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Culture is defined as a complex phenomenon that is comprised of knowledge, beliefs, arts, laws, morals, customs that are sociologically learnt by man as a member of the society (Hawkins et al., 1983, p.5). According to this perspective, individuals have their own cultures when it comes to their ways of life, beliefs, dressing and so on. Several cultural aspects affect the manner in which events take place in the society, and even in the markets. For instance, language, which is a cultural component, directly affects consumer behaviors in the markets.
As argued by Aspers, the “many aspects that define the ways in which consumers and the BGRs interact, and how BGRs interacts with each other, can be described in terms of culture” (2010, p. 60). Social constructions shape interactions between different parties in the market. Social constructions as a result of culture influence such market activities as pricing. For instance, as posited by Velthuis, variations in the prices of artworks tend to be associated with the characteristics of the artists rather than the reputation of the artists (2005, p.26). This paper discusses the influence of culture on markets with regard to whether it limits or makes exchange in the market possible based on the scenarios given by both Patrik Aspers and Olav Velthuis in their books. Other factors that affect market performance are also analyzed in this paper .
The Elements of Culture
The most important cultural elements are language, religion, values and beliefs, social class and status, as well as aesthetics. All these elements of culture actively influence the markets either by limiting them or enhancing the exchange in such markets. These elements of market culture actively influence market performance, either positively or negatively.
Language as a cultural element that actively influences a market is both verbal and non-verbal. It is very important for a market party to understand how people in a particular market use language (Zelizer 1978, p.607). Considering that language is a medium through which negotiations and other forms of interactions in the market place are facilitated, it is important for market parties to have a clear understanding of the components of language and associations that are made through language. Slogans and phrases that different companies come up with in promotions and other advertising ventures should be constructed in such a way that controversies are avoided. This is mainly because such controversies can have adverse effects on sales, and consequently limit the market of certain products. However, while used in the right manner, language as a cultural element assists in making the exchange of products and services in the markets easy. Product advertisements and promotions that use language effectively succeed in the market. Taking the fashion the fashion industry as an object of inquiry, Aspers notices that language as a cultural element helps in maintaining order in the markets (2009, p.11). The manner in which language is used determines how the required order is achieved at the end of the day. The networks that connect the BGRs and their customers globally and also the manufacturers in low-cost countries are made of communication channels enhanced through language (Aspers 2010, P.9).
Religion is another vital cultural component whose influence tends to be ignored by many firms in the market. When religious aspects are not effectively addressed in a given market, thesocial order might be disrupted as a result and markets affected negatively (Hawkins et al. 1983, p. 59). It is, therefore, important to identify the religious values upheld in a given market to ensure that conflicts are avoided. Identification of the shared beliefs, such as those typical of Islam, Buddhism, or Christianity, can play a significant role in ensuring that productive market relations are maintained. The fashion and art industry, as illustrated in the works of Aspers and Velthuis, are greatly influenced by religion. For instance, religion influences the nature of dressing that a particular group considers decent or indecent. A fashion producer should effectively understand the dominant religion in a given market to avoid conflicts between the consumers’ tastes and the products. The same applies to all other product types in the markets. A good example is the ban of pork products and alcoholic beverages in most of the countries in the Middle East region. An effort by a trader who specializes in such products to venture into the market can only result in chaos (Kagel, & Roth 2000, p.226).
Values and beliefs affect markets in that they shape the attitudes and reactions that people holding them have towards given products. As posited by Aspers, the order that exists in the markets is a result of “the predictability of human activities and the stability of social components in relation to each other” (2010, p.7). Having the knowledge of the beliefs and values of different participants in the market and observing them helps in maintaining such an order that fosters exchange of goods and services in the market. While some beliefs have been in existence for a long time, others are continuously being formed, as human beings continue interacting with each other in different activities. For instance, it reaches a time whereby the reputation of an artist which is attained over a given period of time by becoming dominant over the artworks themselves. At such times, the prices of artworks are no longer dependent upon the quality of the artworks but rather upon the reputation of the artist (Valsan 2006, p. 165). Also, in what Aspers refers to as the status markets, the prices of clothes are not determined by the quality but rather by the status of the producers (Godart 2010, p. 206).
