Feeds:
Posts
Comments

Posts Tagged ‘Price-Quality’

Anyone who has been to a trade fair, as those taking place usually on weekends in villages, small towns and some big cities, would know the kind of treasure goods one can find there: woodcraft decorative figurines (e.g., animals), dolls and puppets, handmade kitchenware, glassware (sculptures, vases etc.), knitting and embroidery articles, fashion accessories, and much more (including some local food products). A great part of the products sold in the fair are handicraft made by local and regional residents who present their creations to visitors. Often it is possible to find in such fairs also vintage items from years past (e.g., cameras, radio sets, coins). Now, consider shopping, or hunting, these kinds of treasures in an online marketplace.

Etsy offers an online marketplace similar in concept as described above: it is a special type of e-commerce website for handcrafted and vintage goods, where the sellers are small and independent entrepreneurs who interact directly and sell their merchandise to buyers in the virtual marketplace of Etsy, and then ship the sold goods to their destinations. So a buyer will not find there food products (e.g., homemade jams or local cheese) but he or she can find on Etsy.com a great variety of handmade and vintage goods beyond what is usually presented in any single physical fair (e.g., larger items of furniture that are more difficult to bring to a physical fair). It is not the same experience as strolling between counters in a physical fair, looking for ‘treasures’, but browsing handcrafted and vintage goods in an online marketplace like Etsy offers its own advantages and opportunities in  (almost) immediate access.

Etsy hosts 2.3 million active sellers (all must be registered members) and 47.2 million active buyers (membership is voluntary) as of the end of June 2019 (an increase of 17.7% and 19.3%, respectively, from same period last year). On Gross Merchandise Sales (GMS) of $2.1bn made in its marketplace in the first half of 2019, Etsy has generated a revenue of $350.4m (74% revenue from marketplace fees and 26% from seller services). While GMS increased by 20% from H1/2018, revenue increased by almost 40% (Etsy, Press Release, 1 August 2019). The company provides a platform for a community of sellers to trade their handcrafted creations or vintage goods worldwide. The ‘community’ is a cornerstone of its whole activity. Etsy also cherishes interactions between people (“connecting humans”) as the basis for commerce — its headline calling is to “Keep Commerce Human”. While the company is aiming to maintain the intimacy, reliability and convenience customers expect from a community, it wants to provide these benefits with the efficiency of a large corporation [Fortune: A; Etsy: About]. Making those ends meet seems like a non-negligible challenge.

Shopping for handmade products or vintage products has a special motif: it often gives consumers the feeling of treasure hunting. The pleasure in finding sought-for products as such only increases as they become less common in the world of modern (automated) production and marketing. The product item has to be useful, yet an emotional appeal can be further more important as a driver for buying the product.

Handicrafts are desired for being perceived authentic and genuine. People value the talent, skills and effort invested in their making. They like the human touch in both making the product and personally selling it to them by the person who made the product. Moreover, many of the handmade products are artisanal (e.g., woodwork, glasswork) and may exhibit an exceptional quality. Buying such a product is often considered a gesture of appreciation and a way of making a contribution to the creator.  Vintage products (especially from 1920s to 1960s) may hold a somewhat different attraction: They are associated with the past period of time they originate from (e.g., nostalgia, personal memories from childhood); different, possibly higher standards of quality; different ways of doing things (e.g., listening to music, cooking, taking photos); and vintage ‘treasures’ are also likely to be much less available in the market and even being rare. Vintage products may be handcrafted but that is neither a requirement nor their main source of value to the prospect buyers. (Note: Handcrafted artefacts may be made using just low-tech machinery and tools).

The pages on the website of Etsy appear spacious and bright. Items (text bodies, pictures) are placed over a white background, and the pages do not seem to be condensed and crowded with them. Some areas may be painted in pastel colours (e.g., as background for text on the homepage). This design endows the website with a soft and light feeling, and makes it easier for the eye to move around and observe product listings, pictures and other information on pages. There are very few product listings with images on the homepage, used for illustration rather than out-right promotion; a ribbon with images of products most recently viewed by the visitor appears on top of the homepage and on other pages, exercising relevance and convenience.

