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I n t e r n a t i o n a l M a r k e t i n gI n t e r n a t i o n a l M a r k e t i n g

Cultural Dynamics in

Assessing

Global Markets

Chapter 4

1 4 t h E d i t i o nP h i l i p R. C a t e o r a

M a r y C. G i l l y

J o h n L . G r a h a m

McGraw-Hill/IrwinInternational Marketing 14/e Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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4-4

In 20 years, McDonalds in Russia changes consumers AND

businesses in Russia. Among its suppliers:

Belaya Dachas Viktor Semenov: Biggest packed veggies

seller in Russia.. Lettuce Magnate ofRussia

Anatoly Revyakin: Became Pickle King ofRussia

Wimm-Bill-Dann: Milk and Juice supplier, first food company

in Russia to be NYSE listedMcDonalds ALSO had to change somewhat in Russia:

Plastic knives and forks

Mayo for dipping Fries

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4-5

Definitions and Origins of CultureDefinitions and Origins of Culture

Traditional definition of culture

Culture is the sum of the values, rituals, symbols, beliefs, andthought processes that are learned, shared by a group of people,and transmitted from generation to generation

Humans make adaptations to changingenvironments through innovation

Individuals learn culture from social institutions

Socialization (growing up)

Acculturation (adjusting to a new culture)

Application (decisions about consumption and

production)

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4-6

Origins, Elements,and Consequences of Culture

Origins, Elements,and Consequences of Culture

Exhibit 4.4

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4-7

Cultures Pervasive ImpactCultures Pervasive Impact

Culture affects every part of our lives, every day,from birth to death, and everything in between

Japan the year of the Fire Horse

As countries move from agricultural to industrial toservices economies birthrates decline

Consequences of consumption

Tobacco

Culture not only affects consumption, it also affectsproduction

Stomach cancer in Japan

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4-8

Human Universals Myth of DiversityHuman Universals Myth of Diversity

Use metaphors

Have a system of statusand roles

Are ethnocentric

Create art

Conceive of success andfailure

Create groups antagonistic tooutsiders

Imitate outside influences

Resist outside influences

Consider aspects of sexualityprivate

Express emotions with face

Reciprocate

Use mood altering drugs

Overestimate objectivity ofthought

Fear of snakes

Recognize economic

obligations in exchanges ofgoods and services

Trade and transport of goods

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4-9

History, the Political Economy,and Technology

History, the Political Economy,and Technology

History

Impact of specific events can be seen reflected in technology, socialinstitutions, cultural values, and even consumer behavior

Tobacco was the original source of the Virginia colonys economic survival in the 1600s

Political Economy Four approaches to governance competed for world

dominance Fascism

Colonialism

Communism

Democracy/free enterprise

Technology

Jet aircraft, air conditioning, televisions, computers, Internet, etc.

None more important than the birth control pill

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4-11

Social InstitutionsSocial Institutions

Family

Nepotism, favor your own

Role of extended family

Favoritism of boys in some cultures

Religion First institution infants are exposed to outside the home

Impact of values systems

Misunderstanding of beliefs

School

Affects all aspects of the culture, from economic development toconsumer behavior

No country has been successful economically with less than 50%literacy

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4-12

Social InstitutionsSocial Institutions

The media

Media time has replaced family time

TV

Internet

Government

Influences the thinking and behaviors of adult citizens Propaganda

Passage, promulgation, promotion, and enforce of laws

Corporations Most innovations are introduced to societies by companies

Spread through media

Change agents

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4-13

Elements of CultureElements of Culture

Cultural values

Individualism/Collectivism Index

Power Distance Index

Uncertainty Avoidance Index

Cultural Values and Consumer Behavior

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4-14

Hofstedes IndexesLanguage, and Linguistic Distance

Hofstedes IndexesLanguage, and Linguistic Distance

Exhibit 4.5 Individualism/

Collectivism Index

Power Distance

Index

UncertaintyAvoidance Index

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Elements of CultureElements of Culture

Rituals Marriage

Funerals

Symbols Language

Linguistic distance

Aesthetics as symbols Insensitivity to aesthetic values can offend, create a negative impression, and, in general, render

marketing efforts ineffective or even damaging

Beliefs

To make light of superstitions in other cultures can be an expensivemistake

Thought processes Difference in perception

Focus vs. big-picture

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Nike - television commercial for hiking shoes shot in Kenya using

Samburu tribesmen.

