A by-product of globalisation is the emergence of global brands competing for global market dominance. An ever growing number of brands are expanding by entering and trying to establish themselves in foreign countries. In order to succeed, the development of an appropriate marketing strategy is a vital, if not the most important component. While some brands seem to establish themselves without much difficulty and others fail miserably, hence some brands have more successful marketing strategies than others. Marketing strategies rely heavily on market research, i.e. compiling knowledge about consumer habits, attitudes and perceptions. This is especially relevant to brands that are planning to enter a new, foreign market as consumers cannot be expected to have the same characteristics as the consumers of the country of origin or those of the countries the brands might have entered previously. Since the onset of globalisation in general and the formation of the European Economic Area in particular, a lot of research has been conducted about cross-country consumer habits and the approaches are as diverse as the theories that have been developed as a result. However, to date, no conclusive evidence has been found as to how and why consumer habits differ across nations and whether these persisting differences will diminish or broaden as globalisation progresses. Therefore, further research into country-specific consumerism is believed to be justified and relevant. In relation to existing research, a particular focus will be placed on the impact of cultural values, perceptions and attitudes.
Since international marketing is a vast area of research, it is appropriate to narrow the research down to a specific segment of the market and to specific countries. Therefore, this work will focus on fashion retailers and will in particular consider and propose strategies for established UK brands entering the German market. The fashion industry evidently is a globalising and remarkably resilient industry despite the recent economic downturn, but is also one that changes rapidly and heavily relies on trends and the impact of the media. The two countries have been chosen based on the fact that they are both relevant economic areas in Europe and, at first sight, seem to share many economic, cultural and geographic traits. In regards to fashion retailers, however, the UK is rather prolific in producing brands while the German consumers are used to shopping at retailers of foreign origin. However, some UK retailers that have been very successful in the UK have not (yet) tried to enter foreign markets.
The aims of this work are to explore German consumer behaviour, to discuss and critically evaluate how the research findings reflect or refute previous research and hypotheses and to propose an effective marketing strategy for UK fashion retailers.
This work does not aim to either prove or disprove any existing theories about European consumer behaviour as such, but rather to 1) provide further insights into current consumer behaviour, 2) explore how much European consumers resemble another or where the differences lie and 3) propose an adaptive marketing strategy for UK retailers.
It is hoped that this work will add to the controversial debate of whether it is appropriate to say that the ‘European consumer’ does exist in reality or whether cultural differences amongst consumers in Europe still persist. Based on my own empirical research as well as the exiting literature, the aims are to develop a marketing strategy for UK retailers entering the German market while highlighting the differences as well as the similarities in European consumer habits. Furthermore, this work seeks to explore which factors and variants impact on or even determine these differences and similarities. To facilitate the aforementioned aims, the objectives are to conduct primary research with consumers in Germany in the form of questionnaires, to perform a qualitative analysis and to critically evaluate my own findings in the context of the existing literature and research.
Overview of the literature
An important element of a company’s overall marketing strategy is its branding policy. Strong brands help to establish an identity in the marketplace and develop a solid customer franchise, as well as provide a weapon to counter growing retailer power (Aaker and Keller, 1993). In international markets, the firm’s branding strategy plays an important role in integrating the firm’s activities worldwide. A firm can develop global brands or endorse local country brands with the brand logo, thus establishing a common image and identity across markets. Globalisation has led to the convergence of income, media and technology and it has been suggested that consumer behaviour would also become more homogeneous. This theory, however, is increasingly questioned.
According to De Mooij (2003), there is still substantial variation of consumer behaviour across nations despite converging wealth. Levitt (1983) has argued that new technology would lead to homogenisation of consumer wants and needs because consumers were expected to prefer standard products of high quality and low price, as compared to more customised, higher priced products. Levitt’s claims were based on the assumption that consumer behaviour is rational but this is now regarded as unrealistic as this places the consumers outside their cultural context. By ignoring the cultural dimension and by failing to acknowledge the differences of values and attitudes amongst consumers, many brands have suffered from centralising and standardising their marketing strategies. De Mooij claims that there are wide differences among the value systems of consumers in different European countries and that those value systems are rooted strongly in history and appear to be resistant to change. The differences were predicted to diminish with the single European market and the emergence of cross-national media. However, despite converging economic and demographic systems in Europe, De Mooij finds no evidence of converging value systems but rather claims that consumer behaviour is diverging. Further research, sampling teenagers from different countries and analysing their respective value systems, has revealed that the teenagers share more values with older generations from their own country than with their peers from different countries, hence refuting the notion of the ‘global teenager’. Analysis of the influence of income or culture on consumption at country level over time has shown that when countries converge at macro-level, cultural variables must increasingly be considered to explain the differences in cross-country consumer behaviour. A model developed by Hofstede (2001) explains most of the variation of consumption and consumer behaviour across countries and enables marketing executives to quantify the effects of culture. Hofstede distinguishes five dimensions of national culture: power distance, individualism / collectivism, masculinity / femininity, uncertainty avoidance and long-term orientation. Consumer behaviour by country can be analysed according to the scores of each of the dimensions. The model provides further evidence that a brand’s marketing success in one country does not mean that the same strategy would be successful in another country. The persistence of cross-cultural variations implies that effective marketing strategies have to be adaptive and have to be tailored to the consumers in each country. Douglas et al (2001) claim that building a coherent international brand architecture is a key component of the firm’s overall international marketing strategy. They believe that three product-market factors determine the brand architecture: the target market, the cultural embeddedness and the competitive market structure. In contrast to De Mooij, Douglas et al believe that because some brands are targeted to the same market segment worldwide, they benefit from the cachet provided by their appeal to a global consumer group and that similar interests exist among the consumers in Europe. They believe that some products are more culturally embedded than others and thus that only brands that target homogeneous markets should develop corporate branding while products that are culturally ingrained should be marketed to countries more individually.
