Gift Giving Behaviour Among British & Uk Consumers

Monetary Gift giving Comparison between Chinese & British Culture among University students in UK By Shantanu Krishna MSc International Marketing, Spec. Customer Management Strathclyde Business School, UK Lecturer-International Business, Rai Business School, New Delhi

Executive Summary In this era of globalization, where growing importance in understanding the cultural differences and preferences of the people to maintain and develop long lasting relationships have become imperative. This study attempts to investigate the differences in the gift-giving behaviour among Chinese and British people. Cross cultural issues on the gift giving behaviour have been examined by researchers with a strong emphasis on giftgiving in the business context. No specific study comparing the Chinese and British culture could be found. Despite the large amount of general information on gift giving no literature was available on

monetary gift giving comparing the differences between the Chinese and British culture. This paper also identifies a potential area of further research to understand cross cultural issues in sustaining effective CRM practices across cultures. Being aware of the identified research gap a suitable research method was adapted. A short exploratory qualitative research in form of a focus group was conducted. Based on the findings from the literature review and the outcomes of the exploratory research a questionnaire was designed and a face-to-face survey was carried out.

II

Introduction This report will investigate the differences of monetary gift giving behaviour in the Chinese and British culture. Although a lot has been written about gift giving since the 1970’s, only few studies have concentrated on the monetary aspect with even less conducting an empirical research. Qualitative research in form of a focus group was initially used to increase the understanding of the subject and then further investigation was done through 50 face-to-face questionnaires with British and Chinese students at the University of Strathclyde. Results were analysed with SNAP and SPSS. The Chi-square test was used to test the significance of the differences of the results. With regards to the attitude question which is based on a Likert scale, the t-test allowed to determine the differences of the means. The results were then interpreted, put into context with the gift giving literature and findings were used to explain to what extent and in what ways there is a cross cultural difference in monetary gift giving behaviour. Limitations and recommendations have been drawn and areas of interest for future research are indicated. 1 1.1

Gift Giving Literature Review

Gift giving is defined as the “voluntary transfer from one person to another without compensation” (McGrath, 1995). This old custom, which occurs in all societies, is nowadays an integral part of our daily life. Gift giving is not only an economic transaction, but a process of high-context communication that conveys rich, symbolic meanings and is a medium for social interaction and personal expression (Wang et al., 2001; Allan, 2003). With the average US household spending 4% of its budget on gifts (Park, 1998) it is an industry that cannot be neglected. Despite the worldwide spread of gift giving, Waldfogel (1993) argues that non-monetary gifts make little sense from an economical point of view and are a source of potential deadweight loss. Since gift decisions are always made by someone else than the final customer, the recipient’s preferences might not be met with the non-monetary gift. A monetary gift, which can take the form of cash, vouchers or cheques, avoids this deadweight loss. This reduction of deadweight loss can partly explain why vouchers have become increasingly popular as gifts. According to Scammon et al. (1982) four primary functions of gift-giving can be identified. One function is gift giving as communication between gift giver and receiver. As gifts are often means of showing respect and honour for the recipient the choice of the “right” gift is very important for the giver in order to transfer the desired message from the giver to the recipient. Furthermore, gifts can be used to communicate how important somebody is to the giver and the 1

