DOES CULTURE MATTER?

BY SHRUTI BALABHADRA
DM16144

In the yearly part of the 21st century Thomas L. Friedman published the bestseller
The World is Flat: A brief History of the 21st century which was an international
hit. The author stated that the world has become a flat and levelled field with
respect to commerce thus in turn giving equal opportunity to competitors across
the globe. Further, it stated that we have reached a time where geographical,
cultural and historical divisions have become insignificant in terms of a trade
culture.
Friedman stated ten Flatteners that have levelled the global map:

The Berlin wall collapse: the downfall of communism was a primary

breakthrough in terms of freedom of trade, content creation and an
opportunity for the world to connect with each other.
Netscape: when the company went public, it gave rise to a new era of
digitization where anyone could access and information form any part of
the world.
Workflow software: the rise of new programming languages and
machines resulted in the rise of a global platform for new multinational
collaborations. Also called as the Genesis Moment of the flat world, it
gave rise to the rest of the global flatteners.
Uploading: people were uploading and working together on online
assignments from different parts of the world.
Outsourcing: this has helped companies in mass distribution where
services and other activities like manufacturing have been segregated for
better efficiency and cost effectiveness.
Offshoring: relocating of production and manufacturing activities to foreign
destinations for better cost efficiency.

Supply chain: use of better technology and latest software to streamline

and improve different components of supply chain management like
distribution and sales.
Insourcing: just the opposite of outsourcing, the local company offers
services for other players(especially foreign players)
Information: rise of search engines like Google, Yahoo and Wikipedia have
given the power of search in the hands of the people which allows people
to find information about multiple things sitting at multiple locations
Steroids: services like mobile, wireless internet, voice over internet
protocol that in offering high speed processes and can be done by anyone
and anywhere.

However, the world received critical reviews in terms of the authors views and
logics. As someone had suggested, the world is too round to be flat. Multiple
factors like geography, government regulations, economic backgrounds and
cultures (in particular) make the earth too unlevelled and act as major barriers to
flattening of the world. It can be said the above ten flatteners did have an
impact on the world map but the question is the effect was to what extend and
whether have they reached their saturation? As Joseph Stiglitz says in his article
Making globalization work, the world is now a more connected place but
definitely not flat. Also there is no chance that the world will get any more flat.
When we talk in terms of consumer consumption we have to answer one
question which is are consumers homogeneous in nature that are ready to
accept and adopt standardised and global products in every part of the world or
whether consumers differ all across the globe in terms of geography, culture and
history?
Wikipedia defines culture as complex whole of knowledge, beliefs, art, morals,
law, custom and other capabilities and habits acquired by a man as a member of
the society. These activities are being performed from generations that they
have now been deeply imbibed into our psychology and have become a part of
our personality so much so that now they are being taken for granted. Culture
affects our decision making process at a subconscious level which in turn drives
our behaviour. These practices in turn shape our cognitive beliefs which in turn
affect our attitude and develop our social norms at a subconscious level. Culture
creates a standardization in terms of needs (social and psychological) which then
affects our purchase/buying decision. As Saikat Mandal in his article, Does
culture matter? - A consumer behaviour perspective ever purchase decision has
a target value connected with it and culture helps in differentiating this target
value.
Another terminology we need to talk about is ethos. Wikipedia describes ethos as
guiding beliefs and ideals that define a nation or community. It is a set of
predefined guiding and moral principles that the culture believes in and is related
to the emotions of a group. The culture in whole can be divided into two
categories: Collective culture where an individual keeps his people/group before

himself and Individualist group where a person gives top priority to his personal
goals and gives maximum importance to himself.

Culture chances with respect to time, location and people. It is constant yet
kinetic in nature. Thus it becomes extremely important for the marketers to
understand culture. A cuture can be divided into three areas:

Ecology: how culture adapts to its surrounding environment and how

technology affects it.
Ideology: the principals, morals, rules and ethos of the people of a certain
group
Social Structure: the structure of the group, the ties between individuals in
a group and the pattern of relationships existing in a culture.

