Buying Behaviour in International Marketing
Social and cultural factors influence all aspects of consumer and buyer behavior. The differences between these factors in different parts of the world can be a central consideration in developing and implementing international marketing strategies. Discuss. Consumers are not purchasing goods without taking into considerations several aspects which comprise their buying behavior. In line with this fact, producers would have to take into consideration that the existence of diversity among individual behaviors might also affect the marketing strategy that is effective for their target market.
As said by S. L. O’Brien (2006), Demographics normally play a major role in the buying process. Five steps are involved in nearly every purchase made Purchasing decisions include many factors that most consumers are not even aware of. Five steps are involved in nearly every purchase made: need recognition, information search, evaluation of alternatives, purchase decision, and finally post purchase behaviour. “Purchases are further influenced by such things as personal, psychological, and social issues.
A good market researcher will study the thought process undergone by consumers, compare it with their demographic data, and use the resulting information to market their products. (Armstrong et al, 2005)” Just before delving into the discussion, it is best to discuss
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One culture may be adapted from a single place to another; however, as studies showed the cultures’ other elements are sometimes altered by the society where it is upheld, making it unique from the culture where it originated. There are particular elements of these influences on the buying process that ought to be underscored because it is most likely to be the disparity from country to another.
(a) Social Class In some countries, social class is very firm; that only little movements up or down in the social strata is possible.
(b) Family The notion of the family varies from the narrow version of the family where parents and their associated children are the only ones who are counted, to the extended family which includes the grandparents and the other relatives. As is the norm, say in the Philippines and Italy.
(c) Age and life-cycle stage Age is also another distinct factor, for it draws the line between the needs of every age segment in the society.
For instance, a two-year old would of course have a different need from the middle-aged person, a 26-year-old individual who is married with two young children have a distinct set of priorities compared to a 26-year-old single individual. “In different countries the age composition varies. Atypical difference is that industrially advanced countries (such as Germany) will have ageing populations, whereas in lesser developed countries the population will have a much younger profile, with large numbers of babies and children. ”
(d) Gender The roles and status associated with men and women vary within most cultures and between cultures. One would need to familiarize himself with these differences and of the manner in which the changes take place.
(e) Needs and motives In many Western countries, customers share similar motives and motive hierarchies, such as the desire to succeed and belong and achieve social affiliation. “These derive from Maslow’s model of a hierarchy of needs, which has been very influential in the way consumer behaviour is considered. However, these are not consistent across cultures. So, for example, in some parts of the world, self-esteem needs are met before physiological needs. ”
Since the world market is an all-encompassing arena which generally include all the countries in the world, it is best to keep in mind that the development of the country also contributes to their buying behavior.
BUYING BEHAVIOUR IN LESSER-DEVELOPED COUNTRIES (LDC)
Bohm-Bawerk (1959) identified that these countries are considered poor because of their comparatively low levels of economic and social infrastructure. Companies already claimed that they are experiencing difficulty to market to these countries because there is little spending power and market sizes are small in most instances.
It is in these countries where there’s often a set of inefficient support systems, like for instance, an unreliable electricity supply. Among all the things, this incident would lessen the market for consumer durable products that are powered by electricity. Another incident would be the poor quality of roads which makes it longer for products to reach their distribution areas and sometimes the product gets damaged even before it reaches its destination due to excessive bumping and jolting.
These cases are very unlikely to occur in developed countries where rail systems hasten the arrival of the products. This does not mean to say that these markets should necessarily be ignored. In most LDCs it will be possible to sell some products. In particular, companies might be willing to accept low sales because they hope to become well established and be in a position to benefit when the country begins to grow and develop larger, more worthwhile markets. (Bettman 1979)
Birenbaum and Sagarin (1976) said that most consumers will have very low levels of income and little discretionary spending power. Consumer buying decisions will, therefore, be considered more carefully because, relatively, the cost of purchase will be very high. Think, for example, of the different significance for a consumer in an African country with a family annual income of 500 considering whether to buy a portable radio priced at 15, compared with a consumer in Germany with a family income of 20,000 considering the same purchase. For the African family the purchase is very significant, it involves considerable risk. For the German family the expenditure is so insignificant in terms of the total spending power that it could be almost an impulse purchase. There will, though, be some segments of the population with higher amounts of money to spend, including an urban middle and upper social class as well as some expatriate managers, administrators and civil servants from other more affluent countries.
There will be a ready market among these groups for fast moving consumer goods (FMCGs) which can be sold with little or know adaptations. There will be comparatively few business buyers. It is likely that industrial development will be limited to a few industries, probably based upon developments from the primary production of agriculture, fishing or the extraction of minerals – for example, the canning of vegetables or the mining of coal. LDCs often rely heavily on a few products for their total export earnings.
As a result, they are usually limited in their reserves of convertible currencies. This means that the political and economic management of LDCs is often geared to encouraging exports from their country and discouraging imports into it. If there are marked differences in the cultural context level, there will be considerable difficulties in understanding and developing strong working relationships with business buyers in LDCs.
