International Marketing - highly recommended marketing background tutors
MKT3064 International Marketing International Marketing MKT3064 MKT3064 International Marketing Chapter 3: Social and Cultural Environments • Society, culture, and global consumer culture • High -and Low -Context Cultures • Hofstede’s Cultural Typology • The Self -Reference Criterion and perception • Diffusion Theory • Marketing Implications of Social and Cultural Environments Agenda Introduction Having an understanding of the culture can actually become a firm’s competitive advantage .To do this we must overcome our prejudices that are a natural result of the human tendency toward ethnocentricity . Cultural factors challenge global marketers because many are hidden from view .Edward T.Hall ’s notion of high and low -context cultures , Hofstede’s cultural typology , the self -reference criterion , Maslow ’s hierarchy and diffusion theory aids the process of appreciating cultural differences . • Society, Culture, and Consumer Culture • Hall’s Theory • Hofstede ’s Cultural Typology • Ethnocentricity and Self -Reference Criterion • Maslow ’s Hierarchy • Diffusion Theory • Environmental Sensitivity Task of Global Marketers • Study and understand the cultures of countries in which their companies do business in • Understand how an unconscious reference to their own cultural values, or self -reference criterion, may influence their perception of the market • Incorporate this understanding into the marketing planning process Society, Culture and Global Consumer Culture • Culture is acted out in social institutions and in society. • Culture – ways of living, built up by a group of human beings, that are transmitted from one generation to another • Culture has both conscious and unconscious values, ideas, attitudes, and symbols • Culture is acted out in social institutions • Culture is both physical (clothing and tools) and nonphysical (religion, attitudes, beliefs, and values) Social Institutions • Family • Education • Religion • Government • Business These institutions function to reinforce cultural norms Material and Nonmaterial Culture Physical Culture – Clothing – Tools – Decorative art – Body adornment – Homes Abstract Culture – Religion – Perceptions – Attitudes – Beliefs – Values Material and nonmaterial elements of culture are interrelated . Cultural universals include athletic sports, body adornment, cooking, courtship, dancing, decorative art, education, ethics, etiquette, family feasting, food taboos, language, marriage, mealtime, medicine, mourning, music, property rights, religious rituals, residents' rules, status differentiation, and trade . Society, Culture, and Global Consumer Culture “Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another. ” Geert Hofstede A nation, an ethic group, a gender group, an organization, or a family may be considered as a category . Society, Culture, and Global Consumer Culture Because of technologies such as satellite TV, Internet, cell phones, and other communication channels, marketers have begun to see the emergence of the global consumer . The hallmark of this culture is consumption . As the world becomes more interconnected and as cultural imagery continues to freely flow across national borders, it can be expected that this culture will grow . • Global consumer cultures are emerging – Persons who share meaningful sets of consumption -related symbols – Pub culture, coffee culture, fast -food culture, credit card culture • Primarily the product of a technologically interconnected world – Internet – Satellite TV – Cell phones Quiz 1 Plc click and answer below:https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3 z6MP1lK_wGBdd4j5HjFi0nHkGJSFUQUIxTzlHUjE2WEg5VEVERElTNU1HVk JDVi4u Attitudes, Beliefs, and Values By accepting Hofstede ’s definition of culture (the collective programming of the mind) it would make sense to learn about culture by studying the attitudes, beliefs, and values shared by a specific group of people .Values represent the deepest level of a culture and are shared by the majority of members . Within any culture, there are likely to be subcultures , that is, smaller groups of people with their own shared subset of attitudes, beliefs, and values .Subcultures may represent attractive niche marketing opportunities, i.e.,vegetarians . • Attitude –learned tendency to respond in a consistent way to a given object or entity • Belief –an organized pattern of knowledge that an individual holds to be true about the world • Value –enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct Japanese values include striving for cooperation, consensus, self -denial, and harmony. • A Japanese belief is that they are unique in the world. Japanese youth believe that the West is an important source of fashion trends. Therefore, many Japanese share a favorable attitude towards American brands. Religion • The world ’ s major religions include Buddhism, Christianity, Hinduism, Islam, and Judaism and are an important source of beliefs, attitudes, and values . • Religious tenets, practices, holidays, and history impact global marketing activities . Religion -Examples • McDonald ’s does not serve beef hamburgers in India because Hindus do not eat beef . • There were objections raised in the merger of Daimler -Benz and Chrysler relating to Jewish history and the Holocaust . • Some Muslims have tapped into anti -American sentiment by urging a boycott of American brands due to U .S .military action in the Mideast following 9/11 . • Europeans are divided on the issue of referring to God and Christianity in a new European constitution .Strong Catholic countries like Ireland, Spain, Italy, and Poland are for inclusion . France and Belgium are strong advocates of separation of church and state . Europe ’s politically active Muslim minority are resisting inclusion of Christianity in the EU Constitution . • One entrepreneur, Tunisian -born Tawfik Mathlouthi , launched a soft drink brand, Mecca - Cola , as an alternative to Coca -Cola for Muslims living in the United Kingdom and France . The brand’s name is both an intentional reference to the holy city of Islam as well as an ironic swipe at Coca -Cola, which Mathlouthi calls “the Mecca of capitalism .” London’s Sunday Times called Mecca -Cola “the drink now seen as politically preferable to Pepsi or Coke .” In 2003 ,Qibla Cola (the name comes from an Arabic word for “direction”) was launched in the United Kingdom . • Founder Zahida Parveen hoped to reach a broader market than Mecca -Cola by positioning the brand “for any consumer with a conscience, irrespective of ethnicity or religion .Bill Britt, “Upstart Cola Taps Anti -War Vibe,” Advertising Age (February 24 ,2003 ), p.1.See also Digby Lidstone ,“Pop Idols,” Middle East Economic Digest (August 22 ,2003 ), p.4. Aesthetics • The sense of what is beautiful and what is not beautiful • What represents good taste as opposed to tastelessness or even obscenity • Visual – embodied in the color or shape of a product, label, or package • Styles – various degrees of complexity, for example, are perceived differently around the world Aesthetic elements that are seen as attractive in one country may be viewed differently in another . In surveys about color preferences, 50 percent of respondents indicate blue is their favorite — and it is favored by a wide margin over the next -preferred color . Aesthetics and Color Some colors may be used in all countries, i.e., Caterpillar yellow, Marlboro ’s red chevron, Bluetooth, and JetBlue. Tiffany blue is trademarked. Colors may need to be adapted according to local cultural preferences.
• Red –associated with blood, wine -making, activity, heat, and vibrancy in many countries but is poorly received in some African countries. • Blue — since the pigment was rare, ancient Egyptians, Chinese, Mayans associated it with royalty and divinity. Half of interviewees state blue is the favorite color. • White –identified with purity and cleanliness in the West, with death in parts of Asia. • Gray –means inexpensive in Japan and China, but high quality and expensive in the U.S. • Soft drink labels and color associated with good taste: Chinese associate brown.
South Koreans and Japanese associate yellow. Americans associate red. In England and the U.S., “ Something Blue ” on a bride’s garter symbolizes fidelity The Meaning of Color Red signifies good luck and celebration in China Yellow indicates a merchant in India Music •Found in all cultures •Rhythm is universal •Styles are associated with countries or regions: bossa nova & Argentina, salsa &Cuba, reggae& Jamaica, blues, rap, rock, country & U.S.
•Understand what style is appropriate in advertising; varies by culture and government regulations Dietary Preferences • Despite local preferences, there is evidence that global dietary preferences are converging .When time pressed families do not have time to prepare meals, fast food becomes more popular . Young people experiment with different foods .Global tourism has exposed people to pizza, pasta, and other ethic foods . Shorter work hours and tighter budgets are forcing workers to find a place to grab a quick, cheap bite before returning to work . • • Due to the backlash to fast food in France ,especially le Big Mac ,the French National Council of Culinary Arts designed a course on French cuisine and “good taste ” for elementary students .The director of the council, Alexandre Lazareff ,warns that France ’s haute cuisine is under attack by globalization of taste . The French have a new buzzword, le fooding ,to express the notion that the nation ’s passion for food goes beyond mere gastronomy :“To eat with feeling in France is to eat with your head and your spirit, with your nose, your eyes, and your ears, not simply your palate .Le fooding seeks to give witness to the modernity and new reality of drinking and eating in the 21 st century . Everything is fooding so long as audacity, sense, and the senses mix .” • Domino ’s Pizza pulled out of Italy because its products were seen as “too American ” with bold tomato sauce and heavy toppings. • Subway had to educate Indians about the benefits of sandwiches because they do not normally eat bread. • Although some food preferences are deeply rooted in culture, global dietary preferences are converging. • Pasta, pizza, sushi , other ethic foods Quiz 2 Plc click and answer below:
