Social and Cultural Influences on Buying Behaviour and Consumption

Welcome to Topic 4: Social and Cultural Influences on Buying Behaviour and Consumption.

Given the fact that most humans are social animals, it is no surprise that a wide range of our social circles can affect what we think, how we behave, and how we make purchasing decisions. Reference groups, social class, culture and subcultures can have a significant influence on our attitudes, beliefs, lifestyle, purchasing behaviour and consumption patterns. The level of diversity in Australia alone serves as a good indicator of the numerous larger differences that may exist between citizens of different countries, often referred to as cross-cultural differences.

In this topic, you will learn about:

• Social influence on consumer behaviour
• Subculture influence on consumer behaviour
• Cultural influence on consumer behaviour
• Cross cultural consumer analysis
• Global versus localised campaigns.

These relate to the Subject Learning Outcomes:

1. Explain the basic psychological and sociological principles, theories and models influencing consumer behaviour.
2. Discuss the current trends in consumer behaviour and apply them to the marketing mix.
3. Identify the impact of social and cultural factors on consumer behaviour.

Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.

Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.

Social influence on consumer behaviour

One of the five key factors that influence consumer behaviour is social influence. We refer to social influence when our values, beliefs and behaviours mirror those of the people we are close to (reference groups including, family, friends, colleagues and peers). These consumer reference groups act as a frame of reference for purchase decisions. We may proactively seek out their opinions, or we may be subtly influenced by conversations with these people.

Reference groups 

Reference groups are groups of any size that may present a frame of reference or source of comparison and function as consumption-related role models. These reference groups can influence people's values, opinions, and behaviours. Research has found that credible, knowledgeable and trustworthy reference groups can be powerful and change consumer attitudes and behaviours (Solomon 2020).

The scope of the groups can be broad such as members of a sporting or social club, neighbours, acquaintances, friends, influencers and celebrities or as narrow as the immediate family and close relatives. Word-of-mouth (face-to-face or via digital channels) influences buying decisions as consumers consider the feedback from other consumers (positive or negative) as more credible and trustworthy than brand communication. In fact, word-of-mouth is regarded as the most powerful advertisement due to its impact on consumer behaviour.

Families are the most important reference group because they help with the consumer socialisation of children. Family and friends traditionally appear to have the greatest influence over consumption choices. The scale of influence depends on an individual's desire to conform and the nature of the product and service. Culture, subculture, and social class are other important reference groups. Reference group influence can be classified into two types, normative and comparative. Normative reference groups are groups that impact values and behaviours while comparative reference groups provide benchmarks for specific attitudes and behaviours (Schiffmann & Wisenblit 2019).

Consumers choose different reference groups throughout their lives depending on the timing and circumstances.

We also distinguish between direct and indirect influences of individuals and groups. Direct influence relates to someone influencing another person's opinion firsthand often through persuasion or manipulation. Indirect influence means that the person does not need to have direct face-to-face contact or even be personally known by the person being influenced. For example, famous actors, politicians, social networks, experts, TV celebrities, virtual brand communities and advocacy groups can exert indirect influence. When a consumer identifies with a sports team or sporting event, the consumer may subsequently choose the same products that sponsor their favourite team or event.

Consumers who are predominantly concerned with the approval of other people they identify with may select the same brands and products as their key friends or influencers to ensure social recognition and status. In these instances, while behaviour is being influenced, attitudes often do not change. Status objects such as cars, jewellery, fashion brands, watches and mobile phones are termed conspicuous products because they influence status (Schiffman & Wisenblit 2019).

Consumer socialisation

Consumer socialisation is a two-way process of learning how to behave in a socially acceptable way. Consumer socialisation is highly influenced by family (parents and siblings). Socialisation involves teaching children's values, behaviours, interpersonal skills, manners, moral principles, how to dress and speak. Brands aim to reach children from a young age and research has found that young children react positively to spokespeople that resemble their parents while teens are more influenced by their friends (Schiffmann & Wisenblit 2019). Children as consumers can be classified into three markets, namely children as influencers, children as a primary market, and children as future consumers (Schiffman & Wisenblit 2019, p. 279). The following figure provides more information about consumer socialisation.

