Book chapter, The Globalization of the Art Market: A Cross-Cultural Perspective where Local Features...

Analyzing the Cultural Diversity of Consumers in the Global Marketplace

Juan Miguel Alcántara-PilarUniversity of Granada, Spain

Salvador del Barrio-GarcíaUniversity of Granada, Spain

Esmeralda Crespo-AlmendrosUniversity of Granada, Spain

Lucia PorcuUniversity of Granada, Spain

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Analyzing the cultural diversity of consumers in the global marketplace / Juan Miguel Alcantara-Pilar, Salvador del Barrio-Garcia, Esmeralda Crespo-Almendros, and Lucia Porcu, editors. pages cm Includes bibliographical references and index. Summary: “This book explores the strategies associated with promoting products and services to a culturally-diverse target market, providing innovative solutions for global brands”-- Provided by publisher. ISBN 978-1-4666-8262-7 (hardcover : alk. paper) -- ISBN 978-1-4666-8263-4 (ebook : alk. paper) 1. Consumer behavior--Cross-cultural studies. 2. Marketing--Cross-cultural studies. 3. Consumers--Cross-cultural studies. I. Alcantara-Pilar, Juan Miguel, 1975- HF5415.32.A527 2015 658.8’34089--dc23 2015003852

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Chapter 5

DOI: 10.4018/978-1-4666-8262-7.ch005

ABSTRACT

Background literature and market flow data show evidence of an increasingly global art market. In turn, the global art market, instead of being a single, defined entity appears to be made of various local and diverse art markets. These various markets are progressively converging and integrating thanks to lo-gistic and communication circuits. Key actors and organizations in the art market (e.g. auction houses or leader-dealers) see managers and marketers increasingly encountering cultural diversity alongside with economic heterogeneity. This chapter takes into account the not-yet-conceptualized framework of the art market in cross-cultural context. In so doing the author specifically identifies divergences and convergences concerning consumer behavior and art goods in a global economy. The results support the notion that in the current art market cultural diversity influences consumer attitudes. Such evidence may have specific managerial implications for practitioners and may stimulate further empirical studies to enforce this theoretical claim.

INTRODUCTION

In the last century the entire art trade has deeply evolved and it is still changing. Unfortunately, the art market is characterized by a dramatic informational asymmetry and uncertainty (Codignola, 2003) and such a feature affects any analysis therein. Basic difficulties are indeed linked to incomplete data and figures. Information is not shared by or accessible to one and all on an equal basis because, for example, online or dealer sales are not public or, hammered price at an auction may not correspond to the final value. Therefore, this study is based both on available market flow data and background literature, considering the limitations of such market information figures. Among all players in the art market,

The Globalization of the Art Market:

A Cross-Cultural Perspective where Local Features meet Global Circuits

Federica CodignolaUniversità degli Studi di Milano – Bicocca, Italy

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The Globalization of the Art Market

this chapter focuses on a number of players which can be viewed as consumers or buyers of artworks. Normally, the ‘buyer’ is the one that makes a purchase from the seller and the ‘consumer’ is the one that ‘uses’ the product or service (Kotler & Keller, 2012). However, this chapter doesn’t make such a distinction. In this way broader categories can be examined, such as auction houses, dealers, collectors, investors, and museums. Furthermore, in this categories, a distinction between the final buyer and the art seller is highly intricate and sometimes imprecise. In sum, the distinction between sellers and buyers would exceed the purpose of this study.

Moreover, in order to examine the influence of cultural values when selecting, buying, and disposing of artworks, the framework of ‘consumer behavior’ is most appropriate. Sure enough, such a framework contains a sequential process involving different activities that can influence the consumer in a number of ways. This process, fits perfectly with the distinctive dynamics of the global art market. In fact, con-sumer behavior is “the study of individuals, groups or organizations and the process they use to select, secure, use and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society” (Hawkins, Best, & Coney, 2011, p. 7).

The art market global growth is considerably persistent, one reason being its reliance on its extraor-dinary wealth. For instance, the global total turnover for the art auction market was $7.1 billion after the first six months of 2014, a billion more than the same period a year earlier and 5.2 billion more than 10 years earlier (+ 17 percent in one year and +275 percent in a decade). The whole value of the art market, including both auction sales and dealers, was estimated in 2013 at $65.7 billion, with a growth of 154 percent since 2003. Contributing to such prosperity within the art market system, there is a substantial amplification in demand both at the high end of the market (where artworks are sold for over $1 mil-lion) and at the ultra-high end with artworks sold for over $10 million (Artprice, 2014). The high prices of contemporary artworks are certainly influenced by the participation of these demand top segments. While the United States and the European Union confirm their high trends in buying contemporary art, new buyers from the Middle East, Latin America, China, Russia, India, etc. have quickly enlarged de-mand and started a global competition. In fact, for the first quarter of 2013 Christie’s listed buyers from 128 countries, 10 percent being new clients (Artprice, 2014). This typology of new buyers perceives an auction house such as Christie’s into a recognizable global platform that makes it possible for them to become part of the inner circles of reputation and prestige sales.

The new demand shows an extensive variety of profiles, such as investment funds, wealthy private collectors, and key dealers at times acting on behalf of a country. In any case, given that in the high-end market buyers derive from the world’s wealthiest segments, this chapter mainly considers the top seg-ment of the demands.

At the same time this study proves that such segments themselves are heterogeneously composed because of national and cultural diversities. Moreover, the market supremacy of the contemporary art’s segment, which grew in value by 564 percent between 2004 and 2012 (Artnet, 2014), represents one of the significant signs of such evolution. The origin of this segment’s preeminence is to be sought once again in the various market’s demands. For example, the segment of the collectors has noticeably been restructured, both quantitatively and qualitatively. Therefore, the specific framework of the contemporary art market it is particularly relevant as a growing global phenomenon on the one side and for its players’ cross-cultural nature on the other.