https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3 z6MP1lK_wGBdd4j5HjFi0nHkGJSFUNUozQkJCMTlOWE4zQ0lXUFJCVUlPO DRLVy4u Language and Communication Linguistic Category Language Example Syntax -rules of sentence formation English has relatively fixed word order; Russian has relatively free word order. Semantics -system of meaning Japanese words convey nuances of feeling for which other languages lack exact correlations; ‘yes ’ and ‘no ’ can be interpreted differently than in other languages. Phonology -system of sound patterns Japanese does not distinguish between the sounds ‘l’ and ‘r’; English and Russian both have ‘l’ and ‘r’ sounds. Morphology -word formation Russian is a highly inflected language, with six different case endings for nouns and adjectives; English has fewer inflections. Language and Communication • American and British English have different meanings .British firm BAA McArthurGlen set up a factory outlet -style store in Austria only to have local officials ask, “Where ’s the factory? ” The firm had to rename it a “designer outlet center .” “Light beer ” failed for both Miller and Anheuser -Busch in the U.K. because it was perceived as light in alcohol .In the European market, Miller Lite is now Miller Pilsner . • Good Housekeeping magazine had to adapt for the Japanese market . “Housekeeping ” is most closely translated as “domestic duties, ” which may be tasks performed by servants . The magazine retained the name but the word “Good ” is much larger than “Housekeeping ” on the cover . The famous Good Housekeeping Seal was eliminated as it caused confusion among readers . • In China ,Dell had to find another way to express “direct sales ” since the literal translation meant an illegal pyramid marketing scheme .Sales reps now use a phrase that translates as “direct orders .” • Phonology : In Spanish, Colgate means “go hang yourself ;” Whirlpool advertised extensively in Europe only to find that Italians, French, and Germans had trouble pronouncing the brand ’s name . “Diesel ” was chosen for the jeans brand because it is pronounced the same in every language . • Technology is providing opportunities to exploit linguistics .Short codes of certain number combinations takes on special meaning .In Korea, 8282 means “hurry up ”,7170 sounds like “close friend ” and 4 5683 968 may be interpreted as “Ilove you .” • After eBay acquired EachNet auction site in China, it used rebates and other promotions to attract visitors . It offered credits of 68 yuan on purchases of 168 or more . In Chinese, the word “six ” is pronounced the same as “safe ” and “eight ” is pronounced the same as “prosperity .” Language and Communication Pronounced “shu” Sounds like “I hope you have bad luck”. Sounds like “break into pieces or fall apart”. Sounds like “death” or “the end”. In China, it is bad luck to give these three items. Westerners must pay close attention not only to what they hear but also what they see when conducting business in other countries. Marketing’s Impact on Culture • Universal aspects of the cultural environment represent opportunities to standardize elements of a marketing program • Increasing travel and improved communications have contributed to a convergence of tastes and preferences in a number of product categories The astute global marketer often discovers that much of the apparent cultural diversity in the world turns out to be different ways of accomplishing the same thing . Widespread shared preference for convenience foods, disposable products, popular music, and movies in the United States, Europe, and Asia suggests that many consumer products have broad, even universal, appeal . The cultural change and the globalization of culture have been capitalized upon, and even significantly accelerated, by companies that have seized opportunities to find customers around the world . McDonaldization of Culture “Eating is at the heart of most cultures and for many it is something on which much time, attention and money are lavished. In attempting to alter the way people eat, McDonaldization poses a profound threat to the entire cultural complex of many societies.” Sociologist George Ritzer Many people resent the breaking down of cultural barriers that occurs when global firms expand into new markets.
