TOPIC 5.

THE ENVIRONMENT OF THE DEMAND, CULTURE AND SUBCULTURE

1. THE INFLUENCE OF THE ENVIRONMENT IN THE CONSUMER

Why studying the Environment?

- The consumer as an individual lives in relation to an environment

- The demographics and economics have their greatest impact on the macro level of the groups of
consumers
- The analysis of these characteristics of the environment is crucial to the definition of target,
segmentation of markets, and analysis of demand
- The demographic-economic analysis is a fundamental task for and its available to any company

- This analysis is essential to develop marketing strategies

ECONOMICS: The kind of income of consumers can affect their behavior and for that it should impact on the
marketing strategy that the companies use.
- National income, disposable income (total personal income – personal current taxes), consumption and
savings.
- Private consumption expenditure: evolution -> food, clothing, housing, leisure…

DEMOGRAPHICS: The kind of target market may affect also the consumer behavior and the marketing strategy.
- Population and age groups

- Demographic changes in population and mobility of markets

- Educational increments
- Family – structural changes

2. CULTURE: CONCEPT, DIMENSIONS AND CHARACTERISTICS

A CULTURE is like a society’s personality, and it shapes our identities as individuals

Culture: refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, roles,
relations, concepts of the universe, and material objects and possessions acquired by a group of people over
generations. Is a collective programming of the mind that distinguishes the members of one group or category
of people from another.
▪ Cultural productions: values, norms, customs, language, behaviors, myths, rituals, trends.

CHARACTERISTICS OF CULTURE

- It is a global phenomenon

- It generates satisfaction

- It is shared and learnt

- It is an adaptive process

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…some considerations for marketing decisions

o Language and communication style

o Nonverbal communication: signs, symbols and customs
o Collectivism and individualism
o Male and female countries
o Treatment of inequality, differentiation of roles and power distance
o Aversion to uncertainty or risk
o Context

HOFSTEDE CULTURAL DIMENSIONS

• Power-Distance Index

The power distance index describes the extent to which the less powerful members or an organization or
institution — such as a family — accept and expect that power is distributed unequally.

Individuals in societies that have a high degree of power distance accept hierarchies where everyone has a
place in a ranking without the need for justification.

Meanwhile, societies with low power distance seek to have an equal distribution of power. The implication
of this is that cultures that endorse and expect relations that are more consultative or democratic, or
egalitarian.

In countries with low power distance index values, there tends to be more equality between parents and
children, with parents more likely to accept it if children argue or "talk back" to authority. In low power
distance index workplaces, employers and managers are more likely to ask employees for input; in fact,
those at the lower ends of the hierarchy expect to be asked for their input (Hofstede, 1980).

Meanwhile, in countries with high power distance, parents may expect children to obey without questioning
their authority. Those of higher status may also regularly experience obvious displays of subordination and
respect from subordinates.

**If I say this country has a high-power distance, it means that people there accept hierarchies and know
than there is an inequality is power distribution

• Collectivism vs. Individualism

Individualism and collectivism, respectively, refer to the integration of individuals into groups. Individualistic
societies stress achievement and individual rights, focusing on the needs of oneself and one's immediate
family.

A person's self-image in this category is defined as "I." In contrast, collectivist societies place a greater
importance on the goals and well-being of the group, with a person's self-image in this category being more
similar to a "We."

Those from collectivist cultures put more emphasis on relationships and loyalty than people from
individualistic cultures.

They tend to belong to fewer groups, but are defined more by their membership in them. Lastly,
communication tends to be more direct in individualistic societies, but more indirect in collectivistic ones
(Hofstede, 1980).

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 • Uncertainty Avoidance Index

The uncertainty avoidance dimension of Hofstede's cultural dimensions addresses a society's tolerance for
uncertainty and ambiguity.

This dimension reflects the extent to which members of a society attempt to cope with their anxiety by
minimizing uncertainty. In its most simplified form, uncertainty avoidance refers to how threatening
change is to a culture.

A high uncertainty avoidance index indicates a low tolerance for uncertainty, ambiguity, and risk-taking.
Both the institutions and individuals within these societies seek to minimize the unknown through strict
rules, regulations, and so forth.

People within these cultures also tend to be more emotional. In contrast, those in low uncertainty
avoidance cultures accept and feel comfortable in unstructured situations or changeable environments and
try to have as few rules as possible. This means that people within these cultures tend to be more tolerant
of change.

The unknown is more openly accepted, and less strict rules and regulations may ensue.

*For example, a student may be more accepting of a teacher saying they do not know the answer to a
question in a low uncertainty avoidance culture than a high uncertainty avoidance one.

