The Global Environment

Legal
Social/ Culture Environmental Influences on Global Marketing Economic

Political

Technological

What is Culture?
Culture prescribes the forms of behaviour that are acceptable to people in a specific community Includes knowledge, belief, art, morals, custom and any other habits and capabilities ac

Culture is difficult to define but some of the key characteristics are

Culture is learnt Culture is dynamic Culture is subjective

Why is culture important to marketing?

Links back to Marketing ConceptAchieving organizational goals depends upon determining the needs and wants of target market and delivering the desired satisfactions more effectively and efficiently
Culture affects ALL aspects of the Marketing Mix

Product

Place

Promotion

Price

THE 4Ps AND CULTURAL DIFFERENCES

PRODUCT Names, flavours, aromas, strengths, packaging, labelling, colours Customs, symbols, language and advertising practices Marketability of larger sizes Distribution channels may be different supermarket, hypermarket vs the corner shop

PROMOTION

PRICE PLACE

Elements of culture & the overseas market

Material culture
Technology and economics the production of goods

Example: a car is a prestigious/status item which involves high ambitious but in some cultures driven until it falls apart

Social institutions
The spine of the cultural process which links the individual to the group Social institutions include the family, education, political parties, social organisations all of which have their own set of values and standards of behaviour

Relations with the universe

Symbolic and sacred elements which form the link between the material and metaphysical world. Example: religious and superstitious belief systems have an impact on value systems. Religion affects what people eat, what they wear and how certain groups in society are treated.

Elements of culture & the overseas market

Aesthetics
-Includes folklore,dance, drama, music anything that is used as a mode of expression

Communication/Language
- Language shapes an individual view of the world and their social behaviour. The successful marketer must understand communication on a number of levels.

- Concern over meanings, what something means in one country different in another
- Marketing example: Advertising, carelessly translated ads lose their intended meaning it may suggest something obscene, comical, offensive - Non-verbal communication

Levels at which Culture operates

Culture operates at various levels each having influence on negotiating or undertaking business overseas

National

Industry

Organizational

Research on the European Community markets showed that the average Frenchmen uses almost twice as many cosmetic and beauty aids as his wife German and French eat more spaghetti than the Italians The Muslims disapprove of liquor, the Hindus de-emphasise material goods, Black and Decker's successful entry into the Japanese market is attributed to intensive marketing research on Japanese culture and lifestyles. Black and Decker changed the colour of their tools from green to orange (which is the colour of the rising sun). Time in Latin America is regarded very casually. As one international marketer aptly puts it: The clock runs in the United States but walks in Latin America'

Examples of Cultural Influences on Global Marketing

Barbie Doll had to be modified in the following ways to succeed in the Japanese market:
The blue eyes changed to brown. Her hair had to be darkened.

Examples of Cultural Influences on International Marketing

Mr Donut's entry into the Japanese market was troubled by

too high counters pastry too big cups too heavy

Colour Implications
* In Malaysia green suggest illness. * In Pakistan, green is the colour of happiness. * Blue is considered feminine and warm in Holland. * Blue is masculine and cold in Sweden. White indicates mourning in China, Korea and Japan.

 Never touch the head of a Thai or pass an object over it. The head is considered sacred in Thailand. Avoid using triangular shapes in Hong Kong, Korea and Taiwan. It is considered a negative shape. The number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has a magical connotation in Benin. The number 10 is bad luck in Korea. The number 4 means death in Japan. Red represents witchcraft and death in many African countries. Red is a positive color in Denmark.

Its Not the Gift That Counts, but How You Present It
Japan Do not open a gift in front of a Japanese counterpart unless asked, and do not expect the Japanese to open your gift.

Avoid ribbons and bows as part of the gift wrapping. Bows as we know them are considered unattractive, and ribbon colors can have different meanings.

Europe

Avoid red roses and white flowers, even numbers, and the number 13. Do not wrap flowers in paper. Do not risk the impression of bribery by spending too much on a gift.

