CROSS- CULTURAL VARIATION IN CONSUMER BEHAVIOR

1

Term paper on

CORSS-CULTURAL VARIATION IN CONSUMER BEHAVIOR

CourseConsumer Behaviour

Course InstructorDr. Selim Reza

M-402

Group members

Sumaiya Afreen (ID# B1001014)Nazifa Nushrat (ID# B1001038)

Anika Tasnim Shawki (ID#B1001048)Zaharatul Munir Sarah (ID#B1001049)

Submission date3rd April, 2013

Bangladesh University of Professionals (BUP)Mirpur Cantonment, Dhaka-1216

Acknowledgement

2

At first, we would like to express our gratitude to the Almighty for enabling us the strength and opportunity to complete the report in the schedule time successfully.

We would like to thank and take the opportunity to express our sincere gratitude and respect to our honourable course instructor Dr. Selim Reza, for setting such an interesting term paper as our task for course. This paper has been an interesting assignment, one from which we have learned much and which helped us enrich our knowledge regarding cross-cultural variation in consumer behaviour which help us to understand the degree of variation of consumer behaviour and its impact on marketing in different countries.

3

EXECUTIVE SUMMARY

Cross-cultural marketing is defined as "the effort to determine to what extent the consumers of two or more nations are similar or different. This will facilitate marketers to understand the psychological, social and cultural aspects of foreign consumers they wish to target, so as to design effective marketing strategies for each of the specific national markets involved." The world economy is becoming increasingly cross-cultural. During the next decades, as marketers enter new international markets, an understanding of how culture influences consumer behaviour will be crucial for both managers and consumer researchers. This article presents a framework that integrates and reinterprets current research in cross-cultural consumer behaviour

Despite the growth in international marketing, cross-cultural research in marketing has been limited. Recognizing the deficiency of definition of culture in cross-cultural studies, this paper presents a conceptualization of culture. The relevant literature form cross cultural psychology, anthropology, consumer behaviour and international marketing is reviewed in an attempt to describe the impact culture has on salient consumer behaviour constructs of perception, information processing, value systems, and self concept and offer hypotheses for marketing management, Additional implications for key areas of international marketing management are derived.

4

Table of Contents

Topics Page Number

Culture: -------------------------------------------------------------------------------------- 6 Culture And Consumer Behavior:---------------------------------------------------------- 6History:------------------------------------------------------------------------------------------6Innovativeness:---------------------------------------------------------------------------------8Measurement Of Innovation:-----------------------------------------------------------------8Individual Modernity:-------------------------------------------------------------------------9Measurement Of Modernity:-----------------------------------------------------------------9The Interaction Of Culture And Consumer Behavior:-----------------------------------11Characteristic Features Of A Firm Going Global:---------------------------------------15Research Issues For The Twenty-First Century:----------------------------------------15A Buzzing Issue In Modern Era: Internet And Consumer Behavior:-----------------16Role Of Internet And Its Extent In Marketing:------------------------------------------16Conceptual Framework: Consumer Trust In A Web Merchant:-----------------------19Trust and Risk:--------------------------------------------------------------------------------20Problems In Cross Cultural Marketing:---------------------------------------------------20Conclusion:------------------------------------------------------------------------------------21

Reference :------------------------------------------------------------------------------------ 21

5

CULTURE:

Culture is a crucial concept for the understanding of consumer behavior because it is the lens through which people view marketing messages and products. Culture consists of shared elements that provide the standards for perceiving, believing, evaluating, communicating, and acting among those who share a language, a historical period, and a geographic location. As a psychological construct, culture can be studied in multiple ways—across nations, across ethnic groups within nations, across individuals within nations (focusing on cultural orientation), and even within individuals through the priming of cultural values. As will be discussed presently, regardless of how culture is studied, cultural distinctions have been demonstrated to have important implications for advertising content, persuasiveness of appeals, consumer motivation, consumer judgment processes, and consumer response styles.

CULTURE AND CONSUMER BEHAVIOUR:

Every year, multinational companies spend billions of dollars in marketing their products around the world. Some of this money is wasted or, worse, actually damages the marketer’s reputation through cultural or linguistic faux pas (e.g., Ricks, 1983). As new global markets emerge, and existing markets become increasingly segmented along ethnic or sub cultural lines, the need to market effectively to consumers who have different cultural values has never been more acute. Thus, it is no surprise that in the last ten to 15 to 20 years, culture has rapidly emerged as a central focus of research in consumer psychology and behavior. Therefore, Interest in cross-cultural consumer research is growing rapidly. In a relatively short period of time an increasing number of studies have been conducted focusing on differences/similarities of consumers across cultural boundaries. The depth as well as the breadth of research in this area is very encouraging. Given the importance of investigating consumer behavior in a cross-cultural context, it is surprising that there is no systematic assessment of the constructs and methodologies used to study consumer behavior differences cross-culturally.