Social classes

Social class is another key reference group that exists in all societies and influences consumer behaviour. It is concerned with the classification of members of society into distinct status classes that relate to status and prestige (for example, power, wealth, esteem).

Social classes are often used for customer segmentation. Factors that determine categorisation include income (household), sources of income and wealth, education, and occupation (ranked by prestige). Categories include lower, lower-middle, upper-middle and upper class (Schiffman & Wisenblit 2019, p. 287), which relate to the social status of a consumer. The US population is in fact divided into seven social classes as displayed in the following figure.

America's social classes can be described in the accordion below (Schiffman & Wisenblit 2019, pp. 291-293). Click on each of the following headings to read more

Cultural influences on consumer behaviour

Culture is a key driver of consumer behaviour and can be defined as the sum of beliefs, values and customs that guide and regulate us as consumers. Studying the cultural impact on consumer behaviour is a challenge as there are so many cultural elements to consider. Cultural influences are rarely in peoples’ sphere of awareness but rather ingrained in daily activities that offer guidance in all phases of problem-solving.

Culture is learned from an early age from the social environment children are exposed to. Enculturation is the term used for learning ones’ own culture and acculturation is the term used for learning a foreign culture. The latter is of critical importance for marketers of global firms. Language and symbols are used to communicate within a society and marketers use symbols to convey their advertising messages. The ability to learn through symbols is a specific human trait. The family, educational institutions, and the church are primary facilitators of the enculturation process. Mass media, social media, chat rooms, brand communities can all play a significant role in the transmission of culture and transfer of new habits and customs. Culture is dynamic and marketers who keep on top of trends can identify new opportunities (Schiffmann & Wisenblit 2019).

Australia is a multicultural society with a multitude of values, beliefs, and customs within a narrow social and legal framework. Once these are understood, marketers can develop and implement global or local campaigns.

The country of origin of a product or service can play a considerable role in influencing purchase decisions. To avoid a biased viewpoint, marketers that aim to be successful in foreign markets must go through acculturation to understand all the aspects of a country and its culture. Acculturation considers characteristics including but not limited to, psychological, social, cultural, environmental characteristics that make a culture distinctive and unique.

As marketers learn everything relevant to the product or product category in the society, they must also identify ways to persuade consumers in that society to potentially break traditional ways of behaving to readily adopt the new product or service.

Cross-cultural analysis helps marketers to understand how consumers in various societies are similar or different before entering a foreign market. It provides marketers with an understanding of the social and cultural characteristics of the foreign target audience they are trying to reach including needs, values and product usage. Cross-cultural analysis informs how to differentiate the marketing strategies in each country and determine whether a global or a local approach is best. Language considerations and symbolic communication from part of the cross-cultural research (Schiffmann & Wisenblit 2019). In summary, the study of culture as part of consumer behaviour requires researching factors such as language, customs, beliefs, rituals, food preferences, religion, arts, technology, work patterns - everything that makes a society distinctive.

Beliefs consist of a significant number of mental or verbal opinions and statements reflecting our knowledge and evaluation of people, products, services, and brands. Values and beliefs are mental images that guide our behaviours and decision making while customs are accepted norms or rituals that have been approved by society from a cultural perspective. Influences of culture are so ingrained in a society that everyone takes them for granted. Awareness is often only created when comparing the customs and values of different cultures. The more a marketer interacts socially with members of a foreign society the better he or she will understand the real differences in cultural norms and beliefs. Watch the following video, which explains how culture affects personality.

National characteristics

Professor Geert Hofstede conducted one of the most significant studies of how culture influences values in the workplace. The conclusions of which are applied globally both in business settings and academia. National characteristics, also known as Hofstede’s (1980) cultural dimension, originally examined four cultural dimensions (6000 respondents from IBM in 66 countries). The research has expanded to include two additional dimensions. These include:

• Individualism versus collectivism
• Uncertainty avoidance
• Power distance
• Masculinity versus femininity
• Long-term orientation versus short-term normative orientation
• Indulgence versus restraint (Sethna & Blythe 2019, p. 455).

The categorisations are summarised in the following figure.

Watch the following video, which explains the Hofstede model of national cultures.

