Some products are widely accepted by cultures in certain regions while others are not. Companies’ pricing strategies may differ across various regions of the world depending on if their product is culture-bound or not. Think about visiting a foreign country with a different culture. The culture-bound products that are easily noticed include food, beverages and clothing. I’ll provide the example of Indonesia – a country consisting of 17,000 islands that I’ve spent about seven months traveling around over the past five years.
Indonesia is actually home to a wide-range of cultures with hundreds of different languages being spoken. The primary religion is Muslim, however, other religions such as Hinduism, Christianity and Animism can be found in different parts of the country. Typical dishes include rice or noodles, along with fish or chicken and mixed vegetables. These dishes are commonly served with a spicy chili sauce called sambal. While there I tried types of potato chips that I never imagined existed including: seaweed, cheese pizza and barbequed beef flavors. Beverages are somewhat similar to those found in the western world and include water, juices and soda. Alcohol is not consumed by many Indonesians because it is not seen as acceptable in many of the Islamic areas. Clothing can be very different with people on remote islands such as the Mentawais wearing tribal outfits that look similar to what Native American Indians once wore. While differences in these three product groups may be obvious to the casual onlooker, many other types of products are prevalent which are not as common Western countries.
One product that is widely accepted in parts of Indonesia are cigarettes. Locals can be seen chain-smoking cigarettes as they represent a product that can be easily afforded by the masses. Western countries often put higher taxes on cigarettes because of the damage they do to the human body which ultimately translates into a high burden on the public health system. In Indonesia, however, a pack of cigarettes can be purchased for a dollar or less and due to low education levels, many cigarette users are not aware of how harmful the effects can be.
Another product group that I noticed being widely accepted by Indonesians was social media sites/applications. I met many teenage Indonesians that had used social media platforms such as Facebook for digital marketing purposes. Many of the times, the platforms were being used to advertise or promote a family business. People who had started little three room homestays for surfers were constantly posting new content to advertise their business all over the world. Figuring out what kinds of products are likely to be accepted by a foreign culture is no easy task. Values, customs, beliefs and type of lifestyle will all dictate whether a product becomes widely accepted or simply passed by.
For the last five to ten years, the day after Thanksgiving has been the busiest shopping day of the year in the United States. Big Box retailers open early with sales promotions that offer incredible savings enticing consumers to wait in long lines for hours on end. According to Fundivo – Black Friday Statistics, there were 141 million people shopping on Black Friday in 2013 and they spent about $57.4 billion. That’s nearly half the U.S. population! Now the tradition is spreading abroad. How have retailers continued to attract such an astounding number of consumers year after year?
The answer is promotional advertising, but be warned—the deals may not be as sweet as they sound. “Doorbuster” deals are one of the powerful advertising tactics that stores use. These are commonly used to advertise big-ticket items like flat screen TVs at unbeatable low prices. Offering these items at prices close to cost gets shoppers into the store where almost everything else is priced at normal margins. While some shoppers are able to obtain a big-ticket item, add-ons, installations and accessories often outweigh the savings they thought they were getting. Advertisements usually imply that only a limited quantity of an item will be available or that each customer may only purchase a set amount. This implied scarcity makes people think they have the opportunity to get something special, but it’s usually nothing more than a deceptive marketing tactic.
Unfortunately, most consumers who make the investment to wake up early, drive to a mall and wait in a long line outside a store just don’t know when to quit. Putting in all that extra effort translates into consumers who actually become inclined to purchase more than they initially intended. Consumers should recognize when they find themselves in an unprofitable situation, what economists refer to as a sunk cost, and cut their losses. This, however, is hardly the case on Black Friday. Most shoppers figure that since they already did all that work to get into the store, they might as well spend a little extra. The emotional investment causes people to overlook flaws an item may have and further rationalize expensive purchases.
Thanksgiving is mostly an American holiday so it is interesting that the tradition of shopping on Black Friday has started to spread abroad. Canadians had been traveling into the U.S. for Black Friday deals until retailers in Canada started to run their own promotions to entice shoppers to keep their spending at stores within the country. Recently, the United Kingdom, India and Brazil have started offering Black Friday discounts. Could this increasing interest abroad be a signal that all consumers, regardless of nationality, may be susceptible to the Black Friday hype?
Sales executives often utilize similar tactics when attempting to sell their organization’s products or services to a potential customer. A common strategy has five main steps. The first step is the approach which attempts to gain a prospect’s attention and build rapport. The second step is known as needs identification. In this step the salesperson usually tries to gain an understanding of the specifics of the customer’s situation so that they can tailor their presentation to that individual’s needs. The third step is the actual presentation of the available product or service. This involves presenting the benefits of a product or service and demonstrating how those benefits will meet the needs of the potential buyer. The fourth step is overcoming buyer objections. It is important for the sales person to answer questions and eliminate any concerns a potential buyer may have. The final step is closing the sale where the sales person asks for the prospect’s business or some sort of appropriate commitment. While these five steps are considered essential to most sales strategies, it is important to modify this approach to align with the cultural norms of the targeted customer.