choice of the gift provides information about him. In order to prevent a misunderstanding in the gift giving communication givers are likely to choose gifts which are considered to be accepted by the society and are therefore “safe” (Scammon et al., 1982). Another function of gift giving is the facilitation of social exchange. This is particularly relevant on gift giving occasions and often serves as a symbol of social support. When gift giving is seen as an obligatory reciprocal exchange between two people it is an economic exchange. Finally, gifts are also given as a mean of socialisation. In this context gifts are given to people in order to express social connection and symbolise relationship in rites (Scammon et al., 1982; Ertimur, B. and Sandikci, O. 2005). Selfgratification has been identified as a fifth function of gift giving by Mick and DeMoss (1990). They argue that people buy “something nice” for themselves in a number of different circumstances such as when feeling depressed or wanting to reward themselves. Even though most gift giving studies concentrate on women, research in gender differences has been undertaken. Fischer and Arnold (1990) showed that women are more involved in Christmas gift shopping than men. McGrath (1995) supports these findings as she argues that women have more intimate exchange relationships than men. Gift giving is a practice which is very sensitive to the cultural, ethical and legal environment and therefore varies across different cultures (Wang et al., 2001). Hofstede’s (1983) model gives insights into the differences between the Chinese and the British culture. In the Chinese culture, an individual is inherently connected to others and fosters relationships through reciprocity, sentiment, and kinship network (Joy, 2001). Chinese philosophical thought is largely influenced by Confucianism and emphasises that people should align their behaviour with their social roles to maintain harmony in interpersonal relationships (Allan et al., 2003). These traditional values emphasize the importance of compliance to social norms over individual recognition and achievement and of family security and affiliation (Wang et al., 2001). In other words, the Chinese experience themselves as interdependent and willing to make sacrifices for maintaining communal harmony (Joy, 2001). Looking at the influence of the culture on gift giving, Wang et al. refer to Yau (1988, 1994 cited in Wang 2001) who identified three concepts in the Chinese gift giving culture. The first one is the concept of face which implies that the giver looses his face when offering a gift which does not match to the recipients standing in life or prestige. The concept of GuanXi refers to gift giving as a process for building relationships throughout individuals in professional and public lives. The last concepts is the already mentioned concept of reciprocity which implies the returned gift giving at an appropriate time of a gift with at least the same value what is expected in 2

return (Wang et al., 2001). As a result of these three concept, Park (1998) concludes that because of group conformity and face-saving needs, there is a high degree of social pressure in the Asian gift-giving behaviour. In contrast to that the British culture is characterised by a very high degree of individualism (Hofstede, 1993). Ties between individuals are therefore much looser, the level of loyalty is lower and the conformity with the group is less important in the UK than in collectivistic cultures such as China. According to Park (1998) this influences and explains differences in gift giving between individualistic and collectivistic cultures. Belk (1984) states that cross cultural differences in concepts of self, affect attitudes in the giftgiving behaviour. In western cultures it is common to asses the identity of self based on individual characters such as different symbols of individual status whereas in other cultures the theories of self are developed more by the view that people make part of a cohesive whole. In cultures where identity tends to be collectivistic, gift giving has the three function of establishing and sustaining social linkages, limiting envy through sharing and giving to extended self (Belk 1984). In contrast to that, in individualistic societies gift giving helps transmitting the self concept outside the family. This means that in these cultures gift giving is more an action that reflects the giver’s concepts of self than enhances an identity which is based on the group (Park 1998). Differences of gift giving behaviour between cultures can be seen in both, the personal and the business environment (Arunthanes et al., 1994). With the increasing globalisation of today’s world, the understanding of gift giving concepts in different cultures becomes more and more important, in particular for business relationships. In the British culture, relationships are developed after the business is done whereas in China the relationships are developed before the business is established (D’Souza, C. 2003). Giving gifts in China is therefore seen as compulsory for the establishment of business and personal relationships. Contrary to that, gifts in the British business context are often not well accepted and can even be seen as a form of bribery (D’Souza, 2003). Other than differences in the motivations of gift giving, the literature suggests that the types of gifts also vary across cultures. According to Liao and Huang (2006), a red envelope containing cash is a very common gift in China that is socially accepted and economically supports the receiver. Ting et al. (2005) even suggest that most Chinese think a monetary gift is not only convenient but also substantial, whereas a receiver is difficult to satisfy with a non-monetary gift. Therefore cash is seen as a gift for what the gift search effort is low and which avoids loosing the giver’s face by choosing the wrong gift item (Park, 1998). 3