The camera closes in on the one tribesman who speaks, in native Maa. As he

speaks, the Nike slogan "Just do it" appears on the screen. Lee Cronk, an

anthropologist at the University of Cincinnati, says the Kenyan is really saying, "Idon't want these. Give me big shoes.

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4-20

SummarySummary

Understanding origins and elements of culture:Single most important thing for global marketers

Marketers can control the product offered to a

market its promotion, price, and eventualdistribution methods but they have only limitedcontrol over the cultural environment withinwhich these plans must be implemented

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4-21

SummarySummary

When a company is operating internationally,new cultural environments and elementscomplicates the marketing task

Understanding foreign cultures is a key: Globalmarketing requires adaptation to cultures

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4-22

Global Perspective Equities and eBay Culture Gets in the Way

Global Perspective Equities and eBay Culture Gets in the Way

Culture deals with a groups design for living

The successful marketer clearly must be astudent of culture

Markets are the result of the three-wayinteraction of a marketers

Economic conditions Efforts All other elements of culture

The use of something new is the beginning ofcultural change

The marketer becomes a change agent

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Birthrates (per 1000 women)Birthrates (per 1000 women)

Exhibit 4.1

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Patterns of Consumption(annual per capita)

Patterns of Consumption(annual per capita)

Exhibit 4.2

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GeographyGeography

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

Empirical data supports climates apparent influence on workers wages

Explain social phenomena using principles of physiology

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We All Love Flowers Why?We All Love Flowers Why?

Geography

History

Technology and economics Social institutions

Cultural values

Aesthetics as symbols

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Metaphorical Journeysthrough 23 Nations

Metaphorical Journeysthrough 23 Nations

Exhibit 4.6

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Similarities An IllusionSimilarities An Illusion

A common language does not guarantee asimilar interpretation of word or phrases

May cause lack of understanding because of apparent and

assumed similarities

Just because something sells in one countrydoesnt mean it will sell in another

Cultural differences among member of European Union a

product of centuries of history

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Cultural KnowledgeCultural Knowledge

Factual knowledge

Has meaning as a straightforward fact about a culture

Assumes additional significance when interpreted within the

context of the culture

Needs to be learned

Interpretive knowledge

Requires a degree of insight that may best be described as a

feeling

Most dependent on past experience for interpretation

Most frequently prone to misinterpretation

Requires consultation and cooperation with bilingual natives with marketing

backgrounds

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Cultural Sensitivity and ToleranceCultural Sensitivity and Tolerance

Being attuned to the nuances of culture so that anew culture can be viewed objectively, evaluatedand appreciated

Cultures are not right

or wrong, better or

worse, they are simply

different

The more exotic the

situation, the moresensitive, tolerant, and

flexible one needs to be

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Cultural ChangeCultural Change

Dynamic in nature it is a living process

Paradoxical because culture is conservative andresists 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 BorrowingCultural Borrowing

Effort to learn from others cultural ways in thequest for better solutions to a societys particularproblems

Imitating diversity of other makes cultures unique Contact can make cultures grow closer or further apart

Habits, foods, and customs are adapted to fiteach societys needs

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Resistance to ChangeResistance to Change

Gradual cultural growth does not occur withoutsome resistance

New methods, ideas, and products are held to be suspect before

they are accepted, if ever

Resistance to genetically modified (GM) foods

Resisted by Europeans

Consumed by Asians

Not even labeled in U.S. until 2000

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Planned and UnplannedCultural Change

Planned and UnplannedCultural Change

Determine which cultural factors conflict with aninnovation

Change those factors from obstacles to acceptance intostimulants for change

Marketers have two options when introducing andinnovation to a culture

They can wait

They can cause 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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Consequences of InnovationConsequences of Innovation

May inadvertently bring about change that affects veryfabric of a social system

Consequences of diffusion of an innovation

May be functional or dysfunctional Depending on whether the effects on the social system are desirable or undesirable

Introduction of a processed feeding formula into the dietof babies in underdeveloped countries ended up beingdysfunctional