In conjunction with several other consequences, Adam states that such a transformation in art con-sumption is due to the follow reasons: the impact of emerging economies; the nature and polarization of

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wealth; the increased interest in art as investment; the overlap between art, fashion, luxury and celebrity; and the impact of globalization and the Internet (Adam, 2014, p. 10). In his study Velthuis identifies three main trends shaping the contemporary art market: commercialization, globalization, and financialization (Velthuis, 2012). Such trends are interrelated and “have produced new regimes of value within the market” (p. 18). The present chapter reviews evidence of an increasingly global art market by considering such a market as a multifaceted entity made of various local and diverse art markets and consumers. In fact, these multiple markets within their consumers are progressively integrating and converging thanks to communication and commercial circuits. As a consequence, around the major axes of globalization and commercialization (or commoditization) it is possible to identify within the art market the phenomena of cultural diversity alongside with economic heterogeneity.

Basically, the market for art goods continues to grow globally. The desire of art goods is increasing considerably in emerging markets such as BRICS (Brazil, Russia, India, China, South Africa) and U.A.E. (United Arabian Emirates) countries (Adam, 2014; Thompson, 2014; Velthuis, 2012). The economic development in these emerging economies is raising the desire for prestige products, status symbols and luxury among consumers, causing a significant intensification in their general consumption of consumer goods never seen before. Observing the figures and the trends of the art market, art can today be effectively evaluated as a luxury product. Some of the relevant features of an artwork are uniqueness and high prices; these may help an owner to show his taste, as well as his wealth or status. This creates an overlapping effect, a sort of assimilation between notions of ‘symbolic value’ and ‘market/economic value’ of an art good. Therefore, observing global and local consumption dynamics, such a consideration can lead to some interesting conclusions. In relation to this vibrant expansion of the global art market stimulated by the growth of emerging markets, comprehending the motivations of why consumers buy art and how consumers’ perceptions of symbolic and market value affect their buying behavior, turns out to be relevant for art market practitioners, students and scholars.

To do so, a cross-cultural perspective seems to provide an innovative and stimulating theoretical beginning. If we take into account the following: 1) that the global nature of art business is constantly increasing; 2) that an art good is somehow evaluable as a luxury good; 3) that no studies have yet used the cross-cultural framework to observe the art market, results of cross-national and cross-cultural studies dealing with the topic of luxury consumption (Dubois, Czellar, & Laurent, 2005) can be an interesting way to start approaching the issue of cultural diversity and art goods consumption.

This chapter focuses on the influence of diverse art value perceptions on art good’s purchase attitudes in a cross-national context. Cross-cultural issues are increasingly relevant thanks to the globalization of markets (Ghemawat, 2007; Engelen & Brettel, 2011) and the art market has been proven to be directly influenced by the globalization phenomena (Codignola, 2006, 2009; Moulin & Quemin, 1993; Quemin, 2006; Velthuis, 2012). Therefore a cross-cultural framework constitutes a reasonable perspective through which to explore the topic. Under such a framework, some aspects of a critical coexistence within the art market will be examined. In fact, a coexistence emerges between global (logistic and commercial) circuits on the one side and local cultural features on the other side. In summary, the chapter helps to identify some relevant features that derive from the multidimensional roles of the art market system within art consumption and exchange activities. More precisely, the study investigates, thanks to art market literature and available figures of the market, consumer diversity and value perceptions among art consumers of several countries. Consumer behavior in conjunction with diverse demand can reveal discrepancies and similarities. Therefore, such investigation provides a new setting for practitioners and students concerning the influence of art value perceptions.

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The structure of this chapter is as follows. The next section reviews the conceptualization of the art market and globalization. The following section outlines the convergences and the divergences within the global art market and discuss the implications of cultural diversity in art consumer behavior. Finally, the chapter offers future research directions alongside with managerial implications, and conclusions.

APPROACHING TODAY’S ART MARKET

With globalization, new countries have increased their presence in the art market leading to a newly distributed visibility. Nevertheless, some scholars have demonstrated that the international art market is still composed of a hierarchical configuration dominated by Western countries (Buchholz & Wug-gening, 2005; Janssen, Kuipers, & Verboord, 2008; Quemin, 2002, 2006). Facts such as the Western market supremacy already highlight a perspective in which local features play a role. In the art market the different dimensions of the globalization process are stretched transversely across global and local connections (Featherstone, 1995; Robertson, 1992; Scott, 1997). These connections are delineated by heterogeneous political, financial, economic and cultural flows, linking different geographical areas. Contemporarily, they are shaped by transnational homogeneous mediatic flows and cultural goods market flows (Appadurai, 1990, 1996; Lizardo, 2008). In fact, concerning the art market, there is evidence of a global structure composed of specific commercial circuits which are formed by market players. These players are the global reference system (auction houses, fairs, dealers, the Internet, art magazines, etc.) for art consumers.

The art market generates and distributes goods of a stronger symbolic than material value (Hirsch, 1972) so these are esteemed not only for their financial utility as investment goods, but also for their intangible, social/artistic features (Bourdieu, 1983; Caves, 2000). Moreover, since each market possesses its special meanings and criteria, the art market is then inclined to be physically and culturally localized. As a consequence, the global frame of reference for the art market itself is composed of specific local markets, each consisting of a complex system of artists, collectors, dealers, critics, museums, etc., which systematically interact. Precisely, the fact that the art system is formed by a plurality of markets which are physically and culturally localized, explains the usefulness of the theoretical cross-cultural construct. Cultural identity and national identity have conventionally been an essential postulation of the majority of cross-cultural studies. Therefore, an examination of culture at such levels is useful in order to observe the effects of culture on consumer behavior in the current art market.