Six main categories are displayed in the top menu: Jewelry & Accessories; Clothing & Shoes; Home & Living; Wedding & Party; Toys & Entertainment; and Art & Collectibles. A drop-down menu with sub-categories can be ‘pulled’ from each of these main category items. However, on category pages the visitor also can see tiles for subcategories with sample images, and a sample of product listings in the category. Visitors can narrow down their search by using a key list on the left-hand side of the screen. For any category and sub-category, a visitor-shopper can choose to see all available products in that class or select to focus on either handmade or vintage products in that class (an additional item on the top menu labeled Vintage allows quick access for those interested only in vintage products).

Three basic information elements appear on each product page: a title describing the product, price, and a photo image. In addition, three more components are noteworthy: (1) Handmade products (e.g., a TV stand with cabinet, mid-century modern, made of oak wood) are accompanied by a description on materials and ways of their application, modes of use, design trend, dimensions, etc. For vintage products (e.g., antique Teddy Bear from the 1930s, Dutch Arthur van Gelden), the viewer may find a background story on the artefact, materials, history, any versions if available, etc. (2) Sellers offering their own handmade goods may provide options for personalisation (e.g., first name, a phrase, and photograph in picture frames and displays) and customization (e.g., type of wood, surface finish- colour and texture , size, and extra features for furniture). Furthermore, additional images may show the product from different angles and in different versions that can be customized to the preference of the prospect buyer. (3) The page is set to include reviews contributed by buyers regarding the product purchased and any aspects of their relationships of exchange with the seller.

The complementary information in words and pictures may fulfill an important role in persuading visitors who view a product page to complete a purchase order. Giving a visitor the flexibility to make adjustments (modest as they may be) to the product to better fit his or her needs and preferences can only strengthen the shopper’s conviction to buy. Victor Yocco (‘A List Apart’, 1 July 2014) well-explains in his article key implications of the central and peripheral routes to persuasion (in the Elaboration Likelihood Model [B]) for e-commerce websites. He stresses the importance of including cues that may be applied at different levels by visitors who browse pages, process and evaluate product offerings through a central route or peripheral route. In the case of Etsy, we may distinguish between visitors who get their impressions and make judgement based on the images and reviews, and perhaps use price also as a cue for quality (peripheral route), and those visitors who extensively and carefully consider the technical details and background of the product offered, and may also inspect the images provided in greater attention (central route).

Etsy enables prospect buyers to engage in conversation with sellers and make queries before a purchase, and it encourages such interactions (e.g., buyers tell in their reviews about satisfying enquiries they have had with sellers who were particularly helpful in their responses). Sellers can use a community forum to consult and discuss any matters that concern their activities from craftmanship to e-commerce. Furthermore, Etsy publishes workshops it offers to sellers in different disciplines of craftmanship, and a special section of the website is dedicated to craft supplies and tools, thus extending its hand to help entrepreneurs-sellers in their creative work. Shipping, however, is in the responsibility of the sellers, and trust between them and their buyers-customers can be particularly crucial at that stage of the exchange.

Some recent initiatives taken by Etsy could be a more delicate matter and a source of friction. For instance, the company started encouraging sellers in the US to offer free shipping in the country. It provides some guidance and assistance in shipping, but a question hangs as to how Etsy actually facilitates and makes it easier for American sellers to offer free shipping (e.g., does it give any ‘subsidy’ to the seller, or should the seller raise the product price, or absorb the extra cost alone?). Without practical support in shipping, the legitimacy of asking sellers to eliminate shipping costs is weak. Etsy has also taken action to improve the payment functionality. At first it was a matter of ensuring to buyers the confidentiality of their payment information. Next, however, sellers were required to use only the payment platform of Etsy. That has allowed Etsy to collect commissions that had previously gone to other payment providers. While this initiative helped in standardizing the checkout procedure and improved customer service, it also led to raising the commission rate sellers are charged from 3.5% of revenue per transaction to 5% [A]. A third initiative involves a new programme of advertising for sellers in co-operation with Google — sellers who join in an advertising plan can get their product offers promoted or prioritised inside the platform (e.g., in displays of product listings) and outside (i.e., in Google search results). This would create two classes of sellers that did not exist before.

