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Contemporary Issues in Consumer Research

Mid Term Assignment: Cultural Influence

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Submitted to Dr. Michael Coulburn

(Professor)

Salford Business School

Date 9th Aug 2015

Type of Assignment Individual

Submitted by

Name of Student Sanjay Vaid

Roll No 00436743

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Table of Contents

CONTEMPORARY ISSUES IN CONSUMER RESEARCH........................................................... 1

MID TERM ASSIGNMENT: CULTURAL INFLUENCE ..................................................................... 1

INTRODUCTION.................................................................................................................... 5

CULTURE: ............................................................................................................................ 5

THE CUSTOMER’S CULTURE: .................................................................................................. 7

CUSTOM ER DIV ERSITY: ........................................................................................................ 7

THE AGE INFLUENCE ON CULTURE AND CONSUMPTION: ............................................................ 7

GENDER A ND SEXUAL INFLUENCE: ......................................................................................... 8

REGIONAL INFLUENCES: ....................................................................................................... 9

ETHNIC INFLUENCES: ...........................................................................................................10

RELIGIOUS INFLUENCE: ........................................................................................................10

OCCASION: .........................................................................................................................11

EXTENDED/LIMITED FA MILY: .................................................................................................11

SOCIAL CLASS INFLUENCE ..................................................................................................12

SOCIAL CLASS INFLUENCE: ..................................................................................................12

DETERMINA NTS OF SOCIAL CLASS: ........................................................................................13

CONSPICUOUS CONSUMPTION A ND STA TUS SYMBOLS: ...........................................................14

COMPENSA TORY CONSUMPTION: .........................................................................................14

THE CONSUMPTION PATTERNS OF SPECIFIC SOCIAL CLASS: ....................................................14

HOUSEHOLD INFLUENCE: .....................................................................................................14

ROLES THAT HOUSEHOLD PLAYS:..........................................................................................15

PSYCHOGRAPHICS: VALUES, PERSONALITY, A ND LIFESTYLES: .................................................................16

VALUES: ...............................................................................................................................16

AGE AND VALUES: ...............................................................................................................17

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MEA NS-END CHA IN ANALYSIS: .............................................................................................17

PERSONALITY .....................................................................................................................17

PSYCHOA NALYTIC APPROA CHES: .........................................................................................18

TRAIT THEORIES: ................................................................................................................18

PHENOMENOLOGICAL APPROA CHES: ....................................................................................18

SOCIAL-PSY CHOLOGICAL THEORIES: .....................................................................................18

BEHAVIORAL APPROA CHES: .................................................................................................18

PERSONALITY AND CONSUMER BEHAV IOR: ............................................................................18

ILLUSTRATION OF SEA GRA M ROYAL STA G .............................................................................18

SOCIAL INFLUENCERS: ........................................................................................................19

OPINION LEA DER: ................................................................................................................19

CONSUMER CHA RA CTERISTIC: .............................................................................................20

GROUP CHA RA CTERISTICS: ..................................................................................................20

FOOD SAFETY, HYGIENE AND ETHICS: ....................................................................................20

MCDONALDS LOCALIZATION TO MEET CULTURAL DEMANDS: ..................................................20

SUGGESTION: .....................................................................................................................21

WORKS CITED .....................................................................................................................22

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Introduction Consumer behavior is the field of understanding how the consumer buys and what

influences their buying decisions at its core. “It is a rich arena of study drawing on

the perspective from disciplines as wide ranging as economics, psychology, sociology, cultural anthropology and other.” (Fahy & Jobber, 2012)

Culture: We need to consider culture to understand consumer consumption pattern. The

impact of cultural influence is very strong on consumer buying behavior and how

they perceive a product. Companies when venturing into global business have to

decide the basis on cultural factors on their adoption of the product in terms of

localization to meet consumer aspiration and demand.

“Culture refers to learned norms based on the values, attitudes, and the belief of a group of people.” (Daniels, et al., 2009)

As per Michel R. Solomon, “Culture is a society ’s personality. It includes both

abstract ideas, such as values and ethics and material objects and services, such as automobiles, clothing, food, arts and sports a society produce.” (Solomon, 2011).

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Figure 1.0 A Theoretical Model of Cultural Influence on Behavior. Source: (Karahanna, et al.,

2005) (Schiffman & Kanku, 1997)

Culture is also not static it's evolving continuously, and with the introduction of the

internet and its wide accessibility, world is becoming boundary-less. When it comes

to people to people and culture to culture contact, and it is impacting on cultural

acceptance and how its perceived and accepted.

