news details |
|
|
| The Impact of Culture On Sales Promotion | | | DR.MANZOOR
AHMAD YETOO
The widespread use of consumer sales promotions has sparked considerable interest and debate over their effectiveness. Critics argue that sales promotions are ineffective as they make consumers more promotion prone, resulting in market share losses in the long run. However, other researchers have shown that sales promotions lead to real increases in sales and profits. This discrepancy suggests that there are conditions and factors that can influence the effectiveness of sales promotions. For instance, it has been shown that sales promotions are more effective when they provide benefits that are congruent with those of the promoted .
Culture has an impact on many aspects of consumer behavior, from service expectations to consumer innovativeness.. It also has been suggested that an understanding of culture can assist in making marketing decisions, such as whether to pursue standardised or localised strategies - something that has been discussed recently in the context of retailing strategies It has been proved that cultural differences may also exist at an ethnic level, for instance among Caucasian-Americans, Hispanic-Americans, African-Americans, North African-French, Italian-Australians, etc.
However, there is limited empirical research focusing on culture at an ethnic-group level and its impact on consumer behaviour. Various studies undertaken in Australia and other parts of world reveal that.As in many nations, increasing use is being made of consumer sales promotions by a diverse ethnic mix of consumers .
It provides evidence to examine the popular assumption that cultural differences exist at this level. The studies also contribute to theory development by providing further validation of a new scale for measuring culture in a consumer context, namely the CVSCALE. The majority of past studies on the effectiveness of consumer sales promotion have focused on monetary sales promotions.
However, in practice, a range of both monetary and non-monetary sales promotions are used, and there are important differences between them. Monetary promotions (e.g., shelf-price discounts, coupons, rebates and price packs) tend to provide fairly immediate rewards to the consumer and they are transactional in character; non-monetary promotions (e.g., sweepstakes, free gifts and loyalty programs) tend to involve delayed rewards and are more relationship-based.So in assessing the effectiveness of sales promotions, it is necessary to examine both types. Based on the distinction between the types of sales promotions and promotion benefits, it is shown that monetary promotions provide more utilitarian benefits whilst non-monetary promotions provide more hedonic benefits. These relationships are a matter of degree rather than absolutes; for example, coupon promotions (i.e., a monetary promotion) may still provide some hedonic benefits such as the enjoyment in redemption, although its main benefit of saving is utilitarian.The congruency effects, including the product life cycle, purchases situations .
Culture and Ethnic Groups
Culture can be defined as a set of norms and beliefs that are shared amongst a group of people and that provide the guiding principles of one's life.Culture is also defined as the way of life of people grouped by ethnicity, including shared norms and beliefs that can impact on behavior. This definition is appropriate for several reasons. Firstly, it implies that culture encompasses all the norms and beliefs of a society - it is the total way of life in a society. As Triandis (1989) suggests, these societal norms and beliefs will ultimately have an impact upon the dispositions and behaviours of society members. Thus, the definition allows for the possibility of culture to have an impact on consumer behaviour.
Secondly, the definition is flexible in allowing for different levels of culture. This is evident by the notion of "society" within the definition, which means culture is not necessarily restricted to a country basis. Furthermore, it has been suggested that equating culture with nations can be inappropriate. Instead, culture can be conceptualised at different levels and in a variety of contexts. For instance, culture defined by age or music, as in youth or jazz culture. Ethnic groups can be considered as subcultures within a country. They preserve the main characteristics of the national culture from which they originate but also develop their own unique norms and beliefs. Each ethnic group constitutes a unique "community because of common culture". Thus, the study of culture by ethnicity within a domestic context is feasible and appropriate since each ethnic group will have its own unique set of cultural values. In fact, it has been suggested that intra-country variations of culture can be as large as the variation across countries.
As Nakata and Sivakumar (2001) noted, the impact of culture has been well documented in many areas of marketing, including consumer responses to sales promotion.
Cultural Dimensions
Given the potential relevance of culture, a basis is required for assessing its impact. Here use is made of the five cultural dimensions popularised by Hofstede (1991): power distance, uncertainty avoidance, individualism-collectivism, masculinity-femininity and the Confucian dynamism.
In general, it is hypothesised that differences based on Hofstede's (1991) five cultural dimensions can lead to relative differences between ethnic groups in their preference for promotion types. In effect, within the congruency relationships established between product and promotion types, ethnic groups may differ in their relative choices of monetary and non-
monetary promotions. For example, whilst monetary promotions might be more effective for utilitarian products, the choice share of monetary promotions may be higher for one ethnic group than another due to cultural differences.
Power distance deals with the acceptability of social inequalities, such as in power, wealth and status (Nakata and Sivakumar 2001). In high power distance cultures, inequality is prevalent and accepted. Indeed, privileges and status symbols are both expected and desired. Consumers in such cultures are thus likely to be more responsive to sales promotions that contain differential treatment. These mainly involve non-monetary promotions, in which differential treatment may occur by purchase value (e.g., free gifts and reward programs) or by chance (e.g., sweepstakes). In contrast, cultures with lower power distance are less tolerant of inequalities and special privileges (Hofstede, 1991). Consumers in such a culture would have a relatively higher preference for sales promotions that offer equal rewards for everyone. These mainly involve monetary promotions, such as price discounts and coupons, as they are generally available with the same level of benefit offered to everyone.
