Culture & Global Marketing

1
Culture Global Marketing
2
Importance of Culture

• Culture affects market demand.
• Managerial behavior is driven by his/her cultural
  knowledge
• Knowledge of Native culture is useful when
  dealing with home markets but it has little value
  when dealing in foreign markets
• Culture affects the nature of business
  negotiations
• Culture acts as a hidden entry barrier, but it
  can be overcome with cultural sensitivity, hard
  work quality

3
Culture Defined

• Culture is the underlying value framework that
  guides an individuals behavior.
• Culture is reflected perceptions, social
  interactions, business interactions
• Culture guides the selection of appropriate
  responses in social situations
• Culture is a learned behavior. People learn dos
  dont as they grow up

4
Culture across Countries

• Some countries are multicultural- India, China,
  US, Russia. These countries have several
  sub-cultures.
• While many are monocultural. UK, France, Germany,
  Columbia, Peru etc.
• Culture is the Silent Language in International
  business
• Relationship with Time, Space Energy
• High Context Low context cultures
• Body language

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Need for cultural Adaptation

• Self-Referencing Process by which one judges
  others actions with reference to ones own native
  culture. Usually Right Wrong decisions
• Often leads to wrong opinions, Mistakes
• Avoid self-referencing mistakes by cultural
  adaptation.
• Cultural adaptation is a learned skill must be
  mastered by Global Managers

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Hofstedes Cultural Dimensions

• Individualism Vs Collectivism
• Masculine Vs Feminism
• Uncertainty Avoidance Vs Risk Taking
• Power Distance
• Confucian Dynamism Long term outlook, work ethic
  of Chinese

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Gannons Metaphors

• Gannons Metaphors offer a mental anchor for
  manger who has to deal with a new culture and
  cannot foresee contingencies
• It is a simplified, holistic representation of a
  culture
• USA- Football Individualistic, specialized,
  competitive
• China Harmony Roundness, Harmony Fluidity
• Germany Symphony Discipline under a leader,
  Skilled workers working together, a well oiled
  machine
• India Cyclical Hindu Philosophy Life follows a
  cyclical pattern

8
Rapailles Archetypes

• Dr Rapaille simplified cultures for easier
  understanding by explaining it in 7 steps of
  decoding culture
• People dont buy products, People buy
  relationships
• Culture can make or break your marketing plan,
  sales or public relationship plans
• Time, Space Energy are the building blocks of
  all cultures
• Design create products/Services to solve the
  right problem

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Rapailles Archetypes

• The more Global, The more Local Global companies
  have to localize. Quality is the key to succeed,
  but word quality means different things in
  different countries
• USA It works
• Japan Perfection
• Germany Made according to the standard
• France Quality Luxury
• India Quality Reliable
• Cultural Awareness is the key to global success

10
Culture How to do Business

• The aim of business is same everywhere, but the
  way to do it varies across countries
• Global Managers must be able to handle Culture
  shock
• Similar business situations in different
  countries does not imply similar opportunities.
  E.g Nestle in Africa
• Culture influences Management skills. So in a new
  country, its Back-to-Basics w.r.t learning
  local culture

11
Culture Managerial Skills

• Culture defines a set of acceptable
  unacceptable behaviors, which forms the basis of
  Way of doing Business
• Managers learn how to do business. This process
  is called Enculturalization and Socialization
• How consumers behave
• How to manage people, supplier subordinates
• What guides the consumer behavior
• Acceptable Behavior in business is usually
  acceptable behavior in society

12
Culture Managerial Skills

• Successful mangers tend to be good at acceptable
  behaviors and avoid unacceptable behaviors
• Lessens from past managerial experience in other
  countries has little value in other cultures.
• Success Failures in the past will be repeated
  elsewhere, before learning the local implications

13
Managerial Styles

• Cultures tend to generate different managerial
  styles. Management styles is heavily influenced
  by home country culture.
• Japan High Context culture influences mangers to
  read body language while in US, a low context
  culture tends to ignore body language
• Managers are usually inadequately trained to
  handle different cultures.
• Time, Money pressure compromise training.

