Market Planning in a Global Environment

Take-Home Assignment 2

‘In considering the development of international consumer

markets it is important to take account factors influencing buying
behaviour’

Submitted to:

Dr. Sushil Mohan

Submitted by:

Anna Zvarikova 090012475

Md. Nazmul Hasan – 110000703

Calum Fraser - 110000740

Date of Submission: 18 March, 2011

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Table of Contents
Introduction.............................................................................................................
Buying Behaviour and International Marketing........................................................
Internal Influences...................................................................................................
External Influences..................................................................................................
Annexure.................................................................................................................
References...............................................................................................................

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Introduction
Consumer purchasing decision is affected by many reasons such as their perception,
knowledge, background, basic needs, education, cultural beliefs, religion etc. All these
decision criteria vary significantly from country to country. Every individual is a part of a
society first then a consumer. Over the years marketers have done a considerable amount of
research to find out if the decision criterion of the consumer is related to consumer
psychology. In this era one has to admit that marketers were successful to some extent and as
a result so many multinational business giants are operating around the world. But no
marketers can avoid the importance of all these influencing factors that affect buyers to
purchase particular goods and services. This essay mainly focuses on why marketers should
take all factors of consumer buying behaviour into consideration prior to expanding
internationally. The first part provides a general analysis of the key concepts. The second part
looks at the internal and external influences.

Buying Behaviour and International Marketing

The understanding of why buyers do what they do (or don’t do) is perhaps the most difficult
concept in marketing. But such understanding is vital for marketers since having a strong
understanding of buyer behaviour will help them to know what is important to the customer
and also suggest the key influences on customer decision-making. In using this information,
marketers can create marketing programs that they think will be of interest to customers.

In the era of globalisation, world does appear to be very small. However cultural values,
traditions, beliefs, norms and attitudes of people still vary significantly from country to
country. A number of things can be appropriate in most countries but can also be completely
opposite in some other countries. For example, white is the symbol of happiness in many
nations and a number of companies develop their products using the white symbol in
different markets. But white is the symbol of unhappiness in India and consumers will react
negatively to a product symbol and campaign using the white colour. The effect will be more
severe in China because white is the death symbol over there!

Developing consumer markets in North America will differ significantly from those in South

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America. Similarly consumer behaviour differs in Central Asia and South Asia. In the third
world market cheap prices are more important for a particular product and consumers want to
buy cheaper things but in Western Europe the most important thing that affects buying
decision is quality; not price. So marketers need to take all these factors that affect consumer
buying decision into account before expanding their market or product internationally.

Many uncontrollable factors affect consumer buying behaviour. A simple way of imagining
these factors is to think of individuals. What affect them when they go to a shop to buy
something? Obviously quality, price and packaging are important in general. In terms of
buying behaviour, culture is a significant factor. Culture is made up of attitudes and beliefs of
individuals. These attitudes and beliefs have developed gradually. When an individual is
growing up, a child is influenced by their parents, brothers, sisters and other family members
who may educate them about what is good or bad. Individuals learn their religion and culture,
which helps them to develop these opinions, attitudes and beliefs. These factors will
influence a consumer’s purchasing behaviour.

Studying consumer behaviour brings an advantage to get to know consumers better, to get
closer to them. Effective communication between a seller and a buyer can be a very powerful
tool for an organisation in a competitive environment. When the organisation communicates
with consumers about their needs, it is perceived that this company cares about the
consumers’ values. In today markets, where some products might be seen as the same by
customers, consumers’ recognition will bring a significant success. It will create an image of
a company. Good image sells products and helps the company to gain and maybe even
enlarge its market share.

Hennessay (1995) points out that all buyers go through a similar process to select a product
or service for purchase. While the process will be similar from country to country, the final
purchase decision will vary because of the differences in the social, economic, and cultural
systems.

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Internal Influences
The best way to examine the influences on consumer purchase decision is to first look inside
the consumers mind to see the most important internal factors that affect how they make
choices.

Perceptual Filter

Every marketer attempts to get customers to have a positive impression of their products but
getting to this stage is very challenging and difficult. The existence of perceptual filter makes
it more difficult. Marketers need to carefully convey their message into the new international
market because there will be competitors. Marketers must continually monitor and respond if
their message becomes distorted in ways that will negatively shape its meaning. The ultimate
objective of the marketers is to create awareness of the product successfully.

Knowledge

Consumer knowledge about the upcoming product in a new market is very crucial. Marketers
need to find out how much information consumers have about the product. Sometimes this
information is insufficient. If this is the case, they have to find an effective way to encourage
consumers to acknowledge more information. This may affect other influencing factors.