Etsy under the leadership of its CEO Josh Silverman (since 2017) is set to put more emphasis on quality over price, reports Wahba in Fortune. At a time when online retail is primarily concerned with low prices and price promotions, it is suggested as remarkable that Etsy succeeded in cultivating loyalty. First, by its focus on handcrafted goods and small businesses, Etsy succeeded in making its marketplace feel like a community, but it still aims to deliver with greater business efficiency. Second, Etsy intends to give greater weight to higher-priced and better-quality products in search rankings (a change from how its search engine worked so far) with an aim to elevate the image of Etsy’s brand to an upscale status. Etsy also expects to encourage shoppers to level-up their purchases with complementary products (e.g., if one wishes to buy a lamp for a desk, consider also buying a desk). [A]

Etsy offers a special type of online commerce: bringing the richness, spirit and originality of a trade fair for handcrafted and vintage goods to consumers’ homes. It is not only the attraction of the goods, but also the experience of browsing collections and finding precious treasures, and the interaction with small businesses of independent entrepreneurs and creators (‘people more like us’ the shoppers might say). Etsy has seen success in improving its business performance since early 2018 and is ambitious to move ahead in strengthening its online marketplace. However, Etsy will have to take extra care not to lose the friendliness and comfort of its marketplace and community, for the pleasure of treasure hunting.

Ron Ventura, Ph.D. (Marketing)

 

Note:

[A] “Crafting a Comeback at Etsy”, Phil Wahba, Fortune (Europe Edition), August 2018 [Global 500], 180 (2), pp. 31-33

[B] “Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement”; Richard E. Petty, John T. Cacioppo, & David Schumann, 1983; Journal of Consumer Research, 10 (Sept.), pp. 135-146

 

Read Full Post »

Many companies are well-known to consumers by their corporate names, including manufacturers, chain retailers and service providers. The corporate name may serve as the leading brand identifier (like an ‘umbrella’ name) for the company’s products or services. But furthermore the corporate-level brand name is the gate to access the organisation’s image as held in the public opinion of consumers. In the last decade companies are increasingly judged by their values, culture, and market and public conduct. Consumers are more strongly influenced in their choice of products or services of a company by what they think of and how they feel towards its corporate brand.

A Tel-Aviv-based strategic management consulting firm, TACK, constructed a two-dimension metric for assessing the image strength (or sturdiness) of companies in Israel. The metric comprises a rational-oriented ‘pillar’ named Logic and an affective-driven ‘pillar’ called Magic. Each dimension of the image strength metric is measured by two (rating-scale) items.

Logic represents how much a company is appreciated by consumers, and to what extent the company makes it worthwhile for consumers to be its customers.

Magic expresses how much a company is loved by consumers, and to what extent consumers believe that the company cares about its customers.

Magic pertains to the emotional ties between the company and its customers and is therefore particularly important to the relationships built by a company with the customers. We cannot underestimate the importance of the logical or cognitive-based evaluation of the company, by weighing its advantages and disadvantages, as the basis for the interest and preference consumers show in using the company’s products and services. However, reasoned appreciation of the company and its offerings will likely not hold-up a relationship without developing an attachment to the corporate-name brand.

TACK applied its Logic & Magic metric for the third continuous year in 2019 to 71 Israeli companies (e.g., food producers, retail chains, telecom service providers, banks). Measures were collected in a survey of 503 adult Israeli consumers (Hebrew-speaking). The companies are not necessarily managed purely as a ‘branded house’; however, this study is not concerned with additional brands owned by the company (e.g., brands that may be endorsed by the corporate brand name or products positioned as sub-brands). The demonstrated mappings of corporate brands (in Hebrew), along the dimensions of Logic and Magic, bring forward some sobering realizations shared below:

Firstly, it is noticeable that, from a consumer perspective, companies that are doing better on the logical-functional front are also more successful on the emotional front, and thus are doing better overall in connecting with consumers. We cannot conclude from this a cause-and-effect relation. But the findings do suggest that a wise strategy that is sensitive to consumers (i.e., it sees things through the eyes of consumers) can win on both fronts. In other words, a company as such that succeeds, through its strategy, in gaining the appreciation of consumers for its performance and advantages of its products and services, is also likely to win the affection, trust and approach of the consumers.

