Abstract
When making decisions of purchase, both individual consumers and industrial buyers are affected by the culture and social class they are in. Different countries have different cultures. Including all the results of human spiritual activities, culture poses a strong constraint on individual consumers and industrial buyers’ belief, value attitudes and understanding of time and space, indirectly and directly affecting their consumption behavior. All individual consumers and industrial buyers belong to their particular social class, according to their profession, wealth, reputation and other aspects. Different social classes have different consumption behaviors. This paper attempts to explore the influence of culture and social class on individual consumers and industrial buyers’ behavior. After understanding culture and social class more deeply and comprehensively, this paper applies those theories to individual consumers and industrial buyers’ consumption of automobiles in the real world. In general, in this open material-oriented and globalized world, the influence of culture is fading, especially for industrial buyers when purchasing automobiles. Social class still influence individual consumers’ behavior, although it never affect industrial buyers to a considerable extend. The result of this paper shows the cultural features and social class positioning of many automobile brands, and the influence on their sales performance. The suggestion about how to utilize culture and social class in marketing management process and thus promote market performance is put forward at the end of this paper.
Introduction
Individual buyers refer to those who buy products or services for themselves or their families. What individual consumers buy are consumption products. Individual consumer is opposite to industrial buyer/organizational buyer. An industrial buyer refers to someone who makes decisions to buy material stuff, by-products, finished products or services for an organization like government, enterprise and non-profit organization to support its operation, to further process or to resell for the pursuit of profit.
The purchasing processes of individual consumer and organizational buyer are much the same. The basic steps in a purchase process are information search, information evaluation, purchase decision and post-purchase evaluation, which fit both individual consumer and industrial buyer. Both individual consumer and industrial buyer are influenced by internal factors and external factors in purchase process. Individual consumer and industrial buyer are all constrained by their budget. They both choose what they think are better products or services.
However the differences between individual consumer and industrial buy are also considerable. The most apparent difference is that industrial buyer purchase products or service in much larger quantities. Industrial buyers are more innovated by profit objective, while individual consumers try to reach greatest utility. Individual consumer makes buying his or her own decisions, whereas industrial buyer has to co-decide with others like accountants and salespeople to respond to the various needs and perspective in the organization. There is also a noticeable difference between individual consumer and industrial buy in price elasticity of demand. Individual can buy more products when they are cheap and buy fewer when they are expensive, but industrial buyers have to purchase fixed quantity of a product as before despite the changing price. Individual consumers are mainly influenced by their four characteristics: cultural, personal, social and psychological. Industrial buyers are influenced by the purchasing center which displays straight re-buys, modified re-buys and new tasks, three types of buying situation.
Culture is one of the most abstract and important terminology for life and study. There are multiple definitions of culture. Parson T. (1949) thinks that culture lies in the patterns that are relative to behavior and human actions that may be passed on from generation to generation. Useem J. and & Useem R. (1963) define culture as the learned and shared behavior of people in a community. Hofstede G. (1984) treats culture as the collective programming of members’ mind which distinguishes them from those who are not members of a particular category. Whatever the definitions of culture are, they all highlight the uniformity of people’s ideas and activities. It is certain that it affects individual consumers’ and industrial buyers’ consumption behavior. According to Del I. Hawkins (1989), to understand the cultural difference of consumers we should understand the difference in values of people from different cultural background. He classified value into others-oriented value, environment-oriented value and self-oriented value. Other lingual and non-lingual factors also influence consumers’ behavior, like different meanings of the same word in different cultures. Customer culture theory (CCT) is the theory that addresses the experiential, socio-cultural, ideological and symbolic aspects of consumption. People in different countries and areas have different culture, giving them different languages, religious beliefs, ethic values and aesthetics. In a Muslin country people are forbidden to eat pork products; in India people are not supposed to buy beef; In Christian counties people will not buy products with the number 13. A non-profit organization will be blamed if it buys a priceless desk for its charger.
Social class is one of the most contested concepts in sociology theory. In this stratified world, people are parted into different classes according to their status. Gilbert and Kahl (2002) classified people in USA into 6 classes, taking economic variables, social variables and political variables into account. The 6 classes he classified are capitalist class, upper middle class, lower middle class, working class, working poor and underclass. Leonard Beeghley (2004) classified people in USA into 5 classes: the supper rich, the rich, middle class, working class and the poor. William Thompson & Joseph Hickey (2005) also classified them into 5 classes: upper class, upper middle class, lower middle class, working class and lower class. Today few societies are as class-ridden as before, due to multiculturalism and changing economy, but some features still exist. People of different social class have different consumption behavior. Working class cannot afford a Rolls-Royce or a Luis Vuitton bag. A venerable politician will be criticized if he breaks the image of upper class by wearing a pair of $15 jeans trousers.