Morality as a cultural element both limits and permeates exchange in the market. The concepts of morality are construed in accordance with the prevailing ethics and what the people in a given market term as amounting to the concepts of right and wrong (Roll 1997, p. 154). The pricing of commodities in the markets is actively shaped by what is considered right or wrong in that particular market. For instance some markets consider some dressing as inappropriate and indecent, and, therefore, their performance is gauged on the standard ordering as claimed by Aspers (2010, p.56). Morality permits or restricts people from buying particular commodities in the markets, thus directly affecting their performance in the markets.
Education or literacy levels form another element of culture that may limit of permeate exchange of commodities in the markets (Suen 2000, p. 115). In cases where the literacy level is generally low in a given market, some resistance to change with regard to the prevailing market trends is experienced both from the points of the consumers and the retailers. Illiteracy or generally low levels of education have inhibiting tendency in the markets compared to high levels. For instance, the fashion industry and art business thrive in societies that have high levels of literacy of the populations. This is because a certain artwork or fashion might appear worthless to a person whose knowledge about the them is limited. High education levels are conducive to market performance in that interactions are made simpler, and any misunderstandings are solved effectively (Suen 2000, p. 117).
According to Aspers, fashion markets can be ordered either by status or standard (Godart 2010, p.13). It is on the consumption end that status ordering occurs. This is actually during the interaction of the reflexive identities represented by both consumers and retailers. Such identities are regarded as reflexive considering that they are mostly influenced by internal desires. Due to this, they usually have dimensions that range from superficial to ethical. Commodities derive meaning through considering the relationship that exists between them and the wearers under status ordering (Nierderle, & Roth 2004, p.50). In such a case, both the status of the consumer and that of the retailer are important. Considering that status is a social construction, it is important to realize that such constructions play significant roles in the markets, and that the effects that they have on the movement of both products and services cannot be ignored. The exchange of commodities is influenced a lot by the status of the involved parties and less by such aspects as price, quality, etc. that are important in what Aspers terms as the standard ordering (2010, p. 14). These social constructions are similar to those that shape the reputation of artists, as described by Velthuis.
All the arguments that have been taken into consideration by different scholars in the field highlight the existence of culture as an active agent in the markets. Some of them view the markets as culture in itself, while others view culture as a component of the markets actively influencing its performance. Whichever the approach, cultural elements affect the market by either making it hard for it to operate smoothly or enhancing its operations. The cultures that have been highlighted in the fashion market by Aspers and in the art industry by Velthuis actively shape the operations in those markets.
The cultures represented in the two books that form the basis of the evaluation of cultural influence in markets are comprised of the usual elements of culture. These include the values that the people hold, as well as the issues of social status and stratification. For instance, as claimed by Aspers (2010, p.67), in the status ordering, commodities are not gauged with accordance to their quality but by the status of both BGRs and consumers. Brands are as a result appreciated by consumers according to tastes that are in accordance with their status. It is, therefore, clear from this that in the fashion industry, the most prevailing culture that shapes the aspects of the commodity markets is social class of status. “The retailers and consumers, respectively, are ordered in status ranks” (Aspers 2010, p.46). Also, as brought out by Velthuis about the art market, social classes also play a significant role in shaping different aspects, including the pricing of the works of art. The reputation of the artist becomes more important than the quality of the art work when it comes to determining the price of the piece.
The Influence of Cultural Exchange on Market Performance
As described in the works of Aspers and Velthuis, the art and fashion industries directly benefit from cultural exchange. Introducing a foreign culture in the markets invokes a variety of responses from the market stakeholders, which are not at all predictable (Roll 1997, p. 129). Some of the involved parties in the market, whether consumers or retailers, may not understand the foreign cultures due to substantial lack of the appropriate knowledge. For instance, some fashions that are associated with given cultures from the east, such as the Indian culture, may be perceived as primitive or simply unpleasing in a western market. This is also true of those who understand the aesthetic values of the fashions or artifacts, irrespective of where they reside tend to appreciate them. In this case, the localizing of a foreign culture or the mixing of different cultures in a given market is appropriate to ensure that the desires of different people are well catered for (Roll 1997, p.138).
Through the mutual understanding of different cultures and the gaining of respect for various cultures, the influence that cultural exchange exerts on business activities is noticeable (Niederle, & Roth 2004, p. 49). Cultural exchange works to improve the brand image of a given country, which in turn improves the demands for the products of such a culture. For instance, most art fanatics believe that France is superior when it comes to the production of artworks and beauty in general, while to them Germany is a force to be reckoned with when it comes to engineering. These associations enhance trading activities for such cultural entities, as well as directly affect the prices of the commodities. Artworks of French artists are considered to be highly rated in terms of prices compared to the artworks of other artists throughout the world (Velthuis 2005, p. 42). It is also common to hear many people preferring going to France for holidays to other countries due to the brands France has createed through its tourist activities. French artworks and fashion products are preferred by most people, and the same people also prefer motor vehicles and machines made in Germany.