Personality

Traits

Subjective

Culture:

Regional

Ethnic

Religious

Linguistic

National

Professional

Organizational

Groups

Cognitive

Beliefs

Practices

Values

Attitude

Social

Norms

Behavioral

intentions

Behavior

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The customer’s culture:

Customer Diversity:

The Age influence on culture and consumption:

Population age factors data can help markets to make a decision based on taste

pattern. There are four major age groups a) teens and Generation Y, also called

“millenniums,” b) Generation X, c) boomers and c) Senior. ‘The basic logic is that

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people of the same age are going through similar life experiences and, therefore, share common needs, symbols and memories, which, in turn, may lead to similar consumption patterns. (Hoyer, et al., 2008)

In India, the population age group distribution is skewed. More than 50% of the

populations are fairly young and 55% of the workforce. There is another large based

waiting to come into the workforce, which would make the dependency ratio low.

Thus, there would be high income in the household and which would affect their

consumption pattern.

The Rural-Urban Divide:

The Rural and Urban population also divide the taste and preference of the

consumer. In a country like India, 70% of the population lives in villages

having different consumption preference than the rest 30% living in cities. But

the rural and urban landscape is also changing with more people migrating

from villages to cities affecting household both in origin location and also

migrated household. Also, the urban landscape is also changing, with tier 2,

tier 3 and new cities with unfolding the potentials and affecting their

consumption trends.

Gender and Sexual influence:

“Gender refers to a biological clarification (male or female), and sexual orientation reflects a person’s preference towards a certain behavior.” (Hoyer, et al., 2008)

The gender ratio in term of the population in India is skewed with woman population

undergoing demographic and psychographic profile change. The population of

working woman has increased, and this has led to more out of home mothers

creating new and changing consumption habits.

According to Hofstede’s 4+1 dimension model of national culture, that includes

power distance, uncertainty avoidance, individualism, masculinity and time

perspective. “Masculinity cultures exhibit different roles for men and women and

perceive any this big as important. The feminine culture value ‘small as beautiful’ and

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stress quality of life and environment over materialistic ends.” (Hollesen & Banerjee,

2010)

Regional Influences:

The region of the world in which they resides influences consumption patterns of

customer. This could be due ethnic, religious, economical, agricultural or

geographical reason. Factor movement or people movement also plays an

important role, for example, the fastest growing restaurant cuisines in the United

Sates are Thai, Indian, Vietnamese and Cajun. That's predominantly due to the

migration of people. Also, certain countries are associated with certain products, for

example beer in the United Kingdom and sushi in Japan. Consumption of certain

products is forbidden in certain countries; for example, drinking alcohol and

consumption of pork is prohibited in Muslim countries and beef in India. People from

Afghanistan prefer Kebab with no spices, but with only salt added for marinating,

whereas in Indian prefers Kebab Marinated in species and curries.

“Marketers need to understand global differences in consumption behavior so they can alter marketing strategy, where necessary to appeal to specific regions and countries.” (Hoyer, et al., 2008)

Many companies have adjusted the market positioning and product offerings by

localization. For example, KFC and Pizza Hut offer rice bowl which is adaptation of

local cuisine Biryani both in vegetarian and non-vegetarian option.

Regional influences in India vary from one state to another. And differs in terms of

culture, languages and religion that impacts the consumption behavior. There are 28

states and seven union territories, 18 official languages and 1652 distinct dialects. In

terms of religion there are six main religions, Hinduism, Islam, Christianity, Sikhism,

Buddhism and Jainism.

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Ethnic influences:

Ethnic influences are another major factor that affects consumer behavior. “The Member of this ethnic group share a common heritage, set of belief and religion and experience that set them apart from other society.” (Hoyer, et al., 2008)

India has a diverse ethnic population with more than 80 languages and 120 dialects

spoken in the country.

KFC and Pizza Hut in India:

KFC and Pizza Hut, both owned by Yum Brands, have done well in India. They

customize their American-Style Menus to the taste of consumers in specific cities,

with local ingredients and flavors that appeal to each sub-segment.

Religious influence:

Another type of subculture is based on religious beliefs. ‘Religion provides people with a structured set of beliefs and values that serve as a code of conduct or guide to behavior.’ (Hoyer, et al., 2008)

Religious beliefs can prohibit the consumption of certain products. Common

prohibitions are on the consumption of liquor, Tabaco, and caffeine, including Cola.

Orthodox Jews do not eat pork or shellfish, and only consume those meat and

poultry products certified as kosher. Muslims do not eat pork or drink liquor. Catholic

consumers may choose to not consume meat on Fridays during the season of Lent.