In the UK, an enormous amount of money is spent on gifts which are generally of non-monetary character (Prendergast and Stole, 2001). The reason for non-monetary gift giving is that the thought counts more than the actual value of the gift. The donor is expected to spend time on searching for an appropriate gift for the recipient (Prendergast and Stole, 2001; Belk, R. 1976). Waldfogel (1993) states that in individualistic countries, monetary gifts are often seen as impersonal, reflect the donor’s lack of personal knowledge of the receiver and show little willingness to spend time to find an adequate gift. According to Predergast and Stole (2001) people give nonmonetary gifts to illustrate to what degree they know the personal preferences of gift receiver. Therefore the symbolic value of the gift has more importance than its economic value (Ertimur and Sandikci, 2005). As a result of these factors monetary gifts often appear as inappropriate and impersonal. They are usually given only in certain contexts such as weddings or when the desires and needs of the recipient are not well known (Ertimur and Sandikci, 2005). 1.2

Research objectives: This upcoming research is primarily concerned with

1.2.1

A comparative study of the British and Chinese monetary gift-giving behaviour.

1.2.2

Analysing whether the monetary gift giving behaviour would differ because of crosscultural differences between the two countries.

2 2.1

Methodology Research approach and design

The design and execution of the research is of high importance in order to capture the differences in the cross-cultural monetary gift-giving behaviour. A combination of an exploratory and conclusive research approach was determined to meet the research objectives. 2.2

Questionnaire design

A questionnaire was developed in SNAP based on secondary research and the outcomes of the exploratory qualitative research. Its aim is to generate the necessary data to answer the research question mentioned above. Using the same questionnaire for both Chinese and British respondents ensured the validity of any comparisons of different respondents’ answers. The questionnaire contains closed and scaling questions only. Open-ended questions were avoided due to their drawback of being difficult to analyse and interpret (Wilson, 2006). As recommended by Wilson (2006) the design of the questionnaire follows a funnel sequence going from general to specific questions. Wordings and phrases were kept simple and straightforward in order to avoid any ambiguity.

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2.3

Sampling design and interviews

According to the research objectives and instructions from the Marketing department the target population for the research has been defined as all Chinese and British Strathclyde University students, no matter what age, course of study or sex they were. A further criterion, the necessity of a participant to be either a British or Chinese citizen, was introduced by the researchers. In addition, a participant had to give their consent to conduct the interview. If any of these criteria were not fulfilled, the interview was not continued. To identify the target group, screening questions were developed where participants were asked about their nationality in addition to whether they wanted to participate in the interview. Because of budget and time constraints, a convenience non random sampling method was adopted (Wilson, 2006), as the most accessible members of the population of interest were selected. In accordance with the guidelines stipulated by the Marketing department the sample of respondents was restricted to a total of 50 personal interviews inside the University of Strathclyde. 3

Analysis

3.1

Overview of Results

After completing 50 questionnaires the data was entered into SNAP and exported to SPSS. SPSS was used to analyse the data rather than SNAP because of SNAP’s restricted analysis capabilities. SPSS offers a wider range of possibilities to analyse the data and portray the results. Chi-square analyses, t-tests, Cronbach’s coefficient Alpha and a correlation test were performed comparing the two cultures where appropriate on the gift giving variables. Several significant differences could be identified in gift giving behaviour between respondents from the two countries.

Monetary gift giving Using a Chi-square procedure, the first three questions were compared across genders, age, nationality and years of work experience. No significant differences have been found on any of the analysed variables. The results have to be interpreted with caution, as there were warnings that more than 20 percent of cells had expected values less than five. Most British and Chinese students prefer to give non-monetary gifts while there is no clear preference of kind of gifts received. The majority of people of both cultures tend to receive non-monetary gifts. While using a Chi-square procedure to compare what kind of monetary gifts people usually give across genders, age, nationality and years of work experience, significant differences were found 5

for nationality and work experience. Chinese citizens more often give cash directly as a gift than their British counterparts, who tend to give vouchers or avoid monetary gifts. (Chi-square=9.934, df=1, p<.01). In addition, everyone with more than two years work experience has given monetary gifts to others, while more than a half of the people who do not have any work experience have never given monetary gifts (Chi-square 10.979, df=2, p<.01). Monetary gift giving and non-monetary gift giving to different people on different occasions. The following analysis will focus on what kind of gifts (monetary or non-monetary) are given to whom and on what occasions. Graph 1 shows that the proportions of the kind of gifts given, varies between the British and the Chinese gift givers. British people prefer to give less monetary gifts and more non-monetary gifts than Chinese. It was also noticed that the majority of gifts in Britain are non-monetary and one third of the gifts given are monetary in China. Graph 1: Types of gifts given by Chinese and British people.

