Global Convergence and Global Divergence in the Consumer Behaviour

Global Convergence and Global Divergence in the Consumer Behaviour

Introduction

Globalization is defined loosely as the growth to a global or worldwide scale. Aspects of globalization especially on consumer behaviour were not considered until later 20^th century when the world started experiencing rapid rate of globalization. Two aspects of globalization, as asserted by Mooij (34), which are now seriously considered is the convergence and divergence of consumer behaviour as can be experienced in the media, income as well as technology. As defined by Mooij (102), global convergence is the idea that the income per capita of poorer economies tend to grow faster than the income per capita of richer economies – thus there is potential of all economies globally converging in terms of their income per capita. Because of the overall diminishing returns to capital, all developing economies have greater potential of growing faster than developed nations. The diminishing return of capital is very strong in rich nations as compared to poorer nations.

Various schools of thoughts anticipate that global convergence will ultimately lead to a peculiar form of homogeneity in the consumer behaviour. However, this hypothesis is being questioned by other schools of thoughts who do not anticipate homogeneity in the overall consumer behaviour across the globe. According to Douglas Samuel (99), such views argue that despite the convergence of national wealth, there is no substantial disappearance of variations in consumer behaviour across several nations. After conducting an elaborative empirical study, Barfield (121) concluded that variations are found in almost all aspects of consumer behaviour despite the on-going convergence of national wealth – for instance, variation is found in ownership and usage of durable goods, consumption of packaged goods, as well as in media behaviours.

The idea of global convergence was put forward in 1983 by Harvard professor named Theodore Levitt; he argued that as the income gap narrows, globalization will eventually leads to convergence in the pattern of consumption across the globe. In essence, globalization will give rise to global citizens living in global villages across the world. Such global citizens will have the same test and preferences adjusted to the global fashion and opinion. Theodore Levitt continued to argue that globalization will eventually lead to global monoculture whereby the demands and preferences of global consumers are standardized across the globe.

The idea of global convergence has led to opposing culture that argues in favour of global divergence. The proponents of global divergence argue that as the income per capital between developing and developed nations continue to converge, there would be divergence in consumer behaviour across the globe. This hypothesis of global divergence postulates that as income per capita increase to basic levels across the globe, some cultural factors will set in that will cause divergence in the consumer pattern. This paper proposes to investigate the role of cultural differences in divergence rather than convergence of consumer behaviour across the globe. In addition, it aims to determine how cultural variables can be used to explain variance in consumer behaviour while at the same time presenting consequences for global advertising and management of internal brand (Singh and Manoj 122).

Statement of the Problem

Globalization has brought one aspect which is now being considered by many researchers – it is the convergence of income, technology and media. Some authors including Mooij and Geert (55), Mooij (99), Mooij and Marieke (86) and Ahonen and Alan (64), expect that the on-going convergence of media, technology and income will ultimately lead to homogeneity of consumer tastes, needs and lifestyles. An example is given by the cross-border music channels in which increased communication and travels have created the notion that teenagers currently have similar values regardless of their nationality or country of origin. Due to exposure to new technology, such teenagers tend to prefer the same standard of products. According to Jamali and Ben (34), this argument is based on the assumption that consumers express rational behaviours. On the contrary to this assumption, several researchers and scholars such as Mooij and Geert (65), Samli (67), and Chang and Ming‐Hua (109) have established that consumer behaviour is not rational as anticipated, which further puts into question the hypothesis of convergence of consumer behaviour.

Under the hypothesis of convergence, the rationality of consumer behaviour implies that consumers prefer standard products which are low-priced and high in quality as opposed to customized products which are highly priced. Researchers such as Sung and Spencer (87), Cutler, Edward and Rao (122), and Ahonen and Alan (64) have established that this hypothesis is problematic because consumers are not making only purchase decisions that are aimed at maximizing their utility. Strizhakova, Coulter, and Linda (67) asserted that the assumption of consumer rationality is unrealistic because some come consumers are not concerned about maximizing their utility. In addition, the assumption of consumer rationality puts most consumers outside their cultural context, which is a significant factor influencing their purchase decisions.