Thanks to some studies and thanks to market figures and facts, it is easy to observe how specific cultures can affect consumers interacting in the art market (Velthuis, 2013). What would constitute and represent a deal (social and communication codes, models, etc.) can vary across national cultures. Cul-ture, in fact, in a market may determine crucial issues such as: at which point a deal between partners is appropriately accomplished; which is the suitable unit of exchange; which works of art, which media, or which artist, buyers and sellers must exchange. Culture, therefore, influences the process through which the art market consumers select their business opportunities as well as the mechanisms through which they choose to follow attitudes or norms allowing them to optimize their investments. When one takes into account the cross-cultural theoretical perspective, which states that with global expansion ‘distance’ still matters (Ghemawat, 2001; Moore & Rugman, 2005), once again such ‘influencing’ phenomenon can be seen to vary across national cultures. This chapter indeed observes the influence of culture on art consumption behavior adopting a cross-cultural perspective. To do so, national culture is taken into account.

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In fact, cross-cultural literature has proven that even if minor theoretical orders such as sub-cultures, regional cultures (Smith & Schwartz, 1997), within-country determinants (Schwartz & Ross, 1995), dimensions (Hofstede, 2001) and levels of culture exist and may count for particular results, national culture can explain variances dramatically more than all these different determinants. Nations therefore explain the strongest within-entity (i.e., within-country) homogeneity and the strongest between-entity (i.e., between country) heterogeneity in terms of most important values (Trompenaars & Hampden-Turner, 2004). As a result, national margins are suitable for identifying and analyzing culturally homogeneous backgrounds which compose the current art market.

The art market subsists, then, in a highly interconnected environment without being ‘flat’ (Friedman, 2005). In fact, observing the art market focusing on how national cultures can affect consumer behavior can help to go beyond a theoretical scheme which considers the art market as a unique global market. Such a scheme possesses too many limitations.

GLOBAL AND LOCAL IMPLICATIONS: CONVERGENCES AND DIVERGENCES

Globalization is broadly perceived as one of the leading drivers of business strategy in the twenty-first century. Markets become gradually more integrated, and more organizations from different parts of the world are intensifying business processes on a global scale (Gupta, Govindarajan, & Wang, 2008; Peng, 2009). Scholars and market facts continue to prove that art business is directly influenced by the global-ization phenomena (Codignola, 2006, 2009; Moulin & Quemin, 1993; Quemin, 2006, Velthuis, 2012). Moreover, studies have observed during the last three decades a perpetual dissemination of cross-borders circuits of commercialization and consumption within the art world (mega or micro fairs; luxury-spon-sored exhibitions; clones of iconic-branded museums; private museums; globally-disseminated auction houses, etc.), especially, within the contemporary art world. ‘Commoditization’ and ‘globalization’ of art are therefore two key concepts when observing the role of cultural diversity in consumer behavior. In fact, considering the art market, it is precisely around these two major conceptual references that an identification of the cultural diversity phenomena may result easier. More precisely, this will help to make a conclusion as to whether the art market’s cultural diversity influences consumer attitudes or not.

The Commercialization and Globalization of the Art Market

Commercialization is one of the main reasons for this radical change in the market, which is particularly evident in the contemporary art market. In turn, the commercialization phenomena is influenced by globalization and manifestations are evident on the supply side (artists), on the demand side (collectors, investors, museums), and on the intermediaries side (dealers, auction houses).

Contemporary artists seem more and more motivated by financial gain and, with the commercial sustain of dealers, they construct powerful business and marketing strategies “aligning themselves with powerful taste makers, constructing a market for their work and cranking up prices” (Velthuis, 2012, p. 19). In fact, some artists started to produce works of art adapted to the taste of the new collecting base, showing a strong branding expertise integrated by finance experts who do the figures and develop their market.

Taking into account that in consumer perceptions the idea of art as an alternative asset class is gener-ally recognized and that the number of art funds today is internationally high, the fact that some contem-

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porary artists create works within a commoditization logic has to be recognized. Instead of valuing the uniqueness and the originality of an artwork, today the demands (especially from emerging economies) appreciate the fact that the artwork is multiple or part of a series. In sum, the fact that the art work is comparable represents added value (a collector values the fact to possess and display an art work which is contemporary displayed in a famous museum). Following this logic, artists tend to produce very identifiable and homogeneous (e.g. the size) works of art. Other valuable factors may be public prices (when an item is sold and resold at auction) in order to insert the series into indices just like another product typology. Another sign of this commercialization of art is to find on the artist’s market adapta-tion of materials and subjects. Such consideration become particularly evident taking one more time into account the segment of buyers from new economies alongside with market figures such as results of auctions sales or evidence from exhibitions catalogues (Artprice, 2014). Frequently, foreigners artists use camels, Arabian horses, desert landscapes to build up an exhibition in the Middle-East or, Mao and Buddha portraits recur during exhibitions, fairs, or auction sales in Hong Kong and Mainland China.