The influence of culture and social class in consumers’ behavior has long been found. Taking color as an example, Americans treat the deep color as the symbol of being rich. So Americans use deep color for their cosmetic products. Although American companies made efforts in advertising their cosmetic products to Japanese, they found Japanese indifferent to their products. After investigation they found that Japanese prefer white, thinking white skin is the symbol of being beautiful and rich. Another cultural example is the use of violet for decoration. Chinese people like violet very much, while French treat it as the sign of a failure in love. So when Chinese export their cloths and art-wares decorated with violet, whey found their products declined by French people.
Marketing experts and managers have paid much attention to culture and social class in marketing management for more a hundred years. Today all the international firms in consumer goods industries are well aware of the influence of culture and social class. Many international companies adjust their products to fit the culture characteristics of their target markets. And the posting for particular classes of a product is well conducted before being released.
Automobile is one of the most noticeable products in the world. It is also one of the most globalized industries. Automobiles giants like Toyota, Honda, GM, Ford, and Volkswagen sell their product all over the world. In this industry with fierce competition, marketing tools and strategies have been very skillfully and frequently used. People and organizations in different cultures and different classes make very different decision when buying automobiles. So automobile is a good choice to study the influence of culture and social class on individual consumer and industrial buyer’s behavior.
Culture and Social Classes in Automobile Market
Automobile Market: A glance
As one of the biggest industries in the world, automobile industry fosters the most world top brands. The following table can show some situation of automobile industry and market. (Motor vehicles include cars and commercial vehicles.)
Table 1: global production of motor vehicles from 1999-2009 [1-11]
year production Change
1999 56,258,892 2.98%
2000 58,374,162 3.80%
2001 56,304,925 -3.5%
2002 58,994,318 4.8%
2003 60,663,225 2.8%
2004 64,496,220 6.3%
2005 66,482,439 3.1%
2006 69,222,975 4.1%
2006 73,266,061 5.8%
2008 70,520,493 -3.7%
2009 60,986,985 -13.50%
Table 2: top 10 motor vehicle producing countries 2010 [12]
Country Production
China 18,264,667
Japan 9,625,940
United States 7,761,443
Germany 5,905,985
South Korea 4,271,941
Brazil 3,648,358
India 3,536,783
Spain 2,387,900
Mexico 2,345,124
France 2,222,742
Canada 2,071,026
Table3: world top 10 motor vehicle manufacturing companies by volume 2009 [13]
Group Production
Toyota 7,234,439
GM 6,459,053
Volkswagen 6,054,829
Ford 4,685,394
Hyundai Kia 4,645,776
PSA 3,042,311
Honda 3,012,637
Nissan 2,744,562
Fiat 2,460,222
Suzuki 2,387,537
Renault 2,296,009
Daimler AG 1,447,953
Table 4: world top motor vehicles, their marques and markets
Marques Country origin Ownership Markets
Toyota Daihatsu
Japan Subsidiary Global, except North America and Australia
Hino Subsidiary Asia Pacific, North America and South America
Lexus Division Global, except Iran and Caucasus
Scion Division North America
Toyota Division Global, except Iran and Caucasus
GM Buick
United States
Division North America, China, Israel
Cadillac
Division North America, Europe, Asia, Middle East, Africa
Chevrolet
Division Global, except Australia, New Zealand
GMC
Division North America, Middle East
Holden
Subsidiary Australia, New Zealand
Opel
Subsidiary Global, except North America, United Kingdom
Vauxhall
Subsidiary United Kingdom
Volkswagen Audi
Germany Subsidiary Global
Bentley Subsidiary Global
Bugatti Subsidiary Global
Lamborghini Subsidiary Global
Scania Subsidiary Global
SEAT Subsidiary Europe, South America, North Africa, Middle East
Škoda
Subsidiary Global, except North America, Japan and South Africa
Volkswagen Subsidiary Global
Volkswagen Commercial Vehicles Subsidiary Global
Ford Ford United States Division Global
Lincoln Division North America, Middle East, Japan, South Korea
Hyundai Kia Hyundai South Korea Division Global, except Mexico
Kia Division Global, except Mexico
PSA Citroën
France Subsidiary Global, except North America, South Asia
Peugeot subsidiary Global, except North America, South Asia
Honda Acura Japan Division North America, East Asia, except Japan
Honda Division Global
Nissan Infiniti Japan Division Global, except Japan, South America and Africa
Nissan Division Global, except North America
Fiat Abarth Italy Subsidiary Global
Alfa Remeo Subsidiary Global
Ferrari Subsidiary Global
Fiat Professional Subsidiary Global, except North America and Japan
Lancia Subsidiary Europe and Japan
Maserati Subsidiary Global
Fiat Subsidiary Global
Suzuki Maruti Suzuki Japan Subsidiary India, Middle East, South America
Suzuki Division Global
From the above tables we can find that automobile industry is facing a crisis, the weak demand has led to the sharp drop of production in from 2008-2010. The production of automobile is mainly monopolized by Japanese, American and European manufactures. All companies have used more than one marque to promote their sales. Developing countries produce more automobile, but lack their own top companies. The competition in this industry is very extensive, for customers can easily turn to other companies.