Another difference concerns the receiver of a monetary gift. In the Chinese culture, family members more often receive monetary gifts than in the British culture (Chi-square 5.867, df=1, p<.05). Graph 2 shows that the total number of British and Chinese people that give gifts to their family members is the same. However British people are more likely to give non-monetary gifts to their family, whereas Chinese have a preference to give more monetary gifts. This portrays the strong family bonds in a collectivistic culture such as China.

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Graph 2: Types of gifts given to family members for Chinese and British people.

It is interesting to note that, a difference in giving gifts to other family members exists among people having a different length of work experience (Chi-square 9.180, df=2, p<.01). 86 percent of the respondents having no work experience tend to give non-monetary gifts to other family members. For people having less than two years work experience, no clear preference of type of gift to family members can be identified. Following that trend, the group of people having more than two years work experience has a strong preference of giving monetary gifts. Based on the comparison above, it can be concluded that the more work experience people have, the more they are inclined to give monetary gifts, no matter what culture they come from (Graph 3). Graph 3: Types of gifts given to other family members based on length of work experience.

Looking at the different occasions on which the British and Chinese give gifts (Graph 4), it becomes clear that there are more gift giving occasions in China. In addition, on more of these occasions it is common to give monetary gifts than in Britain. 7

Graph 4: Gift giving in different occasions.

In the list of occasions, Baby Announcement is not applicable for Chinese on which, no British will give monetary gifts. On the other hand, British do not have Chinese New Year, Reception of University Offers, Child Birth / One month after Birth, Teacher’s Day and Children’s Day. In the 17 occasions listed in the graph above, 12 of them were selected to compare across country by using Chi-square tests (see Table 1). In this Chi-square test, the variables of non-monetary gift, no gift and not applicable were recoded into a same variable in order to avoid warnings. The excluded five gift giving occasions are the ones where no monetary gifts are given at all.

Table 1: Chi-Square Tests Matrix – Significance of differences of type of gifts given between Chinese and British people on different occasions Occasions

Value

df

Asymp. Sig. (2-

Warning

sided) Anniversary

0.222

1

.637

*

Birthday

0.136

1

.713



Child Birth/ One month after Birth

21.429

1

.000

Chinese New Year

28.125

1

.000

Christmas

1.020

1

.312



Father's day

1.495

1

.221

 8

Funerals

15.789

1

.000

Get University Offers

6.818

1

.009



Graduations

0.166

1

.684



Housewarming

5.357

1

.021



Mother's day

5.556

1

.018



Wedding

6.650

1

.010

* More than 20% cells have expected count less than 5

As shown in table one, there are significant differences in gift giving when someone gets University Offers, housewarming and mother's day between British and Chinese. The results marked with an asterix have to be interpreted with prudence, as more than 20 percent of the cells with expected count of less than five. It is important to point out that 60 percent of Chinese will give monetary gifts on child birth or one month after birth, while British do not give gifts on such occasions (Chi-square 21.429, df=1, p<.001). On Chinese New Year, Chinese people exclusively give monetary gifts, whereas the British do not celebrate this occasion at all (Chi-square 28.125, df=1, p<.001).It is a Chinese custom to give monetary gifts in the two occasions for bringing luck to the receiver. For funerals, Chinese either give monetary gifts (48 percent) or nothing at all. This is an occasion where British people do not give gifts (Chi-square 15.789, df=1, p<.001). It seems that this is a way Chinese people give assistance to the families of the deceased and again stresses the high degree of collectivism which leads to a strong family and group cohension. Another distinct difference between the Chinese and the British culture is the type of gifts given for a wedding (Chi-square 6.650, df=1, p<.01). 26 percent of British citizens will choose a monetary gift for a newlywed couple whereas 88 percent of the Chinese will give monetary gifts. Again, it is a tradition in China to give monetary gifts when attending a wedding, which not only means good luck but also is a form of assistance for the newlywed people to form new families. Overall, Chinese people have more gift giving occasions and are more likely to give monetary gifts than the British due to the fact that for several occasions the tradition demands a monetary gift. Motivations for gift giving Seven items in the questionnaire aimed to find the different motivations for giving gifts, especially monetary gifts for Chinese and British. The respondents were asked to give their opinion 9

