International Marketing REPORT
ibrhim4
week_4_-_cultural_environment.pptxChapter 4 Cultural environment
Prepared by Alistair Hodgson & Robin Roberts
Key Themes
Following this lecture and reading chapter 4, you should be able to:
Understand the meaning of the term ‘culture’ and its complexities
Appreciate the components of a culture and their importance in a society
Evaluate and make cross-cultural comparisons
Key Themes
Understand your own culture and develop cross-cultural competence, empathy and the capacity to adapt to other cultures
Describe how cultural differences affect the development of a marketing strategy
Define and discuss organisational culture
This week moves more towards the practice of international marketing
Scenario 1
Jonathan Manning has been chosen to set up a branch of his engineering consulting firm in Seoul, South Korea. Although the six engineering consultants that would eventually be transferred there were British, Jonathan is interested in hiring locals as support staff. He is particularly keen to hire an accountant. He is offering a great salary with excellent working conditions. He gets some names put forward through contacts he has in Seoul. After meeting with them he is surprised to find all of them turn down his offer. All preferred to stay with their current employers. Why?
Scenario 1
Many Koreans stay with their first employer for the rest of their career out of a sense of loyalty.
Koreans consider it shameful to work for foreigners.
Jonathan should not have approached them directly but through a third party.
New firms are seen as risky in Korea, most Koreans prefer to transfer to well established companies.
Scenario 2
Georgina Tailor works as a supervisor for an engineering company in Riyadh, Saudi Arabia. In the UK she had a reputation for speaking her mind and by doing so getting the best out of his staff. At the current project in Riyadh she supervises 12 British staff and nearly 50 Saudi staff. After a few months Georgina has become increasingly frustrated by what she sees a less than effective Saudi team. Their lack of competence and slow work pace is causing concern. What should Georgina do to try and bring the Saudi staff back into line?
Scenario 2
Publicly reprimand a few of the Saudi staff to ensure the message gets across to them all. By doing so she will also establish who is boss.
Pick one member of the Saudi staff to explain her worries to. This staff member will then be used to relay George's opinions to the rest.
Speak to as many members of staff individually or in small groups, explaining her viewpoint and encouraging them to better their work practice and enthusiasm.
Report them to her manager, a Saudi national, and let him deal with them.
Scenario 3
Nick Mills had worked hard to become the top sales representative of the IT company he worked for. When the company received an invitation from an Argentinean firm to make a marketing presentation for them, Nick was chosen to go to Buenos Aires. Nick had set up an appointment to make his presentation the afternoon he arrived. Upon arrival he was met by the host firm who told him the presentation was postponed for two days to give Nick a chance to rest and see the sights. Nick insisted he was fit and ready for the presentation and pressed to have it that afternoon. Eventually it was put back to the original slot but Nick noticed that none of the executives at the meeting seemed interested. At the end of the meeting the Vice President suggested they all meet again in two days. Why did Nick get this reaction?
Scenario 3
Argentines are fiercely proud of their culture and heritage and saw Nick's lack of enthusiasm to take in the sights as an insult.
Nick's insistence that it take place that day was seen as over zealous - a trait considered undesirable.
Their initial offer to delay it two days was their way of allowing enough time to get to know Nick. As a virtual 'stranger' none of the executives felt the desire to engage with him.
Overview
Cultural identity influences virtually every element of our existence
The cultural dimension also affects the global market place
For marketers, there is a need to accommodate foreign cultures and to adapt an organisation’s marketing mix accordingly
Organisations are also governed internally by their organisational culture and this too needs to be considered
Refer to header: Overview
Human cultural identity – the definition of who we are and where we belong – is a major element that influences virtually every element of our existence, and fashion are lives.
It is hardly surprising, therefore, that buying and consuming goods and services is largely driven by cultural norms.
Global business means dealing with consumers, strategic partners, distributors and competitors with different cultural mindsets.