There are hardly any corporate brands that seem to get a high score on Logic but relatively lack in their score on Magic, and vice versa. This implies that a company cannot sustain a ‘cold-minded’ appraisal of its performance and offerings while failing to win the hearts of its customers; and just as well, a company cannot sustain an affectionate connection with its customers without establishing the foundation of approval of its functional benefits to customers (e.g., being relevant and attractive). Nevertheless. it should be noted that the spread among corporate brands with relatively higher Logic and Magic scores is greater than among brands with relatively lower scores on both dimensions (there are more of them and they are more condensed). There is still much variability among the best performing companies — they are not consistently doing better in the same way.

Secondly, the quality of products and services is just one of the factors consumers likely consider in their logical-functional evaluations, and is possibly not the more prominent one. There seem to be large differences in perceived quality of the products of at least some of the companies or in the weight assigned to quality. Moreover, companies whose products appeal in their high quality or expertise to only a relatively small segment of consumers (a niche) seem to fall behind and do not come out favourably in this type of all-market brand rankings. It is not so surprising to realise that the stronger and leading corporate brands are those of companies that aim to fulfill the needs and preferences of the wider common base of the mass market.

Let us look at a few examples:

  1. In the category of retail food chains, a heavy discount retailer, Rami Levy, is positioned close to the top-right corner of the map (both in its category and overall) with high Logic and Magic scores, while a delicacy retailer Tiv Ta’am is at the bottom-left corner of the map. The two major food retail chains are in-between, one in the top-right quadrant (Shufersal) and the other in the bottom-left quadrant (Bittan [Mega]). Tiv Ta’am may bring better-quality products (e.g., fresh produce, imports of delicacies) than other food retailers, but its stores are considered too expensive, lucrative, and they are not liked. Rami Levy and Shufersal are listed among the Superbrands of Israel for 2018 in the retail category.
  2. In the category of coffee houses, we find in relatively high positions the low-cost, basic-service chain of Cofix, and the espresso-bar, self-service chain Aroma. In the worst position we find Arcaffe, an Italian-style chain of coffee bars serving fine coffee, sandwiches and other products, but it fails to receive the appreciation of the greater public for their offerings and service. Aroma is much more popular although their products and its serving standard are moderate. Yet Arcaffe is considered more ‘top-notch’, made for European-connoisseurs, and is relatively more expensive. Eventually, Aroma and Coffix are also much more emotionally appealing to Israeli consumers than Arcaffe. Roladin, a bakery and coffee-house chain, can be argued to be much closer in quality and service standard to Arcaffe than to Aroma; yet, Roladin is appreciated and considered worthwhile (Logic) similar to Aroma and is even a little more loved and cherished (Magic) than Aroma —  the advantage of Roladin over Arcaffe seems to be that they understand better what the greater part of Israelis like to eat and expect to find in a coffee-house for a light meal. Aroma and Roladin are listed among Israel’s Superbrands of 2018 (dining out) whereas Arcaffe is absent.
  3. In the media category, among the news press publishers, HaAretz holds a much lower position on both Logic and Magic than Israel HaYom; Yediot Aharonot is located closer to HaAretz. Two marked differences between them: (a) HaAretz is left-leaning (affiliated with the Guardian and New-York Times) and Yediot is oriented to the centre-left, whereas Israel HaYom is right-wing; (b) HaAretz is superior, especially in some areas, in quality of commentary and analysis to the two other newspapers (tabloid-fashioned). But the political left, and the HaAretz newspaper associated with it, are out of favour in recent years, and perhaps as a result the tolerance to its reporting by large circles of society is low, no matter its apparent news quality. [It is noted that all three also have a news website, though in the case of Yediot the online channel is branded separately as ‘ynet’ — it is positioned close and just a bit better than the press edition]. Yediot (+ynet) and Israel HaYom are listed in the media category of Israel’s Superbrands for 2018 but HaAretz is absent (its economics and business branch TheMarker is included).
  4. Interestingly, the researchers of TACK report that preference for Arcaffe and for Tiv Ta’am, each in its category, is stronger among consumers who describe themselves as leaning to the political left. The relevance of political attitudes to dining-out and food shopping is a little obscure, but it gives an indication of the portrayal of their more likely customers. More importantly, this research evidence amplifies the argument that corporate brands more entrenched in niches — like HaAretz, Arcaffe and Tiv Ta’am — are much less likely to be considered strong leading brands.