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Cultural Dilemmas

• Managers face cultural dilemmas due to
  differences in cultures
• Universalism Vs Particularism Doing the right
  thing or doing things right?
• Individualism Vs Collectivism in decision making
• Neutral Vs Emotional
• Specific Vs General Is it just business or the
  whole person, individual or the entire firm
• Attitudes towards Time
• Attitudes towards Environment

15
Culture Negotiations

• Global business involves cross cultural
  negotiations, establishing relationships with
  suppliers, customers, distributors other
  partners
• Know whom you are dealing with
• In some cultures, 10AM means Sometime in the
  morning. Actual time on the clock has little
  significance.

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Cross Cultural Negotiations

• First Establish Trust. Skilled negotiators
  identify genuine behavior of their counterparts
  and work towards establishing trust
• Know their Silent Language
• Body behavior
• Cultural signaling
• Culturally sensitive subjects
• Know what to say and when to say

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Stages of Negotiations

• Non-Task Sounding An initial period to know each
  other better
• Task related exchange of Information An extended
  Period where main issues are brought up
  positions clarified
• Persuasion Attempt to make the other side see
  your point of view. Explaining positions, giving
  evidence questioning other partys position.
• Concessions Agreements Concessions are made
  and agreements are signed

18
Limits to Cultural Sensitivity

• When not to be culturally sensitive
• Global Culture Globalization is creating a
  global business culture. In business it may be
  inappropriate to dress in a local way.
• Cultural Sensitivity must be inline with the
  business model. If the product/Service offering
  does not meet the buyer requirement, no amount of
  cultural sensitivity will help
• Cultural Sensitivity does not mean giving up
  ones own culture. Successful manager will know
  both the cultures

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Culture in B2B markets

• Business Marketing Tasks
• Cultural Conditioning
• Organizational Culture
• Relationship Marketing
• Culture Networks

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Business Marketing Tasks

• Establish the global firm as a dependable
  supplier operating in the local market
• Understand buyers position
• People who influence the buying decision
• Role of the suppliers product/Service in the
  buyers business success
• This will make the local buyer treat the global
  supplier as a local firm.
• E.g Cognizant in US, BASF in US, ABB in India

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Cultural Conditioning

• Buyers tend to develop different styles of
  dealing with vendors
• Equal or unequal relationship between supplier
  and buyer
• Cultures openness to change influences buyers
  attitude toward Risk
• Changing vendors is seen as a Risk
• Often Buyers prefer local suppliers
• Terminating Local supplier carries bad publicity
  political risks for the buyer
• CEO or high executive from the vendor firm may
  have to visit prospective buyer as a signal of
  commitment

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Organizational Culture

• Organizational culture of the buyer influences
  the buying decisions
• Single Buyer decision maker
• Engineers, staff who use the product
• Top management which signs the contract
• Power Brokers who influence the final decision
• Global firm must be aware of the decision making
  process

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Relationship Marketing

• B2B sales is usually more than one single sale
• Relationship marketing means marketing efforts
  involving various personalized services, creation
  of new additional services and customizing a
  firms offering to the needs of the buyer
• Build trust for a long term business relationship
• Upfront costs are high but it acts as a
  competitive advantage an entry barrier
• Adopt Buyers viewpoint
• Accept Demand transparency
• Grow with the relationship
• Be Proactive

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Culture Networks

• Relationship marketing creates a Network between
  various buyers and sellers over a period of time.
• Independent companies would have built up
  dependencies with one another creating a
  semi-independent companies
• Network of companies often share common culture
• Outside companies find the network hard to
  penetrate, Network form a barrier
• E.g Keiretsu network in Japan, Glaxing in China
• Military-Industry network in US

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Foreign Entry

• Culture defines The way to do Business
• Learn analyze local cultures before entry
• Dos donts
• Identify trustworthy local agents or middlemen
• Identify danger signals
• Know the strengths weakness as perceived by the
  local culture
• Establish trust friendships
• New Culture is an operational risk

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Local Marketing

• Culture affects
• Consumer behavior
• Local demand
• Buying decisions
• Brand Image
• First hand experience in local markets is a must
• Lessons from home country may not be applicable
  abroad

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Global Management

• Culture influences managerial styles and
  management decisions
• Global managers must be knowledgeable of both
  cultures (Local Home)
• A new global business culture is emerging
• Sensitivity to local issues is necessary for
  success
• Global coordination is a must for global companies