Defining culture
The A-B-C-D of culture (help to describe consumption processes in individual cultures)
Access
Buyer behaviour
Consumption characteristics
Disposal
Refer to header: Defining culture
To grasp the intricacies of foreign markets, it is imperative to gain a deeper understanding of cultural differences.
From an international perspective, the cultural environment is important for at least two reasons.
1st – cultural forces are a major factor in shaping an organisation's international marketing mix program.
2nd – cultural analysis often pin points market opportunities.
Considering consumer behaviour in the international marketplace. Within a given culture, consumption processes can be described via a sequence of four stages –
Access – does the consumer have physical and/or economic access to the product?
Buying behaviour – how do consumers make the decision to buy in the foreign market?
Consumption characteristics – what factors drive the consumption patterns?
Disposal – how do consumers dispose of the product (in terms of resale, recycling, etc.)
Defining culture
The A-B-C-D of culture
Access
can consumers afford your product or service?
can they physically access it?
Buyer behaviour: how do consumers make the decision to purchase a particular product?
perceptions of the brand
loyalty
social norms
Refer to header: Defining culture
Access
Can consumers obtain your product or service?
Affordability
Developed versus developing world
Can they physically access it?
What barriers to distribution exist?
Buyer behaviour
Perceptions of the brand
Esprit is Chinese but has a French cache
LV’s biggest market is Japan, not France
Loyalty
Brand and store loyalty
Social norms
What time is dinner time for McDonald’s patrons in Thailand?
Defining culture
The A-B-C-D of culture
Consumption characteristics (factors affecting consumption patterns)
level of service consumption
social class
trend towards urbanisation globally
Disposal
recycling/environmental issues
growth in corporate social responsibility (CSR)
Refer to header: Defining culture
Consumption Characteristics
Level of service consumption
Traditionally higher in developed countries, but this trend is changing with a growing service sector in emerging economies
Social class - Extremes in developing countries
Trend towards urbanisation globally
Disposal
Recycling/Environmental issues
Stronger in more developed/established markets
Growth in Corporate Social Responsibility
What responsibility do global companies have in countries that are weak on CSR and environmental issues?
Elements of culture
Identity
Material life
Language
Social interactions
Aesthetics
Religion
Education
Value systems
Refer to header: Elements of culture
Culture consists of many components that interrelate with one another.
There are eight elements that are most likely to matter to international matters:
Identity
Material life
Language
Social interactions
Aesthetics
Religion
Education
Value systems.
Elements of culture
Identity
‘What am I?’ What are the perceptions of me?
Develops from cognitive processes that help us understand a complex environment by developing categories for swift information processing
Social identity theory
the desire to belong to groups
strong in all cultures
Refer to header: Elements of culture
Identity and heredity are the fundamental places where cultural ties begin.
It is the fundamental aspect of self-definition – the answer to the question ‘What am I?’ that determines the culture with which the person identifies.
An essential assumption of social identity theory is that people desire to belong to groups, and may see their in-groups as being superior to the out-groups to which they do not belong.
Elements of culture
Material life
…the technologies that are used to produce, distribute and consume goods and services within society
Technology gaps can exist
road infrastructure
smaller soft drink bottles need to be distributed due to the lack of access to some towns
internet bandwidth slows downloads
need to alter communications campaigns: perhaps become image-based, rather than video-based
Refer to header: Elements of culture
A major component of culture is its material aspect.
‘Material life’ refers primarily to the technologies that are used to produce, distribute and consumer goods and services within society.
Elements of culture
Language
Cultural meanings are captured by language
culturally-appropriate words (& myths).
Understanding the world we live in (some ideas only exist because of a particular phrase).
In a business context, the English language dominates
Chinese (Mandarin) and Spanish (but also French, German, Arabic, Russian) very important
Refer to header: Elements of culture
Language is the most important element that sets humans apart from animals.
Cultural meanings are encapsulated by language and used to communicate and to interpret the environment.