Thirdly, response to price and value perceptions are not free of an emotional loading. An economic approach views the calculation of value as a rational procedure of weighing the benefits and cost of a product or service offer. However, when an offer is judged as unfair to the disadvantage of the buyer, this may stir anger and resentment of the consumer in response to the price offer. The resentment is more often directed to the retailer, but it may be pointed towards the manufacturer of a national brand as well, depending on whom the consumer believes to be more responsible for a price differential or increase.

The judgement of unfair price differentials is contingent on the reference price used (e.g., a price paid by a friend for the same product at another store this week). In the case of a price increase, the reaction is subject to whether consumers can see justification to a price increase by attributing the increase in retail price to a rise in cost that retailers or manufacturers could not control (e.g., price of raw materials). In the past decade much resentment developed because consumers failed to find such justifications. Instead, the perception more accepted was that retailers and manufacturers were rolling their cost rises mostly to consumers, and they raised prices merely to improve their profits. In Israel this problem was evident especially in the food category where consumers were witnesses to continued feuds between the food chain retailers and manufacturers. More broadly, many Israeli consumers appear to these days to have little tolerance to retailers, service providers or manufacturers that seem to raise prices unfairly or try to position themselves to be more up-scale and luxurious — disappointment and anger at them motivates consumers to punish them in some way. This kind of resentment and urge to act in revenge is apparent also in the results of the study by TACK.

Price is given priority by more Israeli consumers, and it seems to overweight possible advantages in quality of products, services or the environment of shopping. In some cases consumers may fail to appreciate any such advantages while in others they simply consider the price premium as unjustified or unaffordable (which may add frustration to their evoked emotions). This can be another aspect that explains the differences between companies described above: (a) for instance, the gaps on Logic and Magic between coffee-house chains like Cofix and Aroma compared with Arcaffe,  and vis-à-vis Roladin, or (b) Rami Levi which is probably perceived as making greater effort to charge affordable prices (although it declined a little from last year), far better than a delicacy chain such as Tiv Ta’am. In other categories, it is more difficult to make clear inferences. In telecom services (mobile, TV, Internet), for example, all major companies receive relatively low appreciation and are less loved. A specialised dairy producer (Tara) is positioned less favourably than the two major and larger dairies (Tnuva and Strauss) which happened to be more shaken by consumer protests of several years ago (Tara is more preferred though among ages 55+ according to TACK). Among fashion retailers, a low-cost retailer of casual wear (Fox) is positioned just slightly higher on Logic but lower on Magic than some major main-stream retailers (H&M, Castro, Zara); yet another retailer (Renuar) that is probably somewhat more exclusive appears to be considered less worthwhile and having moderately less of magic (as reference, Polgat [for men], which has visibly better quality clothing, is not included).

The study of image strength by TACK sheds light on the relative positions in which consumers hold corporate brands both in their minds (Logic) and in their hearts (Magic).  It is somewhat surprising to find such a strong association between the logical-functional dimension and the affective dimension — it suggests that a company cannot sustain a positive stance on one dimension without the other for a long time. There is some discomfort also in realising that price could be more dominant than quality, but it is important to acknowledge how perceptions of value, and especially unfairness, can influence the emotional reaction of consumers to the corporate-level brands. Effectively, being attentive and sensitive to what the wider circles of consumers in the country need and expect to have is a key to be regarded overall as a favourable, strong leading brand.

Ron Ventura, Ph.D. (Marketing)


Comment on Methodology:

The brand scores are given in percentages. More detailed values reported for 2017 help to understand the metric’s structure. The score on each dimension (Logic or Magic) seems to be calculated as the sum of the ‘top-box’ proportions for the two items it is composed of (e.g., % who give a rating of 6 or 7 on a 7-point Likert-type scale in agreement with each statement of Logic, where 25% on ‘appreciate’ + 20% on ‘worthwhile’ = 45% on Logic). However, summing up those percentages is not a proper procedure — this sum does not have a meaningful interpretation because the proportions cannot be accumulated. It would be correct to take their mean rather than the sum. Another valid option is to add-up the rating values of the pair of items for each respondent and then calculate the percentage who have given a total score on that dimension of above a threshold (e.g., a score on the index of Logic of above 12) in order to produce a score that may be more easily related to.