Obviously on the market demand side there is evidence of a commercialization logic as well, especially if we consider the new collectors segment who perceive art goods both as a status symbol and as an investment. Observing the ARTnews 200 Top Collectors ranking in 2013 and 2014 these new collectors have generally earned their fortunes mainly in financial services and investment; luxury goods industry; real estate and construction business; and retail (ARTnews, 2013, 2014). Such a segment is qualified by a low or inexistent knowledge in art and art history, the need for consultants and art advisors in their buying processes, and, generally, social or/and business reasons when selecting art goods and artists (Velthuis, 2012). In fact, in many of the emerging markets consumers are more pleased to buy tangible assets than intangible assets. Therefore an investment purpose become very important especially in countries such as China and India. Besides the market dynamics that deal with financial value, a different set of market dynamics deal with symbolic value (Graw, 2009). New buyers such as new collectors perceive the art world as the emblematic marketplace to be. The contemporary art market, with its fashionable players (from celebrity-artists to leader-dealers, to top collectors), is treated by the media as the new mundane global playground for the wealthier segment of the world. So in turn, for this consumer segment, dealing with art has become necessary. This explains why for a such segment every single purchase in art needs to be public, at least identifiable by the art market’s global audience. For this reason, among art con-sumption dynamics between new collectors, emulation attitudes are very common. Such facts facilitate, once again, a comparison between the art good and the luxury good. More precisely, it helps to balance dynamics of consumption in which possessing a status symbol is the first consumer motivation. So, alongside with an expensive car or another branded luxury item today, consumers associate a branded and costly work of art. The last peculiar attribute of this new buyers segment is the age (30s/40s) on which today they become big collectors (ARTnews, 2013, 2014).

Auction houses have recognized the power of such buyers and the value that contemporary art, in particular, represents to them. Moreover, opposite to the scarcity of old and modern art works, contem-porary art is characterized by an over-supply (or, for its nature, an infinite supply because it is perpetually produced by living artists) and, paradoxically, by the higher prices in the market.

Belonging to luxury-goods magnates and entrepreneurs, leader auction houses have played a fun-damental role on the commercialization and on the globalization of the art market. Investing heavily in global reach and marketing departments, such players have produced and stimulated demand. Principally, regarding the emerging markets. Kapferer and Bastien observe how Christie’s and Sotheby’s represents the luxury brands of the art market symbolizing a number of attributes of consumer luxury brands such

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as exclusivity, a long and recognizable corporate history, elitism, and personal service (Kapferer & Bastien, 2012). These traits influence consumers’ perceptions, especially the ones of the buyers from new economies who identify in Christie’s and in Sotheby’s the allure of two high-status foreign brands.

Alongside with auction houses, the Internet, fairs, and dealers have all contributed to reshaping the art good by pursuing an increasingly commoditization logic. The Internet represents today a different concrete and basic opportunity to buy art from home (with or without the interference of intermediar-ies) or simply to access, in real time, all the critical market information (about prices, about an artist’s ranking, etc.) before, during and after the whole purchasing process. An art fair has an implicitly com-mercial nature and contributes noticeably to market expansion. In fact, with globalization, an art fair gives the opportunity to dealers coming from all over the world, to reach new foreign artists and to meet new international collectors. Moreover, as for the luxury-goods industry, the art fair gives to buyers the ‘experience’ of the event, which is increasingly becoming the crucial commercial aspect of the fair. Lastly, new dealers represents a part of the players which are dramatically transforming the market. Leader-dealers such as multinational firms, have expanded globally, opening a number of mega-galleries in various locations around the world. In the contemporary art market they almost control the artists pursuing aggressively marketing logics (Graw, 2012). For instance, the opening of galleries around the globe is a strategy aimed at following the segments of the wealthiest collectors from emerging markets.

Since the 1990s, new powerful and emerging economies such as BRICS (Brazil, Russia, India, China, South Africa) and U.A.E. (United Arabian Emirates) countries have reshaped the overall geography of the art market. Previously, the United States and Europe were definitely controlling the market without any particular foreign rivals. Such new market geography is structured around the key-players of the market: dealers, auction houses, museums, fairs, collectors, etc. are all constantly connected and inter-related by and through market dynamics. Concerning these new entrants, it is important to consider that as consumers they represent the wealthiest segment of the population in each country. As said, such buyers have rapidly built up fortunes and have quickly identified art goods as aspirational products, as possible investment, and as potential instruments to gain symbolic status and power in the society.

Purchasing art is today one of the top needs: in order to own a product that others cannot have you buy a painting. For example, Azerbaijan is a country that has been isolated under the Soviet Union for a long time, where today, the wealthiest segment aspire to enjoy luxury elitist life and products, perceiv-ing art as a strategic tool. For this reason, they realized a $300 million building branded by the global architect Zaha Hadid in order to house the Aliyeva Foundation museum which hosts Azeri art shows curated by a Louis Vuitton’s consultant (Adam, 2014).

At present, the number of buyers who spend over $5 million is about 1,000 or more and every sea-son sees a new country (Hong Kong, Indonesia, Brazil, Singapore, Colombia, Malaysia, Azerbaijan, etc.) entering into the market and representing a new segment of buyers (Adam, 2014, p. 30). Behind such figures relies the global expansion of auction houses which, thanks to their powerful and global marketing departments, have been able to efficaciously penetrate such new markets. Strategically, the leader auction houses have both included in their advisory board collectors from such emerging markets (India, Hong Kong, Turkey, etc.). These collectors are able to strategically advice the auction houses so that these adapt the supply to a variety of culturally diverse tastes. In important museums, international acquisition committees are structured with the same criteria.

With globalization new buyers in emerging markets are therefore able to purchase art produced in Western countries and, in turn, Western buyers can diversify their purchasing habits, for instance, dis-covering and buying art produced in other countries. To do so and, more generally, to connect all the

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players in order to let the market perform, global logistic/commercial circuits are crucial: such circuits create converging dynamics. The art market is if fact composed of a set of globally connected national and local businesses which interact thanks to a convergence of systematic and multiple cross-cultural flows.

Global Circuits of Consumption

In this section some aspects of the art market’s global circuits are highlighted as well as some effects these circuits have on art consumers. The term ‘circuit’ is appropriate because of its Latin origin mean-ing ‘going around’ and because of its current implication: “an established itinerary of events or venues used for a particular activity” (The Oxford English Dictionary, 2014).

