Culture based competitive positioning of consumer products in global markets.

ABSTRACT

This paper makes a case for designing culturally responsive product positioning strategies in global markets to gain competitive advantage. It recognizes the role of cultural complexity in global marketing and the implications of cultural frameworks on product positioning

strategies. It examines on how uncertainty avoidance, power distance, masculine versus feminine value systems and individual versus collective orientations may affect product positioning in culturally diverse global markets. A product classification based on the degrees of cultural congruence that products and services possess can be used as a strategic tool to enhance positioning effectiveness.

INTRODUCTION

A review of literature on product positioning in the global context indicates that there is not much conceptual or empirical work done directly on product positioning driven by culture. Most writings essentially extend the domestic product positioning concepts and strategies to the international markets. Al Ries and Jack Trout refer to positioning as "not what you do to a product, positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect"(Ries and Trout 2000). Product positioning is the process of establishing the image of a product or service as being unique and different from the competition in the mind of consumers. Most common criteria of positioning are product attribute or characteristics (Aaker 1991). Firms typically identify unique and or special attributes that are desired by the target markets and are communicated to them and position the products or services to meet these expectations (Evans and Berman 2000). Jain summarizes the most common criteria used as the basis for positioning into six major categories. They are positioning by attribute, by price/quality, by use or application, by the type of users, or by product class and by competitors (Jain 1993).

Traditional approaches for positioning have been developed mainly for the domestic markets and do not involve the use of culture as a driver for positioning. Use of culture as a separate and distinct criterion is a valuable tool in formulating product or service positioning strategies, particularly in culturally diverse global markets. It is understandable that in a domestic environment where all competitors as well as consumers belong to the same culture, the strategists may take it for granted. However, this is clearly not valid in a global setting and ignoring culture as a factor in product positioning strategy may become a major cause for blunders.

Culture is the prism through which consumers perceive or interpret their view of the world and "reflect the sum total of their experience that is projected on to a situation" (Flora and Pierson 1997). It may trigger favorable or unfavorable behavior and can create distinct competitive advantage, if it is used properly. Creating an effective fit requires an understanding of consumer's values that are driven by culture and traditions, particularly for consumer products and services. These products are bought on the basis of whether or not they conform to consumer's cultural traditions and customs. Industrial products, on the other hand, are bought on the basis of technical specifications and utilitarian requirements, without regard to cultural characteristics. Culture emerges as an important criterion in designing consumer product positioning strategies in global markets. The purpose of this paper is to propose why culture can be used as a driving force for designing culturally responsive product positioning strategies and gain competitive advantage in global markets.

CULTURAL FRAMEWORKS AND POSITIONING STRATEGIES

In designing culturally responsive product positioning strategies, it is important to use a cultural framework that systematically explains cross-cultural differences and how they can form the foundation for product positioning. The cultural framework assumes additional significance in the consumer markets since they are more significantly affected by cultural influences compared to industrial or business markets. Product features, characteristics and benefits are used as the basis for differentiation and positioning as cultural differences have enduring influence on them.

A search of literature in global business and marketing reveals that several cultural frameworks have been put forward to explain cultural differences that exist between different national and regional markets. Foremost among them is Geert Hofstede's Value Survey Model (VSM) that classifies various cultures on the four dimensions of power distance, uncertainty avoidance, individuality versus collectivism, and masculinity versus femininity (Hofstede 1983). Fons Trompenaars offers an analytical framework based on seven value dimensions: universalistic versus particularistic, neutral versus affective, specific versus diffuse, achievement versus ascription, individualism versus communitarianism and attitudes towards time and the environment (Trompenaars 1994). Edward Hall's high context and low context culture model is centered on a communication framework that emphasizes that the context in which communication occurs and this context assumes varying degrees of significance in cultures. In a low context culture, spoken words are explicit and direct and convey the message of the communicator, while in a high context culture the context in which the communication occurs is as important as words that are spoken (Hall and M.R.Hall 1997). An earlier framework centers around six basic cultural orientations (nature of people, relationship to nature, relationship to other people, modality of human activity, focus of human activity and conception of space) and the range of variations within each orientation (Kluckhohn and Strodbeck 1961). While any one of these models can be used as a tool to explain the role of culture in consumer product positioning strategies, Hofstede's Value Survey Model will be used as the framework of choice to establish the relevance of culture for product positioning.

