Cultural Dynamics in Global Market

International Marketing

1. INTERNATIONAL MARKETING
1 5 T H E D IT IO N
P H IL IP R. C A T E O R A
M A R Y C. G IL LY
J O H N L . G R A H A M
Cultural Dynamics in Assessing Global Markets
Chapter 4

2. INTRODUCTION
Cultures are not right or wrong, better or
worse; they are simply different

3. INTRODUCTION
Culture is human-made part of human
environment-the sum total of knowledge,
beliefs, art, morals, laws, customs, and any
other capabilities and habits acquired by
humans as members of society.

4. INTRODUCTION
Culture is pertinent to the study of international
marketing
Culture is pervasive in all international marketing
activities-Pricing, promotions, Channels of
Distribution, product, packaging and styling
The priority of the needs and wants and the manner
in which they are satisfied are functions of culture
that eventually dictates styles of living.
Markets constantly change and market behaviors
are part of a country’s culture.

5. INTRODUCTION …….CONTD.
One cannot truly understand how markets
evolve or how they react to a marketer’s effort
without appreciating that markets are a result of
culture.
In fact, markets are a result of the three-way
interaction of a marketer’s efforts, economic
conditions, and all other elements of the culture.
Marketers are constantly adjusting their efforts
to cultural demands of the market, but they are
also acting as “agents of change” whenever the
product or idea being marketed is innovative.

6. Levels of Culture in Multinational Management
National Culture
Business Culture
Organizational Culture Occupational Culture
Multinational Management

7. National cultureis the dominant culture within
the political boundaries of the nation-state
Business culturerepresents norms, values,
and beliefs that pertain to all aspects of doing
business in a culture.
Levels of Culture in Multinational Management

8. Occupational culturesare the norms, values,
beliefs, and expected ways of behaving for
people in the same occupational group such as
physicians, lawyers, accountants, and craftspeople.
Organizational culturesare the norms,
values, and beliefs concerning the organization
shared by members of the organization.
Levels of Culture in Multinational Management

9. Changes in Asian Cultural Drivers
•Religion -Remains strong in many
•Family -Getting smaller in many
•Government -Quite active in many
•School -Always important
•Social media -Getting stronger in many
•Copyright: Dae Ryun Chang

10. EXAMPLE
How the Chinese view relationships.
https://www.youtube.com/watch?v=qingy5JAt
8w&feature=related

11. CULTURE’S PERVASIVE IMPACT
Consumptionof different types of food
influences culture
Chocolate by Swiss, seafood by Japanese
preference, beef by British, wines by France and
Italy
Even diseasesare influenced by culture
stomach cancer in Japan, and lung cancer in
Spain

12. CONSUMPTION PATTERNS (ANNUAL PER
CAPITA)

13. Exhibit 4.2 Consequences of Consumption (annual per capita) Source: EuroMonitor
International, 2010, 2012

14. THREE DEFINITIONS OF CULTURE
•Culture is the sum of the “values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted from
generation to generation”
•“software of the mind, problem-solving tool”
(Hofstede)
•“An invisible barrier… a completely different way of
organizing life, of thinking, and of conceiving the
underlying assumptions about the family and the
state, the economic system, and even Man himself”
(Hall)

15. ORIGINS OF CULTURE
Material Culture
Technology –the techniques and “know-how” of producing
material goods.
Economics –the employment of capabilities and the results.
Social Institutions
Social organizations –family life, status, age.
Education –literacy and intelligence and how informed the
public is.
Political structures –control over business.
Man and the Universe
Belief systems –how do these affect product and promotional
acceptance?