Observing the art market provides evidence of one general and global frame of reference made up of a variety of elements which can be divided in two main categories of circuits: the global market circuits and the global communication circuits (formed by the Internet as a global platform for the dissemina-tion and the accumulation of information, with English as a global usable communication tool). Under the global market circuits category there are the market players (dealing with logistic and commercial aspects of the market) which make up the global reference system of the art market. All local art market segments must deal, directly or indirectly, with this system in order to subsist and to participate in the art business. In other words, any market player of the exchange process in this market (from the artist as a good producer, to the collector, the dealer, or the auction house as buyer or distributor, to the art magazine, the museum, or the critic as influencer) will at some time or the other, have to be aware of, and interact with such global market circuits. These circuits have been structured and made recogniz-able as a strong system of reference all over the world thanks to the perpetual market expansion that has auto-selected its market-driven winners. Sotheby’s and Christie’s are commercial circuits developed into integrated and strong dealing cross-platforms which are disseminated around the globe. In so doing, they are more and more enjoying an incremental influx of buyers from emerging economies. Regarding their strategies, they have also diversificated their supply by creating separated market sales and categories which cover modern and contemporary art from almost every region in the world, from Africa to Russia, India, Latin America, and Asia (Khaire & Wadhwani, 2010).

The fast proliferation of contemporary art fairs around the world is evidence of the art market expan-sion in the twenty-first century (Quemin, 2008) and represents another global commercial circuit. Inter-national contemporary art fairs function as a multifaceted tool and global cross-platform for consumers. Each fair represents a catalytic social and mundane event during which museum curators, intermediaries, buyers, and collectors converge and are given the chance to network, to visit all the present galleries, and eventually to meet new artists. Therefore, the fair represents a global circuit: through the fair, sup-ply and demand from all over the world are connected and stimulated towards commercial dynamics. Such dynamics are: networking and public relation activities, new market trends identifications, busi-ness and deals opportunities, and the distribution and sharing of information. In fact, fairs, by converg-ing individuals, have the capacity to concentrate a significant amount of potential international buyers that can compare and select an international heterogeneous supply during the same event (Codignola, 2014). Moreover, such an offer is composed by an equal concentration of international galleries, artists and artworks which can be evaluated without the necessity to travel widely all around. That is why the consumer fluctuation through galleries is noticeably more intense during the fair event than all through the year at their ordinary location (Velthuis, 2011). A study has in fact demonstrated that 36 percent of the galleries profits in 2012 derived from art fair deals, 6 percent more than 2010 (TEFAF, 2013). For

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the artists itself, the involvement in an important art fair necessarily enhances his/her career given that it offers more global exposure and coverage, in contrast with a single local gallery exhibition.

Apart from the global market infrastructures constituted by the auctions circuit, the fairs circuit and the dealers circuit (which, as seen, have strategically expanded with branches in critical marketplaces all around the world), the global diffusion of the contemporary art museum can also be intended as a market circuit. Identifiable as one among other infrastructures which have a relevant role in the value creation process in the art market (along with art critics and art magazines leaders), the contemporary art museums global circuit is another element of the global reference system for art consumers. For an artist, to be shown through a gallery in a leader art fair, or to be sold during an evening sale at Sotheby’s, as well as to be exposed at MOMA in New York, at Tate Modern in London, or at the Guggenheim in Bilbao, means that the artistic value of his or her products will be enhanced and officially declared. As a consequence, such a recognizable artistic evaluation, will be inserted in the market process, show-ing tangible results on the market value of the artist’s production. Such a fact will have an immediate influence on the consumer’s selection practice. Just like the other players, museums create another commercial circuit through the replication of branded museums in every part of the world. Once again, these museums represents a recognizable social and commercial symbol which enable all typologies of art consumer to converge on a same platform which may serve as a reference in shaping personal taste or filling the lack of art knowledge (the art critic segment may hold the same task).

Within the global communication circuits the Internet (together with English, as its predominant language) is a global platform for the dissemination and the accumulation of information across the na-tions. The Internet and the web 2.0 via its social media function as a strategic device. As a consequence, the Internet enable the art market to: 1) globally converge and disseminate the information on an equal basis, dampening in such a way the risk of asymmetries; 2) influence the buying-decision processes; 3) allow buyers and sellers to bypass traditional communication and trade systems. The Internet is more and more orientated to homogenize its communication process by the over-expanded use of English as the principal language of any website. Moreover, most of the ‘business conversations’ in the market that flow between global circuits are in English because the subjects of these conversations are heterogeneous in terms of their country of origin. In the art market, the Internet has then been crucial to the formation of a near-seamless, global marketplace by overcoming national boundaries and by influencing consumer behavior. For instance, it is interesting to note the emergence of Instagram in the sale process (e.g. a dealer a day before the opening of a fair posts pictures from his booth on Instagram so that clients from all over the world can buy what they see through the pictures without going to the fair), or the role of Instagram as a promotional tool which can help to generate or increase the interest around the artworks. This may be important in order to reach new consumers less familiar with traditional art knowledge or art value systems, (critics, etc.) and more prone to be stimulated by new technology tools. New tech-nologies can in fact be deployed as a social and marketing tools in order to converge customers from all over the world so as to connect them to the global networks of the art market. The Internet indeed can be considered as an additional convergent global market circuit.

Local Features of Consumption

Consumers and market players then converge and are interconnected through global circuits. However, there is evidence of an high degree of divergence among local art markets and local art consumers. In fact, national markets have shown different processes, paths, and timing in incubating and building up

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their individual markets for art. In this case, this pattern leads to an identification of heterogeneous features. The complex system of artists, collectors, dealers, museums, critics, etc. is made of local fea-tures (belonging to Western countries as well to emerging countries) which systematically interacts and converge within a global framework through global circuits. The art market underlines evident cultural diversities which influence consumer behavior and which must strategically be taken into account by market players.