IMPACT OF POWER DISTANCE ON PRODUCT POSITIONING

Power distance concept refers to how a society handles natural physical and intellectual differences that exist between people and over time it results in accumulation of wealth and power creating differences in class and status. High distance cultures accept these inequalities and allow them to grow and even nurture them. Low distance cultures attempt to minimize and de-emphasize them as much as possible through laws and or other social and cultural mechanisms. United States, United Kingdom and Canada exemplify low power distance countries while India, Japan and countries in Middle East are classified as high power distance countries. In high power distance cultures, hierarchy, status, authority, command chain and respect are important ingredients in interaction between and among people. So product features, attributes and benefits consistent with maintenance, expression and or promotion of these values are likely to obtain the share of consumer mind in positioning strategy. If in a high power distance culture, Coca-Cola is positioned as a drink for high and powerful in the society and is promoted as the product of choice of the elite economic, social and or political hierarchy, it is likely to result in higher sales. Others not belonging to these groups, are likely to either emulate and or aspire to be like them will consume the product. In a high power distance society, advertising that seeks to position a high end automobile such as BMW or Mercedes-Benz being driven by an owner is less likely to succeed than in a low power distance culture such as the United States where the owner driving the automobile as a status symbol. In high power distance cultures such as Saudi Arabia and India, advertising that shows the car as being chauffer-driven is likely to result in positioning as a status symbol and a high end automobile. Similarly, high priced luggage items will achieve better positioning in low power distance cultures if the advertising shows the traveler using the product himself or herself with ease and convenience. In high power distance cultures, the same advertisement will have a negative impact and is likely to position the product as being suitable for lower class buyers who have to carry their own baggage. If the advertisement shows the luggage as being carried by an attendant, it will have greater impact because it is positioned as a product of choice of the elite and the rich. Positioning products as status symbols and as winning the respect and compliance from others are more likely to be effective in a high power distance culture. In low power distance cultures that espouse and cherish more egalitarian values, product positioning needs to reflect these values.

INDIVIDUALISM VERSUS COLLECTIVISM AND POSITIONING

This dimension of Hofstede's model classifies cultures based on whether a culture's main focus is an individual or a group or a collective unit. Many Western societies such as the United States stress individual values such as individual achievement, individual identity, and freedom and individual choice. Individuals are the focus of attention and the unit of analysis. Individual norms, values and preferences are emphasized and prized. Positioning of products should relate to and be consistent with this value framework for effectiveness. If the product's features, characteristics and benefits are framed and positioned in individual context and messages and appeals are rooted in the individual and independent mindset, the positioning is more likely to be effective. For example product features and or service attributes that are centered on the concept of self-service, self-reliance, and appeals that stress the individuality are likely to become popular because they are positioned in right cultural context.

In collectivist cultures, an individual's identity is defined by birth and is derived from the identity of a group and or collective unit such a family and or an extended family. The individual is raised to think for the benefit of a larger interest of the extended family or a larger group such as a tribe or a caste. Values and norms of group take precedence over those of the individual. Group welfare becomes a higher priority over individual desires or preferences. Words such as we, together are and us emphasized. If they are used in advertisements, they facilitate to position a product and or service in a culturally consistent fashion and secure consumers' share of mind and share of market. Product features, characteristics and benefits have to be portrayed for the benefit of the group rather than for the exclusive benefit of an individual, which may be construed to be self-serving and or selfish. Such positioning may prove disastrous. Culturally consistent positioning may result in the product being positioned differently in different cultures for cultural responsiveness. For instance, an automobile can be positioned as an individualistic choice in a culture such as the United States by highlighting customizable features to meet individual needs and preferences. The same automobile can be positioned in a collectivist culture by stressing the comfort and roominess to carry a family or the safety of the group.

UNCERTAINTY AVOIDANCE AND POSITIONING

Uncertainty avoidance refers to how a society prepares its members to deal with uncertain and ambiguous situations. Societies low on uncertainty avoidance exhibit and value characteristics of high risk taking, both as consumers and as entrepreneurs. They extol the virtues of enterprise, continuous improvement in products and services and the spirit of competition. Consequently, consumers are accustomed to constant change in products, style, format and packaging. They do not only take risk in trying out new products but may even become more demanding of producers to provide new choices and improvements. Successful product positioning may require innovative strategies that cater to this continuous craving for change and betterment. Each product attribute and characteristics becomes the basis for competitive positioning. Durability or longevity as a tool of product positioning is relegated to a secondary position. Challenging consumers to try new and improved products is almost a routine positioning strategy that aims to gain both share of mind as well as market. The battle for consumer loyalty is more explicit because there is a possibility of the consumer to switch to a competitive product as a result of high-risk preference. United States is a culture where uncertainty avoidance is low and the securing, improving and maintaining competitive positioning becomes a constant quest for change and improvement. Societies that value uncertainty avoidance tend to emphasize virtues of security, longevity, constancy, durability, assured benefits and others that pose no major risk or change. The culture exhibits high levels of risk aversion and products features, attributes, and benefits that help avoid change or replacement are preferred. Products that are long lasting even almost paralleling consumer's own life span, have constancy of functions, and can even be passed on to future generations are culturally more desirable. Manufacturers or products that do not change style, model or format frequently are favored because they pose no risk of loss or obsolescence. Positioning products based on longevity, continuity and durability is a successful strategy in such cultures.

