International Marketing15th edition

Philip R. Cateora, Mary C. Gilly, and John L. GrahamMcGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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 country’s culture.

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Introduction (2 of 2) • 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.

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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?

v=qingy5JAt8w&feature=related

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Culture’s 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)

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Exhibit 4.1

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Consumption Patterns (annual per capita)

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Exhibit 4.2

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Consequences of Consumption

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Exhibit 4.3

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Human Universals

Create Art

Are ethnocentric

ReciprocateTrade and transport

goodsImitate outside

influences

Conceive of success and failure

Express emotions with face

Use Metaphors

Resist outside influences

Have a fear of snakes

Consider aspects of sexuality private

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Human Universals

Create Art

Are ethnocentric

ReciprocateTrade and transport goods

Imitate outside influences

Conceive of success and failure

Express emotions with face

Use Metaphors

Resist outside influences

Have a fear of snakes

Consider aspects of sexuality private

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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

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Exhibit 4.4

4-14

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 GDPRoy Philip 4-15

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 colony’s economic survival in the 1600s

– American values and institutions influenced by Adam Smith’s 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

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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

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Social Institutions (3 of 4)

• School – the most important social institution– Direct link between a nation’s 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 one’s 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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Hofstede’s Indexes Language, and Linguistic Distance

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Exhibit 4.6

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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 damagingNext

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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!

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Elements of Culture (4 of 4)

• Beliefs– Superstitions play a large role in a society’s 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 society’s 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 society’s needs• The marketer must eventually gain cultural

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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/questions/americanbritish/index.html• Just because something sells in one country

doesn’t 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

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