HISTORY:The first marketing author to recognize cultural differences was George Mateyo (1942). in an article focusing on market research problems and availability of market data in Latin American countries, Mateyo noted (p.12):"Many observers hint that the Latin American temperament precludes the use of personal interview technique either when applied on-the-street or in-the-home."Nevertheless, the level of interest in foreign marketing, in general, and cross-cultural studies, in particular, remained very low during the 1940s. Other published studies during this period primarily dealt with the institutional aspect of marketing in other countries and made very little reference, if any, to consumers (for example see Beattie 1945, Schneider 1948, and Waterhouse 1948).The interest in foreign markets began to grow in the 1950s as evidenced by two events. The 1957 Boston Conference on distribution placed heavy emphasis on papers dealing with foreign marketing and the June, 1958 conference of the

6

American Marketing Association had a strong international flavor (Buell 1958). Nevertheless, studies of the 1950s continued to focus on the institutional characteristics of foreign market rather than on consumer behavior differences.

The nature of published articles in the 1960s did not change to any great extent from the reported studies of .the 1950s. Titles such as "Marketing in and "The Marketing Structure in it was considerably more frequent (see for example, Westfall & Boyd 1960; Stewart 1961; Goldman 1960; Robinson 1961). Toward the end of the 1960s, articles dealing with cultural differences began to appear in marketing journals. Notable among these are Thorelli (1968); Bartels (1960); Furuhashi & Evart (1967) and Fatt (1967). In general, the studies of the 1960s can be characterized as descriptive and non-empirical.During the 1970s, the number of cross-cultural analytical studies increased dramatically. Consumer differences were studied from a variety of perspectives using numerous concepts and theories. Some examples include perception of foreign products and perceived risk (Baumgartner & Jolibert 1978), life style (Vickers & Benson 1972; Linton & Broadbent 1975; Urban 1976; Douglas 1976, information search (Swagler 1977, Engledow, Thorelli & Becker 1975), perceived image of consumers of a specific product (Green, Cunningham and Cunningham 1973), time spent on shopping and other activities (Haws, Gronmo and Arndt 1978), husband and wife role (Hempel 1972), search behavior and the size of evoked set (Maddox, Gronhaug, Homans and May 1978), personal values (Munson & McIntyre 1978), and cultural determinants of consumption (Henry 1976).Cross-cultural studies of the 1980s have included: choice of preventive health care (Alexander & McCullough 1980), the methodology of-crossnational research, (Wallendorf & Reilly 1983; Douglas 1980; Davis, Douglas & Silk 1981; Andreason and Manning 1980), effects of prior product/ brand experience on the information seeking behavior, (Arndt, Gronhaug, Homans, Maddox, and May 1981; Kiel & Layton 1981), variety seeking behavior (Faison 1980), cognitive structure (Hirschman 1983), gift-giving practices (Jolibert and Fernandez 1983), consumption patterns (Reilly and Wallendorf 1984), fashion involvement (Tigert, King & Ring 1980), brand and store loyalty (Keng & Ehrenberg 1984), effects of culture on consumption patterns (Schaninger, Bourgeois & Buss 1985), consumer acquisition patterns .(Clarke & Soutar 1982), family purchasing behavior (Green, et al. 1983), consumer stereotypes (Douglas 1976), and cultural assimilations and consumption patterns (Wallendorf & Reilly 1983).Despite the incompleteness of the list of studies reported here, the variety of topics examined to assess cross-cultural differences is impressive. Also note the emphasis on methodological concerns of cross-cultural research.While reviewing these cross-cultural studies in detail is beyond the scope of this paper, a selected number of constructs that seem to be most relevant to the study of

7

cons-umer behavior in cross-cultural context is examined in greater detail. These include: innovativeness, individual modernity, novelty seeking, and variety seeking.

INNOVATIVENESS:

There is little doubt that both the theory of the diffusion of innovations and the construct of innovativeness are well established in the literature of marketing and consumer behavior. In 1981, marketing ranked fourth among all disciplines in its contribution to diffusion research (Rogers 1983). For the purpose of this paper, a brief overview of innovativeness is given.Rogers and Shoemaker (1971) define innovativeness as "the degree to which an individual is relatively earlier in adopting an innovation than other members of his system." They further note that "by relatively earlier is meant earlier in terms of actual time of adoption, rather than whether the individual perceives he adopted the innovation relatively earlier than others in his system." It is fairly obvious that Rogers and Shoemaker's definition implies a temporal dimension which leads to "relative time of adoption" as the operational definition of innovativeness.From a methodological standpoint, the use of temporal dimension to measure innovativeness has been criticized because it is rather difficult to determine precisely when an innovation was introduced into the social system (Hirschman 1980). Nevertheless, a conceptual strength of the definition is its "dependence on the notion that an innovation is an idea, practice, or object perceived as new by the individual" (Hirschman 1980).Recently, Midgley and Dowling (1978), offered another conceptualization of the concept that suggests innovativeness is "the degree to which an individual is receptive to new ideas and makes innovation decisions independently of the communicated experience of others." Furthermore, Midgley and Dowling view innovativeness as a personality trait possessed to a greater or lesser extent by all individual members of a society.Like many other social science constructs, innovativeness is conceptualized and measured as a single construct, but it is, in reality, a multidimensional phenomena. Many studies within the marketing tradition have identified several other constructs that are positively related to innovativeness (Robertson 1971). These include receptiveness to new products and ideas, risk taking, cosmopolitans, opinion leadership, social mobility, social participation, other-directedness, receptiveness to change, personal efficacy, and self confidence (Robertson 1971; Rogers 1983).A review of the literature by Rogers (1976) reveals that innovativeness as a construct is particularly relevant for cross-cultural investigations. This is because innovativeness is thought to be the individual-level equivalent of the multifaceted phenomena of societal modernization (Rogers 1969).