National and cultural discrepancies are in fact at the basis of some crucial divergences which char-acterize the art market. Such divergences create a number of peculiar art markets distinguished by specific sets of reasons. These reasons generally go from national identity issues (a collector who wants to support nationalistic values through his art consumption and purchases local artworks produced by local artists, e.g. Russia, China, or India) to transnational consuming dynamics (a collector who seeks to imitate Western or international consumer trends, standards, and attitudes and who is more oriented to buy Western or globally-recognized artists such as Damien Hirst, Maurizio Cattelan, Marlene Dumas, etc.). Moreover, governmental and institutional issues may obstruct the expansion of a domestic art market (custom obligations, taxation policies, import/export tariffs and norms which create entry bar-riers for foreign actors and consequently encumber the local market to participate and to interact with global market circuits).

Few scholars have examined in depth the issue of cultural diversity and consumer behavior in art. However, observing public market information such as indices, auction results, media articles, or reports together, it is possible to collect interesting figures and facts. For instance, a 2013 survey on the online art trade shows that American and European art buyers trust the online art purchasing practice more than Asians collectors. Nevertheless, Asian collectors are more likely to spend higher sums (38% would be pleased to spend at least £50,000 on a single artwork online, in contrast with 20% of Europeans and 15% of Americans. Although American and European galleries normally trade with a local/regional cli-ent base, 40% of the Asian galleries stated that the online platform is a crucial system in order to attract European and American customers. Moreover, they stated that they are using their digital presence in order to attract international buyers more than European and American galleries (Hiscox Group, 2013). Kapferer and Bastien observe that buyers from new markets prefer the auction selling process because they perceive ‘transparency’ as an added value while Asian buyers, in particular, are attracted by the competitive factor of the auction model because they are culturally used to and involved in gambling. Moreover, the fact that Asian have a strong feeling of respect for ‘longevity’ rendered the long corporate history of Christie’s (founded in 1766) a major positive factor influencing the brand perception of the firm (Kapferer & Bastien, 2012). National pride often emerges as a relevant factor in consumer behavior, especially for markets such as Russia and China (Velthuis, 2012). The same factor emerges from the high level of competitive dynamics among the Gulf states which struggle to insert themselves on the cultural global landscape by building museums, acquiring the most expensive artworks in the scene, or funding mega public art projects.

Nationality is therefore a primary strategic aspect through which to observe the art market and un-derstand consumer behavior. Although the framework of globalization tends to emphasize convergences and homogeneous factors, the art market shows evidences of crucial divergences. Nationality is then at the basis of such argumentation. The purchasing attitudes among Western consumers are charged with ‘international’ or ‘global’ influences. Actually, observing both the ARTnews 200 Top Collectors rank-ing (ARTnews, 2014) and the first 200 artists classified by the ArtFacts artist ranking (ArtFacts, 2014) there is a dramatic correspondence between the country origin of the first top collectors and the number of artists belonging to the same country of the collectors.

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• Regarding the collector ranking: 1) United States in 2014 has 109/200 collectors; 2) Germany 15/200; 3) United Kingdom 13/200; 4) Switzerland 12/200; 5) France and China 9/200; 6) Brazil and Belgium 5/200; 7) Canada 4/200; 8) Russia, Mexico, Netherland and Greece 3/200; 9) Austria, Japan and Italy 2/200; and 10) Norway, Turkey, Spain, Venezuela, Argentina, Finland, Lichtenstein, South Korea, Ukraine, Dominican Republic, Indonesia, Qatar, South Africa, and Dubai 1/200.

• Regarding the artist ranking: 1) United States in 2014 has 66/200 artists; 2) Germany 36/200; 3) France 16/200; 4) United Kingdom 13/200; 5) Switzerland 9/200; 6) Italy 8/200; 7) Austria 7/200; 8) Spain 6/200; 9) Belgium and Japan 4/200; 10) Netherlands 3/200; 11) Denmark, China, Cuba, Lebanon, Canada, Russia, Poland 2/200; and 12) South Africa, Serbia, Mexico, Sweden, Brazil, Chili, Thailand, India, Slovakia, Israel, Bulgaria, Portugal, Romania, Hungary 1/200.

Taking into account such evidence, a predilection for artists from the same nationality is a fact. Therefore, buyers’ practices appear to be still local instead of being globally homogenized. So, if artists, dealers, and collectors, thanks to the global market circuits system, may be itinerant across countries (especially regarding the top buyers segment), the general foundation of the art market is developed around local art markets and culturally diverse consumers.

Such local markets are then connected through the global art market framework but still possess in-ternal and distinct value systems, commercial dynamics and logics, and sets of players. For instance, all of these traits depend on the fact that some of these markets have an art knowledge, or a cultural artistic tradition, or a cultural collecting habit (e.g. Turkey, India, Latin America, etc.) while some have not, or have lost these habits because of political regimes and dictatorships which managed the art market through ‘official art’ and ‘official artists’. United Arab Emirates and Qatar, even if characterized by a small national population and by no art education neither institutions practice, have a collecting tradition of local and Oriental art, essentially made by the ruling families.