There are many different measurement techniques used in culture research. These include, for example, content analysis, lifestyle analysis, taxonomies of culture, consumer fieldwork, and value measurement survey techniques. The value measurement survey instruments such as Kahle’s List of Values (LOV), the Roy Morgan’s Research Australian Values Segments, and the Rokeach Value Survey were already covered in a previous topic (Sethna & Blythe 2019).

Watch the following video, which introduces you to the Roy Morgan Values Segments.

Arnould and Thompson (2005) put Consumer Culture Theory (CCT) on the radar of academics. In their seminal article the duo suggested four distinct areas that could contribute to theory building, which included:

• Socio-historic pattern of consumption
• Consumer identity
• Marketplace cultures
• Consumers’ interpretive strategies (Sethna & Blythe 2019, p. 459).

Subcultures influence on consumer behaviour

Subcultures are different cultural groups that can be identified as a segment in the larger society. Some values, belief systems, rituals, and customs of members of the subculture are different to those of the larger society but still align with the most prominent beliefs of the entire society.

Major subcultural categories in Australia include ethnicity, religion, Indigenous background, urban versus rural location, age, gender and working status. Australia is regarded as a multicultural society based on many ethnic subcultures and more than 270 languages used throughout Australian households (Australian Human Rights Commission, n.d.).

Marketers need to understand that members of a culture usually belong to a variety of subcultural groups that provide viable niche market opportunities, provided the subculture and its media and distribution preferences are well understood. Thus, understanding different subcultures can play an imperative role when creating a targeted marketing strategy as product, pricing and promotion characteristics can be tailored to the specialised needs of market segments (Schiffmann & Wisenblit 2019).

Age

Age groups and each life cycle stage of the family life can be regarded as a different subculture. People are often clustered into age cohorts known as generation Y, generation, X, baby boomers, the elderly and generation Z.

These cohorts can also be qualified into different lifestyles. For example, the generation Y cohort includes Australians, born between 1980 and 1994 who grew up during good economic times, experienced the emergence of the Internet, globalisation, and September 11. This group can be characterised as open for change, brand disloyal, technologically sophisticated, media-savvy, well educated, confident, self-focused and loyal to family and friend relationships.

Moreover, members of generation Y are avid social media users, enjoy streaming content on their mobile devices instead of watching TV and enjoy shopping online.

The generation X market (Xers) encompasses people born from 1965 to 1979. Individuals of this segment are well educated, don’t favour labels, don’t have as many savings as previous generations and job satisfaction and work-life balance are more important than the actual salary.

The baby boomer market is the largest age segment composed of individuals who are at their peak of affluence and are considered a key target market for many industries. Baby boomers were born between 1946 and 1964, and they are a relatively tech-savvy and affluent generation who like to consume.

Anyone at or over the age of 65 is considered elderly but many view themselves as being much younger. Within this age group there are many further sub-segments based on further clustering of ages, motivations, and lifestyle orientation (Schiffmann & Wisenblit 2019).

Gender 

Every society in the world attaches certain traits and roles to males and females. Times have changed and traditional feminine and masculine traits are less prevalent or have disappeared. Therefore, it is advisable that marketers do not just consider gender but rather perceived gender identity.

Working women are of key interest to marketers as they present an opportunity. This segment is further divided into specific categories such as just-a-job or career-orientated working women in managerial positions.

LGBTIQ+

The LGBTIQ+ market is equally as important and is a widely accepted affluent subculture in Australia. This segment has its own magazines, websites, and online communities.

Marketers should be reminded that consumers are members of various subcultures at the same time and, therefore, aim to understand how these subcultures interact to impact the consumers’ purchasing and consumption behaviour (Schiffmann & Wisenblit 2019).

Cross-cultural consumer analysis

As already discussed, different countries have different cultures, values, beliefs, rituals and languages. International marketers, therefore, need to be willing to tailor and adapt marketing strategies to specific customs and norms of each country. Also, the country of origin of a product or service can play a considerable role in influencing purchase decisions as it may signal quality and trustworthiness (for example, German engineering or car manufacturing).

A company’s marketing success in a foreign country depends on how well the target market and cross-cultural context is understood. Marketers therefore conduct cross-cultural consumer analysis to determine market opportunities in a foreign market. The outcomes of cultural studies are often referred to as cross-cultural differences or cross-cultural similarities.

