Strategy and Transformation (MBA)

Examine the arguments for and against the increasing homogenization of consumer tastes.

Muneeb Naik
 Homogenization of Consumer Tastes

Introduction

The key element of globalisation is the conjunction of earnings, technological development

and mass media, that had led to homogenisation of consumer tastes. This amalgamation theory
is gradually being grilled. Though, there is mixing of national wealth but still considerable
disparity of consumer behaviour is seen around the world. Along with homogenization,
variation exists in customer behaviour; in buying of packaged goods, in utilization of durable
items and in association with mass media. With blurring boundaries of GNP per capita of the
nations, culture is a strong example for clarifying differences (Mooij, 2003). The essay will
send light on the pros and cons of the swelling homogenization of consumer tastes and its
impact on the current businesses.

Paradigm Shift

In 70s the market segmentation strategy was outlined as standardization against adaptation, in
the 80s it became globalization against localization and in 90s it was global incorporation
against local receptiveness. And the ultimate problem was whether the world-wide
homogenization of consumer tastes permitted global adjustment of marketing mix and dot com
boom added a new turn to the long-standing argument of unparalleled global market (Rao,
2010). For illustration, Twix Cookie Bar Company did their world-wide promotion with a new
international public relations agency, Grey Worldwide, after analysis this approach does make
sense for Twix. On the other hand some companies took the opposite path, Coca-Cola in India
captured local soft drink manufacturer namely, Thums-Up to compete against Pepsi in the
market. Coke had to come to the grounds with contradictory truth when acquiring the local
market overseas due to the buying pattern of consumers that depends on the income and
nationalistic behaviour of the customers and they spend more money on indigenous beverages
whose tastes are not the part of the Coca-Cola Company (Rao, 2010).

Homogenisation- Friend or Foe to Business

Levitt (1983) claimed three decades ago that new technological developments will lead to
homogenisation of consumer needs and wants as customers were likely to have typical products
of high quality at lesser price in contrast to additional personalised, high priced items. His
claims were built on the supposition that customer behaviour is sensible. But, it is not every
time that customers make rational purchase decisions that boost utility. Hence, statement of
sensible buying is progressively considered as impractical and puts buyers outside a cultural
framework (Antonides, 1998). In order to yield maximum benefits from the homogenising
consumer taste, it is highly crucial for the businesses to understand the culture of the target
buyers. Neglecting the impact of culture on business has led many businesses to consolidate
their operational and marketing strategies, instead of boosting the efficacy and has caused
decreasing profits. Best example is of Coca-Cola, when in the year 2000 the company focused
on getting close to local markets due to reduction in profits. As of earlier their focus was on
the standardisation of practice and less emphasis on local sensitivities in order to stay lucrative
(Mooij, 2003).

Homogenisation of user habits creates cost benefit to the business and calibration of the
marketing mix in a practical way. If the business is not standardising, it means they are out
dated (Levitt, 1983). As the standardisation is necessary evil for the sustainability of businesses
(Cassinger et al, 2003). International marketing strategy has recognised a rise of fiery argument
on the design and application of global strategies. Adaptation and standardisation are the two
outlooks that control the argument on the strategic marketing. Those who support adaptation
claim that even if human requirements and preferences may be alike globally, but the variance
in cultural and environmental features remarkably effect the buying behaviour of the people
around the world. Hence, global strategies where the same merchandise are sold in the same
method all over are seen as unsuitable. On the other hand, those supporting standardisation
confront that inclination towards modernism is leading to a homogenisation of consumer taste
around the world (Cassinger et al, 2003). Technological developments have played a crucial
role to reach the international markets and blurred the dissimilarities in standard of living.
Hence, strategies involving standardisation of marketing techniques have provided the desired
results.

Convergence of technology and GDP per capita in the first world nations have touched the
maximum number of populace, they can purchase plenty to eat and have extra earnings to spend
in new technology and other consumer durables. Hence the countries will have same market
penetration of such products, but what individuals do with their belongings does not unite, as
most of the consumer behaviour diverges through borders. More the convergence of national
wealth across nations, more its explanatory influence decreases (Mooij, 2011). It is assumed
that communication on the global level formed a global, homogeneous consumer taste. But this
homogenization is robust in the USA than in any other part of the world. In advertising, global
consumer culture is signified as a collective sets of utilization related signs (product
categorization, trademarks, utilization pattern) that are important to segment customers. USA
is the hub for the flow of mass media programs and it had played a crucial role in the
development, knowledge and division of such intake signs. Hence, these signs of world-wide
consumer taste are just Americanisation, whereas in USA these signs are just local. After
analysing the advert samples, just 5.5% were considered as global culture signs whereas 25.6%
were considered local. Therefore, the homogeneity is not based on the world-wide signs of
consumer habits (Mooji, 2011).

Merging or Separation?