BUYING BEHAVIOUR IN NEWLY INDUSTRIALISED COUNTRIES (NIC)
The main attraction of NICs is the growth potential that they embody.
Some NICs, particularly some countries in South East Asia (such as Malaysia, Korea, Singapore and Taiwan) have time and again shown faster than average growth for a number of years. This higher level of growth, when contrasted with slow growth or recession in many other parts of the world, together with their higher levels of income per person in the population, makes NICs particularly attractive as market opportunities both for consumer goods and business supply. It is important to note that that whilst there are considerable opportunities in these markets, there are often barriers to entry into them.
The governments of NICs sometimes set high tariff barriers on goods coming into the country in order to protect their own developing industries. (Miles, 2002) The consumer markets in NICs can develop rapidly once a certain critical point of income level has been reached. In consumer durables, the growth possibilities of opening up the market in NICs are very attractive, particularly where the markets in more developed economies have reached the maturity phase of the product life-cycle.
Increasing affluence also allows the development of FMCG markets which initially might have been slow to grow because of income constraints and conflicts with indigenous culture. Retailers are changing their approaches from small, customer-service market stalls and small fixed units into some of the larger, more capital-intensive styles of Western retailing. These changes provide opportunities for retailers from other countries to enter the NIC market. Many of the NICs are in Asia and Latin America. For international businesses operating from Europe or the US, this poses problems.
The cultural differences between the comparatively low context Europeans and North Americans and the high context Asians and Latin Americans are quite large. The growth in NICs has been created through the expansion of business. Accordingly, there are many more business buyers than in LDC countries. As the NICs expand, there is an inevitable link to increased demand for a wide range of infrastructure improvements – power and communications, education and health care, in addition to internal and external defense.
The increased opportunities to market to businesses have to be set in the context of the cultural differences of many of the NICs. This may mean that understanding the ways in which business buys is more difficult than in low context culture countries. Whilst the main concepts of business buying hold true, the nature of the roles in the DMU, or the length of time taken to go through the whole process, might be rather different from more advanced industrial companies. It is also quite likely that the nature of competition in NICs will be fierce.
Local suppliers will have advantages of lower labor costs and less transport and packing expenses. The NIC competitor might also be prepared to operate on lower profit margins than companies from the UK and the US. Brown (1998) noted that, Business buyers in NICs might favour local suppliers in any event, but be particularly attracted to them because of the lower prices offered by the local, indigenous supplier. To succeed, companies from more highly industrialized countries will need to offer more sophisticated, high technology solutions.
If they are able to do this, and keep in front of their NIC competitors, they will maintain their market position in NIC countries.
BUYING BEHAVIOUR IN HIGHLY INDUSTRIALISED COUNTRIES
Most of the material written about marketing has come from the US and from Europe. More recently, material has started to appear from Japan. All the main concepts of buyer behavior have originated from scholars in highly industrialized countries. Because of this there is a cultural sympathy between the concepts and the culture of buyers in these countries.
The main exception to this is Japan. In many ways Japan is different. It is a high context culture. It has been isolated from many cultural forces until quite recently and has evolved a number of different business and management systems. For example, just-in-time and an insistence on quality both originated in Japan. According to Craig (1992) considering marketing to highly industrialized countries, it is perhaps more useful to think about the problems facing an LDC or an NIC producer in attempting to market products in the US, the UK or Germany.
That is not to say that marketing from one highly industrialized country to another is easy, but the level of difference (Japan excluded) is not so large as in the former situation. As said by Muellbauer and Deaton (1980), A major problem will be overcoming the country of origin problem, especially in the purchase of consumer durables. To overcome this problem, the NIC or LDC Company might need to sell products at a low price and include many additional features within that low price.
In addition, they will need to fight hard to secure adequate distribution channels. After-sales service will need to be convincingly strong to reassure potential buyers. The main markets for LDCs are in craft products and ethnic fashion clothing, as well as certain food products – for example, bananas from Caribbean countries. The difficulties are somewhat lower amongst business buyers. It is likely that business buyers will be more receptive than consumer or government buyers since they will judge products on more objective and careful evaluative criteria.
Businesses around the world are trying to find ways to cut costs. They are, therefore, receptive to business propositions that offer reliable, high quality production at lower prices than can be obtained from suppliers based in more highly industrialized countries. The opportunity that LDC and NIC suppliers have is the lower costs of land and labor. The difficulties that they face are those of convincing the business buyer that high quality product will be supplied consistently with reliable delivery.
As even this small study has proven, marketers must be constantly aware of the consumer’s thought processes and buying behaviours, since even the simplest decisions can involve many factors. Market researchers should carefully study consumers and come up with innovative ways of persuading the consumer, at each of the buying stages, that their product is the best fit. If they are successful, then the true concept of marketing – building profitable relationships, will be met.
List of References
Bettman, J, 1979, An Information Processing Theory of Consumer Choice, Reading, Addison-Wesley. Massachusetts.