Ikea uses insights from cross-cultural research to tailor its marketing and communication strategy to each international market based on the consumer needs and even sizes of customers’ homes. Similarly, their restaurants tailor the menu to align with local food preferences. It can be said that Ikea pursues a mostly localised marketing strategy (Schiffmann & Wisenblit 2019).

Nike is another example of a brand that standardises its products across the globe. However, it adapts its marketing strategies in markets such as China by engaging local advertising agencies with great success (Schiffmann & Wisenblit 2019).

Most global airlines, on the other hand, have identified a global target audience that has similarities that allows them to target affluent, international, frequent travellers through global campaigns. Brand marketers of luxury goods need to be extra sensitive to cultural differences between Asian and Western markets. Western consumers often regard luxury items as prestige purchases to further augment their individualism. Southeast Asian consumers may use the luxury item to enhance the connection to others through visible evidence of personal value. Therefore, the purchase motivations are completely different.

Marketers also need to understand the differences in affluence and sophistication in different parts of a country. As discussed previously, a method to understand and study the differences and similarities between consumers of different cultures, is to study the framework of the value systems. A culture that supports openness to change looks upon individual thought favourably. A culture that supports conservation values preservation of traditions and self-restriction. The advertising strategy to those cultures needs to be different as what appeals to consumers in one country may offend another culture.

Marketers must also learn everything about the potential consumer usage of the product and service they plan to introduce to the market. For example, the one child policy in China long presented exceptional marketing opportunities for high quality baby and teenager products (food, toys, clothing, fashion, travel) and education providers as Chinese parents wanted to ensure that their only child is well looked after (Schiffmann & Wisenblit 2019).

Cross-cultural analysis based on a Western research style may not be appropriate in Asian countries due to restrictions in terms of accessing individuals and groups of people. In some cultures, consumers are suspicious and uncomfortable when asked about their personal life and preferences. Researchers must therefore understand the cross-cultural context of research to be able to gather the right market data that supports the decision-making processes. In addition, researchers should design the questionnaires bearing the countries’ specific beliefs, values and customs in mind and should use back-translation and engage linguistic experts if required (Schiffmann & Wisenblit 2019).

Watch the following TEDx talk, which captures some essentials for cross-cultural communication.

Global versus localised campaigns

Some marketers believe that multinational campaign strategies can be successful. Other marketers conclude that the differences outweigh the similarities and, therefore, that different campaign executions are introduced in different countries and even in different subcultures within a country. Whether to pursue a global or localised strategy depends on the product and service that is being marketed and whether a global target segment can be identified that shares common needs, values, beliefs, and goals.

There is a growing number of world brands such as Apple, Patek Philippe, Gilette, and Estee Lauder that tend to position their products in the same way globally. McDonald’s, in contrast, pursues a nation-by-nation communication strategy that adapts the advertisement messages as well as their menu items based on the values and food preferences of the respective cultures. Levi and Reebok follow multi-local communication strategies even across their Western markets. Coke changes the name of its Diet Coke to Coca Cola Light in some markets as the word diet may have either no relevance or no appeal.

Other global companies or destinations may augment their global strategies with local executions. Marketing campaigns by Tourism Australia, Tourism New Zealand, and Black & Decker present good examples of this type of combination strategy. Elements that are localised include the language, product attributes, colours, humour, scenery, and music (Schiffmann & Wisenblit 2019).

High-tech-high-touch continuum

Various frameworks have been developed for international marketers to assist with the planning and creation of marketing and advertising programs for either global or localised campaigns. A further consideration for assessing whether to pursue a global versus a local strategy can be based on a high-tech-high-touch continuum. High-tech is when customers utilise technology rather than human interaction. For example, using chatbots to enquire about an order. High-touch refers to a higher involvement from the humans rather than technology, such as obtaining legal advice from a lawyer.

To learn more about high and low involvement, check out the blog - The FCB grid: What it is and how it works – by Bains (2015).

What is the difference between high and low involvement products?

• High-involvement products benefit from standardisation across markets that appeal to either end of the high-tech-high-touch continuum, making these products more suitable for a global brand positioning.
• Low-involvement products that sit in the middle of the high-tech-high-touch continuum benefit from being presented as a local brand, therefore, the strategy and execution are changed on a market-to-market basis.