MEASUREMENT OF INNOVATION:

There are essentially four measures of innovativeness which have been developed to identify innovators: rating by judges or sociometric method, self designated measures, longitudinal measures, and cross-sectional measures (Robertson 1971). But, in a comprehensive review of the literature, Midgley and Dowling (1978) found that, by and large, consumer researchers have relied on two main approaches to measure innovativeness, namely, the longitudinal and cross-sectional. The longitudinal approach is based on a variant of the "relative time of adoption." For

8

example, those individuals who constitute the first X percent of a given market will be classified as innovators. In a cross-sectional method "ownership of new products" is used as the basis to identify innovators. This technique focuses on determining how many items are purchased within a consumption category rather than time of adoption (Robertson 1971).

INDIVIDUAL MODERNITY:

A survey of the literature indicates that concepts of "modernization" and "modernity" have been used interchange-ably. Therefore, it is important, at the outset, to make a distinction between the two terms."Modernization," as defined by Gough (1977) is a term used to summarize the changes that take place in technology, modes of communication, normative sanctions, economic processes, and world view as a society moves from a less to more industrialized status, and from a lower higher level of material well-being. Viewed this way, modernization refers to a process, whereas "modernity" is the mentality, the state of mind individual members of the society acquire as the process of modernization gets underway.Smith and Inkeles (1966, p. 353) proposed a definition of modernity, which provides a more detailed view of the concept:... Modern means a national state characterized by a complex of traits including urbanization, high level of education, industrialization, extensive mechanization, high rates of social mobility and the like. When applied to individuals, it refers to a set of attitudes and ways of feeling and acting, presumably of the sort either generated by or required for effective participation in a modern society.Major attributes of individual modernity include readiness for new experiences and openness to innovation, future orientation, democratic orientation, belief in human and personal efficacy, aspiration, empathy, fatalism, social participation, faith in science and technology, open mindedness, belief in social mobility, emphasis on nuclear family, and value for urban life (Inkeles & Smith 1974; Lerner 1958; Triandis 1973; Schnaiberg 1970; Doob 1976; Dawson, 1967).

MEASUREMENT OF MORDANITY:

Since its conception in the early 1960s, numerous authors have proposed and constructed a variety of scales to measure the individual modernity syndrome. The existing scales are quite varied in their basic orientation and approach toward the concept. The intention here is not to detail these measures, but a brief overview of the measurement approaches that have been utilized provides the necessary background.Generally speaking, two aspects of the measurement approach stand out distinguishing various scales of individual modernity. The first aspect is the notion of dimensionality. Some well-known measures of modernity (Inkeles and Smith 1974, Kahl 1968) have been constructed using a unidimensional approach. In this perspective, it is assumed that psychological change takes place in an integrated fashion across all behavioral and attitudinal spheres (Schnaiberg 1970). From an operational point of view, this means that the items in the scale of measurement are assumed to be inter correlated and, hence, they form a general value syndrome of

9

modernism.In contrast, some authors have adopted a multidimensional view (Dawson 1967; Portes 1973; Schnaiberg 1970). These authors believe that individuals who are affected by the process of modernization are more likely to change some patterns and commitments, but not others.While the question of unidimensionality/ multidimensionality must be resolved through empirical work, there are convincing arguments in the literature which propose a middle ground position and call for a combination of both approaches simultaneously.The second aspect relates to the cultural orientation that has guided the process of scale construction. Some authors have adopted a culture-specific perspective in the construction of their scales, meaning that various items in the scale are developed from "local material" which are salient to the population under study. The set of culture-specific scales are commonly constructed after extensive field research and with the aid of local "experts" who serve as judges in the process of item selection. Furthermore, the direction of modernity is also determined by what local people consider modern.In contrast, some authors have opted for a "portable" measure; i.e., a culture-general scale that would be applicable to any cultural setting. In this approach, items are selected from the existing literature and the direction of modernity is determined by what modernity theory considers modern. (For details of the existing scales, see Eshghi 1983.)Novelty Seeking and Variety SeekingVariety seeking and novelty seeking, termed exploratory behavior, has been primarily studied in psychology (Raju & Venkatesan 1980).Hirschman (1980) defines novelty seeking as an internal drive that motivates the individual to seek out novel information. She distinguishes two aspects of novelty seeking. The first relates to seeking new and potentially discrepant information while the second is the extent to which individuals vary their choices among known stimuli. The latter aspect may be better described as variety seeking or stimulus variation. It is obvious from this definition that novelty seeking is internally determined and it represents an innate search for information. The rationale for novelty seeking stems from a desire for self-preservation in an unknown world (Hirschman 1980).The extensive literature in psychology leaves no doubt those individuals are different in terms of novelty seeking behavior due to certain psychological traits possessed to a greater or lesser extent by the individual members of the society. From the few studies of novelty seeking behavior in the area of consumer research it can be concluded that novelty seeking behavior is positively related to receptiveness to new ideas and innovations and risk taking (Raju & Venkatesan 1980). Furthermore the literature in psychology reveals that novelty seeking is related to dogmatism (close windedness), democratic orientation (liberalism) and ability to deal with complex situation (Hoyer and Ridgway 1984).Application of novelty seeking/variety seeking to assess cross-cultural differences has been very limited. One reason may be that, relatively speaking, novelty seeking has received greater attention by the psychologists than consumer researchers and, hence, a unified framework to organize and integrate previous work does not exist (Hoyer & Ridgway 1984). The only cross-cultural study that utilized the notion of variety seeking to assess cross-cultural differences is the study conducted by Faison (1980). He found that both Japanese and Americans had a desire for variety