Elements of culture
Language
Language is a significant issue with respect to marketing communications
Diversity of language impacts decisions
7000+ languages across the planet
Issues of verbal versus non-verbal language
what is a comfortable distance to stand away from a stranger for an American? (personal space)
Refer to header: Elements of culture
As a communication medium, language has two parts: the spoken and the so-called silent language.
The spoken language consists of vocal sounds or written symbols that people use to communicate with on another.
The silent language refers to the complex nonverbal communication mechanisms that people use to get a message across.
Elements of culture
Social interactions
Role of nuclear versus extended family
Extended family households in rapid decline in parts of Asia
Marriage
the role of husband and wife
changing roles within and between countries
Reference groups
Collective identities in Asia (group conformity based on concepts of face)
Refer to header: Elements of culture
Nuclear family – the family unit comprising the immediate family members only; that is, parents and their children.
Extended family – the family unit comprising members outside the immediate family; for example grandparents, aunts, uncles and cousins.
Reference groups – the sets of people to whom an individual looks for guidance in values and attitudes
Elements of culture
Aesthetics
Differs from country to country
the role of colour in different cultures
red
luck and money in China
hot in Colombia
directly impacts packaging, product and brand issues
Refer to header: Elements of culture
Aesthetics refers to the ideas and perceptions that a culture upholds in terms of beauty and goods taste.
Aesthetic expressions are driven by three principles
Complexity and decoration (multiple forms, shapes and colours)
Harmony and
Nature displays (e.g. mountains, flowers and trees)
Elements of culture
Religion
McDonald’s in India
selling non-beef products
tofu and lamb burgers
The depiction of women in certain cultures
what do brands like Proctor and Gamble do to accommodate this?
Advertising through more private approaches (magazines, for example)
how to depict long beautiful hair for a woman in some cultures?
Refer to header: Elements of culture
Religion plays a vital role in many societies.
To appreciate people’s buying motives, customers and practices, awareness and understanding of their religion is often crucial.
Elements of culture
Education
Literacy rates
implication for packaging and print advertising in countries with low literacy
Quality of education
not all university graduates are the same
Should not necessarily be considered one unified consumer group
Increasing use of English
Vietnam has a relatively English-literate workforce given its developing nature
Refer to header: Elements of culture
Education is one of the major vehicles for channelling culture from one generation to another.
Two facets of education that matter to international marketers are the level and the quality of education.
The level of education varies considerably between countries. Most developed countries have mandatory education up to a certain age.
In some countries, however, education is largely the preserve of males. As a consequence, males are often far better educated than females in such societies.
Elements of culture
Value systems
Guiding principles in life, which are intrinsic to a person’s identity and inner-self
issue of ‘face’ in many Asian cultures
capacity for change
stronger in some countries and cultures than others
Obviously, a central consideration for marketers
gift giving
Value systems merging as the world becomes a global place
Refer to header: Elements of culture
All cultures have value systems that shape people’s norms and standards. Value systems tend to be deeply rooted.
Core values are intrinsic to a person’s identify and inner-self.
Cross-cultural comparisons
High-context versus low-context cultures
High-context
a culture that communicates mostly through implicit messages
The relationship between the sender and receiver of the message as important as the actual message
This affects the actual method of selling (direct-selling is viewed as more-personal)
Chinese – rich in metaphor
Refer to header: Cross-cultural comparisons
Cultures differ from one another but usually share certain aspects. Getting a sense of the similarities and dissimilarities between your culture and the host country’s culture is useful.
The notion of cultural complexity refers to the way messages are communicated within a society.