Most Hindus and Jains are vegetarians. Hindu and Sikhs do not eat beef. Sikhs do

not consume tobacco. Also, the colour green has significance for Muslim and orange

or red for the Hindus, which has led to its frequent use in product packaging for

these groups.

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Occasion:

A lot of package confectionery, food products are exchanged during occasions like

Festivals, birthdays, Marriages, etc. as gifts. In India in most such occasion sweets

are exchanged.

Extended/limited family:

Family

The fact that a family is a nuclear family with husband, wife and their children. Or has

extended family that includes their parents, grandparents, etc. also play a significant

role in consumer choice and consumption in terms of food products.

The role and importance of family in India are far more than an individualistic society.

Although due to modern day compulsion children live away from their parents , but

they consult them, and their decision is a collective decision.

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Social Class Influence

Social Class influence:

Many societies in the world have social class. The social class hierarchy confers

higher status to some classes of people than to others.

“Social Stratification is the division of members of the society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less.” (Schiffman &

Kanku, 1997) (Nair, 2009)

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“A status-oriented society is more likely to prefer “quality” or established and

prestigious brand names and high-priced items to functionally equivalent items with unknown brand names or lower prices.” (Mooji & Hofstede, 2002) (Hawkins, et al.,

2013)

Determinants of social class:

Marlow’s hierarchy of needs, represented as a pyramid with the most basic needs at the bottom. (Fahy & Jobber, 2012)

Maslow’s hierarchy of needs is a theory that the author finds indicate the reasons for

different consumption pattern based on class, which is further indicative assessment.

“Status is related to the concept of a power index that refers to the degree to which people accept inequality in power, authority, status and wealth as natural or inherent in society.” (Shavitt, et al., 2006) (Hawkins, et al., 2013)

Some of the determinants of social class are Income, Occupation, Education,

inherited status and earned status that affect consumer consumption choice and

pattern.

Self Actulaisation

Esteem

Love/belonging

Safety

Physiological

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Conspicuous Consumption and status Symbols:

“Conspicuous consumption, also related to social class, is an attempt to offset deficiencies or lack of esteem by devoting attention to consumption.” (Hoyer, et al.,

2008). Conspicuous consumption product or services are valuable to their owner

because of what they tell others. This can be dining at a high-end restaurant or

possessing a premium scotch or wine.

In countries like Brazil or India dining at Pizza Hut, McDonalds or Burger King is

considered a status symbol for lower middle class.

Compensatory Consumption:

This type of consumption is an attempt to offset deficiencies or lack of esteem by

devoting attention to consumption.

Case of Radisson Kebab Factory:

The Great Kebab Factory, a fine dining restaurant in Radisson hotels owned by the

Carlson Rezidor Hotel group. They have now opened a stand-alone restaurant for

customers who might get intimidated with five-star hotel appearances, look and price

perception. And in its place would prefer a more toned down version of the

restaurant in the hotel. This concept of the standalone restaurant is open by

Radisson and is located in the suburbs of New Delhi.

The consumption Patterns of Specific Social class:

There are typically four main classes 1) The upper middle class 2) the Middle class

and the working class 4) Homeless

Household influence:

“A family is usually defined as a group of individuals living together who are related

by marriage, blood or adoption.” (Hoyer, et al., 2008)

The factor the effect family consumption is a nuclear family, extended family, a family

with or without kids, married or unmarried, single or divorced, etc. and some earning

member in the family.

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“Household is a broader term that includes a single person living alone or a group of individuals who live together in a common dwelling, regardless of whether they are related.” (Hoyer, et al., 2008)

Roles that household plays:

There can be more than one person responsible for acquisition and consumption.

Other than this there can be spouse’s roles in the decision-making. Children

predominantly are inducers in consumption decision.

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Certain cultures like India it’s the wife, mother or sisters who make most of the

decisions related to food consumption and purchase.

Psychographics: Values, personality, and Lifestyles:

Values:

Value serve as a standard guide our decisions and behavior over time. Value varies

in specificity at the broader level, it global values, which represents the individual

value system.

Individuals in different countries are exposed to different cultural values, which lead

to cross-cultural differences in values.

As pointed out earlier in this essay Geert Hofstede other two dimensions play a

significant role in cultural values.

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- Individualism verse collectivism: This is the degree to which a culture is

individualistic as against collective.

- Uncertainty Avoidance: The extended to which a culture prefers structured to

unstructured situations.

Different social class upholds different values that affect their consumption pattern.

