A Multicultural Model of Consumer Durable Acquisition Patterns

A MULTICULTURAL MODEL OF CONSUMER DURABLE ACQUISITION PATTERNS

Peter J. LaPlaca, University of Connecticut

Girish Punj, University of Connecticut

Noreen Randazzo, Burroughs Corporation

ABSTRACT -

The present research develops a multicultural model of consumer durable acquisition patterns. The model, is in part, based on a synthesis of previous research on consumer durable acquisition behavior. Applications of the model for a fir-.ii operating globally are identified in the are--is of product selection, market selection and timing of market entry.

INTRODUCTION

In recent years, large uninational companies have become increasingly aware of the necessity of expanding to world markets. The domestic markets for many of these companies have become saturated due to reduced growth rates and increased competition.

In the 1960's, several firms initiated foreign operations to supplement their domestic market opportunities. The most common model for this kind of expansion was to develop separate marketing strategies for each foreign market entered. The prevailing strategic thinking was that each market should be treated as a distinct entity with its unique needs and success criteria.

Many firms which had successfully ventured abroad during previous decades now have large foreign operations, often comparable in size to their major domestic facilities. The multiplicity of markets (each with its own strategy) and the growth of local competitive pressures have created complex managerial decision-making and control environments for these companies. A new philosophy for managing world scale operations is needed.

One approach recently proposed by Levitt (1983) is to "globalize" marketing strategies. He contends that "companies raust learn to operate as if the world were one large market -- ignoring superficial regional and national differences." Others have argued that there are sufficient differences across nations to negate the apparent advantages of a globalization strategy.

If globalization as a concept is viable, market planning and strategy models which can be used to design global strategies need to be developed. A necessary input for such models is an understanding of buyer behavior at a crossnational level.

The present research is directed at developing a multicultural model of consumer durable acquisition Patterns which identifies the factors which influence the development of an acquisition order for product categories such as major appliances, housewares, and home entertainment equipment . The model is multicultural from a dual perspective. It conceptualizes the consumer durable acquisition process in global terms while allowing for operationalizations at a country/market specific level. The model is partially based on a synthesis of consumer durable acquisition research conducted in monocultural settings.

Second, the present study provides a synthesis of previous research on consumer durable acquisition patterns by formulating a model derived from the findings of earlier studies. Such a consolidation could be useful in generating and testing new hypotheses as well as identifying directions for future research.

PREVIOUS RESEARCH

While households may acquire consumer durables in a variety of sequences, there may exist broadly valid acquisition patterns for major segments of national markets.

One of the earliest studies concerned with the acquisition pattern of consumer durables was conducted by Paroush (1965). Using the Guttman Scalogram technique (Guttman 1954), Paroush analyzed the acquisition pattern for four consumer durables based on a sample of 5000 families and found that the order of acquisition in Israel was radio, gas cooker (stove), refrigerator, and washing machine. He applied the same technique to sample data from Great Britain and found that the order of acquisition there was cooker, vacuum cleaner, washing machine, and refrigerator. Hence, there is evidence of crossnational differences in acquisition patterns .

McFall (1969) investigated acquisition behavior for a broad range of consumer durables (including electric irons, televisions, floor polishers, electric blankets, pool tables, oil paintings, toasters, mixers, etc.) in the U.S. One of the findings of his research was that different acquisition patterns were obtained depending on whether the input data was based on actual ownership of the consumer durables or the patterns were derived from purchase intention data. McFall also concluded that consumers thought of their household purchases in terms of sets of similar items rather than individual products. For example, consumer durables could be grouped into a "comfort set" (e.g., electric blanket, air conditioner, automatic washer, etc.), a "clean set," a "cook set," an "entertainment set," etc. Acquisition patterns could then be identified across these sets of consumer durables. Gabor and Granger's (1973) analysis of penetration rates for six major consumer durables in England (cooker, television, washing machine, refrigerator, motor car, and central heating system) showed that, while actual penetration rates varied across socio-economic groups, the general pattern of acquisition for these goods was almost identical for all five socio/economic groups studied.

In an insightful analysis of acquisition patterns within sets of similar consumer durables, Hebden and Pickering (1974) and Pickering (1975) found that acquisition patterns existed for defined sets of similar goods and furthermore that these acquisition patterns were also similar for different socio/economic groups. The durables included in this study were: leisure goods (caravan, record player, tape recorder, black & white and color television), domestic goods (deep freeze, dish washer, refrigerator, refrigerator/deep freeze, floor polisher, vacuum cleaner, and washing machine), low ownership goods (second car, color television, dish washer and deep freeze), and a diverse set of goods (first and second car, deep freeze, color television, and vacuum cleaner). Thus there is evidence of common intra-nation acquisition orders.

