EXECUTIVE SUMMARY
This paper discusses the impact of internal cultural understanding on consumer behavior
studies in the global business environment. Based on the analysis of Hofstede's cultural dimensions
theory (power distance, collectivism versus individualism, femininity versus masculinity,
uncertainty avoidance, long- versus short-term orientation, and Indulgence versus restraint), the
study synthesizes some of the effects of each aspect. Culture towards consumer behavior in
different markets. Besides, a comparison of Adidas's two ads in the Chinese and American markets
on the occasion of the new year 2020 is given to analyze how businesses apply this theory in
business practice. Finally, the paper offers some recommendations for cultural studies for different
business scenarios.
TABLE OF CONTENTS
1. Introduction 1
2. Discussion 2
2.1. Power distance 3
2.2. Collectivism versus individualism 3
2.3. Femininity versus masculinity 3
2.4. Uncertainty avoidance 3
2.5. Long- versus short-term orientation 4
2.6. Indulgence versus restraint 4
2.7. The practical application of Hofstede’s theory to gain a deeper understanding of
consumers’ buying behaviour 5
3. Conclusions 6
4. Recommendations 7
5. Reference list 8
1. Introduction
Nowadays, with the development and application of technology increasingly deeply to bring
convenience to human life, consumers easily access information on thousands of items available
online with just one keyword and 1 click. Access to extensive and fast information helps to bridge
the gap between consumers and business products. Despite the benefits of helping to bring company
product information to consumers quickly, at the same time, it creates an environment of fierce
competition among the countless numbers of similar competitors in the market. Consumers are
sometimes confused between too much information, too many products, so it is extremely important
to create a deep brand image and differentiate in the minds of customers. One of the factors that
help businesses come up with a suitable approach and impress consumers in marketing is cultural
understanding. Culture is considered as one thing that allows advertisers to develop greater
interaction, relevance and grow their business. The inability to understand the significance of
culture to brand and company building is the same as deciding that enterprises are all right to be at a
competitive disadvantage (Fields, 2016, p.1). More recently, for marketing, the idea of culture, long
known in Anthropology, Sociology and Psychology, has become increasingly relevant. The 90s
experienced the rise of theoretical contributions to the marketing application of culture. At the same
time, a rich stream of cross-cultural empirical studies has been established (Masuda et al., 2020;
Shavitt et al., 2019). The significance of culture to the understanding of worldwide consumer
behavior has increasingly gained traction and relevance, either by conveniently replicating research
originally produced in one country (often the US), or by cross-cultural testing of marketing
hypotheses and models (Khan, Asad and Mehboob, 2017; Kurpis and Hunter, 2016; Sobol,
Cleveland and Laroche, 2018). In this essay, the meaning of recognizing culture in the sense of
buyer actions in a global setting will therefore be addressed.
2. Discussion
Since the early twentieth century, the importance of culture in marketing studies has been
recognized. The cultural construct-based approach in this field is flourishing after two decades
(Masuda et al., 2020; Shavitt et al., 2019). Sarma (2017) found that culture, as a very complex
phenomenon, forms the disparities in attitudes between countries in consumers' attitudes towards
luxury products, at the national level and in the level of education across nations. That is why a
more reliable measure of customer perceptions could be a mix of market segments coupled with
belief systems and education levels. The customer acceptance model of e-commerce in Russia has
proved the effect of culture on the perceived utility, perceived ease of use, confidence, and intent to
use (Kim, Urunov and Kim, 2016).
Therefore, In consumer behavior, culture has a predominant position. However, it has also
been the core of several research studies worldwide to understand the convergence of culture with
various aspects of consumer behavior. Nevertheless, culture is not an easy feature to understand.
However, the National Culture Theory gave us an easier way to distinguish one category of people
from another by identifying six distinct dimensions (Vana and Salman, 2017) as below:
2.1. Power distance
The power distance factor is incorporated in the cross-cultural sense as one of its cultural
dimensions. This dimension explores how people in a given society view inequality (Pelau and Pop,
2018). Lalwani and Forcum (2016) claimed that high (versus low) customers in the belief of power
distance prefer to use price to judge quality because they have a higher need for structure, making
them more likely to differentiate and rate brands based on price.
2.2. Collectivism versus individualism
Individualism can be characterized as a preference for a weakly-knit social system in which
only themselves and their immediate families are supposed to be taken care of by individuals. On
the other hand, collectivism is a tendency for a tightly-knit social system in which people would
trust their families or members of a similar community to look after them in return for unquestioned
loyalty (Sreen, Purbey and Sadarangani, 2018). In a cross-cultural sense, Muralidharan, Ferle and
Sung (2017) carried out an impact evaluation of the power of culturally congruent appeals in green
ads, reporting that collectivist appeals performed better for Indian consumers while individualistic
appeals were more successful for Americans.
