Culture has been defined as a shared set of values and beliefs by Hofstede (1980), and it is common to members of the group (Hall 1966) and separates them from other groups (Hofstede 1997). Cultural values define the self and personality of consumers in different cultures. The five dimensions of cultural values as proposed by Hofstede (1980, 2001), and Hofstede and Hofstede (2005) are--power distance (low vs. high), uncertainty avoidance (low vs. high), individualism (vs. collectivism), masculinity (vs. femininity), and long term (vs. short term) orientation. Countries with high power distance index have a great inequity between superiors and subordinates. Countries with high uncertainty avoidance index have a society where people do not like to take risks and prefer security and safety in everyday life. Countries that rank high in the individualism index have societies that promote self interest rather than the interest of the group. Finally, countries that score high on the masculinity index have societies where the gap between men and women is very wide.
Scholars have studied the influence of all of the cultural factors that were proposed by Hofstede (1980), and its impact on behaviors of people in different cultures (countries). However, there is conflicting viewpoint about the impact of culture on consumption. There are some who think that since the world is getting smaller, people are travelling more, cultures are getting more homogenous and thus their preferences are becoming similar (Elinder 1965, Ganesh 1998; Hannerz 1990; Levitt 1983). Walker (1996) thinks that the consumer culture has been homogenized by mass media while Jain (1989) concludes that the homogenization is the effect of socio-economic infrastructures and economic development. Companies have subsequently started using somewhat standardized marketing strategies for different cultures and countries (Zou and Cavusgil 2002), which has led companies to promote global brands (Aaker and Joachimsthaler 1999), and position their products to a global consumer culture (Alden, et al. 1999).
On the other hand, there are those who believe that there is not enough information that there has been any convergence of national cultures to a so called global consumer culture. Usunier (1997), Craig et al. (1992) think that the opposite is true, especially in industrialized countries where there appears to be some divergence in people's behaviors. This is because national cultural values are deeply influenced by a country's history (De Mooij 2000), and even after people are exposed to different cultures they hold on to their own values and do not necessarily change and start buying foreign products which may be cheaper (Kotler 1986; Suh and Kwon 2002).
This leads one to believe that cultural differences still play a dominant role (Clark 1990; Steenkamt et al. 1999; Hofstede 2007; Takada and Jain 1991) in determining the values of people in different cultures and ultimately their behavior (Markus and Kitayama 1991; Triandis 1989). Cultural differences have been linked to the differences in attitudes and persuasion (Aaker 2000; Aaker and Maheswaran 1997; Chang and Chieng 2006), emotions (Matsumoto et al. 2008; Wang et al. 2006; Yuki et al. 2007) behavior and habits of consumers (Green and Langeard 1975; Hempeel 1974; Lee and Green 1991; Malhotra and McCort 2001; Zhang and Gelb 1996).
Diffusion of new products (Dwyer et al. 2005; Gatignon et al. 1989; Ganesh 1998; Ganesh et al, 1997; Helsen et al. 1993; Kumar et al. 1998; Kumar and Krishnan 2002; Mahajan and Muller 1994; Takada and Jain 1991; Talukdar et al. 2002; Steenkamp 2001; Steenkamp et al. 1999; Van Everdingen and Waarts 2003; Yaveroglu and Donthu 2002), acceptance of new products (Yeniyurt and Townsend 2003), innovativeness (Shane 1995; Tellis, et al. 2003), entrepreneurship (Morris et al. 1993), organizational behavior Hofstede (1983), and consumption of products and services (Chui and Kwok 2008; Suedo 2004) have also been linked to the differences in cultural values of different cultures (countries). …