The Slow Food Movement McDonaldization of Culture Pls watch Video:
https://www.youtube.com/watch?v=Fdy1AgO6Fp4&t=4s https://www.youtube.com/watch?v=pMLrVP_E -jA Pls go thru the slides:
https://prezi.com/p/d0utiephyq -g/mcdonalds/ High and Low -Context Cultures • High Context – Information resides in context – Emphasis on background, basic values, societal status – Less emphasis on legal paperwork – Focus on personal reputation Saudi Arabia, Japan • Low Context – Messages are explicit and specific – Words carry all information – Reliance on legal paperwork – Focus on non -personal documentation of credibility Switzerland, U.S., Germany Japan, Saudi Arabia, and other high -context cultures place a great deal of emphasis on a person’s values and position or place in society .In such cultures, a business loan is more likely to be based on “who you are” than on formal analysis of pro forma financial documents .In a low -context culture such as the United States, Switzerland, or Germany, deals are made with much less information about the character, background, and values of the participants .Much more reliance is placed upon the words and numbers in the loan application .Similarly, Japanese companies such as Sony traditionally paid a great deal of attention to the university background of a new hire ;preference would be given to graduates of Tokyo University .Specific elements on a resume were less important . Insisting on competitive bidding can cause complications in low -context cultures .In a high -context culture, the job is given to the person who will do the best work and whom you can trust and control . In a low -context culture, one tries to make the specifications so precise that abuilder is forced by the threat of legal sanction to do agood job . Hofstede’s Cultural Typology Hofstede is well -known for research studies of social values suggesting that the cultures of different nations can be compared in terms of five dimensions. Hofstede notes that three of the dimensions refer to expected social behavior, the fourth dimension is concerned with “man ’s search for truth, ” and a fifth reflects the importance of time. Hofstede’s Five Dimensions of National Culture Hofstede’s Five Dimensions of National Culture Hofstede’s Five Dimensions of National Culture Comparing Malaysia to others across Hofstede’s dimensions:
https://www.hofstede -insights.com/country -comparison/china,malaysia,singapore,the -usa/ Self -Reference Criterion and Perception (SRC) • Unconscious reference to one ’s own cultural values; creates cultural myopia • How to Reduce Cultural Myopia:
– Define the problem or goal in terms of home country cultural traits – Define the problem in terms of host -country cultural traits; make no value judgments – Isolate the SRC influence and examine it – Redefine the problem without the SRC influence and solve for the host country situation The lesson that the SRC teaches is that a vital, critical skill of the global marketer is unbiased perception, the ability to see what is so in a culture . Although this skill is as valuable at home as it is abroad, it is critical to the global marketer because of the widespread tendency toward ethnocentrism and use of the self -reference criterion . The SRC can be a powerful negative force in global business, and forgetting to check for it can lead to misunderstanding and failure . Self -Reference Criterion and Perception: Disney How might the European Disneyland been different if Disney executives had used the four - step approach?
• Step 1. Disney executives believe there is virtually unlimited demand for American cultural exports around the world. Evidence includes the success of McDonald’s, Coca -Cola, Hollywood movies, and American rock music. Disney has a stellar track record in exporting its American management system and business style. Tokyo Disneyland, a virtual carbon copy of the park in Anaheim, California, has been a runaway success.
Disney policies prohibit sale or consumption of alcohol inside its theme parks. • Step 2. Europeans in general and the French in particular are sensitive about American cultural imperialism. Consuming wine with the midday meal is a long -established custom. Europeans have their own real castles, and many popular Disney characters come from European folk tales. • Step 3. The significant differences revealed by comparing the findings in steps 1 and 2 suggest strongly that the needs upon which the American and Japanese Disney theme parks were based did not exist in France. A modification of this design was needed for European success. • Step 4. This would require the design of a theme park that is more in keeping with French and European cultural norms. Allow the French to put their own identity on the park. Self -Reference Criterion and Perception: Disney Disneyland Paris https://www.youtube.com/watch?v=G4qMqbL9ACo&t=1s Quiz 3 Plc click and answer below:
https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3 z6MP1lK_wGBdd4j5HjFi0nHkGJSFUMDdRTTJNQTlNSDFWM09UQ1pJODZ BOE01MC4u Diffusion Theory: The Adoption Process The mental stages through which an individual passes from the time of his or her first knowledge of an innovation to the time of product adoption or purchase • Awareness • Interest • Evaluation • Trial • Adoption Diffusion Theory: Characteristics of Innovations • Innovation is something new ;five factors that affect the rate at which innovations are adopted include : – Relative advantage .How a new product compares with existing products or methods in the eyes of customers .The perceived relative advantage of a new product versus existing products is a major influence on the rate of adoption . If a product has a substantial relative advantage vis -à-vis the competition, it is likely to gain quick acceptance .Ex : compact discs vs .vinyl records . – Compatibility .The extent to which a product is consistent with existing values and past experiences of adopters . The history of innovations in international