on certain statements. An inter-item correlation analysis was conducted (Table 2) to find the correlation between the seven statements asked in the 5-point Likert scale. The first three items (X1X3) strongly reflect the Chinese values of face saving, reciprocity and group conformity whereas the last three items are more applicable to the British culture. The inter-item correlation matrix shows that respondents who agreed to X1 tend to agree also on the statements X2, X3 because the correlation between these statements is significant. This stresses the fact that these three statements are strongly related. Respondents who tend to agree on the second items (X2) are likely to agree also on X1 and X3 and with a reduced significance also tend to agree to X4. People who agreed on statement X3 are very likely to agree as well on X1 and X2. These correlations strongly stress the assumption that the first three statements reflect one specific culture, namely the Chinese. Statements X4 to X6 are strongly correlated again which allows the assumption that these three statements build another block, which could reflect the British gift giving behaviour. X7 shows very little overall correlation. It becomes clear that people who agreed on statement X7 tend to disagree on statement X6 due to the negative significant correlation. Therefore, people who value monetary gifts more than non-monetary gifts usually disagree on the statement that they value more the thought and effort behind a gift than the value of it. Consequently, motivations for monetary gift giving behaviour can be divided into two blocks (X1-X3) and (X4-X6). Table 2: Inter-Item Correlation Matrix. X1 It is common in my culture to give mon-

1

etary gifts. (X1)

X2

X3

X4

X5

X6

X7

.405(**

.549(**

)

)

-0.035

0.019

0.238

0.058

.310(*)

0.174

0.141

0.097

1

0.04

0.234

0.181

0.123

0.04

1

.635(**

.503(**

-0.118

)

)

It is expected of me to give a monetary gift if I have received

.405(** )

1

.465(** )

one previously. (X2) There is a lot of social pressure to give monetary gifts. (X3) I give monetary gifts when I do not know

.549(**

.465(**

)

)

-0.035

.310(*)

the preferences of the 10

receiver. (X4) I give monetary gifts when I do not have enough time to look

0.019

0.174

0.234

0.238

0.141

0.181

0.058

0.097

0.123

for a non-monetary

.635(** )

1

.394(** )

0.019

gift. (X5) I think monetary gifts are more valuable/ useful than non-mon-

.503(**

.394(**

)

)

-0.118

0.019

1

-.409 (**)

etary gifts. (X6) I value the thought and effort behind a gift more than the

-.409 (**)

1

value of it. (X7) ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

Applying a reliability test the researchers tried to find out how the series of items in this question taken together are a reliable indication of the concept. The Likert scale question is designed to indicate and how the items can be related to the research topic. In order to achieve reliable results a Cronbach’s Alpha of a value above 0.7 must be achieved. Taking all seven items (X1-X7 Inter-Item Correlation Matrix) used in the 5 point Likert scale into consideration gives a reliability of α=.641. An α < .7 is regarded as marginal, the researchers considered taking only items with “Cronbach’s Alpha if item deleted” lower than the current α (X1-X6). Therefore, the statement X7 was deleted in order to increase the reliability of the items to an acceptable value of α >.7 which leaded to an increase of reliability of the items (α = .703). This outcome does not surprise because looking back to the Correlation analysis it was already assumed from the inter-item correlation matrix that the last items shows little relationship with the other items. The remaining six items (X1-X6) are perfectly related to the research topic and can be used as a reliable indication to explain the differences between Chinese and British gift giving behaviour. According to the outcome of the correlation and reliability analysis the researchers applied a Ttest focused only on the first six items (X1-X6). It is more common in the Chinese culture to give monetary gifts than in the British culture (mean-china=1.80 vs. mean-British=3.00, t(50)=5.041, 11

