Economic Development Assignment Sample

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Executive Summary

The report highlights the key concepts associated with the culture and economic development of a country. It has been analysed that due to globalisation the world has become more connected with each other. However, to address the change in consumer taste and preferences, one should possess knowledge of the variables influencing the change. Customers’ taste and preference are found to be changing when either of the variables including culture or economic development is changed. The main reasons for this change and the impact the change have on marketing is discussed in detail in this report. A critical analysis has been done in this report to have an in-depth understanding of country differences and their impact on customers.

Introduction

In the process of globalisation, the most critical aspect of a business is to connect with customers. A consumer is more than just an asset to a company as customer satisfaction is treated as the biggest metric to achieve success. Different countries have different customer preferences and tastes due to different cultures and economic development. This review aims to highlight the main prospects of customer differences on the basis of culture and economic development. A critical review is carried out to understand whether differences in customer preference based on culture and economic development are true or not.

The objective of review

The main objective of this review is illustrated as follows:

  • To underpin the difference in customer taste and preference in cross countries
  • To analyse the impact of culture on customer taste and preference
  • To evaluate the impact of economic development on customer taste and preference
  • Best Assignment Sample of Economic Development

Figure 1: Mind Map

(Source: Created by Learner)

The difference in consumer taste and preference due to culture

A critical factor influencing customer taste and preference is the culture of different countries. According to Zhang and Yousaf (2020), societal culture reflects the tradition, norms, customs, beliefs and values of individuals. As nominal shopping habits of an individual are dependent on these factors, it can be argued that culture plays a crucial role in shaping consumer behaviour. Customers around the world have different perceptions and overview of things around them. Hotsfede’s cultural dimension is a great model to analyse different aspects of culture and its impact on consumer perception. It is observed that main cultural elements include time constraints, motive, values, beliefs, taste, preferences and product usage. As argued by Kumar (2018), change in any of these elements can cause a change in consumer preference and taste across countries.

Best Assignment Sample of Economic Development

Figure 2: Hofstede’s cultural dimension

(Source: Kumar, 2018)

A good example to state this point is that there is a considerable difference between how Eastern people and Western people perceive things. As cited by Diallo et al. (2018), in Eastern culture, consumers use a lower proportion of their disposable income to purchase products. However, in comparison to Eastern culture, Western culture people have a spending attitude and live more lavishly. Such small differences in culture have to be noted down by organisations to become successful. As opined by Cui et al. (2017), it is because such differences in culture show that consumers of Eastern culture are more price-oriented. Hence, an organisation trying to venture into the market has to keep its pricing strategy low to attract customers of that place. Conversely, pricing strategy has to be high when operating in Western markets such as the US and the UK.

In the current social context, the world is becoming more and more globalised. The companies are penetrating different countries and selling the same products to different customers. However, as argued by Arli and Pekerti (2017), the main thing that changes is the approach through which these companies are selling products. Understanding such differences in culture allows organisations to make profits and sell products successfully in markets. It can be argued from the discussion that due to a change in attitude and belief, it is difficult for a company to enact the same marketing approach in different countries. Therefore, incorporating different marketing strategies for different cultures is the right thing to do for companies trying to influence customer preference and their tastes or preferences.

The difference in consumer taste and preference due to economic development

One of the most distinctive changes in customer preference and taste is due to the expansion of services and economic development of cross-countries. As stated by Gürhan-Canli et al. (2018), economic development has been characterised by regulatory reform, trade liberalisation, and advances towards information and communication technology. As marketing is based on the change of fundamental needs, customers in a flourishing economy would obviously have a different perception towards shopping than customers in a country with an economic recession.

A good example to relate this point is by stating the economic development of countries such as Zimbabwe and the UK. The annual GDP of Zimbabwe in 2020 is forecasted as $14 billion whereas the GDP of the UK in 2020 is forecasted to be $1.938 trillion (Worldbank.org, 2021). Thus, there is a huge gap in economic development in both countries. A global organisation trying to venture into the Zimbabwe market has to know that people in Zimbabwe are relatively poor. As criticized by Foellmi et al. (2019) most citizens in such poor countries would not be able to purchase products that have a high price tag. Hence, if the organisation does not create an appropriate pricing strategy to resolve this problem, it is highly likely that they would incur a massive loss.

On the other hand, the same company when entering into the UK market cannot enable similar strategies that are used in Zimbabwe. The main reason is the economic development of the country, due to which the standard of living of consumers in the UK is quite high (Cui et al. 2017). Hence, low-level engagement and strategies that would have been successful in Zimbabwe would not be effective in the UK. For instance, the pricing strategy would have to be different from that of Zimbabwe to attract customers in the UK. Therefore, through this example, it can be stated that economic development is a critical element that influences customer taste and preferences.

Conclusion

In this review, the main point of discussion has been to critically analyse where customer preference and the taste is affected by changing culture and economic development or not. In order to analyse the topic, discussing concepts of culture change and economic development was necessary. Hence, at first core concepts have been discussed and then differences of customers across different countries are highlighted. In addition, proper examples and justifications are provided to understand differences. It has been found that the world is becoming concentric due to the advent of globalisation. However, the presence of a significantly higher gap in cultural and economic development cannot be overlooked in the context of cross-country analysis. Therefore, this review is extremely beneficial to portray the relevance of taking up this study and understanding marketing differences.

References

Arli, D. and Pekerti, A., 2017. Who is more ethical? Cross‐cultural comparison of consumer ethics between religious and non‐religious consumers. Journal of Consumer Behaviour16(1), pp.82-98.

Cui, L., Wu, K.J. and Tseng, M.L., 2017. Selecting a remanufacturing quality strategy based on consumer preferences. Journal of Cleaner Production161, pp.1308-1316.

Diallo, M.F., Diop-Sall, F., Djelassi, S. and Godefroit-Winkel, D., 2018. How shopping mall service quality affects customer loyalty across developing countries: the moderation of the cultural context. Journal of International Marketing26(4), pp.69-84.

Foellmi, R., Jaeggi, A. and Rosenblatt-Wisch, R., 2019. Loss aversion at the aggregate level across countries and its relation to economic fundamentals. Journal of Macroeconomics61, p.103136.

Gong, T. and Yi, Y., 2018. The effect of service quality on customer satisfaction, loyalty, and happiness in five Asian countries. Psychology & Marketing35(6), pp.427-442.

Gürhan-Canli, Z., Sarial-Abi, G. and Hayran, C., 2018. Consumers and brands across the globe: Research synthesis and new directions. Journal of International Marketing26(1), pp.96-117.

Kumar, V., 2018. A theory of customer valuation: Concepts, metrics, strategy, and implementation. Journal of Marketing82(1), pp.1-19.

Worldbank.org, 2021. GDP of countries. Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD [Accessed on: 22nd February 2021]

Zhang, X. and Yousaf, H.A.U., 2020. Green supply chain coordination considering government intervention, green investment, and customer green preferences in the petroleum industry. Journal of Cleaner Production246, p.118984.

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