10

regarding dinner entrees and musical selection but opted for consistency regarding the toothpaste brand used. This research has been criticized on methodological grounds (Hansen 1980).Measurement of Novelty Seeking/Variety Seeking.Novelty seeking/variety seeking can be measured by scales constructed of items asking individuals how willing they are to seek information that is new-and different (Hirschman 1980). In most consumer behavior studies, however, novelty seeking has been operationalized by asking concrete questions concerning various domains of consumption. For example, a typical scale may include questions such as "How willing are you to try new foods?"It is apparent from the above discussion that variety seeking and novelty seeking have been treated as interchangeable constructs; i.e., they are conceptually indistinguishable. In reality, however, there may be a slight difference between the two. Variety seeking seems to be most closely related to a specific behavior and it has been operationalized accordingly. For example, brand switching behavior is thought to be a function of variety seeking, whereas novelty seeking is a-more generalized construct and thus, represent a higher level of abstraction. For the purpose of this paper, we treat novelty seeking and variety seeking as two separate but interrelated constructs.

THE INTERACTION OF CULTURE AND CONSUMER BEHAVIOR:

An individual's behavior is a result of that individual's cultural value system for a particular context. Individuals' cultural value systems are developed over time as they are socialized into a particular group. Societal culture as well as regional subculture and familial values all influence the formation of an individual's cultural value system. Thus, the cultural value system includes cultural elements that individuals have in common with the group(s) to which they belong, as well as idiosyncratic values unique to the individual. As the model suggests, culture affects consumer behavior, which itself may reinforce the manifestations of culture (Peter and Olson, 1998). An individual's consumption behavior may be viewed and imitated or rejected by others. It can then become the group's norm of behavior and be identified as part of the culture of a given population. Marketers' actions serve as a vehicle to transfer meanings or values from the culturally constituted world to consumer goods (McCracken, 1986, 1988), so marketing communications are

11

represented in the model as a moderator of the effect of culture on consumer behavior. At the same time, marketing communications may also affect a culture's manifestations through advertising (for example, Calvin Klein's ads have reinforced the ``thinness'' value in American society). Of course, as Figure 1 shows, marketing communications can affect consumer behavior independent of culture. When considering this model, it is worth noting that, from an emic perspective, culture may not be seen as a construct apart from and causing behavior. Emic researchers view culture as inseparable from the individual, as an inherent quality (Geertz, 1973). Wedepict culture as causing consumer behavior in order to develop a framework that managers can easily implement to compare the behavior of consumers from different cultures and isolate the cultural causes of consumer behavior differences.

Culture influences behavior through its manifestations: values, heroes, rituals, and symbols (Hofstede, 1997). These are the forms in which culturally-determined knowledge is stored and expressed. Thus, each cultural group possesses different cultural manifestations. We utilize these manifestations, as they encompass most elements of culture described by other authors (e.g. Sojka and Tansuhaj, 1995). We will now describe the four manifestations in detail. Values: The termvalues rests atthe heart ofmost definitions of culture. In fact, most research seems to agree that values drive an individual's behavior. Historically, consumer researchers have often cited Rokeach (1968, p. 161), who viewed ``a value as a centrally held, enduring belief which guides actions and judgments across specific situations and beyond immediate goals to more ultimate end-states of existence''. Examples of values are ``freedom,'' ``pleasure'', ``inner harmony'', and ``happiness'' (Rokeach, 1973). There are different taxonomies of values. For example, Rokeach's view of values implies a differentiation between preferred end states of being (terminal values) and preferred modes of behavior or means to achieve end states (instrumental values).Other authors divide values into the desirable and the desired (Hofstede, 1980). Yet other authors classify values into global values, domain-specific values, and evaluations of product attributes (Vinson et al., 1977). Global values are the most centrally held, while attribute evaluations are the least central and are situation-specific. Hofstede's (1980) landmark study of the dimensions of culture can be considered, an etic approach to the study of cultural values. That study explicitly described values as the core of culture and defined them using Rokeach's definition. Hence, its premise was that the values preferred by a group of people separate them from other groups and thus cultures can be compared with each other using values as a standard. Hofstede's study revealed four dimensions of culture: power distance, uncertainty avoidance, individualism, and masculinity.Emic research focusing on consumption and the meaning of objects in thelives of the individual has also applied values theory to explain how weorganize information in our environment.McCracken (1988),for example,refersto ``cultural principles''. These are the ideas according to which phenomena areorganized, evaluated and construed. Examples of cultural principles include``strength'', ``refinement'', or ``naturalism''. Cultural principles help individualsassign meaning to the world that surrounds them. People's behavior embodiesand expresses these principles. McCracken's cultural principles bear a strongresemblance to Rokeach's values.Other emic researchers have also found cultural values to be at the root of