Uncertainty Avoidance
Uncertainty avoidance deals with the level of discomfort regarding future uncertainties. Although not equivalent, it is closely related to risk aversion.
In high uncertainty avoidance cultures, there is a tendency to "prefer stable situations and avoid risk" . Thus, to the extent that uncertainty avoidance is related to risk aversion, such cultures would prefer promotions that offer more tangible and immediate rewards (e.g., price discounts). This is expected since such rewards are more certain and involve minimal amounts of risk. On the other hand, cultures with low uncertainty avoidance are more risk tolerant and see opportunities within future uncertainties. In fact, they may even be considered as risk seeking given that cultures with low uncertainty avoidance have been shown to exhibit higher levels of innovativeness . Thus, consumers of such a culture will be more accepting of promotions that offer relatively less tangible and long-term rewards (e.g., sweepstakes and loyalty programs).
Monetary promotions are more effective for high uncertainty avoidance cultures relative to low uncertainty avoidance cultures.
Non-monetary promotions are more effective for low uncertainty avoidance cultures relative to high uncertainty avoidance cultures.
Individualism/Collectivism
Individualism refers to the degree of distance in social relationships . It has been suggested that relationships "play an important role in the search and choice processes" of consumers. Thus, the extent of individualism may affect consumer choices between different types of promotions. Individualistic cultures have distant social relationships, in which personal goals are favoured over group needs . Value is placed on self-interest and independence, as well as pleasure. In addition, individualistic cultures emphasise differentiation and the ability to express one's uniqueness . Given these characteristics, individualistic cultures might be more receptive to non-monetary promotions since the associated hedonic benefits are entertaining and more experiential. Furthermore, hedonic benefits can provide intrinsic value to individuals and provide an opportunity for self-expression.
In contrast, less individualistic (or more collectivistic) cultures are characterised by close relationships and interdependence. There is strong emphasis on conforming to in-groups, which are typically close social groups such as family and friends (Hofstede, 1991). At the same time, entry and exit to other groups is difficult and rare Thus, collectivistic cultures can be expected to be less responsive to relationship building promotions (e.g., free gifts and reward programs) since they will be reluctant to forge a relationship with an out-group. Instead, collectivistic cultures may be more likely to respond to monetary promotions since the benefits provided are more common (e.g., conform to group norms) and are more readily shared amongst the in-group (e.g., savings and quality).
Masculinity/Femininity
Masculinity refers to the tendency to strive for personal achievement and performance. In more masculine cultures, strong values are placed on "materialistic success and assertiveness".. It can be argued that consumers in masculine cultures are more likely to respond to monetary promotions, since the more tangible and transactional-based benefits can satisfy their need for personal and materialistic success. At the other end of the spectrum, less masculine (or more feminine) cultures emphasise the values of nurturing, caring for others and the quality of life (Nakata and Sivakumar 2001). There is relatively less emphasis on personal and materialistic gains. Instead, "people and relationships are important" and "group oriented harmony" is preferred. Thus, feminine cultures are expected to be more responsive to non-monetary promotions since the benefits offered are more relationship focused.Monetary promotions are more effective for masculine cultures relative to feminine cultures.
Confucian Dynamism
The final dimension of Confucian dynamism concerns time orientation and is bipolar.
It has been suggested that the way consumers "understand and allocate time may help explain differences in consumer behaviour across cultures". The higher or positive end is related to a future oriented perspective with values placed on persistence and loyalty. Consumers in such cultures are more willing to make short-term sacrifices or investments for long term gains. This is supported by research studies which have shown that people with a future orientation have a preference for delayed rewards . In effect, consumers in cultures high on Confucian dynamism are expected to be more responsive to non-monetary promotions such as sweepstakes and loyalty programs, since many of the rewards are long term and loyalty-based In contrast, the lower or negative end is characterised by a past oriented perspective, with an emphasis on traditions (Fletcher and Brown, 1999). People in such cultures favour "short- term planning and more immediate financial gains". This is supported by the fact that people with a past orientation are less likely to save money for the future . Thus, consumers of cultures low on Confucian dynamism are expected to react relatively poorly towards non-monetary promotions due to the delayed gratification involved. Instead, they are expected to favour monetary promotions given the benefits are more immediate and transactional.
Conclusion'; Sales promotion largely depends on cultural values,dressing sense, purchasing power of any particular culture,close ness of societies and communities, habits, folkways, mores festivals, celeberations,customs and traditions.
Thus slaes promotions techniques should be devised and implemented accordingly, keeping in view the local conditions and culture.
(The author is an expert in environment, project & waste Management, occupational safety& health & pollution control and empanelled
expert from IRCA).
(You may reach him at
[email protected]) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
|
|
|
 |
|
|
|
|
STOCK UPDATE |
|
|
 |
| BSE
Sensex |
 |
| NSE
Nifty |
|
|
| |
CRICKET UPDATE |
|
|
|
|
| |
| |
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
