Culture And Global Marketing
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Transcript of Culture And Global Marketing
Culture & Global Marketing
Importance of CultureCulture affects market demand.Managerial behavior is driven by his/her
cultural knowledgeKnowledge 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
Culture DefinedCulture is the underlying value framework
that guides an individual’s behavior.Culture is reflected perceptions, social
interactions, business interactionsCulture guides the selection of appropriate
responses in social situationsCulture is a learned behavior. People learn
do’s & don’t as they grow up
Culture across CountriesSome 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 businessRelationship with Time, Space & EnergyHigh Context – Low context culturesBody language
Need for cultural AdaptationSelf-Referencing : Process by which one
judges others actions with reference to one’s own native culture. Usually “Right” & “Wrong” decisionsOften leads to wrong opinions, Mistakes
Avoid self-referencing mistakes by cultural adaptation.
Cultural adaptation is a learned skill & must be mastered by Global Managers
Hofstede’s Cultural Dimensions
Individualism Vs CollectivismMasculine Vs Feminism Uncertainty Avoidance Vs Risk TakingPower DistanceConfucian Dynamism: Long term outlook,
work ethic of Chinese
Gannon’s MetaphorsGannon’s 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, competitiveChina – Harmony : Roundness, Harmony & FluidityGermany – Symphony : Discipline under a leader,
Skilled workers working together, a well oiled machine India – Cyclical Hindu Philosophy: Life follows a cyclical
pattern
Rapaille’s Archetypes Dr Rapaille simplified cultures for easier
understanding by explaining it in 7 steps of decoding culture:
1. People don’t buy products, People buy relationships2. Culture can make or break your marketing plan,
sales or public relationship plans3. Time, Space & Energy are the building blocks of all
cultures4. Design & create products/Services to solve the right
problem
Rapaille’s ArchetypesThe 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 worksJapan: PerfectionGermany: Made according to the standardFrance: Quality = Luxury India: Quality = Reliable
Cultural Awareness is the key to global success
Culture: How to do BusinessThe aim of business is same everywhere, but the
way to do it varies across countriesGlobal Managers must be able to handle Culture
shockSimilar 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
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 SocializationHow consumers behaveHow to manage people, supplier & subordinatesWhat guides the consumer behavior
Acceptable Behavior in business is usually acceptable behavior in society
Culture & Managerial SkillsSuccessful 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
Managerial StylesCultures 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.
Cultural DilemmasManagers face cultural dilemmas due to
differences in culturesUniversalism Vs Particularism : Doing the right thing or
doing things right? Individualism Vs Collectivism in decision makingNeutral Vs EmotionalSpecific Vs General : Is it just business or the whole
person, individual or the entire firmAttitudes towards TimeAttitudes towards Environment
Culture & NegotiationsGlobal 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.”
Cross Cultural NegotiationsFirst Establish Trust. Skilled negotiators
identify genuine behavior of their counterparts and work towards establishing trust
Know their “Silent Language”Body behaviorCultural signaling Culturally sensitive subjects
Know what to say and when to say
Stages of Negotiations
1. Non-Task Sounding: An initial period to know each other better
2. Task related exchange of Information: An extended Period where main issues are brought up & positions clarified
3. Persuasion: Attempt to make the other side see your point of view. Explaining positions, giving evidence & questioning other party’s position.
4. Concessions & Agreements: Concessions are made and agreements are signed
Limits to Cultural SensitivityWhen 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 one’s own culture. Successful manager will know both the cultures
Culture in B2B marketsBusiness Marketing TasksCultural ConditioningOrganizational CultureRelationship MarketingCulture & Networks
Business Marketing TasksEstablish the global firm as a dependable supplier
operating in the local marketUnderstand buyer’s positionPeople who influence the buying decisionRole of the supplier’s product/Service in the buyer’s
business successThis will make the local buyer treat the global
supplier as a local firm.E.g: Cognizant in US, BASF in US, ABB in India
Cultural ConditioningBuyers tend to develop different styles of dealing
with vendorsEqual or unequal relationship between supplier and buyer
Culture’s openness to change influences buyer’s attitude toward RiskChanging vendors is seen as a Risk
Often Buyer’s prefer local suppliersTerminating Local supplier carries bad publicity &
political risks for the buyerCEO or high executive from the vendor firm may
have to visit prospective buyer as a signal of commitment
Organizational CultureOrganizational culture of the buyer
influences the buying decisions Single Buyer & decision makerEngineers, staff who use the productTop management which signs the contractPower Brokers who influence the final decision
Global firm must be aware of the decision making process
Relationship MarketingB2B sales is usually more than one single saleRelationship marketing means marketing efforts
involving various personalized services, creation of new & additional services and customizing a firm’s offering to the needs of the buyer
Build trust for a long term business relationshipUpfront costs are high but it acts as a competitive
advantage & an entry barrierAdopt Buyer’s viewpoint Accept & Demand transparencyGrow with the relationshipBe Proactive
Culture & NetworksRelationship 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 barrierE.g: Keiretsu network in Japan, Glaxing in China
Military-Industry network in US
Foreign Entry
Culture defines “The way to do Business”Learn & analyze local cultures before entry
Do’s & don’tsIdentify trustworthy local agents or middlemenIdentify danger signalsKnow the strengths & weakness as perceived
by the local cultureEstablish trust & friendshipsNew Culture is an operational risk
Local MarketingCulture affects
Consumer behaviorLocal demandBuying decisionsBrand Image
First hand experience in local markets is a must
Lessons from home country may not be applicable abroad
Global ManagementCulture influences managerial styles and
management decisionsGlobal managers must be knowledgeable of both
cultures (Local & Home)A new global business culture is emergingSensitivity to local issues is necessary for successGlobal coordination is a must for global companies