MASCULINITY, FEMININITY AND PRODUCT POSITIONING

The fourth dimension of Hofstede's model refers to how the cultures view gender roles. Masculine cultures distinguish make a sharp distinction between male and female roles. Feminine cultures tend toward equality among gender roles and minimize differences in work roles between genders. They stress feminine values such as concern for others, nurturing, relationships and quality of life. Masculine cultures, on the other hand, focus more on values such as assertiveness, winning, materialism and a lack of concern for others(Deresky 2000). Japan and Austria represent masculine cultures while the United States and New Zealand are comparatively more feminine. Understanding differences in value orientations is important in positioning consumer products in these cultures. Product features and messages that are consistent with appropriate feminine and masculine values will find more responsiveness in respective cultures. In Japan males are conditioned to have authority, power and a dominant role in organizational and family matters. Positioning the product that accords the male a dominant role in decision-making will be more culturally consistent. In the United States, husband and wife often play equal roles and the product positioning has to recognize the mutually consultative role in buying a house and or an automobile. (Kotler and Armstrong 2000)

PRODUCT CLASSIFICATION AND CHARACTERISTICS

A culture driven international product positioning strategy also calls for a consumer product classification framework that uses culture as the screening criterion. The framework can also provide insights into the kinds of product attributes from a cultural perspective that then forms the basis for product positioning and helps to determine the market boundaries and specifications and what is required to cross these boundaries. Raval and Subramanian have presented a culture driven consumer product classification that can be used to pinpoint product attributes and consumer market behavior (Raval and Subramanian 2000). The framework classifies consumer products into four major categories and offers strategic options for marketing in the global context. These categories are culturally blocked, culturally obligatory, culturally peripheral and culturally congruent and the positioning strategies will vary depending on the category.

Culturally blocked products are those that are totally blocked from a market, as a result of beliefs, practices, prevailing norms and values of a particular society. Normally market positioning is not an issue because they are excluded from the market based on cultural considerations. In those rare instances where the blocked product is seeking market entry, the strategy is to create a `soft positioning' that places it as globally accepted or desired product and focus away from the cultural conflict. For instance if a fast food organization wants to position its meat based products in a predominantly vegetarian milieu, it would be smart to position them as globally popular and accepted products rather than as meat based which will trigger negative cultural reactions.

Culturally obligatory products are those that are culturally imperative for a particular market segment. These products and services are mandated by cultural determinants such as religious beliefs, historical traditions, or linguistic requirements. Since users deem these products as essentials, they are not very price sensitive and the demand is inelastic. The buyer is willing to engage in considerable search for the product and invest time and efforts to possess it. Since these are specialty products, their market behavior mimics that of specialty items. The positioning strategy would focus on identification of competing brands in this category and carving out a position that incorporates and stresses the cultural salience of the product.

Culturally congruent products are those initially of foreign origin, taste, or design that are consistent with the cultural requirements of a market and are absorbed into the mainstream culture gradually over a period of time. The market behavior of culturally congruent products mimics that of similar mainstream products. While retaining their ethnic identity, and in some cases because of it, culturally congruent products have attained mainstream status in the marketplace. The positioning strategy for this category of products would be similar to the mainstream products they compete with in the market.

Culturally undesirable products are defined as those that are being discarded as a result of changing cultural norms, values, and practices, even though they had previously enjoyed widespread market acceptance. They may totally go off the market and disappear as a result of abandonment by users or may find their way to another market where the cultural values still favor the product. Cigarettes illustrate this product category. The positioning strategy for this class of products would tend to reiterate and reemphasize the product and brand meanings that made them a market leader in the past.

Culturally peripheral products are defined as those that are popular in and consumed by small niches in the market. These products, services, or ideas have not gained acceptance in the mainstream market because they are outside the traditions, religious or linguistic influences, and culture. While these may represent highly desirable offerings to the cognoscenti, they are viewed as highly exotic and disregarded by the mainstream market. The positioning of these products would emphasize their cultural cache and position them emphasizing the culturally attractive and desirable demographic, psychographic, and economic characteristics of the target market segments.

CULTURAL COMPLEXITY

Cultural complexity plays a significant role in determining the market positioning of the products and services on the basis of their cultural relevance and congruence (Fikentscher 1998). It will be naive to assume that culture is a fairly simple and easily manageable strategic constraint, particularly in the global context where the cultural diversity is the norm. Thus culture is an important factor in designing product positioning strategies in global markets. Another important consideration in product positioning strategy where culture plays an important role is to determine where a product falls in the consumer product classification scheme. Kotler suggests that product attributes and features give products the preference in the minds of consumers. Identification of the product features in the cultural context can enhance cultural palatability in the minds of consumers. Multinational enterprises that operate in different cultures and subcultures can ignore in product positioning the cultural diversity of its markets only at its peril. The positioning of consumer products needs to be consistent with the cultural characteristics of the specific markets.

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