Consumer Behavior

1. 2-1 Consumer Behavior Global Consumption and Culture

2. 2-2 Topic Objectives Understand how global markets shape consumption Understand how to interpret indicators of market attractiveness Examine Global Trends Understand �culture� and how it is learned Discuss the dimensions of all cultures

3. 2-3 Discuss What does the term �consumer culture� mean?

4. 2-4 Overview Globalization Increasingly rapid movements of money, information, media, goods, services, and people across national borders fuel globalization. Creates social links and networks that cut across national boundaries such as global market segments that consume global brands. Internet � B2B; B2C; C2C; G2C transactions Social process where geography�s effect on social and cultural relations and actions is diminished.

5. 2-5 Global Consumption Flows

6. 2-6 Discuss �The world is becoming a common marketplace in which people � no matter where they live � desire the same products and life-styles. Global companies must forget idiosyncratic differences between countries and cultures, and instead concentrate on satisfying universal product desires.� --Theodore Levitt Analyze what each of those statements mean � why is the 1st happening? What does that mean in the second for what business should do? Do you agree or disagree?

7. 2-7 Overview Localization � preserving a sense of identity, home and community Globalization produces a revaluing of local cultures in terms of consumption values Globalization promotes �third cultures� Backpacking tourism targeted to middle-class youth and supported by a global network of hostels, Internet cafes, and literature such as the Lonely Plant guidebook series. Vietnamese restaurants; Jamaican raggae music, Chinese films Predicting consumer behavior Global trends and flows Local tastes and preferences

8. 2-8 Global Consumption Indicators Per Capita Income Income Distribution (_________ coefficient) _____________ - the % of an average household�s income spent on food. Analyzing consumer expenditures by category Demographic Indicators (i.e., age distribution) Existential orientations towards having, doing, being

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10. 2-10 Exhibit 2.4Gini Index for Selected Countries

11. 2-11 Engel�s Coefficient in Selected Countries (Share of Household Income Spent for Food)

12. 2-12 Global Market Analysis Attractive markets have Population growth And Consumers with the ability to buy products

13. 2-13 PROJECTED ANNUAL POPULATION GROWTH BY REGION AND AGE GROUP

14. 2-14 Global Trends The Service Economy Green Marketing Growing Gap between Rich and Poor Earthscaping The accelerated movement of people, ideas, goods, capital, information, services, and popular culture around the world. creolization global structure of common difference

15. 2-15 Consumption in Japan and the Newly Industrialized Countries of the Pacific Rim NICs include South Korea, Taiwan, Singapore, and Hong Kong (�Asian Tigers�). Malaysia, Thailand, Indonesia, and the Philippines (�Tiger Cubs� or �Little Tigers�) are candidates for joining the NICs.

16. 2-16 Trends and Changes in Consumer Behavior in NICs Rapid growth in per capita income Adaptation of western forms Modernization From production to consumption orientation Family values �Doing� orientation

17. 2-17 Consumption in Developing and Less Affluent Countries May have to teach consumers about products they do not know (e.g., infant formula, hygiene products) Need to stimulate product trial Brand awareness is important because competitors will follow Visual language is often required Positioning should focus on universal appeals (e.g., mother w/child)

18. 2-18 Marketing Research on Different Countries www.countrywatch.com

19. 2-19 �Cheaper Drugs� Case What globalization trends can you identify in this case? If you wanted to compete with Ron Swager, what features and benefits might you add to a competing service? If you were Francisco Cervantes, how might you take fuller advantage of the business opportunity represented by U.S. consumers seeking relief from high drug prices? How widespread is the cross-border search for cheap pharmaceuticals? http://www.i-saverx.net/

20. 2-20 Discuss Is the rapidly expanding consumption of people in the developing world sustainable? What are the societal benefits for business growth? What are the societal costs for business growth? What are the environmental benefits for business growth? What are the environmental costs for business growth? What should businesses do?

21. 2-21 Culture Society�s personality Represents the accumulation of shared meanings, rituals, norms, and traditions among the members Defines rules for proper conduct Specifies priorities Provides people with a sense of identity Changes continuously

22. 2-22 The Creation of Culture Producers Marketers (e.g., advertising, product design, etc.) Consumers (e.g., new ways to use products) Popular culture elements (e.g., mass media) Technology (e.g., Internet) Infrastructure (e.g., political and educational systems) Managers Gatekeepers for shifting through what is important (e.g., early adopters and opinion leaders) Communication Reflected in consumer choices and behaviors

23. 2-23 Dimensions of All Cultures Language Social Structure Cultural Values Rituals Myths Symbols

24. 2-24 Language

25. 2-25 Cultural Values Cultural values are those shared broadly across a society, values that are learned, reinforced, and modified within subcultures, ethnic groups, social classes, and families. Rokeach Value Survey Has people rank importance of a series of goals and ways of behavior Identifies two types of values Terminal Instrumental

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27. 2-27 Cultural Values (Contd.) Consumer ethnocentrism Belief that one�s own system of tastes and preferences are better than that of another cultural group Materialism importance a consumer attaches to worldly possessions or consumption-based orientation to happiness seeking

28. 2-28 American Core Values Achievement and Success Activity (keeping busy) Efficiency and practicality Material comfort Individualism Freedom External conformity Humanitarianism Youthfulness Fitness and Health

29. 2-29 Core Values Affect Marketing: Define how products are used (e.g., food) Define acceptable market relationships Define ethical behavior Provide + and - valences (meanings) for brands and communications

30. 2-30 Cultural Rituals A set of multiple, symbolic behaviors that occur in a fixed sequence and occur periodically � combine blueprints for action and understanding Organize life experience and give it meaning Include the use of ritual artifacts Material and experiential goods and services Marketing opportunity: product positioning

31. 2-31 Rituals Types of Rituals Representative Ritual Artifact Religious Rights of passage Cultural Civic Group Family Personal Gift giving

32. 2-32 Myths Myths Story with symbolic elements that express shared emotions, cultural values, and social codes Represent ideals of a culture Usually a story about 2 opposing forces and the outcome is a guide for people Magical Elements Comic book heroes, characters made popular by broadcast media (e.g., Mickey Mouse) Urban legends

33. 2-33 Cultural Symbols Shared symbolic meanings Reflect core symbols Consumer goods often become core symbols in a culture (e.g., mouse ears)

34. 2-34 Guidelines for Cultural Awareness Culture is an all-encompassing phenomenon. Culture is learned. ________________ process of learning culture by growing up in it ________________ process of learning a new or foreign culture through a direct or indirect experience of others Culture is patterned. It is repeated and reinforced throughout the society It is reaffirmed and renewed through ritual consumption experience It tells us what things connect with what other things

35. 2-35 The Diderot Effect Moral force that encourages an individual to maintain a cultural consistency in his/her complement of consumer goods. Have you ever bought a pair of shoes�? And then had to buy an outfit to go with them? Your examples?

36. 2-36 Topic Takeaways Globalization changes local cultures, yet the local culture does not passively accept those changes We can assess the attractiveness of markets by looking at indicators such as per capita income, the Gini coefficient, and Engels coefficient Some of the most important global trends of our time include: the service economy, green marketing, the growing gap between the rich and poor, and earthscaping Culture is (1) produced, (2) managed, (3) communicated, and (4) reflected in consumption An understanding of a culture requires you to understand its language, social structure, cultural values, rituals, myths, and symbols