Reference on price fairness:

The Price is Unfair! A Conceptual Framework of Price Fairness Perceptions; Lan Xia, Kent B. Monroe, & Jennifer L. Cox (2004); Journal of Marketing, 68 (October), pp. 1-15.

Read Full Post »

Marketing and consumer researchers have long been interested in revealing and describing differences in the behaviour of consumers that arise from differences in culture between societies, nations and communities. Ignoring such differences can lead companies to making embarrassing and costly mistakes in international marketing. Culture sets ideas, values, norms, symbols and customs that influence and shape the thoughts, beliefs and actions of the people adhering to it; in particular, responses to marketing-oriented stimuli — products, advertising messages, websites, stores etc. — can vary specifically due to cross-cultural differences.

Kastanakis and Voyer (2014 [1]) propose that investigation of the effects of cross-cultural differences on consumer behaviour should look deeper into pre-behavioural processes, namely perception and cognition. Culture conditions perception and cognition, thus affecting how consumers perceive and understand stimuli, which consequently drive behaviour. Consumers develop perceptions and thoughts from the input of stimuli they attend to, but top-down processes set by pre-defined mind-sets, goals and beliefs (e.g., guided by culture) may inversely shape how consumers perceive, interpret and think of the information received from their environment. The researchers review ways in which culture influences perception and cognition in different functions or contexts. Similar to the greater part of research on cross-cultural differences, Kastanakis and Voyer concentrate on differences between Western cultures (individualist, espousing independence) and Eastern [Asian] cultures (collectivist, espousing interdependence).

Western cultures encourage people to see themselves by themselves, that is, developing an independent construal of one’s self-image; Eastern cultures on the other hand encourage people to see themselves as part of a group, that is, developing an interdependent self-construal. Thus, Easterners are predisposed to construe their self-image based on their relations with and similarities to others in a group of affiliation, compared with Westerners who view themselves as individuals independent from others, emphasising their unique traits. The tendency of Easterners to perceive and judge an individual person relative to surrounding others is demonstrated in this example cited by Kastanakis and Voyer: American and Japanese research participants were asked to judge the emotion of a central figure based on his or her facial expression when surrounded by other person figures showing the same or different expressions — “The findings indicate that the surrounding people’s emotions influenced Japanese perceptions but not Americans’ perceptions of the central person’s feelings.” [Based on research by Masuda, Ellsworth and others, 2008.] Contextual information (e.g., feelings of others) seems to matter for judgements in the East more than in the West.

In another implication of the independent-interdependent cleavage, whereas Westerners are mainly focused on achieving their personal goals, Easterners are looking more to help advance goals of the group they belong to, catering to others’ needs or wishes.  The authors suggest as a possible consequence that “Westerners perhaps tend to join groups to serve their own needs, whereas in collectivist societies, people serve the groups to which they belong”. This difference in approach may affect, for example, the way users of social media in North America and Europe participate and interact in these networks, differently from users in Asia (e.g., South Korea, Japan, China). It has been repeatedly argued that social media networks have not helped people in the West to socialise any better, perhaps even to the opposite, and that users engaged in social media may still feel in solitary. A similar discussion may concern also the use of digital platforms in the rising ‘sharing economy’ (e.g., Airbnb, Uber, LendingClub). Gaining true benefits from socialising and sharing platforms is based on collaboration, contributing to others or at least reciprocating helpful actions by others, not quite in line with values and norms taught by the individualist culture of the West (e.g., promoting competition and personal achievement).