Through my own research, I attempt to establish patterns of German consumer behaviour, analyse my findings in relation to the existing literature and try to develop an effective marketing strategy. I will use a qualitative method and research society and culture. Since the research will be carried out in a different country, i.e. in Germany, I have decided on designing a questionnaire which will be sent out to German consumers via email. This method is economical, fits the timescale and is believed to trigger considerably high response rates. The questionnaire will be in German to make it more accessible to the participants. A literal translation of the questions will be attached to the final work and the answers given will also be analysed in English. I have decided on snowball sampling, i.e. that respondents are obtained through referrals among people who share the same characteristics. The main characteristics in this case are that only people with an email address can participate. In order to obtain a representable result, I have contacted about 10 people and asked them to forward the questionnaire to about 10 people each so that a total of 110 people will be contacted. Since the survey will be conducted among family, friends and acquaintances and personal referrals, it is deemed realistic to achieve a response rate of about 50%, i.e. that 55 people will effectively fill in and return the questionnaire. All participants will be informed that their participation is voluntary, anonymous and unpaid and that they do not have to answer every question. They will not be given any information about the broader context of the survey so as to not influence their responses but will be told that their answers will be analysed and used as part of a Master’s dissertation.
The questionnaire itself will contain structured open and closed questions and some personal information such as age group and occupation will be gathered. In order to include as many consumer groups as possible, the questionnaire will be sent out to people of all ages, gender and occupation. However, one unavoidable limitation is that only those people with an email address can be included. Since marketing strategies are increasingly consisting of the usage of digital media and online social spaces, however, this limitation does tie in with the overall aims of this work.
The nature of the questions will centre on German consumer behaviour, the existing knowledge of certain UK fashion brands, the participants media consumption and general attitude towards shopping and fashion. In order to establish trust in reliability and validity, I will pilot the questionnaire with a couple of people before sending out the final questionnaires to the main sample (Seale, 2004). I will check whether any of the questions are ambiguous and interpreted differently by different people and possibly amend the questionnaire accordingly. Once my research topic has been granted approval, I will send out the questionnaires, extend my awareness of existing research and analyse the questionnaires as they come in, which is believed will guide me towards developing an efficient marketing strategy.
My research strategy will be inductive, hence I do not have a hypothesis or theory I want to test out but rather to add to the discussion based on my own findings. My aim is to analyse my research results in light of the existing literature and theories about international marketing and cross-national consumer behaviour. By compiling generic data and using qualitative analysis, I am hoping to gain an understanding of the current German consumer behaviour and to subsequently be able to develop a marketing strategy for UK fashion brands.
Aaker, D. A. and Keller, K. L. (1993) ‘Interpreting cross-cultural replications of brand extension research.’ International Journal of Research in Marketing, Vol. 10, no. 1, pp. 55-59.
Antonides, G. (1989) ‘An attempt at integration of economic and psychological theories of consumption.’ Journal of Economic Psychology. Vol. 10, no. 1, pp. 77-99.
Bianchi, M. (2002) ‘Novelty, preference, and fashion: when goods are unsettling.’ Journal of Economic Behaviour & Organization. Vol. 47, no. 1, pp. 1-18.
Crewe, L. (2003) ‘Geographies of retailing and consumption: markets in motion.’ Progress in Human Geography, Vol. 27, no. 3, pp. 352-362.
De Mooij, M. (1998) Global Marketing and Advertising: Understanding Cultural Paradoxes. Thousand Oaks, CA: Sage.
De Mooij, M. (2003) ‘Convergence and divergence in consumer behaviour: implications for global advertising.’ International Journal of Advertising. Vol. 22, pp. 183-202.
Doherty, A. M. (1999) ‘Explaining international retailers’ market entry mode strategy: internalization theory, agency theory and the importance of information asymmetry.’ The International Review of Retail, Distribution and Consumer Research, Vol. 9, no. 4 pp. 379 – 402.
Doherty, A. M. (2000) ‘Factors influencing international retailers’ market entry mode strategy.’ Journal of Marketing Management. Vol. 16, no. 1, pp. 223-245.
Douglas, S. P., Samuel, C. C. and Nijssen, E. J. (2001) ‘Integrating Branding Strategy Across Markets: Building International Brand Architecture.’ Journal of International Marketing, Vol. 9, no. 2, pp. 97-114.
Hines, T. and Bruce, M. (2007) Fashion Marketing: contemporary issues. 2nd ed., Oxford: Butterworth-Heinemann.
Hofstede, G. (2001) Culture’s Consequences. 2nd ed., Thousand Oaks, CA: Sage.
Knox, S. and Bickerton, D. (2003) ‘The six conventions of corporate branding.’ European Journal of Marketing. Vol. 37, no. 7/8, pp. 998-1016.
Levitt, T. (1983) ‘The globalization of markets.’ Harvard Business Review. pp. 2-11.
Moore, C. M. (1997) ‘La mode sans frontiers? The internationalisation of fashion retailing.’ Journal of Fashion Marketing and Management, Vol. 1, no. 4, pp. 345-356.
Reader’s Digest (2010) Readers’s Digest European Trusted Brands Survey 2010. London: The Reader’s Digest Association.
Seale, C. (Ed.) (2004) Researching Society and Culture. 2nd ed., London: Sage.