• Femininity vs. Masculinity

Femininity vs. masculinity, also known as gender role differentiation, is yet another one of Hofstede's six
dimensions of national culture. This dimension looks at how much a society values traditional masculine and
feminine roles.

A masculine society values assertiveness, courage, strength, and competition; a feminine society values
cooperation, nurturing, and quality of life.

A high femininity score indicates that traditionally feminine gender roles are more important in that
society; a low femininity score indicates that those roles are less important.

 A country with a high femininity score is likely to have better maternity leave policies and more
affordable childcare.

 A country with a low femininity score is likely to have more women in leadership positions and higher
rates of female entrepreneurship.

• Short-Term vs. Long-Term Orientation

The long term and short-term orientation dimension refer to the degree to which cultures encourage
delaying gratification or the material, social, and emotional needs of its members.

Societies with long term orientations show focus on the future in a way that delays short-term success in
favor of success in the long- term. These societies emphasize traits such as persistence, perseverance,
thrift, saving, long-term growth, and the capacity for adaptation.

Short-term orientation in a society, in contrast, indicates a focus on the near future, involves delivering short-
term success or gratification, and places a stronger emphasis on the present than the future.

The end result of this is an emphasis on quick results and respect for tradition. The values of a short-term
society are related to the past and the present, and can result in unrestrained spending, often in response to
social or ecological pressure (Hofstede, 1980).

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 • Restraint vs. Indulgence

Finally, the restraint and indulgence dimension consider the extent and tendency for a society to fulfill its
desires.
This dimension is a measure of societal impulse and desire control. High levels of indulgence indicate that a
society allows relatively free gratification, and high levels of bon de vivre.
Meanwhile, restraint indicates that a society tends to suppress the gratification of needs and regulate them
through social norms.
*For example, in a highly indulgent society, people may tend to spend more money on luxuries and enjoy more
freedom when it comes to leisure time activities. In a restrained society, people are more likely to save money
and focus on practical needs (Hofstede, 2011).

DISTANCE TO POWER AVERSION TO UNCERTAINTY

+/- acceptance of inequality +/- existence of rules and norms to manage personal,
social and economic life
+/- differentiation of roles following age, class, gender…
+/- openness to difference
+/- consideration of status
+/- openness to curiosity and innovation
MASCULINE / FEMENINE

-Masculine societies have different rules for men and

women ORIENTATION TO SHORT / LONG TERM
-Less so in feminine cultures +/-orientation to immediate results
INDIVIDUALISM / COLLECTIVISM +/-acceptance of facts and adaptation
+/- creation of own opinions and personal projects +/-focus of values as perseverance, humility… or
materialism and status
+/- focus on loyalty, harmony, the group…

https://www.hofstede-insights.com/country-comparison/

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 HALL (1976)

LOW-CONTEXT CULTURE HIGH-CONTEXT CULTURE

− More individualist
− More collectivist
− More orientation to short term
− More orientation to long term
− Less aversion to uncertainty − More aversion to uncertainty
− Less distance to power. − More distance to power.
− Rely only on spoken and written languages. Low − Use more elements –like the social context
degree of complexity. surrounding the message.
− The person is independent of the group. Social − Complexity in communication
distance.
− Person is interdependent with others.
− Less sense of responsibility for others − Great sense of responsibility about other people
− Little influenced by the opinions of others − People act according to what is best for the group
− High sense of independence and self − The group’s views are very important.

− Principle of equal exchange − Unequal exchanges justified

(Australian, Dutch, English, German, Finnish, North (Latin American, African, Arab, Chinese, Japanese French,
American) Italian, Spanish, Slavic)

3. SUBCULTURE AND MICROCULTURE

Subculture: group of people within a CULTURE which differentiates from the larger culture to which they
belong. It is a group whose members share beliefs and common experiences that set them apart from other.
Depending on: age, race, ethnic background, religion, place of residence…

*Important for the exam

How consumer behavior patterns change through all these generations?

-millennials shows the highest difference among themselves, those who were born beginning 80s with those
born latest 90s…their behavior changes a lot

-gen Z and alpha have similarities because they were born during the digitalization

-baby boomers and millennials are related (parents of the other)

-Gen X and gen Z also related (parents of the other)

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Microculture: refers to the specialized subgroups within an organization, marked with their own languages,
ethos and rule expectations.

− depends on the smallest units of organization as opposed to the broader subcultures of race or
class, and the wider national/global culture,

− (compared to which) they tend also to be more short-lived,

− as well as voluntarily chosen

A person can belong to a number of different microcultures →Impact on consumer behavior