marketing is replete with failures caused by the lack of compatibility of new products in the target market .Ex .: VCR ’s— Betamax and VHS . – Complexity . The degree to which an innovation or new product is difficult to understand and use . Product complexity is a factor that can slow down the rate of adoption, particularly in developing country markets with low rates of literacy .In the 1990 s, dozens of global companies were developing new interactive multimedia consumer electronics products .Complexity is a key design issue ;it is a standing joke that in most households, VCR clocks flash 12 :00 because users don ’tknow how to set them .To achieve mass success, new products will have to be as simple to use as slipping aprerecorded videocassette into aVCR . – Divisibility . The ability of a product to be tried and used on a limited basis without great expense . Wide discrepancies in income levels around the globe result in major differences in preferred purchase quantities, serving sizes, and product portions .U.S.-size jars of Hellman ’sMayonnaise did not sell in South America . Less expensive, no refrigeration required, plastic packets were ahit . – Communicability .The degree to which benefits of an innovation or the value of a product may be communicated to a potential market .A new digital cassette recorder from Philips was a market failure, in part because advertisements did not clearly communicate the fact that the product could make CD -quality recordings using new cassette technology while still playing older analog tapes . Diffusion Theory: Adopter Categories Innovators :These consumers tend to be venturesome, more cosmopolitan in their social relationships, and wealthier than those who adopt later . Early adopters :Early adopters are the most influential people in their communities, even more than the innovators .Thus the early adopters are a critical group in the adoption process, and they have great influence on the early and late majority, who comprise the bulk of the adopters of any product .Several characteristics of early adopters stand out .First, they tend to be younger, with higher social status, and in a more favorable financial position than later adopters .They must be responsive to mass media information sources and must learn about innovations from these sources because they cannot simply copy the behavior of early adopters . Marketing Implications of Social and Cultural Environments • Cultural factors must be considered when marketing consumer and industrial products • Environmental sensitivity reflects the extent to which products must be adapted to the culture -specific needs of different national markets . Environmental sensitivity is a useful approach to view products because it places them on a continuum . At one end of the continuum are environmentally insensitive products that do not require significant adaptation to the environments of various world markets . At the other end of the continuum are products that are highly sensitive to different environmental factors . A company with environmentally insensitive products will spend relatively less time determining the specific and unique conditions of local markets because the product is basically universal . The greater a product ’s environmental sensitivity, the greater the need for managers to address country -specific economic, regulatory, technological, social, and cultural environmental conditions . Environmental Sensitivity Environmental sensitivity describes the ability of an individual to perceive and process information about their environment . It is a fundamental and basic trait found in many organisms and is crucial because it enables an individual to adapt to different environmental conditions . Environmental Sensitivity: Examples Independent of social class and income, culture is a significant influence on consumption and purchasing • Food is the most culturally -sensitive category of consumer goods – Knorr Soups did not gain popularity in the U .S.market that preferred canned soups .The U .S. soup market was dominated by Campbell Soup Company ;90 percent of the soup consumed by households was canned .Knorr was a Swiss company acquired by CPC that had a major share of the European prepared food market, where bouillon and dehydrated soups account for 80 percent of consumer soup sales . Despite CPC’s failure to change the soup -eating habits of Americans, the company (now called Bestfoods and a unit of Unilever) is a successful global marketer with operations in more than 60 countries and sales in 110 countries . • Starbucks overcame cultural barriers in Great Britain and today has over 700 locations . – On the European continent, coffee has been consumed for centuries .By contrast, Britain has historically been a nation of tea drinkers, and the notion of afternoon tea is firmly entrenched in British culture . In the 1970 s, tea outsold coffee by a ratio of 4-to -1. Brits who did drink coffee tended to buy it in instant form, because the preparation of instant is similar to that of tea .By the 1990 s, however, Britain was experiencing an economic boom and an explosion of new nightclubs and restaurants .Trendy Londoners looking for a non -pub “third place” found it in the form of Seattle Coffee Company cafés . An instant success after the first store was opened by coffee -starved Americans in 1995 , by 1998 Seattle Coffee had 55 locations around London . Starbucks bought the business from its founders for $84 million . By 2005 , Starbucks had overcome the challenge of high real estate prices and had 466 locations in the United Kingdom . Environmental Sensitivity Why Starbucks failed in Australia https://www.youtube.com/watch?v=_FGUkxn5kZQ Quiz 4 Plc click and answer below:
https://forms.office.com/Pages/ResponsePage.aspx?id=6wgQBUDbSUKezp3z6 MP1lK_wGBdd4j5HjFi0nHkGJSFURExPT0o3QTlNMTVMWDFXMzFYVVNVTU9I MS4u Looking Ahead to the next Lecture 4 The Political, Legal, and Regulatory Environments of Marketing