1. HC3152e Business Applications

   Tutorial 4 (Week 5)

   E-Environment

   Read the following Case The implications of globalisation for consumer attitudes

   The article starts by discussing anti-globalisation. It then explores the implications of variations in the characteristics of different cultures on businesses providing services to them. At the end of the article, research about attitudes to globalisation is summarised, along with its implications for businesses trading internationally.

   Globalisation, or maybe more specifically, anti globalisation issues, are never far from the headlines, whether its coverage of the latest antiWTO demonstration or news that McDonalds has replaced Ronald McDonald in France with Asterix-in a move to appease antiglobalisation protesters.

   But what does globalisation actually mean? Stemming from the application of free market principles it has manifested the belief that the world is small and that consumers are becoming more and more alike, thus allowing companies to use the same advertising and marketing across regions and countries. Such a doctrine has enabled companies to act global and think global, much to the distaste of the antiglobalisation lobbies. Indeed, in 1985 it was Friends of the Earth that coined the slogan think global, act local in its desire to counter such global forces particularly with regard to environmental issues.

   However, such glocalisation [global localisation] makes a lot of sense for multinational companies operating today and planning new market entry, for a number of reasons. Firstly, the term globalisation for many Europeans is virtually synonymous with that of Americanisation. For some this has negative con notations of materialism, loss of native culture and the encroachment of the English language. At its extreme, it drives many of the antiglobalisation activists. Thus there is real risk that companies will damage their brand and reputation if they dont recognise the importance of localisation when considering market entry.

   Secondly, consumers are as different as they are similar local and regional cultures have a profound effect in shaping consumer demand. These difference are potentially more interesting than the similarities, in that they can allow product and service differentiation as well as new approaches to segmentation and marketing communications. To take advantage of such opportunities, businesses have to have a clear insight into how and why consumers in one market may differ from ones in another.

   Feelings of antiAmericanisation are a strong under current in Europe. Businesses have to plan how to counter such a groundswell of feeling if planning on entering new markets given that some 50% of Europeans believe that our society is too Americanised and such an attitude has increased over the past 10 years. While the degree of agreement varies within Europe (e.g. 67% of Spaniards agreeing with the statement, as compared with 44% of Brits), it is a significant influence of customer behaviour. To compound matters, multinational companies are the least trusted of 27 entities when European consumers have been asked to state which they trust to be honest and fair.

   As a result, not only have we seen an increase in consumer activism (such as antiWTO protests, growth of the slow food movement in Europe etc.), but also we have seen global brands coming under threat from emergent local brands which are gaining in currency. We would expect this to continue. This is not to say that there is no room for global brands! Many global brands have successfully tapped into local culture and tastes and recognised the need to either modify the product/ service completely or change different elements of the offer and how it is ultimately marketed. Thus companies expanding into new geographic markets have to ensure that their strategies are based on a real understanding of regional and local markets.

   Globalisation is not making the world a smaller, homogeneous place. While this presents many opportunities for businesses, it also implies a need for a clear understanding of what shapes consumer needs and desires in the different nations. Not surprising perhaps that many businesses found the notion of a globalised world compelling, given the significant implications for researching a multitude of different markets in terms of time and money budgets. Similarly, it is easy to under stand the temptation of taking wellestablished national stereotypes and assuming that they are representative of the truth.

   Recent attitudinal studies in Europe and the US undertaken by the Henley Centre show the complexity of attempting to categorise consumers on a broad scale. Lets take an example. At one level, results show that all consumers take pride in their family, so a global advertising campaign using the family as a theme may feel like safe territory. To some extent it is. Dig down a bit deeper, however, and you find that different people define family in very different ways, so what people take pride in will be subtly different. At a country level, many more differences expose themselves.

   Businesses wanting to broaden their geographic reach have to consider at a strategic level what level of understanding of consumer needs they require. Generalisations are important and are a good place to start, but it is critical to then delve further national stereotypes are too simplistic. Differences, rather than similarities, have to be considered, and interrogated in terms of how these will impact customer needs.

   Source: The Henley Centre.

   Tutorial Questions - Debate in classes

2. Based on this article and your experiences, debate the statement: Site localisation is essential for each country for an ecommerce offering to be successful in that country? please answer this question