What are the similarities between the high involvement and high-touch products?

• High-involvement and high-touch products are usually positioned around their emotional appeal with strong visual images as opposed to low-involvement products that use common languages.
• In both cases, high-involvement products whether it be high-tech or high-touch, benefit from a globalised promotional approach.

The risk for marketers in international marketing is whether all elements of the marketing mix - including the product, packaging, distribution, pricing, and promotion - will work in the foreign country and which elements need to be adapted.

As part of the marketing mix, it is necessary to look at colours and pricing distribution strategies. This is because colours have different meanings in different cultural contexts. For example, the colour blue means something different in Sweden, India, the Netherlands and Iran. It is therefore important that marketers consider the colour schemes of the product itself, its packaging, and advertisements prior to launching a new product in a foreign country. Pricing and distribution strategies should also be adjusted to meet the conditions of the local economy and shopping preferences (Schiffmann & Wisenblit 2019).

Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.

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The following learning tasks will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.

Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)

In-seminar learning tasks

The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on the following heading to read more about the requirements for your in-seminar learning task. 

Welcome to your post-seminar learning tasks for this week. Please ensure you complete these after attending your scheduled seminar with your lecturer. Your lecturer will advise you if any of these are to be completed during your consultation session. Click on each of the following headings to read more about what is required for each of your post-seminar learning tasks.

Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.

Click here to access your consultation session.

Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.

Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)

To further develop your knowledge, read the following resources:

• European Business Review 2020, Impact of culture on consumer buying behavior, European Business Review.
• Bakhtiari, K 2021, Cultural trends that will shape consumer behavior in 2021 and beyond, Forbes.

References

• Arnould, EJ & Thompson, CJ 2005, 'Consumer culture theory (CCT): Twenty years of research', Journal of Consumer Research, 31:868-882.
• Australian Human Rights Commission, n.d., Face the facts: Cultural Diversity, https://humanrights.gov.au/our-work/education/face-facts-cultural-diversity
• Bains, J 2015, The FCB grid: What it is and how it works, SemrushBlog, https://www.semrush.com/blog/the-fcb-grid-what-it-is-and-how-it-works/
• CBNC International, 2020, Coronavirus has changed consumer behavior, streaming video, YouTube, https://www.youtube.com/watch?v=PA8W2A1XdX4
• Digital Uncovered, 2020, Best marketing campaigns of the last decade: 2010-2020, streaming video, YouTube, https://www.youtube.com/watch?v=UFxCzPU61vU
• Hofstede, G 1980, Culture’s consequences: International differences in work related values, Beverly Hills, Sage Publications Ltd.
• Hofstede Insights 2022, Compare Countries, https://www.hofstede-insights.com/product/compare-countries/
• Hoyer, WD, MacInnis, DJ, Pieters, R, Chan, E & Northey, G 2018, Consumer behaviour, Asia-Pacific edn., Cengage Learning.
• Practical Psychology 2019, How culture affects your personality, streaming video, YouTube, https://www.youtube.com/watch?v=Jx-1EthJeIg
• Riccardi, P 2014, Cross-communication, 2014, streaming video, You Tube, https://www.youtube.com/watch?v=YMyofREc5Jk
• Roy Morgan Australia 2014, Roy Morgan values segments, streaming video, YouTube, https://www.youtube.com/watch?v=oNUhE3Pxyyc
• tutor2u 2018, Hofstede’s model of national cultures, streaming video, YouTube, https://www.youtube.com/watch?v=Fwa1tkH7LEI
• Schiffman, LG & Wisenblit, JL, 2019, Consumer behavior, 12th edn., Pearson Education Ltd.
• Sethna, Z & Blythe, J 2019, Consumer behaviour, Asia-Pacific edn., Sage Publications Ltd.
• Solomon, MR 2020, Consumer behavior: Buying, having, and being, 13th edn., Pearson Education Ltd.
• Usher, S 2018, Neuromarketing: Knowing why you buy, Sam Usher, TEDxTufts, streaming video, YouTube, https://www.youtube.com/watch?v=hMkkVCQdoa4