Thursday, December 3, 2009

Marketing Management Column #2 - Part 2

A continuation of my second column in Marketing Management. 
Read it after the jump.

Consumer Behavior Issues
1) Cultural adjustment. Our study revealed a seeming dichotomy in regard to cultural assimilation. While there is a strong belief that cultures around the globe will become more similar to one another—particularly in macro issues such as accountability, performance expectations, freedom accorded within society, and product preferences—there is also a perception that uniform ways of thinking, as influenced by the United States, will be less accepted due to increased assertion of regional and local idiosyncrasies and sovereignty.

The key task for governments is to identify cultural conflicts early on, and to prevent from becoming irreconcilable. There must be an ongoing search for ways to keep society cohesive, connected and ready for collaboration. Governments must understand the investment models driving the behavior of firms, and provide a platform that allows businesses to mitigate the sometimes harsh market dynamics created by high risk conditions. There is also a need to reconcile the benefits of corporate growth with consumer expectations for an increased role in the marketplace.

The corporate challenge is to take advantage of the opportunities of globalization, while reflecting unique cultural preferences, tastes and values.  Asian tastes and preferences will increasingly influence product design and corporate business practices. Also, look for corporations to opt for more use of soft power (such as corporate philanthropy) in coping with local requirements in the global marketplace. A challenge for companies will be the increasing expectations of societies and governments related to the extent and nature of corporate social responsibility programs and practices. What was once voluntary is quickly becoming compulsory with sometimes retroactive enforcement—if not by law, then by sentiment.

2) Conservation and sustainability. Green gains global marketing muscle, as consumers exercise the power of demand in the environmental arena. In light of public concern about climate change, there will be a growing preference for energy-saving technologies and a reduction and limit to energy use. A stream of scientific and non-scientific proof will be offered for global warming. Public impressions and perceptions will lead to changes in living patterns and habits. Consumers will increasingly favor products and services from companies with strong sustainability practices.

While governments and companies adjust to both a stronger eco-consciousness and the realities affecting economic growth, there may emerge an uneven playing field.

In its drive to grow, China will demonstrate only limited concern toward the environment, even though environmental problems will have a major effect on its ability to compete as a global manufacturing center. At the same time, environmental, health and other social costs will dramatically reduce the advantages of firms to manufacture in China—with a resultant shift of investment to other locations, including the U.S. and Europe.
A major consequence of China’s and India’s rapid growth will be an ongoing depletion of natural resources. Aspirations for economic progress and better lifestyles will cause shortages in vital commodities. In response, governments will often be sorely tempted to worship the false idols of protectionism, administrative shelter, subsidies and price controls. Food shortages will result in the attempt to put more land into grain production, which leads to downstream problems of water shortages and land exhaustion. Additionally, the safeguarding of products consisting of increasingly valuable materials will grow in importance as prices for commodities such as copper and iron rise.

3) Information. As marketers seek local insights, local data will become even more essential. A greater diversification of information sources may typically provide for better knowledge evolution. But mergers, acquisitions, cost cutting or limited user willingness to pay will lead to fewer data sources offering increasingly similar data. Data users will demand more knowledge about the origin of information, in order to gauge its validity and trustworthiness.

Panelists also expect that there will be a decrease in the willingness of firms and people to offer information at no or low prices. Increased transparency requirements, along with laws and restrictions that raise the threat of law suits, will be coupled with a desire to participate in the financial benefits of knowledge transmission.

Trade Barrier Importance
Although our experts predict that consumers will continue to exercise more muscle, the increasing role of governments in the marketplace will inevitably have both positive and negative consequences. With growing global public anxieties over financial security and loss of domestic jobs, continued and increased protectionist policies may well result in decreased consumer options. The victims of these policies are not only global businesses but consumers as well. Whether it concerns Chinese families in need of banking services, American connoisseurs of Roquefort cheese, Europeans in need of a good American steak or Indian oenophiles, tariff and non-tariff barriers rob individuals of the opportunity to pursue product preferences. The commitment of governments to lowering trade barriers is the key fundament to a better life.

Our next article will address emerging economies, growth industries and demographic changes. We will further explore strategic requirements for success in light of these and other trends, as well as the need for reform in global marketing management.

Read the previous column!


  1. Very interesting findings. While I completely agree that the importance of local cultures has been on a decline, it's also important to realize that this has largely been restricted to the superficial level of cultural artifacts. On the deeper layer of values, culture still does matter. A thorough understanding of the subtleties buried in the values will help global businesses gain advantage.

  2. Dear Gerhard

    Thank you for your comment. I'm with you - idiosyncrasy can play a powerful role. It looks like 10-12 million people tend to form their own custom/cultural preferences which, from a segmentation perspective can then be used to help them fulfill their dreams.

    Michael Czinkota

  3. really interesting findings doctor Czincota, am SIRIN a Lebanese student am studying Business Marketing and i had the chance to know about you,since i was negotiating with my instructor about the guru of marketing and he asked me to had a research about you.what you've written in this Blog website is really interesting. I agree with you sir knowing others culture will help us over come the macro environment obstacles and we'll have more open business markets although still every country has its own culture.
    by the way i sent you an email on i wish you got it. thank you