Culture in Automobile purchase
The multiple auto companies have provided thousands of models for customers’ choice. Although many of them are the same in technical aspects, people with different backgrounds always prefer some over others.
In fact every product brings with it a particular culture, so it is with automobiles. Japanese automobiles are different from that of Germany companies. Fiat and Ferrari both belong to Fiat Group, but they are rather different in cultural presentation.
We can have a look at the cultural values of the main cultures in the world and the cultural characteristics of so world top automobile brands.
Table 5: world main cultures and their characteristics index [14]
Culture characteristics
Power distance Individualism masculinity Uncertainty avoidance Long-term orientation
Chinese 80 20 66 40 118
American 40 91 62 46 29
Japanese 54 46 95 92 80
Germany 35 67 66 65 31
English 35 89 66 35 25
French 68 71 43 86 -
Table 6: characteristics of world top automobile brands
Automobile brand Cultural characteristics
BMW Self, joy
Audi Internalized, stable
Volvo Safe, tempera, dignified
Rolls-Royce Splendid, skillful
Buick Elite, style, mature, personalized
Honda Conservative, powerful, dynamic
Toyota Powerful, traditional
Ford warm, enjoyable, energetic, friendly
Ferrari Passionate, fast, fashionable
Volkswagen Practical, creative
Hyundai Durable, fashionable
Cars with different cultural characteristics fit the culture value of different cultures. For example, Chinese people are more conservative and internalized than others; as a result, many Chinese elites choose Audi or Volvo as their cars, while Western elites more prefer Lincoln, Cadillac or Benz. European culture pays more attention to environmental protection, so Europeans prefer cars with less discharge, while Americans prefer big cars like SUV. In Paris, you can seldom find We can have a general look at what cars are most popular with individual consumers in different cultures. With the fast growing China’s economy, the Chinese culture is becoming more and more materialistic. The young Chinese pay much more attention to material joy than their fathers, which is manifested in their pursuit of luxury cars like Ferrari, BMW, Maserati and Lamborghini.
As for industrial buyers, culture influences their purchase decisions in a different way, for every culture has its derived subculture for its organizations with some characteristics. In group-oriented societies like China and Japan, industrial buyers think that their organizations should use good cars to show their dignity and value. However, in individual-oriented societies like United States and United Kingdom, industrial buyers prefer to buy practical cars like Volkswagen and Ford. But whatever the culture is, there is no culture that prefers to buy a Lamborghini or a Maserati for organizational use. If an industrial buyer does buy such a car, he will be blamed in every culture. A good example to show the influence of culture on industrial buyers is the government fleets in China. In China (a country with incurable corruption) government officers think they are privileged, so they always buy good cars like BMW, Hummer, and Audi for their use at state expense, which is still acceptable. But if a government officer wants to buy Lamborghini as his office car, it is sure to be irritating, even for Chinese people.
The following tables show the cars popular for individual consumers and industrial buyers in China and U.S.
Table 7: popular auotomobiles for individual consumers
country Popular individual automobile brands or manufacturers
China Shanghai GM, Shanghai Volkswagen, FAW-Volkswagen, Beijing-Hyundai, Dongfeng Nissan, BYD, Chery, Changan Ford, Geely, Dongfeng Yueda Kia [15]
United States Ford, Chevrolet, Toyota, Honda, Dodge, Nissan, Hyundai, Kia, Jeep, GMC, Volkswagen, Mercedes-Benz[16]
Table 8: the popular office automobiles for industrial buyers
country Popular office automobile brands
China Volkswagen, Buick, Honda, Audi
United States Ford, Chevrolet, Toyota, Dodge
Social class in Automobile purchase
Different social classes buy different products and services. For a product like automobile whose price range from several thousand dollars to several million dollars, the difference of social class is so apparent that kids can see it. When David Beckham drives Lamborghini, many young men as old as him cannot afford even a second hand cheapest car.
