Unit 6: Cross-Cultural Consumer Behaviour & Consumers' Adoption of Innovations
Global Branding
“world brand” or “global brand” has more power to win attitudes faster for its positive impressions
consumers tend to perceive a global brand to have a better image, to be more technologically advanced, and to produce higher quality products
signals quality and reputation
consumers tend to set higher social responsibility requirements for the global brands
Global brands also serve as the ideal images that consumers want to obtain, while local brands stand for who they currently as
Consumer Views of Global Brands
serve as a potential segmentation variable for global marketing and branding
Global Citizens
Global Dreamers
Anti-Globals
Global Agnostics
brand’s global market success as an indicator of product quality and company innovativeness and expect the global brand to be socially responsible
see global brands as quality options without much concern over social responsibility
do not trust and try to avoid global brands
act in the same way towards global and local brands
Country-of-Origin Effects
certain products are associated with certain countries and related perceptions
consumers’ perception with respect to quality and reliability of a product or service that results in the country-of-origin effect
Along with country-of-origin (COO), country-of-design (COD), country of assembly (COA), and country of parts (COP) are also important
country of parts seems to have the strongest influence on consumers’ evaluation
Some consumers have animosity towards a country and it is reflected in their boycotting or not liking the products from these countries
marketer needs to understand the source of animosity, how deep the animosity is, and how long it is likely to last, and base the strategies on these issues
Strategies to Go Global: Localisation vs Standardisation
Global/ Standardised Marketing Strategy
Local/ Localised Marketing Strategy
using the same product and communication strategies across different countries
customising product and localising communications programmes for each of the unique markets
Hybrid Strategies
customised products with standardised communications
uniform product with customized communications
Cross-Cultural Differences & Cross-Cultural Analysis
cross-cultural analysis = a form of market research to determine as to what extent the consumers of two or more nations are similar or different
Individualism vs Collectivism
reflects to what extent people in a society focus on themselves and immediate family members
Highly individualist cultures emphasise self-reliance and individual initiative
highly collectivistic cultures expect group identity and loyalty
collectivistic consumers rely more on word-of-mouth than their individualist counterparts
Consumer Styles
price-sensitive
variety-seeking
brand-loyal
information-seeking
Adoption & Diffusion of Innovations
Innovation
Firm-orientated innovation
Product-oriented innovation
Market-oriented innovation
Consumer-oriented innovation
new product is produced by a firm but it does not warrant the consumer adopting or accepting the product
change in the features of an existing product
continuous innovation
dynamically continuous innovation
discontinuous innovation
refers to short period of time the product has been in the market or the ability of a small percentage of the target market to purchase the product
Perception of consumers about the novelty of the product has a greater practical impact on gaining the attention of consumers than the physical features and market realities
If the consumers perceive the product to be useful, it will enhance the opportunities for adoption and purchase
Adoption = micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product
Diffusion = macro process concerned with the spread of a new product (and innovation) from its source to the consuming public
4 elements of diffusion process
Innovation
Channel of communication
Social system
Time
Whether consumers will accept an innovation depends on the characteristics of the new product
Formal or informal, impersonal or personal communication
the market: values, lifestyles, culture
the length of the time required until most of the market accepts the innovation
Marketers come up with a “penetration” policy like lower prices to encourage earlier adoption
Product Characteristics Affecting Adoption
Relative Advantage
Compatibility
Complexity
Trialability
Observability
Degree to which consumers consider a new product superior to existing substitutes
Degree to which consumers feel a new product is consistent with their present needs, values & practices (less learning required)
Degree to which a new product is difficult/east to understand or use
video demonstration to counterattack if difficult to use
Degree to which the new product can be tried/samples on a limited basis (prior to adoption)
Degree to which the new product's benefits or attributes can be observed, imagined or described to potential consumers
High fashion items such as clothing gain better acceptance and adoption if potential consumers could observe
Adopter Categories
Innovators
Early Adopters
Early Majority (Mainstream Public)
Late Majority (Mainstream Public)
The Highly Risk-Averse
Laggards
The First Buyers
Prepared to take risk
Willing to pay higher price for innovations
Enjoy being the first and showing off the new product off
The Followers
Buy a new product within a relatively short time after introduction
Venturesome
Likely to engage in word-of-mouth
The Somewhat Risk-Averse
Risk aversion: reluctance to take risks + low tolerance of ambiguity
Waiting for improved version or price drop
Wait until most other consumers buy the new product
Likely to get the older version (tested by others)
Look for extensive guarantees
The Last to Purchase
High risk perceivers
Last to recognise the value of innovation
By the time they get theirs, there would likely to be an advanced version
5 Stages of Adoption Process
- Awareness - become aware that an innovation exists
- Interest - become interested in the innovative product
- Evaluation - undertake a mental trial of the innovative product
- Trial - try the innovative product
- Adoption - decide to use the innovative product repeatedly