Understanding cultural groups’ market segmentation
Today’s markets now globalizes in unprecedented ways. Coupled with the developments in technology, specifically the internet and aviation, and the liberalization of international commerce, globalization is now becoming a reality to many people. Globalization presents business with new realities and therefore new challenges. Businesses are challenged not only to excel in their trade but now must be able to bring that trade to fresh waters and beyond their comfort zones. Understanding cultural groups’ market segmentation is essential
Understanding Culture Culture is described by Dr. Lars Perner, Assistant Professor of Marketing at San Diego State University as “A learned, shared, compelling, interrelated set of orientations for members of society”. Culture influences goals, beliefs, attitudes and values (Perner, 2006). The modern concept of culture commonly recognized is behaviour. Culture should be considered when managers are making their decisions (Bellah, 1989) . This in effect influences the manner in which marketing strategies should be formulated, implemented and executed.
How much an individual is predisposed cultural and societal will define his buying patterns, preference and choice. Gert Hofstede was a Dutch researcher who, in 1980, interviewed IBM executives in several countries and found that cultural differences among the executive tended to centre around four key dimensions (Hofstede, 1980): 1. Individualism vs. collectivism – the extent of belief in the concept individual responsibility and reward vs. belief in the concept collective responsibility 2. Power distance – the extent of separation of individuals based on rank
3. Masculinity vs. femininity – involves the concept of “masculine” values suggestive of competition and “conquering” vs. “feminine” values involve harmony and environmental protection 4. Uncertainty avoidance – extent to which a “structured” situation is preferred vs. an ambiguous one. A fifth dimension has been added to this list recently and it is of long term vs. short term orientation. In the U. S. prefer immediate results while Japanese managers tend to be tolerant to long periods before profits are realized. Figure 1.
Screenshots of one of the first collaterals for the HSBC: The world’s local bank campaign launched in March 2002 (HSBC 2002). An example of how the cultural idiosyncrasies is being considered to a high degree by globalized companies is the use of the by-line “world’s local bank” by HSBC in its international Integrated Marketing Communications (IMC) program. The advertisements run on network and cable channels follows the storyline of pointing out contradicting practices or tradition and the culmination is of HSBC having the skills necessary to cope and the conscientiousness to deal with these practices or traditions.
The program was launched in 2002 and still is the same theme that the company uses in its marketing programs (HSBC, 2006). Was the campaign successful? The London based bank was, under the name of HSBC Bank Middle East and was also voted best bank in the Middle East in 2003 by Euromoney magazine in spite of suffering terrorist attacks against it in Turkey in the same year (Guardian Unlimited, 2003).
The importance of culture in characterizing consumer behaviour concepts such as hidden motivators, emotional gratification, perceived risk, and cognitive dissonance can not be denied. The ability to understand local culture and work with its context creates association, acceptance or tolerance and loyalty for products, services and ideas. This creates a strong local marketing background for both existing and new entrants.