High-context – a culture that communicates primarily through implicit messages; nonverbal messages are considered very important
Low-context – a culture that communicates primarily through explicit messages that are coded in specific terms to be understood; verbal aspects and clarity are very important
Cross-cultural comparisons
Low-context
a culture that communicates mostly through explicit message
English – rich in depth of language (in terms of adjectives, but not really an accurate reflection)
German - compounds
Cross-cultural comparisons
Hofstede’s classification scheme
Power distance (acceptable level of inequality – more status-based than wealth-based)
Uncertainty avoidance (rigid rules & formality in public life needed in countries with a high-level)
Individualism vs. collectivist society
Masculinity (problematic definition – perceptions of what are masculine values have cultural origins)
Long-term orientation
Refer to header: Cross-cultural comparisons
Geert Hofstede has developed a highly useful cultural classification scheme.
Power Distance (PDI) – t the degree of inequality among people that is acceptable in a culture
Uncertainty Avoidance (UAI) – how much people in a culture feel threatened by uncertainty and rely on mechanisms to reduce it
Individualism (IDV) – how much people focus on their own goals over those of a group
Collectivist society – a society in which the interest of the group, rather than the individual, are central
Masculinity (MAS) – the valuing of ‘male’ values (assertiveness, status, success) versus ‘female’ values (solidarity, quality of life)
Long-term orientation (LTO) – the extent of a pragmatic, long-term orientation versus a short-term focus
Cross-cultural comparisons
Figure 4.2 (a)
Refer to header: Terrorism and the world economy
Terrorism used to be considered a relatively insignificant political risk, confined to certain countries and regions.
However, it has gradually escalated in the past decade, particularly after the September 11 attacks, not only because of the nature of the attacks but also because of the vulnerability that they revealed.
Cyberterrorism
The internet has revolutionised information exchange among organisations, their supplier and their customers.
It has given rise to new service industries. With the internet and IT generally critical to business now, new vulnerabilities have emerged for organisations and even for national infrastructure.
Cross-cultural comparisons
Figure 4.2 (b)
Refer to header: Terrorism and the world economy
Terrorism used to be considered a relatively insignificant political risk, confined to certain countries and regions.
However, it has gradually escalated in the past decade, particularly after the September 11 attacks, not only because of the nature of the attacks but also because of the vulnerability that they revealed.
Cyberterrorism
The internet has revolutionised information exchange among organisations, their supplier and their customers.
It has given rise to new service industries. With the internet and IT generally critical to business now, new vulnerabilities have emerged for organisations and even for national infrastructure.
Adapting to cultures
Self-reference criterion (SRC)
tendency to resort to one’s own cultural experiences to interpret a situation
i.e. you view a different culture through your own cultural awareness/experience
Almost impossible to avoid this completely
Use of local marketing expertise
important for the marketer to divorce themselves from this
Refer to header: Adapting to cultures
To function in the global marketplace, you need to become sensitive to cultural biases that will influence your thinking, behaviour and decision making.
Self reference criterion (SRC) – peoples unconscious tendency to resort to their own cultural experience and value system to interpret a given business situation.
Adapting to cultures
Ethnocentrism
The belief that one’s own culture is superior
perhaps even more dangerous than SRC: can lead to product failure
introducing products with too little adaptation in the belief that the home culture will win out
Coca-Cola in China’s poorer interior (dark colour associated with negative and unclean image)
Disney in France - concerns of cultural imperialism. American consumerism clashes with French culture.
More significantly, issues of labour rights became prominent
The name was changed to Disneyland Paris due to different perceptions of the term ‘Euro’ in the US (glamourous) and Europe (business-oriented).
Refer to header: Adapting to cultures
Ethnocentrism is more dangerous than SRC – the belief that an individual’s own cultural adaptation can lead to great success.
There are a couple of techniques that organisations can rely on to prepare managers for cross cultural differences.
Immersion, through prolonged stays in the foreign market, often helps.
Intensive foreign language training is one of the more common tools to foster cultural sensitivity. Language skills, however are not sufficient to become a successful international manager.
Other qualities like humility, a willingness to accept the fact you will not be as competent as in you own environment, also play an important role.
Culture and the marketing mix
Also known as the ‘4 Ps’.