According to Chui and Chuck (96), the influence of cultural context in consumer behaviour has been traditionally ignored yet statistics indicates that it has great significance. Until recently, the influence of cultural factors in consumer behaviour has not been correctly understood. The primary problem with Theodore’s hypothesis of convergence of consumer behaviour is that it ignores the influence of cultural context. Many companies across the world have centralized their marketing plans and operations because they ignore culture’s influence. Instead of increasing efficiency and profits, such companies have experienced decline in their profitability and overall company performance. For example, in 2000, the Coca Cola Company started moving closer to local market because they realized that standardizing of their products was causing serious decline in profitability because some of their products were not sensitivity to local cultural context.

Another example is given by the experience of international marketers in Europe who try in vain to make the public believe that with the introduction of single currency (euro), consumers in Europe will eventually become more similar, eating the same food, wearing the same clothes and watching the same television programmes. In reality, this has never happened because consumers are not rational as it is assumed. The reality is that there are wide differences amongst the values, tastes and preferences of each consumer depending on their cultural background. According to Akaka and Dana (102), the value systems that consumers have are strongly rooted in their history and cultural heritage. As a result, every culture tends to be resistant to change in their overall consumer behaviour. This is the typical example of what is happening in Europe despite the introduction of common currency and heightened campaigns through media. Differences in consumer behaviour were anticipated to disappear in the European market since the introduction of single currency back in 1992, however, to date, they still persist and every consumer across Europe behaves differently (Kjeldgaard and Soren 65). The experience in Europe gives no direct evidence of converging values and consumer behaviour.

Research Question

This research study aims to answer the question, “To what extent does culture influence global convergence and global divergence of consumer behaviour?” To answer this research question, we are going to first review the available literature about global convergence and global divergence within the cultural context then conduct a comprehensive empirical study. The hypothesis of the study is that culture promotes global divergence while at the same time prohibits global convergence.

Methods of Answering the Research Question

In this section, we are going to consider various ways in which this research question could be answered. To answer the research the researcher is going to consider two different ways namely (1) review of available literature on the topic, and (2) empirical survey.

(a) Literature Review Approach

Under this approach, the research will attempt to answer the research question by reviewing recently published literature on the topic of global convergence and global divergence with attempt to identify the significance of cultural influence. In this method, literature should be reviewed from authoritative sources such as peer reviewed articles, journals, books, publications, magazines as well as some online sources. In addition, literature should be reviewed from recently published articles to avoid drawing conclusions from out-dated sources. This method involves a critical and in-depth evaluation of various researches and materials published on the same topic. To specifically answer the research question, the researcher will review all available literature with the intention of establishing the role of culture in promoting global divergence while inhibiting global convergence. This method has the following advantages and disadvantages.

Advantages

• With literature review approach it is very easy to conduct data collection since the materials are already available in publications which can be easily accessed by the researcher. The researcher can easily access books, journals and other publications from libraries while other resources can be accessed from the internet.
• Secondly, it is a quick method of conducting research because the researcher simply looks for relevant information from various publications and summarizes them to give her or his position.
• Another significant advantage of literature review method is that the result and conclusion are drawn from credible sources thus saving the researcher time, energy and resources of conducting a fresh research.
• Another advantage of this approach is that it saves the researcher money because materials are freely available from the library. Unlike empirical research, the researcher is not expected to spend some money conducting literature review from the available public unless where library subscription is required, which is usually not costly.
• With literature review methodology, it is apparently easy to perform data administration and analysis because the data are already sorted in some forms of category. Drawing conclusion from data analysis is also simple because the researcher has access to some hints from the primary source.

Disadvantages

• One major disadvantage of this approach is that the researcher might experience challenge of data inappropriateness. In this case, the data being used is secondary; therefore, it might not have been collected with a concrete idea in mind. As a result, the information presented in the primary literature may not appropriately meet the objective of our research.
• Secondly, literature review method might provide the researcher with a vast quantity of information but limited quality. In essence, some sources of information may not be verified or authenticated as accurate and reliable; the use of such information may create discrepancy in the research project.
• Another disadvantage of this approach is that the information presented in the publications may be out-dated and not relevant to the research population. This problem may arise from two possibilities; either the source being used was published much earlier or the data used in the research was collected much earlier.
• Another disadvantage is the overall lack of control over the quality of research finding. Because the researcher was not involved in the original research and has not control about the source and accuracy of data. In essence, the researcher cannot guarantee quality and accuracy of the research findings because it is just a collection of other people’s work.