12

certain consumer behavior processes such as the diffusion of innovations(Arnould, 1989).We can conclude, then, that both the etic and the emic philosophies seem torefer to similar constructs but from different perspectives (between-culturesversus within-cultures). The notion of values, or at least some variants of it, iscentral to most views of culture. The definition of values has evolved overtime,but it has remained a central component of culture. Therefore, in this article wewill use the term values as an inclusive construct composed of many of thevariations in definitions and terminology developed by cross-culturalresearchers.

Heroes: The term heroes refers to ``persons, alive or dead, real or imaginary,who possess characteristics which are highly prized in a culture, and who thusserve as models for behavior'' (Hofstede, 1997, p. 8). This concept will beextended in the present article to include reference groups and opinion leaders(McCracken, 1986, 1989). Heroes may influence consumer behavior throughtheir association with certain products and brands (e.g. Michael Jordan andNike sports apparel). Marketing communications offer an obvious vehicle forthis association.Rituals:The concept of rituals is often erroneously interpreted as behavior ofreligious or mystical significance. While religious rituals are indeed animportant type of ritual, Rook's (1985, p. 252) definition of rituals is muchbroader:The term ritual refers to a type of expressive, symbolic activity constructed of multiple behaviors that occur in a fixed, episodic sequence, and that tend to be repeated over time.Ritual behavior is dramatically scripted and acted out and is performed with formality, seriousness, and inner intensity.McCracken (1988, p. 84) adds that a ritual is ``a social action devoted to the

13

manipulation of the cultural meaning for purposes of collective and individualcommunication and categorization. Ritual is an opportunity to affirm, evoke,assign, or revise the conventional symbols and meanings of the cultural order''.While Rook's (1985) definition focuses on the form that rituals take,McCracken's emphasizes the goal of ritual behavior.Rituals are pervasive in any society. There are grooming rituals, romanticrituals, feeding rituals, and they are constantly being performed by allmembers of a society. Rituals are important for consumer behavior becausethey involve the consumption of goods and services. Rituals give origin toconsumers' cognitive schemata and scripts, which ultimately reinforceritualistic behavior. Marketers' actions moderate the reciprocal relationshipbetween rituals and consumer behavior through advertising, which modelsritualistic behavior and helps it spread. Consumer products play a significantrole in ritualistic behavior. Products can be employed in their symboliccapacity to operationalize the ritual (Solomon and Anand, 1985). Products canbe considered, therefore, as ritual artifacts and their consumption as part of aritual.Symbols: Symbols are a broad category of processes and objects that carrya meaning that is unique to a particular group of people (Geertz, 1973, p. 89).Hence, a society's symbols may not exist in different cultures, or theirmeaning may be different. Language is a set of symbols, as are differentgestures, pictures, or objects. The symbols most frequently studied byconsumer researchers are language (Sherry and Camargo, 1987) andconsumer products.Several authors have examined the symbolic nature of products andconsumption. We can infer from this body of research that productsymbolism is generated at the societal level (Solomon, 1983). Cultural values,expressed in society's perceptions of reality and beliefs of what is desirable,seem to be transferred to products through vehicles like advertising (Belk,1985). These products then become charged with cultural meaning. Forexample, a pair of sneakers can be elevated to a cultural symbol for the value``a sense of accomplishment'' by ads that show Michael Jordan wearing them.Finally, individuals, in their efforts to define their social self, are moved toconsume the products which are now charged with symbolic meaning(Durgee, 1986).The central role of values: We can infer from previous research (e.g. Belk,1985; Hofstede, 1997) that values have a central role amongst the othermanifestations of culture and that the relationship between these and valuesis characterized by a mutual influence. Hence, symbols generally expresscultural values. Through consumption rituals, consumer goods becomesymbols of cultural values. At the same time, symbols reinforce values, ormay even shift them. For example, if basketball shoes are seen as a symbolfor wealth and repeated advertising associates wealth with a desirable endstate, values may shift in certain societal groups toward considering wealthas a terminal value.The nature of the relationship between language-as-a-symbol and values has been subject to debate (e.g. Pinker, 1994). Some authors suggest thatlanguage influences values, and others propose that cultural values determinethe form of languages. It is possible that the relationship is bidirectional. Forexample, cultural values may motivate the creation of words that may not

