- Introduction
Economists and International Relations experts have argued that the world is slowly turning into a global village. The technological and communication advancements that have been realized in the past century have made it possible for the different territories, peoples, and cultures to interact more easily. Through technology various goods and services as well as people can be able to move from one territory to the other (Rook, 1985, p.253). In the light of this global dynamic this paper seeks to explain the dynamics that shape consumer convergence and divergence behavior, the role of countries as origins of goods and services, dimension of culture, as well as consumer segmentation, targeting and positioning.
- Country of Origin
First of all, globalization has allowed nations as players in the international market to conduct trade and commerce with each other. This means that goods produced in one nation can be consumed in another nation, which is located thousands of miles away. For example, through globalization, the American citizenry has been able to benefit from access to better vehicles than those produced domestically. For instance there are people who would prefer driving a Toyota produced in Japan compared to a Ford Vehicles which are produced domestically. As the result of the break in territorial ties consumers are slowly converging in the choice of goods based on quality and not where the product is produced. In the light of this convergence in consumer taste and preferences producers around the world have begun to standardize their goods so that they can effectively compete with the effective producers who have already established a loyal consumer base. The process of standardization has been made possible by the availability of technology which helps producers to effectively transition from one standard of production to the other based on the existent market trends.
In addition technology has made it possible for the creation of new products each day. A good example in this scenario is the fashion industry. Products and different fashions are accepted by consumers around the world. Most of these customers are waiting to see what manufacturers have to present next. This means that technology has made possible for consumer behavior to be dependent on the market and not vice versa. The influence of manufacturers on consumer behavior makes it possible for customers around the world to be able to converge on tastes and preferences regarding a range of goods. It is important not to forget that nations around the world do not have the same purchasing power. The citizens of the developed world have more purchasing power compared to those of the developing nations. However, many scholars have used different theories to explain the poverty of the developed nations. Key among those theories is the dependency theory and the modernization theory. Dependency theory argues that colonization of the developing world by western nation, which are more developed today led to the massive exploitation of their resource causing them to lag behind in terms of economic development.
- Dimensions of culture: relationships with nature, high and low context, dimensions of time
Borrowing from dependency theory, scholars who subscribe to the modernization theory argue that if the developing nations are growing to realize economic development these nations have to transition from agrarian-based economies and adopt industrial-led economic models that are similar to those of the West (Mooij, 2002, p.67). Therefore, as developing nations seek to modernize and develop their economies, these nations have been forced to change some of their cultures such as the dependence of agriculture and other like sectors for economic development (James, 2000, p.542). By modernizing, the citizenry of developing nations have begun to adopt tastes and preference of those of the West. Today, this can be seen in terms of the western products that are consumed in the developing nations. For example, various industrial products such as cloths, vehicles, and packed food products have begun to be used in the developing world. This is a convergence of consumer behavior because the modernization of the developing nations is slowly causing the developing world to embrace consumer behaviors that are characteristic to the West.
One thing that is worth noting is the fact that culture has for a long time been a cause of divergence in consumer behavior. For example, the culture of fast food is not a culture of the developing world especially in the East. This means that the opening of fast-food stores such as MacDonald’s would not be a noble idea. This is because many of the customers in those territories prefer to eat and home instead of eating in hotels and restaurants. This indicates how the differences in culture create a different business environment for entrepreneurs. However, the good news is that the bonds of culture in the East as slowly being eroded as western culture infiltrates into cultures of the developing world in the East.
- Convergence and Divergence of Consumer Behavior
Technology has played a key role in the infiltration of western culture into societies in the East. Through technology developing nations have been in a position to develop their mass and social media infrastructure. Through this infrastructural development, consumers in the developing world have become exposed to western products through advertisements both in the mass and social media (Havlena, 1986, p.395). Therefore, the media has been one of the vital ways in which the world has been able to achieve some level of consumer behavior convergence. In addition, through the development of infrastructure such as cable TV the developing world is able to access western media such as CNN or MTV. This insinuates that the world is slowly transforming into a global village where people around the world can be able to enjoy the same goods and services (Mooij, 2003, p.194). To reinforce the idea that consumer convergence is a possibility, it is important to realize that many nations around the world have found it worthwhile to eliminate trade barriers between them so that there people can be able to enjoy goods and services from different countries with their region(Eckhardt, 2004, p.146). This has been evident through the formation of supranational entities such that the European Union.
- Segmentation, Targeting and Positioning
The European Union as a trade bloc allows member states to conduct business with each other. This shows that nations have become the facilitators of the convergence of consumer behavior as opposed to keeping the consumer divergence that characterized the past. In fact, a supranational entity such as the European Union has encouraged most of its member states to use the same currency (Mooij, 2000, p.115). In this way, the terms of trade and the purchasing power of the citizens of the member states is virtually the same due to the same currency. Therefore, as a result of the integration of the world through globalization and technology consumers around the world have begun to converge in terms of their consumer goods and services. In addition, the modernization of the developing nations especially in the East has contributed to the convergence of consumer behavior between the East and the West.
Reference List
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