Hofstede has identified fire dimensions of natural culture namely:

Power distance: the interpersonal relations created when different parts of

the group have different powers associated with them, that is, how equal
or unequal are the people
Individualistic versus collectivistic
Masculinity versus femininity: whether the culture gives more importance
to success and achievement or life quality and care for others
Uncertainty avoidance: how threatened and averse are people to
something new, ambiguous and unknown in turn exhibiting their risk
taking ability?
Long term versus short term orientation: whether the society is more
future oriented, sensible and change adopters or conventional historic.

Although the above parameters are standardized they still vary widely across the
world. The first concern to understand the consumers demands and needs is
first understanding their culture. There should be a synergy and momentum
between the offering, the makers and the consumers to enhance the acceptance

of the product and increase its penetration which in turn will give a company a
competitive edge.
As per a research conducted by Donnel Briley, University of Sydney and Jennifer
Aaker, Stanford GSB, the maximum effect of cultural difference is observed in a
perfunctory and spontaneous way. For example, when we come across a
billboard, we will get influenced by the advertisement with respect to its cultural
appeal. However, if we spend more time on information research like web, etc.,
the effect of cultural factors tends to be diminished.
The degree of cultural influence on ones purchase questioned when comparing
culture vs personal knowledge and what we draw upon while making a purchase
decision. On one hand we have implicit theory influenced by other members of
the society which are shared by all and on the other hand personal knowledge
which can come into conflict with the knowledge which we have imbibed as part
of our culture. Hence, as an immediate decision we rely on our culture but when
it comes to deep deliberation we engage in an internal conflict and debate.
Yes, culture is an important aspect in the success of company in terms of
consumer behaviour and organizations are spending large amounts of time and
resources to understand these cultural differences. However, it not only about
tailoring the offerings as per the local culture but also about when these cultural
values will be effective? In other words take the example, cultural influence and
variation is effective for offerings which brief and focussed attention.
The Epidemiological Approach
This approach states that irrespective of a having similar or same economic
backgrounds and other identical factors, people in different cultures will have
different purchasing behaviours and decisions. The basic reasons for this are:
I.
II.
III.

The cultural beliefs are transmitted from the parents to the children.
Cultural beliefs differ across different groups( localities vs immigrants) in a
systematic format representing the country of origin
People living in the same geographic area have similar economic
environments

Research exhibits that different cultures with different values react differently to
foreign products and the source of information the search in purchase decisions.
Also, more youth oriented and in turn more liberal consumers work harder and
thus spend more. Also religious beliefs also affect consumer behaviour where
Islamic and Catholic countries end up spending more on religious art crafts than
countries like China or USA. Further, culture also effects the family bonds where
teenagers in Mexico take more parental advice when it comes to fashion and
movies as compared to USA where family values are comparatively narrower. In
a collectivistic society like India, the purchase decisions are unanimous decision
where an effort is made to maintain a balance between the needs of all
individuals.

Another factor is the diversity and uniformity in a culture, where more diverse
cultures encourage variety (individualistic-USA) and options in products and
services like food and clothing as compared to collective cultures which prefer
uniformity and set standards(Japan and China).
Maslows law of Hierarchy

Maslows Hierarchical model plays a significant role in identifying and fulfilling

the human needs. In different countries culture fulfils a different form of need
and Maslows theory plays a different role. In certain countries self-actualization
is considered a priority and people aim at fulfilling it (especially in developed
countries like USA and UK). While in developing countries where people might
have an inferiority issue social status is their main priority. While in under
developed African countries the culture is based on fulfilling physiological needs
like food and water.

Consumer Behaviour
According to Sheth and Sethi (1995) Consumer behaviour and purchasing pattern
is affected and influenced by factors like:
o
o
o
o
o
o

Culture
Income
Knowledge
Age/life stage
Values
Resources available

o
o
o
o
o
o

Peers
Experience
Motivators
Emotions
Attitude
Family

Culture effects the customers purchasing decisions in either a minor or major

way. Across different cultures the effect of culture also changes in turn the
perception, judgement, assessment and consumer behaviour also changes.
Consumer behaviour considers factors like:
o
o
o
o
o
o
o
o