14

exist in other cultures. At the same time, language may give origin to valuesthat are literally ``unthinkable'' in other cultures because of a lack of adequateterms to discuss them (consider the revolution that Arabic numerals broughtto mathematics and the subsequent shift in cultural values concerning thephysical world). However, existing research seems to be inconclusive in thisarea.The definition of heroes as expressed above implies that heroes are anembodiment of cultural values. Heroes are chosen because they are individualsor groups that represent what members of a cultural group believe in. Therelationship between values and heroes can also be bidirectional. As describedby McCracken (1986, p. 76), new cultural meanings can be invented ``in amodest way. This invention is undertaken by opinion leaders who help shapeand refine existing cultural meaning, encouraging the reform of culturalcategories and principles''.The definitions of rituals included in this article imply that rituals are for themost part an affirmation of values .However, rituals can also influence culturalvalues to the point where values may be revised and cultural meaning ismanipulated (McCracken, 1986). For example, consider a rite of passage thatuncovers or reinforces certain values upon the uninitiated individuals, thusmaking them members of the group.

CHARACTERISTIC FEATURES OF A FIRM GOING GLOBAL:

1. High market share in the domestic market

2. Advantageous economies of scale

3. Access to marketing/manufacturing bases across global borders

4. Availability of resources and capability to absorb huge losses

5. Product/technology clout

RESEARCH ISSUES FOR THE TWENTY-FIRST CENTURY:

The effect of manifestations of culture on consumer behaviour Cultural differences between social groups materialize in four manifestations: values, symbols, and rituals (Hofstede, 1997). Values have received most of the attention from cross-cultural consumer researchers. The literature on the effect of values on consumer behaviour dimensions must now be complemented by research on the other three manifestations of

15

culture. In particular, symbols and rituals must be more clearly understood in order to better define their effect on the dimensions of consumer behaviour. Other research questions that need to be addressed

include:

What is the relationship among the different manifestations of culture?

Are cultural values always the origin of symbols, rituals and heroes?

.If values indeed determine the specific forms of the other three are:

Manifestations, is there also a reciprocal effect?

How stable and exhaustive are the manifestations of culture?

Models of consumer behaviour may need to be expanded to take into account cultural dimensions. This could be done by either generalizing existing models to include cultural variables (e.g. items belonging to the four cultural manifestations of our framework), or by implementing different models in different cultures. Following are several examples of how future research might proceed in this task.

A BUZZING ISSUE IN MODERN ERA: INTERNET AND CONSUMER BEHAVIOUR:

Many have speculated that trust plays a critical role in stimulating consumer purchases over the Internet. Most of the speculations have rallied around U.S. consumers purchasing from U.S.–based online merchants. The global nature of the Internet raises questions about the robustness of trust effects across cultures. Culture may also affect the antecedents of consumer trust; that is, consumers in different cultures might have differing expectations of what makes a web merchant trustworthy. Here we report on a cross-cultural validation of an Internet consumer trust model. The model examined both antecedents and consequences of consumer trust in a Web merchant. The results provide tentative support for generalizing the model.

ROLE OF INTERNET AND ITS EXIENT IN MARKETING:

16

A retailer can use an Internet presence to reach consumers all around the world. Quelch

and Klein (1996) herald how the Internet makes the expanded range of products, services,

and information accessible for consumers from geographically distant and/or emerging

markets. Hamel and Sampler (1998) declare the beginning of “a world where customers

are no longer hostages to geography…” (p. 88).

There is little doubt that the Internet provides enormous potential benefits for consumers

worldwide. Wider choice ranges, lower prices, and entirely new products have become

available in many product categories such as books, CDs, and travel packages, to

consumers who are physically far away from the world's centres of traditional commerce

(Economist, 1997). Amazon.com sells 20% of its books to foreign destinations (Hamel &

Sampler, 1998). One Finnish consumer reported savings of 60% (including surface mail

shipping costs) having purchased a business book from an online store, Amazon.com,

based in Seattle, US than from a Finnish book store (Filenius, 1996). A price comparison

with a UK-based online store, Business Book Direct, was similarly favourable compared

to that available locally. A significant price advantage (25%) remained even if the book

was shipped via an express package carrier.

Although favourable pricing might be a necessity to win orders by overseas customers, it

may not be sufficient. Doney and Cannon (1997) label trust as an order qualifier for

purchase decisions. That is, in order for a consumer to place an order, the consumer must

trust the merchant first. Trust is a belief or expectation that the word or promise by the

merchant can be relied upon and the seller will not take advantage of the consumer's

vulnerability (Geyskens et al., 1996). Trust is a critical factor in any relationship in which

the trustor (e.g., consumer) does not have direct control over the actions of a trustee (e.g.,

merchant or store), and there are possible negative consequences of one party not

fulfilling its promises (Deutch, 1958; Mayer et al., 1995).