These modifications should be taken into account not only when doing business in foreign countries but also domestically when engaging with people who have foreign backgrounds. The United States is characterized as a low-context culture where we communicate directly with the spoken and written word. Americans should be especially keen to modify their sales strategies when doing business with individuals from high-context cultures because those cultures tend to put more of an emphasis on contextual cues. Many parts of Africa, Arab regions of the Middle East, Brazil and China are examples of countries where higher-context cultures are prevalent. It is important for Americans to exhibit patience when building relationships in those regions. The first step of the sales approach, building rapport or trust may take much longer in high-context cultures. People with high-context cultural backgrounds will often need to get to know someone by discussing personal details and attending social activities. For example, Guanxi is a central part of Chinese society. It involves maintaining relationships within one’s network and often is closely related to social status and prestige. In the US, we tend to get right down to business, but taking the time to get to know people will produce the best results in countries like China.
High-context cultures tend to be more formal in business meetings. With the needs identification step, be careful to study body language. People may not be as quick to point out certain needs that they feel are not being met. They may also act like they agree with you even though they don’t in order to maintain a harmonious relationship. Make sure to listen and observe a person from a high-context culture before asking for their business. Being humble and not too direct about asking for an order can help to improve the potential customer’s level of comfort.
Studying consumer behavior means attempting to understand decision-making processes that buyers go through as they select a product or service for purchase. Over the past month, many consumers have been going through this process in order to acquire one of the new Apple iPhones. Typically, people start by asking themselves if the iPhone 6 models offer enough new features above what is included on the older models to justify an upgrade. Next comes the hard part –weather to purchase the iPhone 6 or the iPhone 6 Plus. This is a purchasing decision Apple is surely interested in understanding as sales of the 6 Plus produce a higher profit margin for the tech giant.
When examining why a consumer would want to purchase either of the new iPhones it’s easy to recognize the advancements and features that persuade a purchase. Bigger screens, faster A8 processors and longer battery life are all important. Some other enhanced features that may entice consumers sitting on the fence include optimal image stabilization, 1080p (HD) video recording, WiFi calling and Apple Pay. While both versions of the new phone work well, the 6 Plus has some advantages. For instance the 5.5 inch full HD display makes it the better choice for consuming content and the larger battery enables it to hold a charge for multiple days. In deciding which phone to purchase it is really up to the individual to think about what they will use the phone for most. Those who predominantly use their phones to call and text might choose the regular iPhone 6. People who spend a lot of the time on their phones consuming digital content may want think about picking up the 6 Plus.
In the United States, people still seem to prefer the regular iPhone 6 over the Plus model. The 4.7 inch iPhone has accounted for about 62% of domestic iPhone sales while the 5.5 inch Plus model has accounted for about 24% of domestic iPhone sales. What about consumers in different countries around the world? European smartphone preferences look to be somewhat aligned with those in the US. In China, however, consumers have already caught on to the growing “Phablet” trend. In the first quarter of 2014, for example, larger “phablet-style” phones already made up close to 40% of smartphone sales. Results from a recent digital consumer survey by Accenture show that 66% of potential smartphone buyers in China would prefer to buy a “phablet.” Apple had a production priority in China where the regular sized iPhone was being produced in greater numbers. Due to the greater adoption rates of the 6 Plus, they are attempting to speed up production of the larger model to meet higher than expected demand in the region. As the rollout of the new iPhones continues around the world it will be interesting to see which cultures favor each model. If Apple is able to more accurately predict consumer behavior in each country it enters with the new phones it will be able to systematically meet varying demands and ultimately boost future margins.
To study consumer behavior we focus on the way individuals and groups go about choosing and attaining new products and services. We are able to identify the ways chosen products and services affect and bring satisfaction to the consumers. Eventually we observe the resulting impact on societies. Before examining differences in consumer behavior across different cultures, it is important to take a holistic view to understand the current trends shaping consumer behavior on a global scale.
The contemporary consumer is accustomed to the sensory overload experienced with advertising and storytelling. They now covet ways to interact and participate more when it comes to entertainment, news and new products. Think about the ways social media sites enable users to post any article or webpage to friends’ walls. Friends can then “like” or comment on those postings which in a way rates or qualifies them to others. We expect this trend of growing interaction and communication to become even more important in the future.
When consumers in the information age want to know something, they are addicted to acquiring it within a matter of seconds. This is what some have termed “hyper efficiency.” Problems that used to be unsolvable are now solved instantaneously. Consumers will continue to mobilize collective knowledge and expect to access it at hyper speed.
Technological advances now allow ordinary people to create in ways that were never before possible. Computer programs are allowing everything from art to inventions to take the digital form. As technologies such as 3D printing are perfected, consumers may not need to walk into a store or order a new product online. They will be able to custom design and manufacture it with the click of a mouse.
People are becoming more aware of how their habits and purchasing behaviors are affecting the world around them. The relationship between buying products such as plastic water bottles and widespread environmental degradation is becoming more apparent. Consumers are seeking more meaning from the goods and services they choose to surround themselves with. Is simple convenience still worth supporting merchandise that conflicts with your ethical principles?