Religion
Language
Norms
Education
Lifestyle
Tradition
Personality
Socialization

Consumption pattern can be broadly categorized in Sacred and profane

consumption.
Scared consumption: consumption of products and services which are different
and deviate from our normal routine consumption. Such products are special and
considered with respect and consumers are in awe of them. These objects are
treasured and considered valuable. Example: religious objects
Sacred object can be mythical/ legendary in importance like Rolls Royce, Cartier
jewellery. Even people and events can be considered as sacred and idolized like
legendary actors actors, events like world cup and Olympics.
Sacralisation: when object or even ordinary objects get sacred meaning and have
a deeper emotion related to it. However, when the sacred offerings are
commercialized and made a part of the accepted culture it results in desacralisation.
Profane consumption: consumption of products which are normal/ ordinary and
done on a regular basis. Such products are observed and consumed on a daily
basis and hence much emotional value is not attached to them.
Levitts Argument
As per Levitt the world is seeing a Converging Consumption Pattern, where
everyone from everywhere wands global products and this is resulting in
standardisation of products all thanks to new technology. He says that a
company should adopt standardisation of products and offer high quality at a low
price to maintain good economies of scale. As per him all products irrespective of
their domain come under this rule. Thus he expects the consumers to adapt to
his products rather than adapting the product as per the consumers needs and

wants. Even in the same culture different people have different tastes and
demands then how can we expect that people from completely diverse groups
would accepts products keeping the fact in mind that with different culture
people change their mind-sets, attitudes characteristics, behaviour and specially
consumption pattern take for example, in North and South America pick up tucks
are considered as second or third purchase while in pickup trucks act more as a
utility and fall under firm purchases rather than individual purchases. Another
factor is the structural differences across geographies like road system, climate,
and weather or how cold or humid a place is in turn directly affecting purchases.
Cultural View: Examples
There have been many instances when culture has played a vital role for
companies in the world market scenario:

In India, debit card business is more profitable than the credit card
business for the banks. This is because banks earn profits when a
customer fails to repay the credit card builds but Indians repay them on
time as culturally it is considered bad to take be under any debts.
Tanishq initially offered jewellery in 18 carat gold because it is highly
malleable but it was instantly reject because of the Indians preference for
22 carat gold which is considered traditional.
General Motors lunched a product named Nova in Spain but was a utter
flop and perceived as very bad because Nova in Spanish means doesnt
go.
Mc Donalds when launched in India face a lot of backlash for its beef
burgers and the company had to change its offerings to cater to the
prominent vegetarian public. They had also launched only veg outlets as a
part of the process.
When Kelloggs entered the Indian market it failed tantalize the Indian
palette which was accustomed to spicy and heavy breakfast as part of the
cultural. Also the Indians like hot milk over cold milk which makes the
flakes soggy and they lost their crispiness.
Festival promotions and marketing play a significant role in India because
of the emotional connect of the people with their culture and rituals.
Hindi movies are played in South India with subtitles and vice versa

However, globalization and homogeneity of countries has also seen substantial

success:

Products with high innovation and technology do not customize their

offering in accordance to different cultures and stick to the same product.
Take the case of Apple which offers the same and identical product to each
part of the world.
Premium and niche products are d same and do not change with changing
culture. Take for example BMW where the buying decision is based on the
prestige than on culture. Also, if premium products keep customizing with
changing segments they might loose their premium appeal and in turn be
negatively affected.

Even low involvement products are not culturally involved, where

utilitarian offerings like sugar and salt will remain the same.
Durables like automobiles and television are global in nature and are
highly convergent.

Conclusion
A company needs to adapt and adopt to the cultural values of its customer
segment. A cultural disparity should be avoided or else it can lead to
disastrous results for the company. Culture is a kinetic and dynamic entity
and is under continuous change and hence the offerings should be
accordingly and regularly updated. A company should try to maintain a
healthy balance between globalization and customization (localization). A
company needs to customize its offering to the local needs and tastes but
should not compromise on quality. Such a model should be adopted where the
offering is customised band the process and manufacturing standards are
world class to offer value to the customers and ensure large economies of
scale. The main objective should be first identify the latent needs to the
culture and accordingly design the offerings. The company should maintain a
good balance between being a hedge hock and a fox: they should know about
the different cultural components and adopt them and know everything
(global standards) in the way they approach (production and manufacturing).

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