2.3. Femininity versus masculinity
This dimension's masculinity side indicates a desire for achievement, heroism, assertiveness,
and material incentives for achievement in society. Society is more successful at large. The
opposite, femininity, stands for collaboration, modesty, caring for the poor, and quality of life
choice (Vana and Salman, 2017). Filice, Neiterman, and Meyer (2019) found that men appear to
actively avoid female retailers or commercial spaces that connote femininity, whereas passivity,
aloofness, or reticence are exhibited by those who enter such spaces. The research suggests that the
dominant cultural environment that constitutes hegemonic masculinity, disaffiliation with
femininity, accentuation of heterosexuality, and prioritization of homosocial involvement, shape the
dialectical relationship that manifests through consumption between individual and institutional
gender practice.
2.4. Uncertainty avoidance
Uncertainty avoidance explains how individuals in society or culture cope with uncertainty
and ambiguity and future uncertainty. In essence, the term defines the need for well-defined
prescribed conduct rules: the higher the ambiguity avoidance ranking index, the fewer people want
to encounter unclear or unknown circumstances (Kowalczuk, 2018). Yildirim and Türkmen Barutçu
(2016) found that uncertainty avoidance and power distance decrease s-commerce spending,
indulgence increases it. As a consequence, the results show that in the sense of uncertainty and risk,
the customer's willingness to do online shopping decreases; increases when safety is given.
2.5. Long- versus short-term orientation
The long-term or short-term focus is the degree to which a culture displays a future-oriented
realistic viewpoint rather than a historical or short-term traditional point of view. Perseverance,
organizing relationships by position and following this order, thrift, and getting a feeling of guilt are
qualities found in long-term orientation.
The opposite is short-term orientation, which requires personal security and security, respect
for tradition, rather than the pursuit of peace of mind and happiness. Conversely, short-term
orientation requires personal security and security, reverence for tradition, and the quest for
pleasure rather than the quest for peace of mind. (Mooij, 2017). Results have shown that long-term
orientation (LTO) and safety awareness positively affect health awareness, which also affects
consumers' attitudes towards and repurchasing certified functional foods (Wang and Chu, 2020).
Furthermore, a more optimistic attitude towards certified functional foods resulted from LTO. In
their design of brand communications and marketing tactics, these results assist functional food
marketers.
2.6. Indulgence versus restraint
The cultural component of 'indulgence' describes the degree to which people attempt to
regulate their urges and impulses depending on the way they were raised. Societies that have
weaker control over their preferences are considered to be indulgent nations, and appear to
encourage simple and normal human desires linked to good life to be freely fulfilled. On the other
hand, restrained societies are persuaded that such happiness must be limited and regulated by strict
standards and regulations (Enkh-Amgalan, 2016). Kazmi and Rahman (2019) claimed that the
prevalence of the indulgent and restraint factor would impact the decision making of the customer
and that is how at the time of purchase he and she would make differentiated decisions.
2.7. The practical application of Hofstede’s theory to gain a deeper understanding of
consumers’ buying behaviour
Marketers adopt this theory in particular, and businesses in general, especially multinational
corporations, actively apply marketing and promotion campaigns for significant cultural
differences. A prime example is a fundamental difference between the Chinese and US markets
regarding the collectivism versus individualism and uncertainty avoidance. While the Chinese
market tends collectively towards traditional things, the US is more individualistic and open to
innovations.
Therefore, businesses' approach in these two markets also clearly shows the difference,
typically Adidas's new 2020 advertising campaign in these two markets.
Among younger Chinese consumers, there is a trend called "Guo Chao" to buy goods that
integrate Chinese cultural elements. "Guo Chao" means "national fashion," and refers to clothing
that uses traditional ancient Chinese dynasty patterns and designs. In order to celebrate the Chinese
New Year 2020, Adidas has established a well-received collection time. This advertisement has
made a big splash in the advertising industry with the creative combination of Adidas' brand
identity with Chinese traditional culture. The Adidas logo only shows up in certain scenes in the
Adidas film while the entire video is based on a Chinese theme, the two female celebrities portray
two ancient Chinese characters, only dance, football, and archery are linked to sports; diverting
from main Adidas items.The video featured 6 well-known Chinese celebrities and was officially
released on Christmas Day, earning 1.45 million video views to date (Jan 22nd, 2020) on Tencent
Video. More than 7,600 videos on Douyin (the Chinese version of Tik Tok) were created with users
applying the New Year Ad hashtag of Adidas. In one month, all these videos have produced more
than 500 million views. This impressive result is a testament to the collective strategy toward the
longstanding cultural traditions Adidas applies to this broad Asian market. Marketers in China
summarized in 2019 that in order to achieve resonance, a successful brand must understand Chinese
culture , particularly with younger audiences. In other words, Chinese clients are more likely to
embrace a brand that is capable of making good goods and good content that creatively utilizes
traditional Chinese culture.
The above findings are consistent with recent studies on collectivism (Lee, 2017) and
uncertainty avoidance in Chinese culture (Akhtar et al., 2018). The results show that the latest
ecological model, collective environmental effectiveness, environmental consciousness, and
collectivism are clear precedents of China's green buying intention. In particular, collectivism
positively moderates the relationship between mutual environmental effectiveness and the purpose
of green buying in China (Lee, 2017). Besides, A argued that the avoidance of ambiguity moderated
the link between perceived utility, subjective standards, and Chinese and Pakistani customers'
intentions to adopt mobile banking services (Akhtar et al., 2018).