Kasulis, Lusch and Stafford (1979) postulated that common patterns of consumer durable acquisitions resulted from a common utility structure among the population in question. The utility structure provided a rational basis for prioritizing an evoked set of possible consumer durable alternatives which were in competition for the limited resources available to purchase the goods. It this is in fact true, then there should be greater adherance to underlying acquisition patterns in nations/regions with homogeneous populations. Analysis of the data presented in this study, based on residents in Oklahoma City, indicated that such was in fact the case. The authors concluded that ". . . a population has an underlying common order of acquisition for a large set of heterogeneous durables."

In a-replication of the Kasulis, Lusch and Stafford study on residents in Perth, Australia, Clarke and Soutar (1982) also found a common order of acquisition. A comparison of the Oklahoma and Perth patterns revealed differences which could be explained by climatic and cultural factors. in addition, there were differences in acquisition patterns between home owners and renters. The latter being perhaps created by differences in stage of the family life cycle, lifestyle and other individual/ household level variables. In a nationwide (U.S.) sample of households, Dickson, Lusch and Wilke (1983) also found support for a common underlying acquisition pattern. However, they indicated that since older households acquired their durable products earlier (and from a more restrictive set of products than those currently available), patterns derived from these familiers would serve as weak predictors for acquisition patterns among newer families. Thus, acquisition sequences appear to be time dependent.

Based on the above research, it appears that common acquisition patterns for consumer durable goods do exist. There is also evidence that these patterns are country specific. However, within a population, there appear to be variations around the common pattern, caused by individual/household factors. The multicultural model of consumer durable goods acquisition patterns presented in this paper, models the process by which prioritization sequences are developed. It attempts to explain the common elements and the differences in acquisition patterns, in terms of cultural, geographic, socio/demographic and marco environmental factors .

THE MODEL

The previous research has indicated that common underling patterns of consumer durable acquisition can be found in different populations. However, there are variations both among and within these populations. The model presented here attempts to account for these variations in terms of universal, culture-specfiic and individual constructs.

The idea that a universal acquisition order exists is useful as a starting point for model development. Such a starting point is based on the assumption that consumers have universal needs and is consistent with the "globalization" concept. However, the specific means by which these needs are manifest and satisfied is tempered by culture-specific values and individual differences relating to family life cycle, lifestyle, and sociodemographic factors. Additionally, a variety of macro environmental factors influence the acquisition process by determining the availability of particular consumer durable goods in a population. As shown in the model presented in Figure 1, there are four constructs central to the development of consumer durable acquisition patterns. These are: the available set of durables, the consideration set of durables, the priority order of acquisition, and, the acquired set of durables. (The buyer behavior decision process interacts with the consumer durable acquisition process and can also be viewed as a subset of it.) However, since the former process is well understood (relatively speaking), the present discussion focuses only on the latter.) Table I provides a description of the constructs in the model.

The set of consumer durable goods available to a household varies from country to country. Naturally consumers can only select from among those products available in their markets. An important determinant of consumer durable goods availability is the level of technological development in the country. The variable attempts to account for differences across nations in their ability and willingness to accept new technology. For example, the existence of color broadcast technology must precede the availability of color televisions in a population. Furthermore, the presence of the latter is a prerequisite for the introduction of video-cassette recorders into a market.

FIGURE 1

A MULTICULTURAL MODEL OF CONSUMER DURABLE ACQUISITION PATTERNS

In addition to technology, there are several macro environmental factors which affect the available set of consumer durables in a specific country. These include economic conditions, political philosophy, climate/geography, type of econ,,my, educational levels, and the status of the infrastructure. One measure of the economic condition in a country is per capita income. Since a consumer durable is purchased with disposable income, there have to be sufficient numbers of people who are willing and able to buy a specific consumer durable good before a market for it can be developed. Hence, a country's distribution of disposable income across the population will influence the mix of consumer durables available in that country. A second macro environmental factor to be considered is the climate/geography of the country. For example, extremely hot and/or humid climates have an inherently greater need for refrigerators, air conditioners, dehumidifiers, etc. Locations with opposite conditions (i.e., cold or dry climates) would have greater need for room heaters, humidifiers, etc.

The nature of the country's infrastructure as reflected by the availability of power, water, gas and other utilities; the type of distribution channels and financial institutions; the incidence of service and repair facilities; transportation modes and communications channels; all influence the mix of consumer durable goods available to the population. Countries with well developed infrastructures are likely to be able to support a wider array of durables. Another macro environmental influence has to do with the political philosophy prevalent in the country. Attitudes toward private enterprise, imported goods, and the protection of domestic industry will have an effect on the availability of consumer durables in a country.

