Cultural Dynamics in

1
International Marketing 15th edition
Chapter 4 Cultural Dynamics in Assessing global
Markets
Philip R. Cateora, Mary C. Gilly, and John L.
Graham
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Introduction (1 of 2)

• Culture is pertinent to the study of
  international marketing.
• Culture is pervasive in all marketing activities
  pricing, promotions, channels of distributions,
  product, packaging and styling.
• The priority of needs and wants and the manner in
  which they are satisfied are functions of culture
  that eventually dictate styles of living.
• Markets constantly change and markets and market
  behavior are part of a countrys culture.

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Introduction (2 of 2)

• One cannot truly understand how markets evolve or
  how they react to a marketers effort without
  appreciating that markets are a result of
  culture.
• In fact, markets are a result of the three-way
  interaction of a marketers 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.

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Overview

• The importance of culture to an international
  marketer
• Definition and origins of culture
• The elements of culture
• The impact of cultural change and cultural
  borrowing
• Strategies of planned and unplanned change

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Global Perspective Equities and eBay Culture
Gets in the Way

• Liberalization of the Japanese and the French
  capital markets have given Japanese consumers
  more freedom of choice in their investments and
  brought down transaction costs for institutional
  and retail investors in France.
• Culture is the overriding factor as e-Bay, the
  successful online auction site in America, is
  facing difficulties in Japan and France.
• For example, in Japan there is no American-style
  risk-taking culture (only 12 of households
  invest in stocks, while in America, about 55
  invest in stocks) and in France there are laws
  that restrict operations.

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Example

• Yahoo website is a great example of an
  organization that understands the importance of
  adapting to culture
• http//everything.yahoo.com/index.php?world
• The Chinese view of relationship (2 min. video)
• http//www.youtube.com/watch?vqingy5JAt8wfeature
  related
• http//www.youtube.com/watch?vyA_D29BkXNkfeature
  related

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Cultures Pervasive Impact

• Culture affects every part of our lives, every
  day, from birth to death, and everything in
  between.
• As countries move from agricultural to industrial
  to services economies, birthrates decline and
  global changes in values are occurring.
• Consequences of the cultural impact
• Birth rates - Japan (Year of the Dragon and Year
  of the Fire Horse)
• Consumption patterns Alcohol and Tobacco
• Consumption consequences Life Expectancy,
  Stomach cancer
• It is imperative for foreign marketers to learn
  to appreciate the intricacies of cultures
  different from their own if they are to effective
  in foreign markets.

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Birthrates (per 1000 women)
Exhibit 4.1
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Consumption Patterns (annual per capita)
Exhibit 4.2
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Consequences of Consumption
Exhibit 4.3
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Human Universals
Use Metaphors
Create Art
Consider aspects of sexuality private
Conceive of success and failure
Are ethnocentric
Have a fear of snakes
Express emotions with face
Trade and transport goods
Reciprocate
Imitate outside influences
Resist outside influences
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Human Universals
Use Metaphors
Create Art
Consider aspects of sexuality private
Conceive of success and failure
Are ethnocentric
Have a fear of snakes
Express emotions with face
Reciprocate
Trade and transport goods
Resist outside influences
Imitate outside influences
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Definitions and Origins of Culture

• Traditional definition 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.
• Individuals learn culture in three ways
• Socialization (growing up)
• Acculturation (adjusting to a new culture)
• Application (decisions about consumption and
  production)

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Origins, Elements, and Consequences of Culture
Exhibit 4.4
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Geography

• Exercises a profound control
• Includes climate, topography, flora, fauna, and
  microbiology
• Influenced history, technology, economics, social
  institutions and way of thinking
• The ideas of Jared Diamond and Philip Parker
• Jared Diamond
• Historically innovations spread faster east to
  west than north to south
• Philip Parker
• Reports strong correlations between latitude
  (climate) and per capita GDP

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Why do we all Love Flowers?

• Geography
• History
• Technology and economics
• Social institutions
• Cultural values
• Aesthetics as symbols

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History

• History - Impact of specific events can be seen
  reflected in technology, social institutions,
  cultural values, and even consumer behavior
• Tobacco was the original source of the Virginia
  colonys economic survival in the 1600s
• American values and institutions influenced by
  Adam Smiths book The Wealth of Nations
• Military conflicts in the Middle East brought
  about new cola alternatives such as Mecca Cola,
  Muslim Up, and Arab Cola.

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Political Economy and Technology

• Political Economy - Three approaches to
  governance competed for world dominance
• Fascism
• Communism
• Democracy/free enterprise
• Technology
• Jet aircraft, air conditioning, televisions,
  computers, Internet, etc.
• None more important than the birth control pill
• Although America has the best healthcare
  technology, people in many countries have greater
  longevity lifestyle choices are important

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Social Institutions (1 of 4)

• Family
• Religion
• School
• The media
• Government
• Corporations

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Social Institutions (2 of 4)

• Family
• Nepotism
• Role of extended family
• Favoritism of boys in some cultures
• Gender equality is changing
• Religion - Major Religions
• First institution infants are exposed to outside
  the home
• Impact of values systems
• Misunderstanding of beliefs
• An American women jailed in Saudi Arabia for
  sitting with man at Starbucks