The contrast between independence and interdependence further finds an expression in a respective distinction between thinking styles: analytic vs. holistic. Analytic thinking, associated with an individualist culture, is more focused on single objects and the attributes of each; holistic thinking, associated with a collectivist culture, is more attentive to the context or field in which any object is found. Thereby, Westerners following an analytic perspective would be more inclined to observe and judge objects in isolation, whereas Easterners (Asians) following a holistic perspective tend to consider the relations between objects observed and make judgements based on the context of a whole scene. This distinction can have important implications for the perception and evaluation of visual scenes. For instance, a Westerner would focus on a particular exhibit or display of products in a store (e.g., a dressed mannequin) while an Easterner would see the same display against the background of other in-store displays and interior decorations of the store. In front of a shelf display, an Easterner viewing it holistically would be more attentive to the collection of products on display compared with an ‘analytic’ Westerner focusing on each product at a time (note: such a difference may also be applicable to a screen display of products on a webpage).

The difference in perspective is applicable also in viewing photographs of scenes, not just when being physically present on-site. Easterners more accustomed to a holistic view would be more capable at capturing the gist of a photographed scene as it relies on perceiving relations between multiple figures and objects in the scene. Westerners following an analytic perspective, on the other hand, would be more capable at noticing the attributes of particular objects. It should be noted, therefore, that while people in the collectivist East may have the advantage of identifying relations better, people in the individualist West may have the advantage of observing object details better (i.e., could be judging single objects with greater scrutiny). It furthermore appears that people match their aesthetic preferences to their culture-orientated perspective. Kastanakis and Voyer give an example wherein Eastern portrait paintings or photographs “tend to diminish both the size and the salience of the central figure and emphasize the field”.  Such differences in perspective and thinking style should be considered, as the authors advise, in the aesthetic design of advertising materials and other communications as well as in retail sites.

Stronger relational processing has relevance to attributes, and moreover to a perceived relationship between price and physical product attributes used as intrinsic cues for quality. Lalwani and Shavitt (2013) provided ground support for the association between modes of self-construal — independent vs. interdependent — and reliance on a perceived price-quality relationship. The way people look upon their own self-concept vis-à-vis their relation to others radiates to their perceptions and processing of relations between price and quality attributes. Importantly, however, they show that the linkage is mediated by the distinction between analytic and holistic thinking styles. Interdependent (collectivist-oriented) consumers are more capable at processing price-quality relations, where holistic thinking in particular positively predicts greater reliance on such relationships [2].

In addition to visual processing and aesthetics, culture is known to affect perception, processing and preferences of smell and sound. Consumers may be biased to better recognise smells familiar to them in their culture or to better comprehend culturally familiar melodies. The bias occurs, as said by Kastanakis and Voyer, during recall and recognition before the information even enters the attitude formation, judgement, and decision making processes. Consider thereby the mixtures of styles and forms one would find in a country that absorbs immigrants originating from cultures different from each other or from the culture incumbent in the receiving country, for example in music and food. As people borrow from the traditions of communities of other cultural origins and adopt also from those typical locally, they get exposed to and experience mixtures of music melodies or food flavours. Yet, even with years passing certain things do not change — consumers may continue to feel more secure and comfortable with the familiar music genres and food styles they were raised on at home, associated with a given culture.

  • Kastankis and Voyer note a lack in cross-cultural research on taste perceptions; that is unfortunate because food is such a significant domain, but the smell of food may still have a cultural impact on consumers’ reactions.

Furthermore, the language one speaks can determine the perspective, individualist or collectivist, one applies. Immigrants, for instance, may change how they present themselves depending on the language they use: that of their origin or the one adopted in their current country of residence. The language carries the values and norms of a culture it is associated with, such as how people perceive themselves. For example, bi-cultural Chinese-born people refer to their own internal traits and attributes to describe themselves in English but describe themselves in relation to others when using Chinese. Kastanakis and Voyer argue that language is not emphasised enough as an aspect of culture: “language triggers a culture-bound representation of the self”.


Idiocentrism and Allocentrism are views held by people at the individual level in parallel to the individualist and collectivist cultural views of societies, respectively. This reference to individual-level culturally oriented views becomes particularly prominent when the personal view does not match the societal-level view dominant in one’s country of residence: for example, when people of Asian origin living in the United States, a country with an individualist culture, personally maintain an allocentric view.

