Cross-cultural consumer behavior research: Lessons for global brands
Highlights
- Consumer behavior research is the study of individuals, groups, and organizations and how they select, purchase, consume, and dispose of goods and services.
- Depending on the social and cultural context, consumer behavior can vary from place-to-place, rousing the need for cross-cultural consumer behavior research.
- Businesses aiming to expand and conquer new markets must be vary of cross cultural consumer behavior to mold their products and marketing endeavors according to their targeted segments.
- However, there can be a few obstacles to successfully navigating these territories. By understanding them, global brands can develop more effective marketing strategies and succeed in new markets.
Every decision made by man is influenced by a plethora of factors. A consumer’s mindset is no different. In fact, since the 1940s, consumer behavior research as a field has been under constant study, in trying to understand the why, when, how, and what consumers purchase. The research – then used to develop products and their marketing strategies.
However, with time, researchers have realized that the field is far more nuanced than it previously appeared to be. Especially with the arrival of “globalization”. As the industrial revolution sparked an interest and enabled businesses to expand their reach to new markets and cultures, consumer behavior got harder to predict. In fact, it became evident that consumer behavior is not just influenced by the situation (meaning – why, when, how and what), but also the context ( identity, attitudes, patterns, and social and mental processes) of purchasing decisions.
Fast-forward to the contemporary era, rapid advancements in technology and communication have accelerated the pace, transforming our planet into a global market. This has made it essential for brands to understand the unique consumer behavior patterns in different countries and regions.
Therefore, consumer behavior research can be defined as the study of how individuals, groups, and organizations select, purchase, consume, and dispose of goods and services to satisfy their needs and wants. Meanwhile, cross-cultural consumer behavior research helps businesses identify behavioral patterns that vary across regions, thereby helping them develop effective marketing strategies that resonate with their target audiences.
The impact of culture on consumer behavior
In the new-age global market, burgeoning opportunities for international business expansion coincide with the complexity of diverse consumer preferences. Cultural variables, including values and norms, significantly influence consumer behavior. For instance, distinctions between collectivist and individualist cultures manifest in varied priorities. Collectivist cultures tend to place more emphasis on group harmony and social approval, while individualist cultures tend to emphasize personal independence and self-expression.
Hofstede’s cultural dimensions model provides a structured framework to understand these nuances, encompassing aspects like power dynamics and risk tolerance. These cultural disparities impact consumer choices, emphasizing the necessity for businesses to conduct thorough research. This is where cross-cultural consumer behavior research comes in.
Cross-cultural consumer behavior research in action
First introduced by Christopher Earley and Soon Ang in their book “Cultural Intelligence: Living and Working in a World of Diversity,” Cultural Intelligence (CQ) was argued to be an essential skill for businesses that want to succeed in the globalized economy. In 2005, the Harvard Business Review published an article titled “Cultural Intelligence: The Secret Weapon for Global Success,” that even declared – CQ is more important than IQ or EQ for success in the global workplace.
In essence, Cultural intelligence (CQ) is the ability to understand and adapt to different cultures. It is a complex skill that involves a number of different factors, including:
- Knowledge of different cultures: This includes knowledge of cultural values, norms, beliefs, customs, traditions, and language.
- Empathy: The ability to understand and empathize with people from different cultures.
- Self-awareness: The ability to understand and manage your own biases and assumptions.
- Behavioral flexibility: The ability to adapt your behavior to different cultural contexts.
So, it is essential for global brands to possess this skill if they want to succeed in new markets. Brands with high CQ are able to develop marketing strategies that are tailored to the unique needs and preferences of consumers in different cultures.
Let’s learn a little about cross-cultural consumer behavior from the following examples of how one of these brands successfully adapted and the other failed to adapt to different cultural settings:
Oreos in China
Source: CNBC
A short documentary by CNBC tapped into the fascinating phenomenon of the “oreo” cookies. In 2012, Kraft celebrated the 100th anniversary of its iconic Oreo biscuit in Shanghai, showcasing the brand’s adaptability in the Chinese market. The festivities included transforming the Oriental Pearl Tower into Oreo blue, adorning skyscrapers with neon Oreo ads, and lighting up the Huangpu river with fireworks. Despite its American origins, Oreo has become China’s top-selling biscuit. Kraft’s success in the Chinese market lies in its strategic alterations to suit local tastes. Chinese Oreos are less sweet, come in varied shapes like straws and wafers, and boast flavors such as green tea ice cream and mango-orange. Kraft’s approach, termed “reverse innovation,” involves developing flavors in China that later become global hits. The company’s focus on understanding and appealing to Chinese consumers’ preferences has been crucial in driving Oreo’s success, emphasizing the need for detailed market insights.
Why Starbucks failed in Australia
Another CNBC feature, “Why Starbucks failed in Australia,” highlights how despite its huge success in the Americas’, its launch could be a misguided attempt, par the ignorance of varying consumer behavior in the context of different cultures.
The company’s ambitious expansion plans led to rapid openings, reaching 87 locations by 2008. However, this pace outpaced local demand and failed to allow Australian consumers to develop an appetite for the Starbucks brand. This resulted in $105 million in losses and prompted closures post 2008’s global financial crisis.
The Australian coffee culture, influenced by Italian and Greek immigrants, places a high value on socialization at coffee shops and has distinctive drinks like the flat white. Starbucks’ to-go focused cafes and menu, emphasizing sugary drinks, did not align with the social and taste preferences of the Australian market.