Product policy
Pricing
Distribution (Place)
Promotion
Refer to header: Culture and the marketing mix
Culture is a key pillar of the marketplace.
The success of international marketing activities is to a large extent driven by the local culture. These cultural variables may act as barriers or opportunities.
Discussion showing how culture and the organisation’s marketing mix interact is of value.
Culture and the marketing mix
Product policy (Week 8)
Some products are very culturally bound which can be both good and bad
Vegemite works well in Australia but nowhere else
Why do Australians like Vegemite?
skin whitening cream works well in Asia but suntan lotion works in the west
or fake tan products
Louis Vuitton works well overseas because it is French
The ‘country effect’ depends upon the country being sold
Refer to header: Culture and the marketing mix
Product policy – certain products are obviously more culture-bound than other products; in particular, food, beverage and clothing products tend to be especially culture-bound.
Cultural values determine consumers’ buying motivations.
The country effect is where the cache of the country rubs off on the product. For example the idea a fashion product comes from Italy or France and that automotive products come from Germany are all compelling ideas. Hong Kong fashion companies such as Esprit, Giordano and Baleno use this to great effect.
Culture and the marketing mix
Pricing (Week 12)
Determined by the interplay of the 4 C’s – all of which can vary across cultures
Customers
Company (costs, objectives, strategies)
Competition
Collaborators (distributors)
High price might emphasise quality in one culture but emphasise status in another
Refer to header: Culture and the marketing mix
Pricing policies are driven by the interplay of the four C’s.
Customers
Company (costs, objectives, strategies)
Competition
Collaborators (e.g. distributors)
Customers willingness to pay for an organisation's product will vary across cultures.
An additional important difference is that price bargaining is expected in many Asian nations.
Culture and the marketing mix
Distribution (Week 11)
Cultural implications of certain distribution models
‘direct to customer’ versus ‘High Street retailer’
Sometimes distribution strategy has to be adapted within a country
e.g. rural areas (face-to-face selling preferred to establishing a physical or virtual store)
Refer to header: Culture and the marketing mix
Cultural variable may also dictate distribution strategies.
Cultural hurdles can some times be successfully mastered, as Dell Computer has shown in China.
Culture and the marketing mix
Promotion (Weeks 9&12)
The most clearly culturally-determined aspect of the marketing mix
High-context versus low-context cultures
inferred versus directly stated
Local taboos
swearing in commercials, use of animals
Social media
high use in China (also more sophisticated > key part of civil society)
Refer to header: Culture and the marketing mix
Of the 4 marketing mix elements, promotion is the most visible one.
Culture will typically have a major influence on an organisation’s communication strategy.
Local taboos – swearing – The centre-piece of an Australian Tourism commercial was the cheeky slogan, ‘Where the bloody hell are you’. For some cultures the word ‘bloody’ was considered to strong for public consumption while in countries like Canada the issue of using a potentially blasphemous interpretation of ‘hell’ was called into question.
Organisational cultures
Country-based culture is not the only culture that marketers should consider
Corporate culture is the pattern of shared values and beliefs that help individuals understand organisational functioning
allows them to develop norms for behaviour in the organisation
has a significant impact on any internationalisation strategy
also determines which markets they might commence operations in > requirement to maintain corporate culture might involve establishing overseas operations in particular places
Refer to header: Organisational cultures
So far, we have looked at the importance of national cultures for international marketing operations. At the same time, most organisations are also characterised by their organisational (corporate) culture.
Organisational (corporate) culture – the pattern of shared values and beliefs that help individuals understand organisational functioning, which provides them norms for behaviour in the organisation.
Summary
You should now have an understanding of:
The meaning of the term ‘culture’ and its complexities
The components of a culture and their importance in a society
Evaluating and making cross-cultural comparisons
Refer to header: Summary
Summary
Your own culture and developing cross-cultural competence, empathy and the capacity to adapt to other cultures
How cultural differences affect the development a marketing strategy
The meaning of organisational culture
Refer to header: Summary