Next
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Major Religions

• Christianity 2 Billion followers
• Islam 1.2 Billion followers
• Hinduism 860 Million followers
• Buddhism 360 Million followers
• Confucianism 150 Million followers

Back
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Social Institutions (3 of 4)

• School the most important social institution
• Direct link between a nations literacy rate and
  its economic development
• Difficult to communicate with a market when a
  company must depend on symbols and pictures
• The media it has replaced family time
• TV and the Internet
• American educational system produces a lower
  percentage of college graduates than 12 other
  countries including Russia, Japan, and France

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Social Institutions (4 of 4)

• Government - influences the thinking and
  behaviors of adult citizens
• Propaganda through media
• Passage, promulgation, promotion, and enforcement
  of laws
• Corporations - most innovations are introduced to
  societies by companies
• Spread through media
• Change agents

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Elements of Culture (1 of 4)

• Values
• Rituals
• Symbols
• Beliefs
• Thought processes

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Elements of Culture (2 of 4)

• Cultural values Geert Hofstede
• Individualism/Collectivism Index
• Reflects the preference of behavior that promotes
  ones self interest
• Power Distance Index
• Measures the tolerance of social inequality
• Uncertainty Avoidance Index
• Measures the tolerance of uncertainty and
  ambiguity
• Cultural Values and Consumer Behavior

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Hofstedes Indexes Language, and Linguistic
Distance
Exhibit 4.5
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Elements of Culture (3 of 4)

• Rituals patterns of behavior and interaction
  that are learned and repeated
• Marriages , funerals, baptisms, graduations
• Symbols
• Language
• Linguistic distance relationship between
  language and international marketing
• Aesthetics as symbols
• Insensitivity to aesthetic values can offend,
  create a negative impression, and, in general,
  render marketing efforts ineffective or even
  damaging

Next
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Language

• According to www.ethnologue.com
• A total of 7,413 known living languages exist in
  the world
• 311 being spoken in the U.S. 297 in Mexico, 13
  in Finland, and 241 in China
• EU has 20 official languages
• India alone has 452 known languages!

Back
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Elements of Culture (4 of 4)

• Beliefs
• Superstitions play a large role in a societys
  belief system and therefore, to make light of
  superstitions in other cultures can be an
  expensive mistake
• The number 13 in the western hemisphere is
  considered unlucky, where as the number 8 in
  China connotes prosperity
• The practice of Feng Shui
• Thought processes
• Difference in perception between the East and the
  West
• Focus vs. big-picture

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Cultural Sensitivity and Tolerance

• It is imperative that the marketer be attuned to
  the nuances of culture so that a new culture can
  be viewed objectively, evaluated and appreciated
• Cultures are not right or wrong, better or worse,
  they are simply different
• The more exotic the situation, the more
  sensitive, tolerant, and flexible one needs to be
• There must be an appreciation of how cultures
  change and accept or reject new ideas

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Cultural Change

• Dynamic in nature it is a living process
• Paradoxical because culture is conservative and
  resists change
• Changes caused by war or natural disasters
• Society seeking ways to solve problems created by
  changes in environment
• Culture is the means used in adjusting to the
  environmental and historical components of human
  existence

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Cultural Borrowing

• A responsible effort to learn from others
  cultural ways in the quest for better solutions
  to a societys particular problems
• Imitating diversities of other cultures make
  cultures unique
• Contact can make cultures grow closer or further
  apart
• Habits, foods, and customs are adapted to fit
  each societys needs
• The marketer must eventually gain cultural empathy

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Similarities An Illusion

• A common language does not guarantee a similar
  interpretation of word or phrases
• Difference between British and American English
• http//www.woodlands-junior.kent.sch.uk/customs/qu
  estions/americanbritish/index.html
• Just because something sells in one country
  doesnt mean it will sell in another
• Cultural differences among member of European
  Union a product of centuries of history

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Resistance to Change

• Gradual cultural growth does not occur without
  some resistance
• New methods, ideas, and products are held to be
  suspect before they are accepted
• Resistance to change varies between cultures
• The most important factor in determining how much
  of an innovation will be accepted is the degree
  of interest in the particular subject, as well as
  how drastically the new will change the old

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Planned and Unplanned Cultural Change

• Determine which cultural factors conflict with an
  innovation
• Change those factors from obstacles to acceptance
  into stimulants for change
• Marketers have two options when introducing and
  innovation to a culture
• They can wait (unplanned change)
• They can cause change (planned change)
• Cultural congruence
• Marketing products similar to ones already on the
  market in a manner as congruent as possible with
  existing cultural norms

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Summary (1 of 2)

• A complete and thorough appreciation of the
  origins and elements of culture may well be the
  single most important gain to a foreign marketer
  in the preparation of marketing plans and
  strategies
• Marketers can control the product offered to a
  market its promotion, price, and eventual
  distribution methods but they have only limited
  control over the cultural environment within
  which these plans must be implemented

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Summary (2 of 2)

• When a company is operating internationally each
  new environment that is influenced by elements
  unfamiliar and sometimes unrecognizable to the
  marketer complicates the task
• Special effort and study are needed to absorb
  enough understanding of the foreign culture to
  cope with the uncontrollable features