Dutta-Bergman and Wells (2003) found some interesting differences in values held and lifestyles practised by idiocentrics and allocentrics living in the American individualist culture. For example, idiocentrics are likely to be more satisfied with their financial situation and optimistic than allocentrics; idiocentrics are also more disposed to be workaholic, yet are more innovative. Allocentrics are more likely to be health conscious; additionally, they are more inclined to invest in food preparation and other chores at home and to engage in group socialising than idiocentrics [3]. (Note: Idiocentrism and Allocentrism are approached as individual-level dispositions adopted by people; they are not necessarily contingent on any immigration status or country-of-origin.)


 

The differences between individualist and collectivist cultures may influence human cognition in several more ways explained by Kastanakis and Voyer. Key areas involve self- versus others-related cognitions, self-esteem, and information processing. Briefly mentioning some noteworthy implications: (1) People in Western cultures have a stronger tendency to make dispositional attributions for behaviour (e.g., to one’s personal traits or competencies) and discard situational factors, as opposed to Easterners; (2) Causal reasoning in Eastern cultures tends to give greater consideration to interactions between personal (dispositional) factors and situational or contextual factors than in Western cultures; (3) In Western cultures people will prefer to classify products based on typical functional or physical attributes of categories (i.e., rule-based classification) whereas in Eastern cultures people will rely more on family resemblance and relationships between products (i.e., relational classification); (4) In persuasion, Westerners (e.g., Americans) prefer to take side in conflicts while Easterners (e.g., Chinese) are persuaded more by compromise solutions and are more ready to deal with contradictions.

Readers are reminded additionally of the differences in processing of visual information already described earlier (i.e., between the Western object-focused analytic approach and the context-orientated holistic approach in the East). These differences may be well-connected with the approach consumers take in judging and classifying products visually displayed (e.g., physically in-store, virtually in print or screen images).

Three final comments to conclude: First, as always we have to be careful with generalisations made such as between ‘Western culture’ and ‘Eastern culture’. There are differences in elements of culture between countries associated more closely with either the individualist or collectivist streams of culture. There is furthermore variation among communities and sectors within countries, and some tendencies may also be considered as individual-level differences (e.g., holistic vs. analytic thinking). Second, there is need in the West to explore and deepen the understanding of other streams of culture (e.g., African, Middle Eastern, South American). Third, Kastankis and Voyer address changes in perspective and behaviour of people in Asian nations caused by their growing exposure to the Western individualist cultural orientation. However, a more salient phenomenon prevalent in recent decades seems to be the immigration of people originating from non-Western cultures coming to live in countries of the West. Especially in Europe, the extent of exchange in ideas, values and customs between people with Western-orientation (‘incumbents’) and non-Western cultural orientations (e.g., from Africa and the Middle East) should have great impact on the balance between cultures on the continent (as well as in the UK), and not least the kind of consumer culture that will prevail in future.

International marketers must keep fully aware of and account for the differences between Western individualist orientation and Eastern collectivist orientation, and more so their multiple facets of manifestation in perception and cognition. Particularly important is paying attention to the differing thinking styles (i.e., analytic vs. holistic thinking) for their possible implications in processing and responding, for example, to persuasive attempts in advertising in online and offline channels, store design and visual merchandising. Extending marketing plans or initiatives across seas and borders, without making consideration for these potential differences, may significantly diminish the effectiveness of the actions taken in new destination markets to the extent of proving utterly precarious.

Ron Ventura, Ph.D. (Marketing)

References:

[1] The Effect of Culture on Perception and Cognition: A Conceptual Framework; Minas N. Kastanakis and Benjamin G. Voyer, 2014; Journal of Business Research, 67 (4), pp. 425-433. (Accepted version is available at eprints.lse.ac.uk/50048/ on LSE Research Online website).

[2] You Get What You Pay For? Self-Construal Influences Price-Quality Judgments; Ashok K. Lalwani and Sharon Shavitt, 2013; Journal of Consumer Research, 40 (August), pp. 255-267 (DOI: 10.1086/670034).

[3] The Values and Lifestyles of Idiocentrics and Allocentrics in an Individualist Culture: A Descriptive Approach; Mohan J. Dutta-Bergman and William D. Wells, 2002; Journal of Consumer Psychology, 12 (3), pp. 231-242.

 

 

Read Full Post »