Cross Culture &

Digital Business
• Bachelors Program on Digital Business
• Foreign Trade University
• November 2023
• 12th Class
Consumer behavior:
cultural difference?
• Recap from the 10th class

• How the cultural differences

affect consumer behaviors in
the world.
Power distance:
A high-power distance culture vs. a low-power distance culture
• People accept hierarchy – some people have power, some don’t; whereas
when a society is low power distance, people assume that everyone is equal
in power

• One’s social status must be clear so that others can show proper respect
• Such as President, Minister, School Master, Teacher, Director, etc.

→ Global brands serve that purpose.

Automobile
brands
World Leaders and Their Official Cars
Individualism
• High individualism: One’s identity is in the person. ‘I’ conscious. Self-
actualization is important
- Individualistic society = low context = need to explain in detail
– marketing needs to explain = detailed information important
• Low individual society’s identity is the group – ‘we’ conscious
– collective society = high context = assume commonality
- marketing needs to build relationship and trust
Ex. Japanese manufacturers try to appeal to the consumers by building
‘trust’ : the brand image = trust

→Persuasion (Individualism) vs. creating trust (Collectivism)

Masculinity & Feminity
• Achievement and success vs. caring for others and quality of
life
• In masculine society, performance and achievement must be
demonstrated, so status brands or products such as jewelry
are important to show one’s success.
• In feminine society, the role of men and women overlaps.
Men do more household work such as shopping.
• Shopping time – men in feminine society spend more time
on daily shopping than in masculine society → Impacts on
consumer behavior?
Do masculine
societies
purchase
more pricey
products?
Uncertainty avoidance
• Strong uncertainty avoidance culture
• Need for rules and formality to structure life. People are less open
to change and innovation.

• Low uncertainty avoidance cultures － more active attitude to life and

play more active sports

→PC ownership is related to low uncertainty avoidance

→Internet access is also related to low uncertainty avoidance
→High uncertainty avoidance favors purity in food and drink and use more medication.
→Low uncertainty avoidance have a more active attitude to health by focusing on fitness
and sports.
Long term orientation
• Long term orientation (LTO) values = perseverance, ordering
relationships by status and observing this order, thrift and having a
sense of shame.
• Investment in the future

• Less long-term orientation = personal steadiness and stability.

LTO implies investment in future. `Broadband penetration` is related to

LTO. Broadband penetration requires large investments by business or
governments.
Brand Image from the cultural point of
view
• Friendly → High uncertainty avoidance & low power
distance

• Prestigious → High power distance

• Trustworthy → high uncertainty avoidance

• Innovative/different → low uncertainty avoidance

What is the message for global brands?
• Global companies formulate brand positioning statements for
global communications, meaning the same message for all
the countries.

→But consumers attribute personalities to brands that fit their own

cultural values – not the values of the producer of the brand.
→So the brand image for the entire world may not be so useful.
→Need to cater to different cultures?
How advertising works

A. In individualistic cultures, advertising must persuade.

B. Collectivistic cultures, build relationships and trust between seller and
buyer.

Ex. Japanese advertising focuses on inducing positive feelings rather

than providing information. A typical Japanese TV commercial, a brand,
company name or product occurs later than in a typical US commercial.

Ex. In the individualistic and low power distance cultures, marketers

assume that consumers want information, gather information actively
and want to solve problems. This is only for the individualistic cultures.
 Product Ownership and Usage

Income/Wealth explains ownership of luxury goods but if the income is

controlled (meaning comparing the same income level),

• Ownership of luxury goods like expensive watches and jewelry is

related to masculinity.
• Ownership of cars related to individualism.
• More life insurance policies are sold in individualistic cultures. What
other cultural traits affect insurance?
• Interestingly, there is NO relationship with uncertainty avoidance.
Global Brands Behavior
Is Amazon Leaving India?

Three Points:
Local or Global, Offensive or Defensive,
Reacting or Not to the Market

https://www.youtube.com/watch?v=1WoTkWhbI0o
Web Strategies to Promote Internet Shopping:
Is Cultural Customization Needed?

Read ‘Web Strategies to Promote Internet Shopping: Is

Cultural-Customization Needed?’ (Pages 491-496 & Page 502-503)

• Respond to the following questions:

a) Summarize the study’s objectives and its method
b) What were the two web strategies in building initial trust?
c) Should a company which is promoting internet shopping
consider cultural differences? If so, what are such cultural
differences and how should the company strategize the
promotion?
Your findings
Team presentations
The research team’s intention
• The team wanted to know how ‘consumer trust’ can be built
for new or unknown Internet businesses seeking to extend
their customer reach globally.
• Should website designers take into the cultural
characteristics of prospective customers to increase trust?

