MODULE International Marketing ‘SESSION TOPIC : Understanding International Customer LEARNING OUTCOMES: At the end of this module, leamers must be able to: 1. Describe how the international marketplace is changing and, because of this, understand the integral role that consumer behavior plays in international marketing 2. Discuss the status of the standardization/adaptation debate 3. Identify factors affecting consumer purchase and consumption patterns in international marketing 4. Discuss the emergence of a global consumer culture and global consumers KEY POINTS. Consumer behavior | Globalization Giocalzation Litestyle Culture Demographics ‘Adaptation ‘Standardization Reference groups | Global tribes Motives ~ [Social class CORE CONTENT Introduction: Consumer behavior is at the centre of all_ marketing erforts — both domestic and international. Many key factors have affected the international marketplace such as economic, financial, political, legal, cultural (as studied in previous modules). All are affected by and affect the international marketing experience ‘This module covers the discussion on factors of consumer behavior, globalization and localization. IN-TEXT ACTIVITY Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. Many factors, specificities and characteristics influence the individual in what he is and the consumer in his decisionmaking process, shopping habits, purchasing behavior, the brands he buys or the retailers he goes. A purchase decision is the result of each and every one of these factors. An individual and a consumer is led by his culture, his subculture, his Social class, his membership groups, his family, his personality, his psychological factors, etc.. and Js influenced by cultural trends as well as his social and societal environment. By identifying and understanding the factors that influence their customers, brands have the opportunity to develop a strategy, a marketing message (Unique Value Proposition) and advertising campaigns more efficient and more in line with the needs and ways of thinking of their target consumers, a real asset to better meet the needs of its customers and increase sales (Rani, httoviwwwniicrar.com/vol2-9/Pinki%20Rani,pdt MARNO32/International Marketing *for use as instructional materials only—_— (oece Wate Armsrang ds Sa Figure 1. Factors Influencing consumer behavior (Kotler) Considering the above-mentioned factors, the challenge for marketers is how can they make it global or international? ‘Theodore Levitt emphasized that only global companies will achieve long-term success by concentrating on what everyone wants than worrying about the details of what everyone thinks they might like. He emphasized that wellemanaged companies moved from focusing on customized products to offering globally standardized products that are advanced, functional, reliable and low price. Until today, there is an ongoing debate that is central to the discussion of international marketing- do we keep the same or change? Do we need to Standardize — offer a uniform marketing strategy globally? Or are we going to use Adaptation-an approach used by organizations that focus on cross border differences in the needs and wants of an organization ‘s target consumers? ‘Adaptation atrategy reflects @ customer foous, macta local conditions and ultimately inereaaco conaumer satisfaction. Standardization and Adaptation become the supporting theme of the major areas of global marketing since this issue will impact on decisions of all the components of marketing mix, ACTIVITY 4. STARBUCKS: Is it really a global brand? MARNO38/International Marketing, *for use as instructional materials onlyRandann huenae Figure 2. Examples of Adaptation Factors determining the extent of standardization versus adaptation 1. Nature of the product and whether the product concest lends itself to a global positioning platform 2. Local culture and customs affecting consumption behavior and preferences 3. Attitudes and perception of the foreign product and brand 4. Number of country markets that the alobal firm operates in 5. Resources of the global marketing firm MARNO3B/International Marketing *for use as instructional materials onlyPract 1.Gemder —|1, Pree emis 1. Durban |1.Advertong| sence | lntpree, | chames”|2 Sales vane, | pce Saracen | rometon ‘evar, | cnunger | sae, pce |3. Perot fenwes [2 Docout | ctstopn | setirg 2auwity — | swe, | legates |4, Dect Brand name | payment ramets ying | Sette rss i 6 Petarmance —— resales 9 Deby 10, hese Figure 3. Adaptation vs. Standardization Globalize vs. Localize. Another question that arises in this issue is if itis possible to see it differently to just standardize or customize’? Can we have a blend of the two? Globalize. Can we make our local nature a key feature rather than a disadvantage? Localize. Glocalization is a strategy of offering a uniform product across a region or worldwide, with minor ‘modifications to meet local regulations or market conditions. Example: McDonald's offer rice in Thalland, beer in France and Tofu burgers in India But stil keep the _Big Mac and Fries’ in all three markets Localization is a strategy that proposes that local organizations should capitalize on the _local culture and diversity‘ to offer something different from global organizations Example: Dick Smith Food Products turns over $4400 milion per year selling products based on their Australian- ness’; Many Asian food products have adapted to meet local tastes Drivers of Consumer Behavior Below are the things that affects consumer behavior: 1. Values. These are the person's beliefs about what behavior is desirable and difference does exist across cultures 2. Reference groups. These are groups we look to for guidance in decisions just like our Parents, Peers, colleagues and pop groups, to name just a few. 3, Commercial and social information. This refers to th set of commercial sources that try to. inform or persuade consumers directly or indirectly. These can be Companies, salespeople, triends, government, etc 4, Situational conditions. Terms and conditions, timing of purchase of sale and point of purchase is ‘what this is referring to. What to do in developing countries where credit card facilities are not available. What to do when there is just _cash only’ as an option? 5, Demographics. This are personal information of customers that are given consideration such as the aging populations in developed countries Jagan, Australia, USA and that India's Half the population under 30 years of age. MARNO38/International Marketing, *for use as instructional materials only6. Lifestyles. It refers to the individual's mode of living, involving activities, interests and opinions. 7. Motives. This is the energizing force that aciivates behavior and provides purpose and direction to it. Itis suggested that consumers buy motive satisfaction or problem solutions. 8. Social class. A hierarchical division of a society into relatively distinct groups with respect to attitudes, values and lifestyles. ‘Many of the globalization arguments can be seen as the drivers of global consumer culture, including ‘Spread of capitalism, Growth of global consumerism and Proliferation of MNC's marketing consumer products. ‘The global brand. Companies are seeing an increasing advantage to managing brand equity in a global context. ‘Some groups choose one or two brands and pursue a global strategy for themFosters Beer (from the Fosters Group) Louis Vuitton (from LVMH) QUESTION: Are there really global segmentssingle place‘? Global Tribes are strong _ethnic’ identity across markets, itis a global network based on trust. This may also refer to the openness to cultural and/or scientific development. Example — Metrosexual httou/www.aesop.net.au ‘SESSION SUMMARY Consumers in different parts of the world lead very different lives but they share many pattems of consumption. Meeting changing consumer needs by providing the right products and services has been an ongoing marketing challenge in competitive international and global markets, Consumers may choose particular products or brands not only because they provide the functional or performance benefits expected, but also because they can be used to express consumers’ personality, social status or affliation (symbolic purposes) and full their internal psychological necds, such as the nocd for change. or newness (emotional purposes). Indeed, marketers must consider a number of potential influences when assessing the effect of consumer consumption patterns to fully appreciate consumers’ behaviors irrespective of their location. ‘Such influences can comprise ot, for instance, consumer values, reterence groups, commercial and social information, situational purchasing conditions, specific consumer demographics, lifestyles and life-cycle stages, buying motives, or social class. ‘SELF-ASSESSMENT 1. Explain the main arguments for and against standardization of marketing strategies in overseas markets, 2. Briefly describe what is meant by the term ‘globalization’. Provide one example of a company following this strategy. 3. Briefly explain the concept of ‘brand equity’ and its relevance in international marketing REFERENCES MARNO32/International Marketing *for use as instructional materials only