Additionally, Starbucks faced stiff competition from local coffee shops which tailored its offerings to the Australian market with espresso and local specialty drinks. Starbucks struggled with cost competitiveness, as its drinks were often priced higher than those from trusted local baristas. The company’s failure in Australia underscored the importance of strategic growth, understanding local cultures, and adapting business models to suit market nuances.
Challenges in Cross-Cultural Consumer Behavior Research
1. Cultural misinterpretation and its consequences
One of the biggest challenges in cross-cultural consumer behavior research is cultural misinterpretation. This can happen when researchers do not have a good understanding of the culture they are studying. For example, a researcher might use a survey question that is culturally insensitive or that has different meanings in different cultures. This can lead to inaccurate results and misleading conclusions.
2. Navigating sensitivities and taboos
Another challenge in cross-cultural consumer behavior research is navigating sensitivities and taboos. It is important for researchers to be respectful of the cultural values and beliefs of the people they are studying. This means avoiding topics that are considered sensitive or taboo in the culture.
3. Ethical considerations in cross-cultural marketing
There are also a number of ethical considerations to keep in mind when conducting cross-cultural consumer behavior research. For example, researchers should obtain informed consent from participants and protect their privacy. Researchers should also avoid exploiting or harming participants in any way.
4. Language barriers
Language is a major barrier to cross-cultural research. Researchers need to be able to communicate effectively with participants in their native language, and they also need to be able to translate research materials accurately. Language can often be reliant on context, which may get lost in translation. This can lead to miscalculated results.
In 2012, the American technology company Apple launched a new voice assistant called Siri in China. However, Siri was unable to understand or respond to many Chinese words and phrases. This led to frustration and disappointment among Chinese users.
Source: TechinAsia
5. Access to participants
It can be difficult to recruit participants for cross-cultural research, especially in remote or hard-to-reach areas. Researchers may also need to obtain special permission to conduct research in certain countries or cultures.
6. Time and cost
Cross-cultural research can be expensive, especially if it involves conducting research in multiple countries. Researchers need to budget for travel, translation, and other costs. In addition to that it can also be time-consuming. Especially if it involves building relationships with participants and developing a good understanding of the culture. Researchers need to be patient and willing to invest time in the research process.
Tools and approaches for effective cross-cultural research
Cross-cultural consumer behavior research can be challenging but not impossible. The first step is to understand who your consumers are and what influences their purchasing behavior. Here are a number of tools and approaches that researchers can use to improve their chances of success.
1. Market segmentation in cross-cultural context
One way to overcome the challenges of cross-cultural consumer behavior research is to use market segmentation. Market segmentation is the process of dividing a market into groups of consumers with similar needs and wants. This can be done based on a variety of factors, including demographics, psychographics, and cultural variables. By segmenting the market, researchers can develop more targeted and effective marketing strategies.
2. Surveys, focus groups, and observational research: Best practices
When conducting surveys, focus groups, or observational research in a cross-cultural context, it is important to take the following best practices into account:
- Use culturally appropriate language and symbols. This includes avoiding any language or symbols that might be considered offensive or insensitive in the culture.
- Be aware of cultural differences in communication styles. For example, some cultures are more indirect in their communication style, while others are more direct.
- Use multiple data collection methods. This will help to reduce the risk of bias and ensure that you are getting a complete picture of consumer behavior.
3. Utilizing technology for cross-cultural consumer insight
Technology can be a valuable tool for cross-cultural consumer behavior research. For example, researchers can use social media to collect data on consumer conversations and trends. They can also use online surveys and focus groups to reach consumers in different countries.
Strategies for global brands
One of the most important strategies for global brands is to adapt their products and services for different markets. This means taking into account the unique needs and preferences of consumers in different cultures. For example, a global clothing brand might offer different styles and sizes in different countries.
It is also important for global brands to build a consistent brand identity across cultures. This means developing a brand that is recognizable and appealing to consumers in different countries. A global brand can achieve this by using consistent brand messaging, visuals, and values in all of its marketing materials.
Global brands can also leverage local influencers and opinion leaders to reach consumers in different cultures. Influencers are people who have a large following on social media or in their communities. Opinion leaders are people who are respected for their expertise in a particular field. Global brands can partner with influencers and opinion leaders to create and promote content that is relevant to consumers in different cultures.
Related reading: Conducting customer behavior analysis in insurance and its benefits
Future trends in cross-cultural consumer behavior research
1. The role of technology in bridging cultural gaps
Technology is playing an increasingly important role in bridging cultural gaps. For example, social media and translation tools are making it easier for people from different cultures to connect and communicate. This is leading to a more globalized consumer market, where consumers are more exposed to products and brands from different countries.
2. Emerging markets and their unique consumer behavior dynamics
Emerging markets are also playing a growing role in the global economy. These markets have unique consumer behavior dynamics that global brands need to understand. For example, consumers in emerging markets are often more price-sensitive and more likely to be influenced by word-of-mouth marketing.
3. Sustainability and ethical consumerism on a global scale
Sustainability and ethical consumerism are also becoming increasingly important on a global scale. Consumers are more interested in buying products from brands that are committed to sustainability and social responsibility. Global brands need to take these trends into account when developing their marketing strategies.
Conclusion
Cross-cultural consumer behavior research is essential for global brands that want to succeed in new markets. However, it is important to be aware of the challenges involved in cross-cultural research, such as cultural misinterpretation, ethical considerations, language barriers, etc. By understanding the challenges and trends in cross-cultural consumer behavior research, global brands can develop more effective marketing strategies and succeed in new markets.
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