Technological development and fading income gaps across nations will not lead to
homogenisation of consumer habits but instead it will cause heterogeneous consumer taste due
to variation of cultures. More the income of consumers converge, the index of value
dissimilarities will become robust. Hence, due to this understanding the national cultures and
their effect on the customer behaviour is crucial. Marketing and retailing strategies for one part
of the world cannot be applied in other part of the world without adaptation of local values and
buying pattern of the consumer (Mooij and Hofstede, 2002). In the 21st century there has been
a lot of homogenisation of consumer taste due to internet and fast media, good example for this
is the MTV, teens in America, Europe and Asia have developed the same taste of music,
favourite pop starts and the life-style of the generation Y which is far different than their
predecessors (Mooij and Hofstede, 2002). Moreover the homogenisation of consumer taste
highly depends on the type or category of the product, if the products are consumer durables
like tablets/PCs, mobile-phones, etc. one can see a great deal of similar pattern in consumption
to these items, whereas if the products are fast moving consumer goods such as food and drinks,
consumer is more selective on the basis of their culture, habits and sensitivities. Retailers from
UK and USA neglect the cultural variation when taking business to overseas market and they
tend to forget retailing is a much localised concept and needs to look into sensitivities of local
consumer. Moreover there is very less evidence suggesting consumption patterns are
converging across nations (Murphy, 1999). The supposition that economic conjunction will
lead to homogenisation of consumer habits in only held by circumstantial proof and the data
available is based on macro developmental settings such as number of TV sets, telephones or
cars per 1000 people. Even this data is only from the developed nations, if compared with
developing world there still exists a huge difference (Mooij and Hofstede, 2002).
Source: Convergence and divergence in consumer behaviour: implications for international
retailing (2002)

The above tables shows the impact of individuals personal preferences on his/her consumption
habit. According to Sheth and Maholtra (2004) the range of international customer culture is
accustomed by the world-wide drift of distinct national resources. Due to globalisation the
cultural mixing multiplies through landscaping processes that has led to a swelling awareness
in self-productive process, not least over utilisation (Kjeldgaard and Arnould 2009). Hence
global consumer taste consists of amalgamation of desires, preference to have an identity via
material signs and symbols, curiosity to imitate and desire of a market-intervened physical
world of standardised portraits of better life style (Sheth and Maholtra, 2004). The likelihood
of a worldwide business strategy and emphasis on commercial, national and ecological
variations between countries has weakened its application. Adapting a strategy to replicate
culture-market transformations will create better-quality reaction from consumers (Kotler
1986).

Source: The Glocal Strategy of Global Brands (2010)

Glocal strategy denotes to the notion of think global, act local. In the table above it acts as
a mediator between the global and local strategies.

In the current scenario multinational companies are going through tough waters in decision
making in terms of what business strategy to opt, looking at the marketing strategies on
international level the focus is to increase standardisation, homogenisation and integration of
marketing processes all over the globe (Luigi and Simona, 2010). For the global marketing
analysts they must put emphasis on the volume of problems the business face when developing
and deploying a global marketing strategy to make sure their products will be accepted by the
consumer those are bound with different perspectives in terms of social, cultural, political,
economic and ecological differences (Kotler, 2009). Homogenisation of consumer taste is
directly linked to the marketing and promotion of the products and services, hence MNC
marketing experts need to overcome the challenges of creating new marketplace and device
advertising strategies capable of delivering efficiently to the diverse target customers. To aid
this hefty work, various conceptual frameworks have been designed to regulate these efforts,
could be either by globalised or localised or combination of both (Luigi and Simona, 2010).
Source: The Glocal Strategy of Global Brands (2010)

One of the reasons behind homogenisation of consumer taste is the adaptation of glocal
strategies, which ensures the standardisation of some basis features and localize the other
features of the strategies to penetrate in the global markets. This type of marketing tactic
represents both the model of untainted international marketing strategy and the
acknowledgement of localised problems in the marketing events. In this type of strategy
function heads for certain activities act on local basis to stay lucrative in new markets.
Businesses have global strategies and corporate strategies serving two different purposes i.e.
the former act on global level and later act on local level to understand consumer differences
(Kotler, 2009). Kotler (2009) further enhances the glocalisation and its benefits as; customer
takes a particular product as relevant to their specific needs and desires and are manufactured
to fulfil their necessities. For the business it is an accord and balance amongst the diverse levels
of marketing operations and strategies. Due to these phenomenal actions products gets the
maximum market share. Besides companies are leaving no stone unturned to meets the
demands of the market in order to gain competitive advantage. Corporations have become more
innovate to penetrate the markets world-wide. The ever shining example is of McDonalds, in
India the outlets serve vegetarian burgers and no beef, in Japan Teriyaki burgers, in some
European countries there is beer and wine on the menu as well (Luigi and Simona, 2010).
Hence, if we say that the consumer has become homogenised will be fair to some extent but
its the business itself that has become homogenised as per the preferences, sensitivities and
environmental factors around the globe. Researchers from the academia see globalisation as a
threat to cultural identity, for the supporters of homogenisation theory, international products
are Trojan horses that help transnational organisations to inhabit local ethos (Falk, 1999).