Age and Values:

A particular generation might have different and common values than that of another

generation, which might affect their consumption pattern.

Means-End Chain Analysis:

Marketers can use mean-end analysis to understanding the attributes they consider

important and gain better insight of consumer values. They can use this information

zero in on the values that drive a consumer decision.

Case of Miller light beer:

Miller Light beer is position has low-calorie beer appealing to the health-conscious consumer.

The distinctive product positioning advertisement says, “Less filling, low – calorie beer with no sacrifice in taste.” They used ex-athletes in these advertisements to deliver the message.

Personality

Individuals with comparable background hold similar value. However, people do not

always act the same way.

“Personality consists of the distinctive patterns of behavior, tendencies, qualities or personal dispositions that make an individual different from another individual and lead to a consistent response to environmental stimuli.” (Hoyer, et al., 2008).

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Psychoanalytic Approaches:

Personalities drive from a set of dynamic, unconscious and continuous struggle

within the mind.

Trait Theories:

As per trait theory, personality is composed of characteristics that describe and

differentiate individuals. Psychologist Carl Jung developed traits theory and

categorizes individuals as introverts and extroverts.

Phenomenological Approaches:

This theory proposes that personality is predominantly shaped by an individual’s

interpretation of life events.

Social-Psychological theories:

As per this individual theory, Individual’s action in a social situation is to meet their

needs.

Behavioral Approaches:

This approach proposes that difference in personality, is an outcome of how

individuals have been awarded or punished in the past.

Personality and Consumer Behavior:

Markets have often designed advertisement message to appeal to a particular

personality

Illustration of Seagram Royal Stag

Seagram Royal Stag a Whisky brand uses the tagline “It’s your moment, Make it

Large” this is directed towards achievers.

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Social Influencers:

Opinion leader:

Opinion leaders are part of a general category of gatekeepers; they act as an

information broker between mass media and the views and behaviors of an

individual or a group.

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Consumer Characteristic:

The personalities of some consumer lead them to be readily susceptible to influence

by others. “Group cohesiveness and group similarity also affect the degree of

normative influence,” (Pamela , 2001) (Phelps, et al., 2000) (Hoyer, et al., 2008)

Group Characteristics:

The characteristic of a group influences the degree of normative influence.

Marketers can create normative influences through an advertisement to demonstrate

the benefits that can follow from the product use or nonuse.

Case of Saffola:

Saffola a healthy cooking oil Advertisement provides normative influence by

identifying the way in which homemaker woman takes care of the house and family

members.

Informational influence:

Reference group and other influence sources can exert information influence by

offering information to help make a decision.

Other influences are by word of mouth and viral marketing.

Food Safety, Hygiene and Ethics: Food Safety and Hygiene is a universal concern across all cultures, use of harmful chemicals,

pesticides in Vegetables, Poultry and package product cause harm to consumer health., and

so does un-hygienic food and service environment.

Treatment of animals and environment is another ethical concern that influences

consumers, on how they perceive brands and influences their buying decision.

McDonald’s localization to meet cultural demands:

McDonalds is one company that has localized to the product, positioning,

advertisement, and other marketing communication and yet not compromises its

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global standardization in term of quality. McDonald in India started their

operation1996 and offered vegetarian varieties like MacAloo Tikki Burger, Curry

Pans, Wraps pizza Macpuff and MacVegee today. They do not offer beef or pork

product taking into consideration religious sentiments in India. “In Japan market, they renamed their well-known mascot Ronald McDonald to Donald McDonald as The Japanese language does not include R sound. They have localized their menu in Japan and introduced corn soup and green tea milkshake. In Sweden McDonald’s

developed a new package using woodcut illustrations and a softer design to appeal to the internet the consumers of the nation in food value and the outdoors.” (Monga

& John, 2002)

Suggestion:

- There is a high potential for offering products and services to the season

demands of occasions, festivals, etc. Today, a working class person’s leisure

time at hand is limited, they need to make a choice between where to devote

time. Companies like McDonald or Pizzahut can provide options for the

consumer to arrange get-together to exchange gifts during festival or

occasions at short notice. They can also provide with offering to buy flowers

or gifts in store. That would help people save travel time and enjoy theses

occasion. This service will have high demand in cities.

- The second suggestions are to offer this product in places like trains, long

route buses, Gymnasium, college and office canteens and flights as modern

consumer consumption is happening in these places.

- Offer healthy products, display the nutrition facts on the packaging and align

with similar health cause propagation groups on social media.

- They should offer their product via social media Facebook etc. using location

service and book order via e-commerce online.

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