16. ELEMENTS OF CULTURE: MATERIAL CULTURE
Technology
Technological innovations influence cultural values
Jet aircraft, air conditioning, televisions, computers,
and the internet have all influenced culture
Economies: People’s capability to purchase goods
and services

17. ELEMENTS OF CULTURE:
SOCIALINSTITUTIONS

18. ELEMENTS OF CULTURE: SOCIAL INSTITUTIONS
1.Family behavior varies
across the world, e.g.,
extended families living
together to Dad washing
dishes
2.Religious value systems
differ across the world, e.g.,
Muslims not allowed to eat
pork to Hindus not allowed
to consume beef
3.School and education, and
literacy rates affect culture
and economic growth

19. ELEMENTS OF CULTURE: SOCIAL INSTITUTIONS
4.Media (magazines, TV, the Internet)
influences culture and behavior
5.Government policies influence the thinking
and behaviors citizens of adult citizens, e.g.,
the French government offers new “birth
bonuses” of $800 given to women as an
incentive to increase family size
6.Corporations influence culture via the
products they market, e.g., MTV

20. ELEMENTS OF CULTURE………………..CONTD.

21. ELEMENTS OF CULTURE: CULTURAL VALUES
Hofstede, who studied over 90,000 people
in 66 countries, found that the cultures
differed along four primary dimensions
Individualism/Collective Index(IDV), which
focuses on self-orientation
Power Distance Index (PDI), which focuses on
authority orientation
Uncertainty Avoidance Index(UAI), which
focuses on risk orientation

22. INDIVIDUALISM/COLLECTIVISM INDEX
1.The Individualism/Collective Index refers to the
preference for behavior that promotes one’s
self-interest
2.High IDV cultures reflect an “I” mentality and
tend to reward and accept individual initiative
3.Low IDV cultures reflect a “we” mentality and
generally subjugate the individual to the group
4.Collectivism pertains to societies in which
people from birth onward are integrated into
strong, cohesive groups, which protect them in
exchange for unquestioning loyalty

23. POWER DISTANCE INDEX
1.The Power Distance Index measures power
inequality between superiors and
subordinates within a social system
2.Cultures with high PDI scores tend to be
hierarchical and value power and social
status
3.High PDI cultures the those who hold power
are entitled to privileges
4.Cultures with low PDI scores value equality
and reflect egalitarian views

24. UNCERTAINTY AVOIDANCE INDEX
1.The Uncertainty Avoidance Index measures the
tolerance of uncertainty and ambiguity among
members of a society
2.High UAI cultures are highly intolerant of
ambiguity, experience anxiety and stress,
accord a high level of authority to rules as a
means of avoiding risk
3.Low UAI cultures are associated with a low
level of anxiety and stress, a tolerance of
deviance and dissent, and a willingness to take
risks

25. Exhibit 4.7 Hofstede's Indexes, Language, and Linguistic Distance Source: Geert
Hofstede, Culture's Consequences (thousand Oaks CA: Sage, 2011).

26. ELEMENTS OF CULTURE: RITUALS AND SYMBOLS
Rituals are patterns of behavior and
interaction that are learned and repeated
vary from country to country
Example: Eid salami, to wear bindi by Hindu
wives, to steal shoes in a wedding

27. ELEMENTS OF CULTURE: LANGUAGE AND
LINGUISTIC DISTANCE
From English------
Germany 1, Danish 2, Spanish 3,
Japanese four, Hebrew five,
Chinese 6 and Thai seven
French attempting to preserve
the purity of their language
Linguistic differences from
English, reflects increase in
PDI, decreases IDV and
corruption increases.
Differences in language vocabulary varies
widely, even English is different in
different countries.

28. EXAMPLES OF HOW MESSAGES CAN BE
TRANSLATED IN A WRONG WAY
•A Polish Menu: “Beef rasher’s beaten up in the
country people’s fashion”.
•A BankokDry Cleaner: “Drop your trousers here
for best results”.
•Sign in a Rome Doctor’s Office: “Specialists in
women and other diseases”.
•A Sign in a Hong Kong Hospital Bathroom:
“Please don’t stand on the toilet seat”.
•Copenhagen Airline Ticket Office: “ We take all
your bags and send them in all directions”.

29. ELEMENTS OF CULTURE: AESTHETICS AND
SYMBOLS
Aesthetics as Symbols
the arts, folklore, music, drama, and dance of a
culture influences marketing
Graphic and plastic arts –degree of
modernization.
Folklore –superstition, tradition, etc.
Music, drama, and the dance –promotional
possibilities.