Today what we call modern products are nothing but the end result of modern civilizations.
Hence, the features of modernity are merged in Levitts claims of modern products. Thus, these
products are balanced in a way that they are relevant to use, and consumer have a value for
utilisation whether the quality and performance match their price tags. Also, these products are
meant for the cosmopolitan life, they are present date with appeal of exhaustive innovation that
has no attachments from past poor period. As a result, every consumer in the post-modern era
desire for technically innovative, spotless, modern, simple and sensible products. But, all
present time products cannot be looked upon as universally acceptable (Cassinger et al, 2003).

If the end by-product of globalisation is homogenisation of taste, then the query comes up, who
is globalising who? To answer this, a mirror image concepts of homogenisation and
hegemonisation were introduced by Mazrui (1999), as we are familiar with the former one the
later on is absurd awareness of power from another culture or society in a specific nation or in
a specific society. It is also the rise and association of hegemonic hub, i.e. fashion trends, we
dress the same way around the world as compared to 19th century. It is the 19th century
considered as homogenised by some researchers (Mazrui, 1999). However, the way people
dress is globalised and that too in western style, jeans and suits; it is hegemonisation. The
culture of globalisation has become a one way process, developed world can be perceived as
institution of western culture that fascinate cultures of developing world through rigorous
marketing actions, therefore these activities eventually leads to a global conjunction of habits
and favourites (Ning, 2002). Thanks to the robust technological developments, the amount of
merchandises and data leaving western nations is much higher than the amount of merchandises
rolling in from the other countries, it means that homogenisation of taste can be looked as
hegemonisation of taste, an oration of western business giants (Ritzer, 1998). Therefore, it is
rational to say that intake of homogenous merchandises simply denotes the course of
hegemonisation, organisations are pushing hard for homogenous merchandises on the
international market and not essentially homogenisation of taste. Yet, by stressing that
homogenisation of taste unavoidably leads to the uniformity of merchandises, Levitt (1983)
assumes that homogenisation practice is in a direction to authorize standardisation as global
strategy. The concept of homogenisation of taste is not supported by whatsoever other than
Levitts belief in the dominance of modern businesses and their ability to produce homogeneity
on global platform and done with the activities of marketing (Cassinger et al, 2003).

Another factor that stimulates homogenisation of consumer taste could be the regulations of
world trade. Since last decade, many countries have relaxed their trade rules by eliminating
trade obstacles giving sponsorship to overseas businesses. Further to the swelling trade
capacity, the increasing foreign direct investment (FDI) especially in developing countries has
more assisted the homogenisation. The on-going advancement from the domain of separate
domestic marketplace towards international arena is being propelled by the determined powers
of homogenisation of consumer habits and the strategic benefits for the business being on the
global platform (Lee and Tai, 2006).
Source: Journal of Social and Development Sciences (2103)

In a study by Nezakati and Akhoundi (2013) they suggested there is a considerable amount of
connection between the homogenisation and heterogenisation in terms of marketing strategies
focused on standardisation and customisation, in the above figure are represented with H1 and
H2.

Findings and suggestions

In the current era of more wealth, forecasting and clarifying consumer behaviour dissimilarities
through nations is vital for the transnational retailers. Business expansion to the nations with
diverse culture can be risky if not adapting to their values. Recognition of e-commerce and
online business differs through ethnicities. Cultural features such as the level of insecurity
evasion and long tenure placement in a certain would appear to be possibly valuable when
categorising nations as to the potential of online business. To make sure that the strategy will
work in a specific market, market test is done for the launch of new product or new retailing
framework, businesses need to be aware that it is not necessary that the same approach will
work in another country having different ethics and values. Hence the nations can be
categorised on the basis of cultural dissimilarities. In order to successfully penetrate in the new
markets, Hofsteds conceptual framework for culture is a resourceful tool for devising global
marketing strategies (Mooij and Hofstede, 2002).

People nowadays have more wants than needs and want international and national brands,
hence to meet such consumer demands, companies can make them feel the taste of both
products. Moreover, people have become more attached to their ethnic items as it has become
easy to find the preferred product anywhere in the world due to e-commerce and faster
transportation. For this purpose business can exploit glocal strategies till end-meets (Luigi and
Simona, 2010).

There are few fables related to international marketing strategies and advertising that
conjunction of consumer behaviour, the presence of collective ethics and universal societies
with alike principles. For selected durable merchandises and innovative technologies at macro
level, nations are uniting so the taste of consumer as well, but at the same time they separate
on the basis of how the products are being used. Study in the impact of earnings or culture on
intake of certain products at domestic level over a period indicates that when nations
congregate with regard to domestic capital, ethnic dissimilarities gradually illuminate the
alterations in nation-level behaviour of consumer (Mooij, 2003).

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