Alongside with India, Qatar, the United Arab Emirates, Russia and other former Soviet Union coun-tries, China is certainly an interesting example to examine culture diversity and consumer behavior in art. Even if market figures are in this case particularly unreliable, its growing wealthy middle class certainly influences the perpetual growing of the art goods Chinese demand. The challenge for western dealers (mainly of contemporary non-Chinese art) is that such segment purchase indifferently art and antiques, predominantly appreciating traditional items. This explains the 355 auction houses in the country (Artnet, 2012). Among them, between 2013 and 2014, Christie’s and Sotheby’s obtained from the government the permission to perform sales in the territory and recent results are definitively positive. China represents the perfect example of the new buyers top segment which is clearly dichotomist in its nature. In fact, if from one side China can boast of a proper art market shaped by strict cultural peculiarities and value systems (which results in market domestic behaviors and dynamics among production, distribution and demand), from the other side Chinese top buyers desire to participate in the global market scene (which is in turn influenced by such segments because Chinese buyers are inclined to overpay) because of the symbolic and financial sets of motivations which have been earlier identified. This is the reason why also the Art Basel fair opened a branch in Hong Kong, a peculiar marketplace characterized by a quite different openness toward foreign actors and Western dynamics. Because of the West/East hybridism shaping Chinese taste, Art Basel Hong Kong shows usually foreign dealers presenting a mix of Asian and Western artists. But the majority of artworks, even those produced by Western artists, typically feature recognizable Asian traits. At the same time, Asian galleries operating at the Swiss fair have adopted the commercial visual aesthetics of the Western galleries. Global market circuits have increasingly impacted

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the Chinese art market by developing strong changes in aesthetic tastes. Moreover, while earning con-siderable revenues in the auction sales of New York and London, a lot of Chinese contemporary artists saw an increase of their prices also in China, during Sotheby’s and Christie’s sales in Hong Kong. In fact, it was through the specific contemporary art market that China first transmitted to the global art world and through its global commercial circuits its economic power and its buying potential.

Cultural Diversity as an Influent Factor in Art Consumption

National and cultural identities shape local markets and consumers and, by assuming a cross-cultural perspective, they can be considered as crucial elements. Those elements can be inserted in an adaptive paradigm. Such paradigm makes those markets converge and interact perpetually and efficaciously (through global market and global communication circuits) by valorizing and enhancing their proper features. As noticed in the art market and specifically in the contemporary art market, a large range of contextual features contribute to among-nations and within-nation divergence and impact consumption choices. These factors need to be observed in order to assess specific market opportunities and subse-quently create new profitable market segments. Local features indeed emerge when local art consumers participate and interact crosswise global circuits. Thanks to such convergence, the extrapolation and the examination of such local features is at present more accessible. Fairs, galleries, or auction sales aggregate heterogeneous consumers from all over the world. At the same time, the Internet and other media collect through global channels relevant information deriving from different marketplaces. All this data can be easily extrapolated and analyzed from everywhere and by every market player. Thus, the examination of both global circuits and local cultural factors provides a deeper and richer understand-ing of which markets to penetrate and which segments to target. National cultural diversities along with national economic discrepancies are widely influencing the art market so they must be assessed in order to develop any research on the market or any business strategy implementation. In fact, more specifi-cally, the examination of local features helps to shed light on heterogeneity across nations regarding consumer behavior. Such a consideration might therefore represent a key element both in the formulation and implementation of segmentation strategies.

In evaluating international marketing opportunities in relation to new markets, usually a sequential approach is adopted. This approach focuses primarily on macro-level figures and then chooses a restricted number of countries for an in-depth study to study (Craig & Douglas, 2005). Although such an approach offers a basis for ranking nationalities in terms of relative attractiveness, extra data require to be pulled together in order to recognize potential new consumers and build up a valuable marketing strategy to target them. Nations might be comparable in terms of macro-economic features such as urbanization or the degree of economic expansion, but, as observed, diverge significantly in terms of additional local features such as the nature of the market infrastructure, or cultural within-country variation. These fac-tors have a central influence on targeting new markets and creating marketing strategies. In addition, as new local art markets expand, the global art market scenario becomes more and more complex. For this reason every market player today must create critical segmentation strategies, categorizing new targets within and across countries or differentiating strategies founded on convergent trends in art consumer needs and tastes. Moreover, to be aware of every different economic and socio-cultural context within consumption behavior in the art market will help to control the growing complexity of a global operations management. Such complexity is in part a consequence of the amplified geographical, communicational and technological change affecting the global logistic circuits of the art market. In fact, as the art market

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players increase operations across a larger geographic area, they are dealing with a more and more mul-tifaceted set of scenarios. Such a circumstance makes it complex to build up one integrated strategy for a single global art market. Instead, market players should run operations in multiple, extremely diverse cultures and markets across the world. Such markets indeed diverge not only in their competitive rate or in their market potential and growth, but they also diverge in terms of their diversity or similarity and the level of interconnectedness to the global commercial circuits. This influences the degree to which the player can follow comparable strategies for all such different markets.

Lastly, specifically regarding consumer behavior, Shiffman and Kanuk suggest four different typolo-gies of decision-making behavior: economic, passive, emotional, and cognitive (Shiffman & Kanuk, 2004). Such distinction may help identify a cross-cultural informative model. This model must be ap-plied across nations in order better to structure the cultural variances in the art market dynamics. 1) The economic behavior assumes consumers making rational decisions. Consumers are enabled to recognize limitations and benefits of each option and to identify the best alternative. In the art market, this behavior may, for example, apply to segments of consumers normally interested in investment operations. When the consumers’ goals are financial investments, the global circuits of commerce and communication enable to disseminate the same market information and opportunities equally across nations. Interesting results may be related to how equal information is understood and used among different cultures. 2) The passive behavior identifies consumers as impulsive, irrational, and submissive to interests of marketers and to marketing actions. In this case, it is possible to identify and to compare all the various business strategies activated from the market players which try to reach culturally different consumers’ segments. A second step may consist in a comparison among the diverse consumer’s reactions 3) The emotional behavior applies to consumers’ decision making based on their emotional feeling or involvement about some products. In this case, it is important to consider the symbolic value of art as a critical factor in influencing buyers’ attitudes. National pride, as well as consumers’ affinity or animosity for foreign countries may be considered discriminating factors in consumer behavior. How such factors diverge among nations should be taken into account. 4) In the cognitive behavior consumers are dynamically looking for the products that can rationally respond to their needs. Such behavior is generally dictated by a specific goal. With regard to this behavior the goal of any art purchase allows to identify national and cultural differences.