30. Exhibit 4.8 Metaphorical Journeys through 23 Nations
Source: Martin J. Gannon, Understanding global Cultures, Metaphorical Journeys
through 23 Nations, 2nd ed. Copright 2001.

31. ELEMENTS OF CULTURE: BELIEFS
Beliefs, which mainly stem from religious
training, vary from culture to culture
The western aversion to the number 13 or
refusing to walk under a ladder
Japanese concern about Year of the Fire Horse
The Chinese practice of Feng Shui in designing
buildings

32. CULTURES PERVASIVE IMPACT
•Culture influences every part of our lives
•Cultures impact on birth rates in Taiwan, Japan, and Singapore

33. ELEMENTS OF CULTURE: THOUGHT PROCESSES
Thought processes also vary across cultures
“Asian and Western” thinking
Punctuality, hidden meaning in perception and
straight forwardness etc.

34. Chinese Book of Songs , circa 800 BC:
When a son is born
Let him sleep on the bed,
Clothe him with fine clothes.
And give him jade to play with. . . .
When a daughter is born,
Let her sleep on the ground,
Wrap her in common wrappings,
And give her broken tiles for playthings.
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35. CULTURAL CHANGE AND CULTURAL
BORROWING
International marketers should appreciate
how cultures change and accept or reject
new ideas
Hofstede has shown that consumers’
acceptance of innovations varies across
cultures –innovation was associated with
higher individualism (IDV), and lower
power distance (PDI) and uncertainty
avoidance (UAI)
International marketers should be aware the
extent to which cultures borrow ideas and
learn from other cultures

36. CULTURAL BORROWING
It is a responsible effort to learn from others’
cultural ways in the quest for better solutions
to a society’s particular problems.

37. CULTURAL CHANGE
Planned and Unplanned Cultural Change
Unplanned Change-introduce a product and
hope for the best
Planned Change-deliberately set out to
change those aspects of the culture offering
resistance to predetermined marketing goals.
Consequences of Innovation –functional or
dysfunctional

38. WHOSE ENGLISH?
United States
•Trunk
•Hood
•Convertible
Top
•Elevator
•Toilet
•Bathroom
•Vacuum United Kingdom
•Boot
•Bonnet
•Hood
•Lift
•W.C.
•Tub or
Shower
•Hoover

39. CULTURAL SENSITIVITY AND TOLERANCE
Successful foreign marketing begins with
cultural sensitivity —being familiar with
nuances
ICC qualifier tournament in 1997 when
Bangladesh won
Baisakhiand Bengali New Year.
21
st
Feb International Mother L:anguage Day
A new culture can be viewed objectively,
evaluated, and appreciated.

40. CULTURAL SENSITIVITY HAS TO BE CULTIVATED
There are two kinds of knowledge about cultures both of
which are necessary
Interpretive knowledgeis the ability to
understand and appreciate the nuances
of different cultural traits and patterns,
e.g., the meaning of time, and attitudes
toward people
Interpretive knowledgerequires a
degree of insight
It is dependent on past experience for
interpretation
It is prone to misinterpretation if one’s
SRC is used
Factual knowledge
is usually obvious
and must be learned,
e.g., different
meanings of colors,
and different tastes;
it deals with the facts
about a culture

41. ENVIRONMENTAL SENSITIVITY
It is the extent to which products must be adapted
to the culture-specific needs of different national
markets.
Product
Adaptation
Environmental Sensitivity
High
High
Low
Low
Integrated Circuit
Computer
Food
Fig: Environmental
Sensitivity Product Adaptation
Matrix

42. ENVIRONMENTAL SENSITIVITY
Intel-a chip is a chip anywhere around the world
Product Adaptation-low
Environmental Sensitivity-low
Computer
Product Adaptation-variations in the country voltage requirements require
some adaptation
Environmental Sensitivity-low
Food
Product Adaptation-high, McDonald’s adapting to local taste
Environmental Sensitivity-High, sensitive to climate and culture

43. RESISTANCE TO CHANGE
Although some cultures embrace change
others are resistant to it
Working women in masculine societies like Saudi
Arabia
Lack of acceptance of GM foods (or
“Frankenfood”) in Europe