Quelch and Klein (1996) speculate that in the early stages of Internet development, trust

is a critical factor in stimulating purchases over the Internet. Keen (1997) warns that trust

is not only a short-term issue but the most significant long-term barrier for realizing the

potential of Internet marketing to consumers. An experiential survey of U.S.-based online

17

surfers, new to Internet based shopping, found the shoppers fascinated by international

shopping opportunities on the Web, but they were skeptical about actual purchasing from

overseas sites (Jarvenpaa & Todd, 1997). Others report widespread distrust among

consumers about Internet-based merchants (Culnan & Armstrong, 1999).

Consequently, the role of trust casts some doubts on Internet consumer merchandising.

Consumers are unlikely to patronize Internet stores that fail to create a sense of trust.

Trust can only exist if the consumer believes that the seller has both the ability and the

motivation to deliver goods and services of the quality expected by the consumer. This

belief may be more difficult for an Internet merchant to engender than it is for a

conventional merchant. In Internet commerce, merchants depend on an impersonal

electronic storefront to act on their behalf. Additionally, the Internet lowers the resources

required to enter and exit the marketplace. Internet merchants might be considered fly-by-

night as there are fewer assurances for consumers that the retailer will stay in business for

some time. In traditional contexts, a consumer's trust has been found to be affected by the

seller's investments in physical buildings, facilities, and personnel (Doney & Cannon

1997). Retailers on the Internet thus face a situation in which consumer trust might be

expected to be inherently low.

The global context of the Internet further challenges engendering trust in a consumer.

From traditional marketing contexts, we have learned that consumer trust is most readily

developed when the consumer has a positive trusting stance in general, has had prior

interactions with the merchant, interacts with a knowledgeable salesperson with similar or

familiar background to the consumer, is protected by strong social and legal structures,

and expects to be patronizing the merchant for a prolonged period (Geyskens et al.,

1998). When consumers are scattered around the world, these sources of trust are not

readily available for the merchant to harness.

Moreover, the fundamental bases of trust might vary across nationalities. Those

consumers coming from individualistic countries might have a higher trusting stance in

general and be more willing to base their trust in the merchant on factors that are inferred

from an impersonal web site than consumers from collectivistic countries. Dawar et al

(1996) found that personal and impersonal sources of information had different impacts

18

on individuals across cultures. Doney et al (1998) have called for empirical studies

examining the ways national culture impacts trust and trust building processes.

Jarvenpaa, Tractinsky, and Vitale (1999) developed and tested a theoretical model about

the antecedents and consequences of trust in an Internet store. The model suggests that

customers' evaluations of stores' reputation and size affect their trust in the store. In

addition, Jarvenpaa et al found that the degree to which consumers trust a Web store

affects their perceptions of the risk involved in purchasing from the store and their

attitudes towards the store. Our purpose in this paper is to cross-validate the Jarvenpaa et

al. model in a cross-cultural setting. The study that Jarvenpaa et al. (1999) carried out in

Australia was replicated in Israel and partially replicated in Finland. The replications

enabled us to test for cross-cultural differences, and at the same time to assess the validity

of the model across national borders.

This paper focuses solely on the consumer's initial development of trust in a commercial

store on the Internet. The scope does not include how trust develops upon repeated visits

or how trust operates through third parties that might mediate between the consumer and

the store. This paper is limited to the type of Internet shopping situation in which the

consumer is targeting the search to a specific category of merchandise (e.g., books and

airline tickets) and is dynamically browsing through a variety of merchants in that

category (e.g., books).

The next section reviews literature on trust and culture. The third section outlines the

methodology of the experimental survey. The fourth section reports on the results from

the empirical study, and the final section discusses the results.

CONCEPTUAL FRAMEWORK: CONSUMER TRUST IN A WEB MERCHANT:

We define trust in the Internet store as a consumer's willingness to rely on the seller and

take action in circumstances where such action makes the consumer vulnerable to the

seller. This definition builds on one provided in (Mayer et al. (1995) and ( McKnight et

al. (1998). The definition emphasizes the cognitive dimensions of trust and views trust as

a rationale choice process. The cognitive view is a narrow treatment of trust excluding the

affective and social dimensions (see Kramer, 1999). ( Mayer et al. (1995) proposed a

model of antecedents of organizational trust based on a dyad of trustor and trustee. The

antecedent of trusting behaviour is trusting intention, or the willingness to be dependent

on another person. Trusting intention is in turn influenced by a trustor's propensity to

trust, the trustor's perceived characteristics of a trustee (e.g., trustworthiness of trustee

based on his or her integrity, benevolence, and ability), and indirectly the trustor's

observations of the trustee's behavior. The model is trustor-centric and acknowledges

19

others only in terms of what they do to the trustor, focuses on the trustor's purpose of

interaction and the trustor's outcomes of interactions. The model assumes that the

decision to trust is made by the trustor and the good resulting from trust is of direct

personal benefit to a trustor.