→ Different trust building web strategies have different

cost implications.
Research method
Task: Students in two locations were asked to decide on
whether to purchase required course textbooks from an online
bookstore, iBook.

Australia (Individualistic culture - G. Hofstede’s score of 90) vs.

Hong Kong (Collectivistic culture – G. Hofstede’s score of 25)

The assumptions were made based on the characteristics of

individualism and collectivism.
The research hypothesis
H1. → The positive impact of portal (Yahoo) affiliation on
trusting beliefs will be stronger in individualistic cultures than
in collectivistic cultures.

H2. → The positive impact of peer customer endorsement on

trusting belief will be stronger in collectivistic cultures than in
individualistic cultures.
Why internet business requires ‘trust’ more
than the real shops?
• Unlike the real shops, you don’t know whether the seller is
real. People do wonder if the internet shops are reliable.
• When you provide your products to sell through an existing
portal like Amazon, you must pay for the services and the
brand name.

→ When you shop through Amazon, you are sure you will not
be cheated, right? Whereas if an online shop called ‘Sato’
opens and says that we sell wonderful products, you don’t
know what will happen when you click, and your credit card is
charged.
The research method

• Large universities in Australia and Hong Kong

• Students at these universities were asked to decide on
whether to purchase required course textbooks from an
online bookstore, iBook.
• Students were offered incentives to purchase a textbook.
• 5 percent off from the university’s bookstore price,
• classroom delivery, and
• a lucky draw with a 3% chance of winning)
The research method
• The risks included:
1. The unknown reputation of iBook
2. The need to reveal some personal information, incl.
one’s bank account number
3. The possibility of iBook may not deliver the book or
give the benefits
The research method
• The administer to introduce iBook as a relatively new online
bookstore.
• The students were told by the University that iBook is not
affiliated with the University. The University also told the
students that they are not responsible for iBook’s action.
• The students had to decide individually whether to purchase
the textbook from iBook after checking the iBook website.
• The students were from the second- & third-year students
and had good experience in internet shopping. 166 students
from Australia and 128 students from Hong Kong participated.
Research model
The research background
• The students background did not differ between the Australia
university and Hong Kong university
• Their age
• Their experience in internet shopping
• Their internet usage
• The gender ratio between the two universities showed
that more female students participated in Hong Kong.
Conclusion: Culture Differences in
Effectiveness of Web Strategies
• Portal (Yahoo) affiliation was moderately more effective
than customer endorsement at building trust.
• For Hong Kong, students responded positively to customer
endorsement but not to portal affiliation.

→ The findings support the arguments that individualistic

cultures tend to treat both in-group and out-group members
more equally, whereas collectivistic culture tend to view in-
group members more positively than out-group members.
Conclusion: Culture Differences in
Effectiveness of Web Strategies
Trust building:
• Does the type of peers (local vs. foreign) and the type of organizational
affiliation (local firm vs. foreign firm) make a difference?
• In Australia, the affiliation with the local reputable bookstore and the foreign
bookstore – higher trust for iBook than local peer endorsement, and the local
peer endorsement appeared to build more trust than the foreign peer
endorsement
• In Hong Kong, the endorsement of local peers is significantly higher than the
affiliation of Amazon, which is in turn significantly higher than endorsement by
foreign peers and the local bookstore.
→ Indicate the influence of in-group peers is particularly strong in Hong Kong.
Trust building within the group
Conclusion: Culture Differences in
Effectiveness of Web Strategies
Trust building:
→ In Australia, peer endorsements are useful, but the
impact of reputable organizational affiliations,
regardless of local or foreign, would make greater
impact on enhancing trust for start ups.
Additional thoughts from the research group

• Gender differences in internet shopping

• Past researches show that females tend to be more
responsive to peer endorsements,
• → further research suggested that the results are the same
regardless of gender.
Implications to the on-line business
• Web strategies could be better formulated taking into
considerations the cultural differences.
→A web strategy that works for one culture may not work in
another culture.

• Trust is built differently through different web strategies in

difference cultures.
• The findings also support the findings of Mooji and Hofstede
on advertisement for global brands .
Next class (Dec. 1)

• Lecture by Mr. Tadahiro Kinoshita, Director General,

Sojitsu Vietnam Company Limited. He will discuss
with you the working relationship between Vietnam
and Japan.
• Sojitsu Co. has been working in Vietnam for long-
time with investments in wood-chip, fertilizer,
industrial parks, grain and feed, and food distribution.
And constructed a food value chain, with a Ministop
stores.
• Sojitsu also supports Vietnamese students with
scholarships.