Attitude

Consumer attitude towards new products vary significantly from market to market. Marketers
facing consumers with a negative attitude must work to recognize the key issues shaping a
consumer’s mind-set. They can alter their marketing strategy (e.g., advertising) in an effort to
change attitudes. For companies competing against strong rivals to whom loyal consumers
exhibit a positive attitude, an important strategy is to see why consumers feel positive
towards the competitor and then try to meet or beat the rival on these issues. Alternatively, a
company can try to locate customers who feel negatively towards the competitor and then
increase awareness among this consumer group. (know this, March 2011)

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Personality

Each person’s distinct personality influences their buying behaviour. It can be useful in
analysing consumer behaviour for certain product or brand choices. Such as: coffee,
cigarettes etc. (Kotler, p 148, march 2011). For marketers it is important to know that
consumers make purchase decisions to support their self concept. Appealing to the
consumer’s self concept needs could expand the market share to which the product is
targeted. Understanding the relationship between customers’ self-concept and possessions is
the predecessor to understand consumer behaviour.

Lifestyle

Products and services are purchased to support consumers’ lifestyles. Marketers need to
research how consumers in their target market live their everyday life, since this information
is the key to develop products, suggesting marketing strategies and even determining how
best to distribute products. (Consumer Psychologist, March 2011)

Roles and Motivation

The role a consumer plays in society does affect their buying behaviour and it’s an important
consideration for the marketers prior to market segmentation.

For example, a doctor is more sensitive to buying hygienic food than a plumber. A person’s
buying decisions are affected by subconscious motives that even the buyer may not fully
understand. (Kotler, 2005, p. 148). Motivation to buy a particular product is a part of
consumer psychology and often very difficult for the marketers to find the exact theory
underlining this behaviour.

External Influences
The above discussion was about internal factors but there are some external factors that also
affect the consumer buying behaviour. These factors are more significant for marketers who
want to expand their consumer market internationally.

Cultural and social factors are very important in any marketing context, domestic or
international. In international market there is a whole range of complex cultures of which the

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marketer may have no prior knowledge whatever. In order to avoid serious error, the
marketer must consider at least the relevant aspect of the countries in which they aim to
work. (Walsh, 1994, p. 19).

Some countries have different subcultures which are significantly different from the main
culture. So marketers need to consider this as well in developing the products for a new
market. For example, China and India have various subcultures and religious belief that
makes their consumers different from each other. That is the reason a concept as powerful as
culture must be treated with caution if one is to avoid the dangers of over-generalisation.
(Baker, 1992, p. 168)

Culture also includes family bonding, status, social class and status of the common
consumers. All of these have a significant affect on the buying behaviour of each and every
consumer. A Chinese individual must always take into account all the members of the family
when making a purchase decision, compared to an interactive decision making process
undertaken by the husband or wife in the West where important household expenditure is
concerned (Usunier, p 16, March 1993). The type of culture defines the number of meals
consumed each day in a country, duration of meal, whether the food is ready made or cooked,
whether people prefer to eat silently or they prefer to eat with entertainment. All these facts
do affect buying behaviour; directly or indirectly.

Religious factors and customs are major influencing criteria in modern business. Religious
beliefs of people have huge affect on their product choice and buying behaviour. McDonald’s
for example cannot sell pork burgers to Saudi Arabia or Pakistan as people there have a
strong belief in Islam and will not buy goods that go against their belief.

Educational levels are of importance to the international marketer from two standpoints: the
economic potential of the youth market and, in developing countries, the level of literacy. In
most western countries full-time schooling is a must and therefore they have a higher literacy
rate than that of Third World countries. Consumers therefore are more conscious about their
product choice in western economies than in Third World countries. That is probably the
reason for some large companies producing their products in different categories of quality.
Acer- European Edition or Nestle – Grade Four for South Asia are two grand examples of
that.

Language is another important factor of culture. Some countries are simply more language

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sensitive like China and Japan. Marketers need to adopt strategies that overcome language
barriers in these countries. A foreign language may imply different patterns of thought and
different customer motivations. In such cases knowledge- of the language will do more than
facilitate communication; it provides automatic insight into the relevant culture. (Walsh, p 22,
March 1994). For example, Arab culture is very different from other countries and it will be a
real advantage if the marketers know something about Saudi Arabian language before starting
to do business in that Kingdom. This will prevent a potential foreign investor from making a
mistake which can damage their chances of creating a consumer market successfully. These
kinds of mistakes are destructive because marketers will not have any opportunity to correct
them.