Educational levels, as measured by literacy rates and the number of average years of formal education, will also influence the mix of consumer durables available in a market. Educational levels influence standards of living which in turn require greater utilization of consumer durables. A final macro environmental factor which influences the availability of consumer durable goods in a market is the extent to which the economy is agricultural, industrial, or service based. Countries which are more developed and moving from industrial to service based economies provide greater markets for consumer durables.

The consideration set of consumer durables is a subset of the available set of consumer durables formed by taking into account universal needs, culture-specific values and individual differences. The model assumes the existence of a universal set of basic human needs such as those proposed by Maslow (1954). Culture-specific values, on the other hand are learned. They vary across cultures on dimensions such as attitudes toward time, work, wealth, consumption, achievement and change. For example, some subcultures have a taboo against the use of electrically powered appliances. This would significantly affect the type of consumer durables included in the consideration sets of consumers belonging to that subculture. In another instance, culture-specific values toward time could influence the consideration of labor saving devices in a population.

Individual and household level differences will effect the consideration set of consumer durable goods for households. These variables include the household's stage in the family life cycle, income, occupation, education, social class, life style, and other similar influences on buyer behavior.

TABLE 1

DESCRIPTION OF MODEL CONSTRUCTS

The priority order represents the household's time order for the planned acquisition of the consideration set of consumer durables. This is determined by the household's functional requirements relative to the performance of major functional living tasks (e.g., food preparation, household cleaning, etc.) The order is also influenced by the household's set of consumer durables currently owned. The priority order can also be affected by unanticipated factors which --night alter the planned acquisition pattern, such as household moves, emergencies, and marketer initiated factors such as sales or new product introductions.

Once the priority order has been formed, purchases will be initiated according to the traditional household purchase decision process. Households will cycle through the buyer behavior process for each consumer durable acquisition. In some instances durables will be acquired jointly, particularly if they are interdependent (e.g., washer and dryer). The acquisitions will augment the buyer's current inventory and be used in determining the priority pattern for future purchases.

IMPLICATIONS FOR MULTICULTURAL MARKETING STRATEGY

Due to the increased concern for globalization of marketing strategies, there is a corresponding increased need for global models of buyer behavior and strategic market planning. Most of the traditional models of buyer behavior and strategic marketing planning are based on unicultural assumptions and therefore cannot be readily extended to the global marketplace. The present model represents an attempt to build a global model of consumer durable acquisition behavior.

Corporations involved with the global marketing of consumer durables require a multicultural understanding of the market place to successfully plan and implement marketing strategies. Some of the areas which are most affected by this need are: new product planning, new product introduction, segmentation, assessment of segmentation potential, forecasting local and global demand, promotional strategies and tactics, selection of market arenas for competitive attacks and defensive maneuvers.

The model of consumer durables acquisition patterns discussed in this paper has particular application for the global firm in the areas of market selection and new product introduction. Given limited production capacities, marketing resources, and other constraints, it is critical that proper market selection be achieved to assure overall success of the new product. The marketing manager must determine which markets will be receptive to the new consumer durable. Therefore, a knowledge of the position of a specific consumer durable in the acquisition pattern in different countries can be useful in deciding which markets to enter. A global "rollout" strategy can be formulated to account for differences among consumers in different countries in terms of their readiness-to-buy. Furthermore, consumer durable goods are ideally suited for the application of global marketing strategies. Most manufacturers find that local markets are characterized by slow growth and slim margins. There is little room for product innovation and improvement in manufacturing efficiency. One option for attaining growth and profit goals, these companies have, is through global marketing. The traditional approach used by these companies in their domestic markets has been termed the shotgun approach. This involved offering all products at all price points in all markets. Such a strategy is not feasible in the global marketplace. A global strategy requires a selection of markets for entry, products or sets of products to introduce in these markets, and knowledge of proper timing for market entry.

Market selection entails the identification of specific countries/markets which provide sufficient demand for a company's products. The country demand for a set of consumer durables can be determined by the numbers of people in the market and the location of the firm's products in their priority acquisition orders. The above procedure can then be used to forecast demand for all countries/markets the company is interested in. In this way company resources can be used only in the most 'Lucrative markets.

In conjunction with the selection of countries/ markets for entry, the company must also determine the most appropriate consumer durable or set of durables to introduce into these markets. A knowledge of the highest ranking products in the priority acquisition order can be used in this decision. Also, by studying the priority patterns, a determination of sets of consumer durables which will be purchased simultaneously (or in close time proximity) can be made. This information can then be used to develop logical multiple product offerings (i.e., washer and dryer combinations, television and VCR, or similar pairings) or series of offerings with common characteristics (i.e., a line of power tools with interchangeable components, appliances with coordinated colors, etc.).

REFERENCES

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