p<.01). Expectations for reciprocal of monetary gifts are higher for Chinese people (mean-British =3.08 vs. mean-china=2.28, t(50)=3.065, p<.01). The main reason for this attitudes seems to be the Chinese tradition and the social pressure present in collectivistic cultures. The reciprocity and the strong group cohesion expressed in this behaviour are therefore characteristics of the Chinese monetary gift giving behaviour and are strongly connected to the culture. This fact can also be explained by the high importance of the tradition in the Chinese culture (Mean – British=3.44 vs. Mean-china=2.28, t(50) =3.395, p<.01). Graph 5: Error Bars assessing attitudes.

A further outcome of the T-test was that Chinese and British showed very similar opinions in the statements X4-X6. These three items were describing behaviours likely to characterise the British gift giving culture. As no differences have been found, it must be assumed that British values, such as valuing a non-monetary gift higher and only resort to monetary gifts under certain circumstances, have either become universal or were adopted by Chinese students living in Britain through the acculturation process. These outcomes strongly support the assumptions made in the correlation analysis where X1-X3 showed a high inter-item correlation as well as X4-X6.

4

Conclusion and Future Directions

This study has investigated the cultural differences between the British and the Chinese culture mainly focusing on their monetary gift giving behaviour. The results give an idea of the cultural differences in terms values of Confucian collectivism and individualism. Contrary to Chinese, British projected the individualistic characteristics, which are also reflected in the kind of gifts they like to buy and their motivational aspect behind the purchase of a gift.

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There also exists a striking contrast between both the cultures in the type of gifts given and the occasions on which those gifts are given. Chinese people prefer giving monetary gifts to their relatives, friends and other people and have much more occasions to give those gifts than the British people. Although there are occasions on which British people also give monetary gifts like, graduations, Birthday and weddings, it was quite interesting to note that the motivational aspect behind giving the monetary gift between the British and the Chinese people, was quite different. For British people, it was usually the lack of time to purchase a non-monetary gift or less knowledge of the liking of a particular person/couple but for Chinese people, giving a monetary gift signifies not only good luck but is also is taken as an assistance for the newlywed couple to build a family. Another individualistic pattern of British culture which came out from the study was that, there is less pressure for group conformity in the UK and gifts are given on the basis of whether personal gain for the receiver can be achieved. In China however, gift giving is an expression of love and affection. It is seen as an occasion of developing and containing good personal relationships in the private and the public life which are of high importance, which is a clear example of the collectivistic behaviour of Chinese culture. An important finding from the study said, that the Chinese students do face a lot of social pressure to give monetary gifts, and thus people who are into some kind of job, and are earning are the only ones in both the cultures who give Monetary gifts. This topic is of growing importance, as international activities and people’s mobility are extensively increasing. Although, by examining the monetary gift giving pattern of Chinese and British students does not give sufficient insight into the complexity of the monetary gift giving behaviour, further exploration of this topic is required. Possible future fields of research would be to examine differences in the monetary gift giving behaviour considering generational differences. Furthermore, it is assumed that there are differences in monetary gift giving in a gender context which would be as well an interesting future field of research. Marketers can also use the finding from this study about the motivational and the monetary aspect of gift giving in Chinese and British Culture, to promote gift vouchers in big cultural festivals, party gatherings and occasions such as Chinese New year, where a lot of monetary gifts are exchanged between the Chinese people. Also, the research can come useful to the top management of the business firms across UK and China to develop much more cordial & strong business relationships to attain a competitive edge in the foreign land.

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