Besides building on the assumptions of the Mayer et al. model, we draw upon research in

industrial marketing. There is a scarcity of research on trust in consumer marketing

(Geyskens et al., 1998). A meta-analysis of empirical research on antecedents and

consequences of trust in marketing relationships found no significant differences in

results between industrial and consumer categories of merchandise (Geyskens et al.,

1998).

In industrial marketing, the most salient source of a buyer's trust in the merchant

organization is the salesperson; trust in the salesperson is dependent on the salesperson's

expertise, likability, and similarity to the customer (Doney & Cannon, 1997). In the

Internet context, the salesperson is replaced by a website (Lohse & Spiller, 1998). The

web site mediates the relationship between the consumer and the merchant organization.

Sales organizations have been found to create trust in the customer by demonstrating that

they consider their customers' interests and are willing to make short-term sacrifices.

These sacrifices convey that the merchant is not purely driven by a selfish short-term

profit motive (Ganesan & Hess, 1997).

TRUST AND RISK:

Trust and risk are closely interrelated (Mayer et al., 1995). Trust is a social lubricant that

allows consumers to transact with merchants who are not part of their immediate network.

Trust in a merchant mitigates the consumer's perception of the risks involved in a

purchase situation. The higher the initial perceptions of risk, the higher the trust needed to

facilitate a transaction.

Risk is defined as a consumer's perceptions of the uncertainty and adverse consequences

of engaging in an activity (Dowling & Staelin, 1994). The Internet is an open, global,

heterogeneous, and constantly changing marketing channel. Moreover, the channel makes

it hard to inspect physical goods. There seems little assurance that the customer will get

what he or she sees on the computer screen, in the quantity ordered. If problems arise,

sellers can always blame technical problems that are beyond their control. Many sites do

not even confirm the order, let alone stay in touch with the shopper until the merchandise

has been received or consumed. Because of the newness of the channel, many consumers

may be uncertain about the hazards at present and their full consequences. All these

reasons increase the uncertainty, and possibly the perceived riskiness of shopping on the

Internet. When risk is present, trust is needed to make transactions possible. That is,

consumer trust toward a merchant reduces the perceived riskiness of a specific web store.

20

PROBLEMS IN CROSS CULTURAL MARKETING:

1. Problems related to product selection: The marketer going for cross cultural marketing

has to select the customers/ market not on the basis of the superficial similarities of age or

income, but by using the real motivating factors that prompt them to accept or reject

products.

2. Problems related to promotion/marketing communication: e.g. Ariel in the middle east

and also Pepsi.

3. Problems related to pricing: the marketer has to adjust his pricing policies according to

the local economic conditions and customs.

4. Problems related to selection of distribution channels: in Japan, P & G used this to sell

soap.

CONCLUSION:

Most aspects of consumer behaviour are culture-bound. This article reviews the cultural

relationships with the self, personality, and attitude, which are the basis of consumer

behaviour models and branding and advertising strategies. An increasing body of

knowledge is available that helps explain differences in consumer behaviour across

culture. This article reviewed a number of studies of basic cross-cultural differences.

When designing global marketing, branding, and advertising strategies companies ignore

these at their peril. Cultural models have been developed that explain differences and help

develop strategies that target consumers across cultures more effectively.References:

Aaker,J.L. and Maheswaran,D. (1997), ``The effect of cultural orientation on persuasion'',Journal of Consumer Research,Vol. 24,December, pp. 315-28.

Aaker, J.L. and Schmitt, B.H. (1997), ``The influence of culture on the self-expressive use of brands'', in Alba, J.W. and Hutchinson, J.W. (Eds), Advances in Consumer Research, Association for Consumer Research, Provo,UT,Vol. 25, p. 12.

Aaker, J.L. and Williams, P. (1998), ``Empathy versus pride: the influence of emotional appeals across cultures'',Journal ofConsumer Research,Vol. 25,December, pp. 241-61.

Andreasen, A.R. (1990), ``Cultural interpenetration: a critical consumer research issue for the 1990s'', in Goldberg, M., Gorn, G. and Pollay, R. (Eds), Advances in Consumer Research, Association for Consumer Research, Provo,UT,Vol. 17, pp. 847-9.

21

Arnould, E.J. (1989), ``Toward a broadened theory of preference formation and the diffusion of innovations: cases from Zinder Province, Niger Republic'', Journal of Consumer Research,Vol. 16, pp. 239-67.

http://iba8010kelly.alliant.wikispaces.net/file/view/Culture+and+Innovation+-+An+integrative+framework+for+cross-cultural+consumer+behavior.pdf

http://onlinelibrary.wiley.com/doi/10.1111/j.1083-6101.1999.tb00337.x/full

http://www.acrwebsite.org/search/view-conference-proceedings.aspx?Id=12127 http:// business.illinois.edu/shavitt/Handbook%20Chapter%20page%20proofs.pdf

22