(b) Empirical Survey

This approach is aimed at using some collected pieces of empirical evidence to answer the research question; it is the most common and preferred approach in answering research questions. The empirical approach is designed to allow the researcher to use pieces of empirical evidences to gain substantial knowledge – pieces of empirical evidence can be collected through experiments, case studies, or observations. Empirical evidence can be defined as the record of a person’s direct experience or observation. In this approach, the collected pieces of empirical evidences are then analysed either qualitatively or quantitatively to provide answers to the research question. In this approach, the researcher uses empirical questions, which must be answerable and clearly defined, to conduct the research study. The basis of this approach is the measurability of variables – all variables in the research must be measurable. Empirical approach starts by setting the research study within its appropriate context by simply proving the big picture. This is then followed by conducting an accurate literate review related to the research than developing the research hypothesis. The problem must be described and research problem and question stated clearly.

Advantages

• Empirical method is advantageous because it uses measurable experimentations such as frequencies and proportions to provide answers to the research question. This is because the experimentations are not only measurable but are also observable, can be easily replicated, and the results can be confirmed.
• Another advantage of empirical method is that it relies on raw physical data, which is the basis of ‘seeing is believing.’ It does not take the analysis into mental abstractions which is characterized by idealism but rather make conclusion from the physical data.

Disadvantages

• The primary disadvantage of empirical approach is that it is possible for short run experiments to produce invalid results thus invalid conclusions; this is dangerous because it affects the accuracy and usability of the research findings.
• Time is another great disadvantage of empirical study – it requires time for soliciting participation, data collection, and data analysis amongst others.
• Cost is another great disadvantage of empirical study – empirical researches are too costly because field works and experimentations are involved – field works usually require cash outlay for accommodation, transportation, and so on.

Research methodology

The study is going to adopt descriptive survey research methodology based on quantitative techniques. This research design will be used to allow the researcher gather more information, summarize, present and interpret them appropriately for the purpose of clarification. With this methodology, the researcher will use questionnaire to collect primary data from the sample population for analysis. The collected data will be entered in computer software, preferably SPSS, for data cleaning before analysis using quantitative technique. Items on the questionnaire will be designed to determine the extent by which culture promote global divergence while inhibit global convergence.

(a) Weaknesses and implication of the methodology

One of the greatest weaknesses of this methodology is that it is difficult to obtain several kinds of information because data collection instrument, the questionnaire, is structured and specific. As a result, the researcher might not get some essential information that could have aided the research process. For instance, because of its structured nature, it would be very difficult to collect information on some sensitive topics related to the research study. Another weakness is that sometime the respondent might choose to give inaccurate information in the question. The implication of this research methodology is that it is possible to miss information in the contextual factors related to the study. These contextual factors are very essential in academic research because they help in the interpretation of the result as well as the explanation of certain variations in the behaviour of the target population.

(b) Rationale for this research methodology

Descriptive survey methodology provides rich information about the phenomena being explored and describes real life situation and provides information of the elements as they occurred. The descriptive survey methodology is more applicable in this study because it is going to employ both quantitative techniques in data collection and analysis. Furthermore, this methodology produces statistical information that is measurable and verifiable. Another rationale for this methodology is that it presents an even stimulus of data collection potentially to large numbers of people simultaneously and provides the investigation with an easy means of data accumulation and administration. Lastly, the study fitted within the provisions of descriptive survey methodology because the researcher will collect data and report the way things are without manipulating any variables.

Conclusion

There are several myths and arguments about the idea of about global convergence and global divergence – the debate is on-going and this research, if conducted within its context, will shed more light about the current controversial issues. In addition, the research is designed to shed more light about the role and influence of factor because it has not been considered by various sectors. The information about the influence of culture on consumer behaviour is hard to come thus this research is of great importance because it takes an area which is not widely explored (Griffith 34).

 

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