In contrast, Adidas welcomes spring 2020 in the US market with more feminine and personal
colors. Adidas challenged the world to reimagine sport, questioning outdated assumptions and
celebrating the activity of all forms in the Adidas Reimagine Sport campaign. Inspired by the idea
that sport has changed, the brand's latest collection for Spring / Summer 20 asks its women's
audience to describe what sport means to them. The versatile collection features both streetwear and
efficiency, with each piece designed to empower all women's athletes, but they choose to play. It
brings style-focused activewear, from high-performance tights to tracksuits for argument, in
addition to classic lifestyle looks. Although it did not resonate as much as the campaign in China,
the Reimagine Sport campaign clearly shows an appreciation of each individual's preferences,
desires, and thinking and an openness to accept and challenge continuous changes in sports. Every
woman is a dedicated athlete and should be honored with each person's different judgment about
sport. The idea of developing the trend of new sports is the best testament to America's readiness to
face and embrace new changes and improvements.
The above findings are consistent with recent studies on individualism (Lamb, Cai and
McKenna, 2020) but little paper on uncertainty avoidance in American culture (Yu and Kim, 2018).
In researching the motives of museum visitors from individualistic cultures to write online reviews,
Lamb, Cai and McKenna ̣(2020)
̣ shows that 1) the complexity and heterogeneity of individualistic
culture have been established through online reviews in the dimension of social interaction between
the service provider and visitors; and 2) In the second dimension of social exchange among peers in
online reviews, American and British visitors share a common individualist culture. The paper has
shown that more generous return policies and customer support minimize volatility in the U.S.
market. The disparity in the mindset of the two cultures towards gifts has been shown; in the U.S.,
returning gifts is socially appropriate, whereas in China, it is considered to be impolite (Yu and
Kim, 2018).
3. Conclusions
Cultural understanding plays a crucial role in understanding consumers to develop appropriate
business outreach, promotion, and development strategies. Hofstede's theory covers the six
dimensions of culture (power distance, collectivism versus individualism, femininity versus
masculinity, uncertainty avoidance, long- versus short-term orientation, and Indulgence versus
restraint) as a whole, provides a specific framework, and shows an active role in supporting the
study of this cultural difference, which has been demonstrated in a series of in-depth studies for
decades. Cultural insights give managers and marketers the most common understanding, setting
the stage for more complex consumer behavior studies. A successful business and market
development strategy require building up and developing this knowledge. Specifically, in a strategy
to attack the national culture preference of modern Chinese youth, Adidas has created a very
successful campaign. It cleverly integrates new collections in the context of bold Chinese colors. In
the US market, by contrast, individual sports values and definitions are emphasized. Traditional
culture gives way to innovation and challenge to the throne. This is one of the defining
characteristics of Americans - openness to new things. The lesson of applying cultural insights to
building promotion campaigns and business development in different markets is clearly shown in
the strategy of a global corporation.
4. Recommendations
For businesses that want to explore and expand new business markets, it is necessary to
research new markets thoroughly, especially in terms of culture. Many businesses are too successful
with the current model, and the current markets often subjectively apply this framework in new
markets and then suffer catastrophic failure. Enterprises need to understand consumers in the new
area to evaluate the current model's strengths and weaknesses, thereby proposing improvements and
eliminating the inappropriate ones. With collectivist markets such as China, consumers prefer and
support domestic products with a national and national spirit. WeChat, Taobao, Alibaba is the most
explicit proof of this trend. Therefore, if businesses want to win in markets like these, foreign
businesses need to find a common point between their products and local culture or create new
products with local cultural characteristics to create consumers' familiarity and affection, creating
many opportunities for customers to try the product for free. As for markets that emphasize
individual success and openness, businesses need to focus on the independence, confidence, self-
esteem, or success of each individual of a small group of people. Not only that, managers and
marketers must always be creative, always innovate, challenge all existing limitations, create new
challenges for customers to overcome. What is new will be the factor that helps to connect the
brand with consumers quickly. Foreign businesses can instill cultures from the original country to
help customers discover and build new personal experiences.
For businesses with a global presence and are maintaining their influence in multiple markets,
regularly researching and updating consumer behavior helps businesses capture business
opportunities better and more effectively. In branding, keeping an image and the brand's overall
message is essential but indispensable for localization - appropriate adjustments for easy reception
and acceptance by local consumers. For countries that emphasize traditional values, administrators
need to continually create messages and gentle messages about cultural values in the brand
campaign. Nevertheless, that does not mean that there is no need to innovate; businesses need to be
creative to renew their products to help consumers not be bored and cleverly integrate national
cultural features to create enjoyment—more robust response from consumers. For open and
individualistic markets, of course, creativity is inevitable. Media campaigns should find individuals
who are different (but still relevant to convey the brand message) to emphasize. For example,
Stabilo - one of Europe's leading manufacturers of writing utensils - turned a plug for a highlighter
pen into something that motivated and inspired women everywhere, expertly adding itself to the
ongoing debate on gender equality, with its 'Highlight the Remarkable' initiative.
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