The international marketer must make constant efforts to avoid the trap of the ‘self-reference
criterion’, the unwitting reference to one’s own cultural values that comes instinctively to
everyone. A successful marketer always abandons and suspects his/her own cultural
prejudice. (Walsh, p 24, March 1994)

Probably the least recognising factor in modern marketing is Bribery which is quite common
in Latin America, Africa and Middle East. An experienced marketer would agree on that and
take this as an opportunity to expand the market in these countries where attitude towards
bribery are often relaxed, far from being treated as unethical, it is simply accepted as a fact of
business life.

To summarise, as the world changes as well as values and needs of consumers. Marketers
must have this in mind – consumer behaviour is an evolving process. Furthermore, the factors
that lie behind the change of buying behaviour evolve over time with development of new
products and ways how to buy them. Time and status are being more valued by our society.
Shopping is not a mechanical activity anymore. It is a part of our lifestyle.

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Annexure
Culture

The set of basic values, perceptions, wants, and behaviours learned by a member of society
from family and other important institutions. (Kotler, 2005, p 137)

Attitude

Predisposition or a tendency to respond positively or negatively towards a certain idea,

object, person, or situation. Attitude influences an individual's choice of action, and responses
to challenges, incentives, and rewards (together called stimuli). Four major components of
attitude are (1) Affective: emotions or feelings. (2) Cognitive: belief or opinions held
consciously. (3) Conative: inclination for action. (4) Evaluative: positive or negative response
to stimuli. (businessdictionary, accessed March 13, 2011)

Perceptual Filter

Perception is how we see ourselves and the world we live in. However, what ends up being
stored inside us doesn’t always get there in a direct manner. Often our mental makeup results
from information that has been consciously or unconsciously filtered as we experience it, a
process we refer to as a perceptual filter. (Consumerpsychologist, accessed March 12, 2011)

Self-reference Criterion

The unwitting reference to one’s own cultural values that comes instinctively to all of us.

Standardization or differentiation

Standardization method might be easier as it means to market the same products to all
consumers. A good example is Coca-Cola. It would be hard to find someone who does not
know the bottle with the red and white label. Also, McDonald is a textbook example of
horizontal diversification of a market. It is worldwide well-known. To make sure that the
brand will be recognized anywhere, the franchising licence requires the same colours of
uniforms in any restaurant. However, standardisation goes hand in hand with some consumer’
expectations. Because these products are standardized, consumers of any country will expect
to find the same products with the same quality standards in many different countries. Costa
and Starbucks have chains of coffee shops all over the world. Settings of restaurants resemble
to consumers a familiar environment. They know what they can expect and this is the reason

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why they will go there.

Factors to consider

Social status of consumers also impacts their behaviour. What is their job within society? Are
they playing the role of Actors? Are they playing the role of Doctors? Are they Office
workers? All these are important considerations for the marketers to do market segmentation
and create new markets. For example, clearly being parents’ affects buying habits depending
on the age of the children, types of job will set whether individuals need to purchase formal
clothes or not; the income which is earned has an impact. The lifestyle of someone who earns
£320000 would clearly be different from someone who earns £35000. Also characters have
an influence on buying decision. Whether the person is extrovert or introvert again has an
impact on the types of purchases made.

Social classes are found in most societies. (Armstrong and Kotler, 2007) Purchasing power
varies from ‘upper class’ to ‘lower class’ citizens. In many countries golf is an exclusive
sport predominately played only by middle and upper classes. In order to maintain this level
of clientele, membership, equipment and apparel prices are often high. A ‘Normative
influence’ often exists in golf clubs in which individuals must conform to rules imposed by a
club on dress code. (Hill and O’Sullivan, 1999) Marketers can take advantage by increasing
the prices of apparel. However in Scotland the class issues which prevail globally are less
apparent and golfers are seen wearing less expensive and formal clothing.

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References

Armstrong G and Kotler P (2007), Marketing: An Introduction, 8th Edition, Pearson Prentice
Hall, New Jersey
Baker, J. (1992). ‘Buyer Behaviour’, in Baker, J., Marketing Strategy and Management (2nd
Edition), London, The Macmillan Press
Businessdictionary (2011) Attitude, [online]
http://www.businessdictionary.com/definition/attitude.html (Accessed 13 March 2011)
Consumerpsychologist (2011) The Psychology of Marketing, [online],
http://www.consumerpsychologist.com/ (Accessed 13 March 2011)
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(Accessed 13 March 2011)
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