In spite of its limitations for the study of the global art market, this model provides a valid perspec-tive through which to observe and structure the influence of culture in consumer behavior. Such a model may offer to the marketers new guidelines that would allow them to reach new and diverse consumers’ segments.

FUTURE RESEARCH DIRECTIONS

As other investigations, this chapter suffers from limitations that, in turn, suggest ideas for additional research. The chapter provides almost qualitative findings based on background literature and market figures. Further empirical and comparative studies involving a wider range of cultures and nations will assist in enforcing the theoretical basis of this work. With the aim of finding the appropriate strategy to participate in the adaptive paradigm, the cross-cultural comparative approach is particularly suitable. Thus, exactly as it functions for any cross-cultural analysis, any further research that seeks to identify the right managerial and marketing approach should examine multiple national cultures in relation to a

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specific topic. Otherwise the observation’s results will be less useful. Moreover, additional investigations comparing various developing and developed nations and markets at diverse phases of development will offer additional insights.

Potential new research might take advantage of deeply investigating value dimensions of art and incor-porating those into the arguments proposed in this chapter. Managerial and marketing literature observes a remarkable transformation in consumption behavior amongst the consumers in emerging markets. In order to examine the dynamic of art consumption in these fast shifting economies supplementary research is required. New researches can bring innovative insights into the shifting nature of the art markets and also better observe the specific contemporary art consumption trend. National cultures in fact are highly influential so further studies may observe the potential degree of application of marketing and man-agement theories and disclose their limits. Commercial strategies that incorporate the national culture construct in theoretical frameworks may significantly reinforce marketing and management approaches for the art market as well. As noticed, in the art market a large range of contextual features contributes to national divergences and impact consumption choices. These are typically examined at the macro level. Instead, in order to fully assess market opportunities and establish viable market segments further researches may also examine such contextual features at the middle-level (within nations and regions within nations), at the micro-level (concerning the basic physical infrastructure of a local market, e.g. sizes, technologies, hubs, the number of galleries, the social context, and the media context), and at a situational-level (referring to the particular situation in which consumption takes place that can differ in relation to a particular social or ethnic group on a given occasion).

CONCLUSION

A cross-cultural perspective represents a reasonable one because it allows the construction of a new theoretical framework capable of analyzing the peculiarity of the art market. At the same time, it allows to shed light on emergent economies’ consumer behavior. While the art market lives in a highly con-vergent and interconnected environment (via global market circuits and global communication circuits) its nature is formed by a set of local markets shaped by diverse cultures. Market processes and relations within the art market are inexorably linked to cross-cultural issues because they originate through a multiplicity of culturally different range of consumers. An examination of the multifaceted nature of the art market shows that almost all market consumers (such as collectors, dealers, auction houses, investors, and museums) are systematically confronted with differing cultural systems. These concern both micro and macro features of business and strategies. By a cross-cultural perspective, a critical understanding of the key factors affecting consumer behavior in the art market not only allows an intuitive awareness of major cultural peculiarities in the art market, but also facilitates knowledgeable decision making.

In conclusion, considerable cross-national variations subsist. For instance, the consumer value per-ceptions of art diverge significantly across markets, especially between Western markets and emerging markets. This chapter has therefore underlined a dichotomy of the art market and has examined how such market may highlights cultural diversities. Cultural diversity then can represent a strategic tool in management and marketing operations. A multiplicity of aspects can vary on account of culture: auction systems, taste of artists, taste of buyers, functions of art (artistic versus investment versus social value), etc. In summary, in the art market the impact of context and local features on consumer behavior and market opportunities is all-encompassing and complex. Analysis of local features interacting in the market

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provides a richer and deeper understanding as to which domestic markets to enter and which segments to target. In particular, besides the convergences this analysis helps to shed light on divergences within nations not only in consumer behavior, but also in the nature of the whole art market infrastructure.

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ADDITIONAL READING

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Velthuis, O. (2003). Visual arts. In R. Towse (Ed.), The Handbook of Cultural Economics (pp. 470–475). Cheltenham: Edward Elgar.

Velthuis, O. (2003). Talking Prices: Symbolic Meanings of Prices on the Market for Contemporary Art. Princeton, NJ: Princeton University Press.

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KEY TERMS AND DEFINITIONS

Art Market: The art market is primarily centered about the creation and exchange of value through art. The art market is more of a place where cultural speculation gets translated into monetary terms, to its best ability, based on the interactions and interrelations of the human sector of the market.

Art Market Globalization: The process enabling art markets to operate internationally, largely as a result of market fluxes connections and improved communications.

Art Value: Whether the art value is a result of aesthetics, artists’ reputation or any other factor, the value of a work must be categorized in some way so that it can be assigned value relative to the rest of the market.

Arts Management: In recent years the art system represents a new environment for the diffusion of managerial thought. This approach identifies the arts within their markets as an area that would take advantage from being observed though the medium of managerial tools and understanding.

Circuit: A conventional itinerary of events or venues used for a particular activity.Consumer Behavior: A categorized individual/group attitude related to consumption. It merges

cultural and social identity, marketing and communication issues, and decision-making.Cross-Cultural: A concept involving or bridging the differences between cultures. The concept is

useful to compare or deal with two or more different cultures.

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