Effect of Cultural Dimensions on Market Cannibalism An understanding of how market cannibalism, marketing strategy can be related to the Hoftede’s Cultural Dimensions. Authors: Maithreya Chakravarthula Vikram Aditya Chakravarthula
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Effect of Cultural Dimensions on Market CannibalismAn understanding of how market cannibalism, marketing strategy can be related to the Hoftedes Cultural Dimensions. Authors:Maithreya ChakravarthulaVikram Aditya Chakravarthula
Key ConceptsHoftedes Theory of Cultural DimensionsCulture & Consumer BehaviorConsumer Behavior & Marketing StrategyMarket Cannibalism as a Marketing Strategy
Use culture to build a brand & then a Brand to build a CultureProduct + Brand + Culture = Value
Importance of culture on brand, market, customers, decision making, psychology etc.3
Hofstedes Theory of Cultural DimensionsA scale of comparison on unique aspects of cultureSix different dimensionsImportance: Understanding people as a society Why? A tool to relate customer buying patterns with cultures
The 6 dimensionsHofstedes Dimensions of Culture (100 point scale)LowerHigher
Consumer BehaviorOne defining factorPerspectiveHeavily influenced by Culture
First poster : A man lying in the hot desert sand totally exhausted and fainting. Second poster : The man is drinking Coca-Cola. Third poster : Our man is now totally refreshed. And then these posters were pasted all over the place."Terrific! That should have worked!" said the friend."The hell it should have!" said the salesman. "No one told me they read from right to left!6
Video on perspective and relate perspective to culture
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Blank Slide8
Same slide with markings on it!
Ask them the difference between this and the other9
Difference?Perspective!Comparison.Differentiation.
The reason we identified the spot on the previous slide is because of these. And the way we interpret these differences are defined and shaped by our culture.
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Cannibalism
TraditionalModern
Traditional: Man eats another man
Modern: He eats himself11
Market / Product CannibalismIn Theory
New iPhone 6 promotion should boost its own sales
The sales of the 5s must go down!12
Market / Product CannibalismIn Reality
New iPhone 6 promotion should boosts the sale of the older phone
The sales of the 5s go up!13
Expected theoretical Technique of cannibalism.
Raise in sales when new product launched. Compare Q4 to Q3.
Initially Q4 sales < Q3 sales (New product expected in next quarter, so people dont buy); 14
Why?
Each iPhone as a new product
The trend of following the bell curve does not work in this case.
Why?
After the launch of each new product, initially it is common that people are critical about it. They wait for the reviews, ask people about it and then buy it after they are convinced.
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All iPhones as a single product
When all iPhones are considered as a single product though the bell curve retains its position17
Interesting Trend!Q2 + Q3 = Q1
Unexpected Technique of cannibalism In modern times, reality
Raise in sales when new product launched but at the same time rise in sales of the 4th quarter. Compare Q4 to Q3.
Q3 sales < Q4 sales (New product expected in next quarter, yet people buying the older product before the launch of the new one)
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Why?
Cost to benefit ratio!
Clearly price is a determining factor. Each new release is just an incremental upgrade. Lower cost to benefit ratio!19
ConclusionMarket Cannibalism Not a phenomenon but a strategyMarket Cannibalism based on Consumer BehaviorConsumer Behavior Heavily influenced by cultureHofstedes Dimensions provide an insight in understanding buyer behavior patterns
The other way
Started with Culture, consumer behavior, cannibalism
Ended with cannibalism, consumer behavior, culture20