Social class involves economic variables, political variables and social variables, of which the economic variables are the most important and fast-changing. Economic variables include profession and wealth. The influence of wealth is the most important and obvious ones. Working class with an income of $10,000 a year can only dream of having a Ferrari. But NBA super stars like LBJ, Kobe Bryant and Dwaine Wade occupy several luxurious sports cars at the same time. Profession also affects individual consumer and industrial buyers’ decision in automobiles. A college professor prefers Honda to Maserati; an environment protector prefers small cars to SUV; an industrial buyer in police department prefers cars with greater power than those only with fashionable outlook. Social variable, mainly social reputation also holds considerable influence in consumer behavior. A glorious old gentleman may prefer Rolls-Royce to Ferrari. If he does race a Ferrari, he will be considered abnormal. Political variable should also be taken into account when studying consumer behavior. Politicians are more likely to buy automobile which show an image of stability and maturity, although they can afford a Lamborghini or Buggatti.
For industrial buyers, they surely bring the preference of their class into decisions, but they pay more attention to the goal and budget of their organization. Profit organizations attempt to lower their expenditure, never considering a Lamborghini or Rolls-Royce as office car, although many of its officers may have their own luxury cars. Non-profit organizations should purchase automobile that fir their mission and image. It is disgusting to common people, if Red Cross organizations use BMW or Hummer as its office cars. So, social class have less influence on industrial buyers’ consumption behavior.
We can catch a glimpse of the influence of social class on consumer behavior when purchasing automobile through the following table.
Table 9: social classes and their popular automobiles
Social class Popular automobiles
Upper class BMW, Benz, Rolls-Royce, Volvo, Cadillac
Upper middle class Lamborghini, Ferrari, Audi, Buick
Lower middle class Honda, Toyota, Ford
Working class Hyundai, Kia, Nissan, Suzuki
Lower class ----
References
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Del I. Hawkins. (2010). Consumer Behavior: building marketing strategy, 11th edition. McGraw-Hill Higher Education
Gilbert, D. (2002) The American Class Structure: In An Age of Growing Inequality. Belmont, CA: Wadsworth
Hofstede, G. (1984). National cultures and corporate cultures. In L.A. Samovar & R.E. Porter (Eds.), Communication Between Cultures. Belmont, CA: Wadsworth. (p.51)
Parson, T. (1949). Essays in Sociological Theory. Glencoe, IL: Free Press.
Thompson, W. & Hickey, J. (2005). Society in Focus. Boston, MA: Pearson, Allyn & Bacon.
Useem, J., & Useem, R. (1963). Human Organizations, 22(3):169-179.
Notes
1. OICA (2000). Production statics [online]. http://oica.net/category/production-statistics/1999-statistics/ --accessed on 25th June 2011.
2. OICA (2001). Production statics [online].http://oica.net/category/production-statistics/2000-statistics/--accessed on 25th June 2011.
3. OICA (2002). Production statics [online].http://oica.net/category/production-statistics/2001-statistics/--accessed on 25th June 2011.
4. OICA (2003). Production statics [online].http://oica.net/category/production-statistics/2002-statistics/--accessed on 25th June 2011.
5. OICA (2004). Production statics [online].http://oica.net/category/production-statistics/2003-statistics/--accessed on 25th June 2011.
6. OICA (2005). Production statics [online].http://oica.net/category/production-statistics/2004-statistics/--accessed on 25th June 2011.
7. OICA (2006). Production statics [online].http://oica.net/category/production-statistics/2005-statistics/--accessed on 25th June 2011.
8. OICA (2007). Production statics [online].http://oica.net/category/production-statistics/2006-statistics/--accessed on 25th June 2011.
9. OICA (2008). Production statics [online].http://oica.net/category/production-statistics/2007-statistics/--accessed on 25th June 2011.
10. OICA (2009). Production statics [online].http://oica.net/category/production-statistics/2008-statistics/--accessed on 25th June 2011.
11. OICA (2010). Production statics [online].http://oica.net/category/production-statistics/2009-statistics/--accessed on 25th June 2011.
12. OICA (2011). Production statics [online].http://oica.net/category/production-statistics/
13. OICA (2010). "World motor vehicle production by manufacturer: World ranking of manufacturers 2009" [online]. http://oica.net/wp-content/uploads/ranking-2009.pdf. --accessed on 25th June 2011.
14. Clearly Cultural (2009). Power Distance Index [online]. http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/power-distance-index/ -accessed on June 24th 2011.
15. Auto News (2009). May 2011 top 10 automakers[online]. http://autonews.gasgoo.com/auto-news/search/Top+10.html –accessed on June 27th 2011.
16. Good Car Bad Car (2011). Top 20 best-selling cars in America-June 2011 [online]. http://www.goodcarbadcar.net/search/label/US%20Auto%20Sales?max-results=5 – accessed on July 1st 2011.