While having the plans of venturing in a foreign market, it is important that firms or companies with such plans first exercise cultural influence on the markets they plan to enter before doing so (Roll 1997, p. 156). This prepares the involved parties psychologically and levels the ground for the subsequent actions such that intolerances that may have otherwise been faced are completely avoided. Cultural intolerances in the markets may have devastatingly overwhelming results to the organizations or firms that have not been effectively prepared for them.
Other Factors Affecting Market Performance
According to the commodity that is exchanged in a given market, there are other factors that exist alongside culture and whose influence on the performance of such markets is significant. Just like culture, these factors affect the making of deals in the market by influencing several aspects, such as prices of commodities and the manner of operations to be followed or adhered to in the markets. Among these factors are government regulations, political climate and economic conditions that prevail in the given market (Kagel, & Roth 2000, p. 212).
Government regulations just like culture affect the making of deals in the markets in different ways (Hawkins et al. 1983, p.46). For instance, in a socialist country like China government authorities exert direct influence on the market trends. As a result, prices of commodities are regulated and certain commodities that are favored by such regulations dominate the markets. Government interference in the free markets has different results based on the viewpoint that one may wish to take. Those against government influence in the markets posit that such influence has bad results on the nature of competition, as some of the players in the markets end up being favored by the regulations. This has a negative impact on the spirit of free competition in the markets, since some of the players end up losing after they fail to be favored by the conditions that are put in place. To most consumers, however, government regulation in the markets is important in instances when they aim to control commodity prices. Certain retailers take advantage of the lack of such government influence in the control of prices to exploit the consumers (Suen 2000, p.115).
Government regulations are also important shapers and active influencers of market performance when they are directed towards monitoring the operations of different market stakeholders with respect to the environment. When left free to exercise liberty in production, some producers end up abusing it by not protecting the environment. Some actively contribute to the increase of the carbon footprint without considering the impacts that can have on the environment. For the purposes of sustainability, such regulations are important.
Political happenings are other significant forces that influence markets. For instance, in cases when there is no political stability in a given market, commodities become rare as traders face the risk of incurring losses as a result of the instability (Suen 2000, p. 116). While demand for products still remains high, commodities are in short supply, and this has an impact on prices which increase dramatically. This explains why politically unstable regions experience high commodity prices as contrasted to markets that have politically stable environments. In stable political climates, markets tend to thrive, as entrepreneurs feel protected and ,do not feel any threats concerning their products and their investments.
Economic policies also influence the performance of markets, just like culture and other significant factors in the business world. In most cases, economic policies come as part of market regulations from bodies and governments. Bodies, such as the WTO and ILO, have policies that affect performance of markets in a variety of ways. For instance, certain policies concerning the treatment of workers can affect even the prices of commodities in the markets (Roll 1997, p. 171). In other countries, such as China, economic policies are issued by the government to regulate the manner in which traders handle business. For example, in the Chinese banking industry, there are policies that bar foreign banks from establishing operations in some parts of the country.
From the above discussion, it is clear that culture alongside other aspects, such as political activities, economic policies and government regulations, affect the performance of markets. In particular, culture plays a significant role in that according to how it is viewed, it both enhances the performance of the markets by facilitating the activities in the market and limits the activities therefore negatively affecting the performance in the markets (Velthuis 2005). Language and religion which are important elements of culture can both limit or facilitate the exchange that takes place in the markets. When effectively used, language can have very good results in the markets, as far as advertisement and promotional activities are concerned. The failure to use language in an appropriate manner can result in collapse in the order that exists in certain markets, as claimed by Aspers and therefore limiting the activities in the market (2010, p. 59).
Cultural exchange in the markets is an import phenomenon, which should, nevertheless, be carried out carefully. When a given producer or retailer plans on venturing into a given market, it is important to ensure the cultural aspects that are represented by the commodities are introduced into the target market prior to the venture. This ensures that misunderstandings that could otherwise take place are curbed and that the products are well received in the markets. The two cultures that are represented in the works of Aspers and Velthuis demonstrat the nature of the influence culture has on the performance of markets by both limiting and enhancing the exchange of commodities in the market (Niederle, & Roth 2004, p. 45).