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International Marketing
Theodore Levitt examines the issue of globalization and how it has affected different markets. Globalization has contributed to the development of standardization. Manufacturers are able to take advantage of the economies of scale since they do not have to customize their products for different markets. They pass on these benefits to the consumer by offering the products at low prices. The world has become more homogenized, and different markets demand the same products. Manufacturers can no longer find a market for outdated products in the less developed countries. Technology has aided the change and development of the global market. It has made it possible for consumers in foreign markets to know about the latest modern products, and they are not willing to accept anything less. The rise of the global market has led to the decline of the multinational corporations. Multinational companies tend to focus more on product customization, which results to high prices. They do not consider the changes that have occurred globally, and neither have they considered the changing consumer preferences which demands they get modern products (Levitt 96).
Globalization continues to make headlines and affect the decisions made by corporations today. However, I look at the issue differently, based on what I know concerning trade and the ability of different countries to buy specified products. Although there seems to be a comprehensive and logical argument in favor of the global market, the differences that exist between different countries have made it challenging for companies to adopt standardization of some of their products. Countries differ economically, and they have different levels of infrastructure development (Ramarapu, Timmerman and Ramarapu 101). Some are wealthy, and the people can afford to have customized products. For instance, despite globalization, car companies continue to make different models for specific countries. Some models perform better on rough terrains and are more suitable for the less developed countries while other models are more suitable for developed countries. Such models can consume a lot of fuel and require high maintenance.
Mooij and Hofstede examine the influence of culture in retailing. They posit that culture influences people’s purchasing behavior (65). Failure to observe culture is will lead to a company experiencing losses. Companies that ignore the influence of culture centralize their services and this distances them from their markets. They have no idea what the people want, and they continue providing products based on the preferences of few individuals. The authors highlight the importance of value systems which are influenced by history and are resistant to change. They use Hofstede’s cultural dimension to examine how culture can influence consumption. Countries with high rates of individualism have different consumption patterns compared to collective cultures. Other cultural dimensions such as uncertainty avoidance, power distance, and masculinity and femininity affect the level of consumption. People in cultures that encourage togetherness and are collective in nature tend to focus more on purchasing items that will bring them together. People who are highly individualistic are more likely to be concerned about their privacy. People in masculine cultures are more likely to prefer luxurious products compared to people in cultures that are more feminine.
After exploring the issue further, I agree with Mooij and Hofstede’s critical analysis on cultural influences in determining consumer behavior. Highly individualistic people are more concerned about their personal comfort and individual preferences (Mooij and Hofstede 64). They purchase products based depending on their personal opinion, and they do not have to consult others about the choices they make. Such people are more likely to purchase items on impulse rather than planning for the purchase. On the other hand, people from collective cultures are concerned about the opinion of others when purchasing products. They are keener on purchasing products that will benefit others. Hence such people often choose to forego luxuries. They are more concerned about maintaining their position and membership as members of the in-group in their respective societies (Kacen 169).
Shimp and Sharma discuss consumer ethnocentrism, whereby customers in a local market avoid imported products in favor of those manufactured domestically (286). Consumers want to support the domestic market and they are concerned about the morality of purchasing imported products. They buy products that are manufactured locally with the belief that they help in sustaining the economy by enabling more people to keep their jobs. However, other consumers consider it their right to purchase products from foreign markets. The authors have developed the CETSCALE, which measures consumer ethnocentrism based on tendency rather than attitude (Shimp and Sharma 284). The level of cultural openness determines the consumers’ ethnocentric behavior. Contrary to popular perception, people who are open to new cultures tend to be more nationalistic and they are ethnocentric. Although they like knowing many things about different cultures, they also tend to support their national initiatives more. Culture determines whether people are ethnocentric. People from collective cultures are more ethnocentric. People who are less dogmatic are not ethnocentric and they consume and purchase foreign products. People who are dogmatic see the world in black and white. They consider the harm that foreign goods do the country’s economy and they are more supportive of the local industries (Shankarmahesh 163)
Based on the discussion presented, it is clear that people have different opinion concerning the products in the market. Some people are concerned about the quality or affordability of the things they purchase, and they are not keen on the product’s origin. Other people, such as immigrants are not as concerned about the status of the domestic market as the natives of the country are. They too do not consider the product’s country of origin so long as it serves its purpose. Josiassen labels this as disassociation or disidentification and claims that it affects consumer purchasing behavior (124). People are torn between their subgroups and the national group. Such people may choose to support or reject products with a domestic brand or which are made in the domestic market. People depend on the information provided in the country of origin to determine whether the product is local or whether it is imported.
People from collective cultures are concerned about belonging. They want to belong to an in group and they are devoted to it. They consider their country as an in group when deciding whether to purchase local or imported products. Hence many of them tend to be more ethnocentric compared to people from cultures that are more individualistic. Dogmatic people do not consider all alternatives and possibilities to situations. They do not consider the benefits of having foreign goods in the country. Having foreign goods increases competition between different corporations. Local manufacturers have to find ways of convincing the consumers to purchase their products and most of them do this by manufacturing high quality products or reducing the price of the products. Although consumption of domestic products is good, having foreign goods benefits the economy because it increases competition.
Works Cited
Josiassen, Alexander. “Consumer Disidentification and Its Effects on Domestic Product Purchases: An Empirical Investigation in the Netherlands.” Journal of Marketing 75 (2011): 124-140
Kacen, J. Jacqueline. “The Influence of Culture on Consumer Impulsive Buying Behavior.” Journal of Consumer Psychology 12.2 (2002): 163-176
Levitt, Theodore. “The Globalization of Markets.” Harvard Business Review May-June (1983): 92-103
Mooij, Marieke and Geert Hofstede. “Convergence and Divergence in Consumer Behavior: Implications for International Retailing.” Journal of Retailing 78 (2002): 61-69
Ramarapu, Sangeeta, John E. Timmerman, and Narender Ramarapu. “Choosing between Globalization and Localization as a strategic thrust for your international marketing effort.” Journal of Marketing Theory and Practice 7.2 (1999): 97-106
Shankarmahesh, N. Mahesh. Consumer Ethnocentrism: An Integrative Review of its Antecedents and Consequences. International Marketing Review 23.2 (2005): 146-172
Shimp, A. Terence and Subhash Sharma. “Consumer Ethnocentrism: Construction and Validation of the CETSCALE.” Journal of Marketing Research 24.3 (1987): 280-289