Its Not the Gift That Counts, but How You Present It
Arab World Do not give a gift when you first meet someone. It may be interpreted as a bribe. Do not let it appear that you contrived to present the gift when the recipient is alone. It looks bad unless you know the person well. Give the gift in front of others in less personal relationships. Latin America Do not give a gift until after a somewhat personal relationship has developed unless it is given to express appreciation for hospitality. Gift should be given during social encounters, not in the course of business. China Never make an issue of a gift presentationpublicly or private. Gifts should be presented privately, with the exception of collective ceremonial gifts at banquets.

Whose English?
United States Trunk Hood Convertible Top Elevator Toilet Bathroom Vacuum United Kingdom Boot Bonnet Hood Lift W.C. Tub or Shower Hoover

Cultural Values: Four Dimensions

Individualism/Collective Index (IDV) Power Distance Index (PDI)

Uncertainty Avoidance Index (UAI)

Masculinity/Femininity Index (MAS)

Individualism vs Collectivism
Individualism:

social ties between individuals in a culture are very loose. People are expected to look after their own self-interest and perhaps the self-interest of their immediate family. Society provides a large measure of individual freedom. Canada, Italy, the U.K., and the U.S. score high on this trait.
Collectivism:

social ties between individuals are very tight. People are born into collectives or in-groups--e.g., family, religion, tribe, village. People are expected to protect the in-group in return for receiving the protection of the group. Colombia, Iran, Japan, and Taiwan score high on this trait.

Power Distance
High

PD Cultures - more autocratic and its members accept differences in power and wealth, e.g., France, India, Mexico, the Philippines, and Singapore.
Low

PD Cultures - feel that people should be more equal and differences in power and wealth are less acceptable, e.g., Australia, Israel, the Netherlands, the U.K., and the U.S.

Uncertainty Avoidance
Low

UA Cultures - accept uncertainty. Take each day as it comes, tend to take risks easily. They are tolerant of behavior and opinions different from their own, since they do not feel threatened by them, e.g., Canada, Hong Kong, Singapore, the U.S.
High

UA Cultures - anxiety about the unpredictability of the future is manifested in grater nervousness, emotionality, and aggressiveness. Technology, law and religion are used to build institutions that try to create security and avoid risk, e.g.., Belgium, France, Greece, and Portugal.

Masculinity Versus Femininity

Masculinity

- The division of sex roles in society is maximized, with men taking the more assertive and dominant roles, and women taking the more serviceoriented and caring roles. Masculine societies reflect traditionally masculine values: the importance of showing off, of performing, of making money, of big is beautiful, e.g., Germany, Italy, and Venezuela.
Femininity

- The dominant values for both men and women are those traditionally associated with the female role: not showing off, caring for others, valuing personal relationships, small is beautiful, e.g., Denmark, Spain, Sweden, and Thailand.

Business Customs in Global Marketing Criteria for Adaptation

open tolerance flexibility humility justice/fairness ability to adjust to varying tempos curiosity/interest

knowledge of the country

liking for others ability to command respect

ability to integrate oneself into the environment

Business Customs
Cultural Imperatives Cultural Adiophora Cultural Exclusives

Contextual Background of Various Countries

High Context

Japanese Arabian Latin American Spanish Italian

English French North American Scandinavian German

Swiss
Low Context

Cultural Differences Between Japanese and American Business

American Business Japanese Business
Game concept: Business is a game in pursuit of profits under the rules of laws and contracts Mutual trust-oriented business: business is based on trusting relationship among people rather than the rules of game

Efficiency-oriented and approximate accuracy, simplicity, clarity, and quickness

Highly precision-oriented and perfectionism-high dependency on human awareness

Quantity-oriented

Quality-oriented

Short-term performance evaluation

Mid-to-long term evaluations

Easy layoffs, dismissals of employees, and selling of businesses

Job security

Cultural Differences Between Japanese and American Business

American Business Top down management Japanese Business Heavy dependence on human resources, bottom-up management and teamwork High mutual dependence between employers and employees Joint management of business by employers and employees Management by "motivation" Low mutual dependence between employers and employees

Control of business by stockholders and the management

Management by "force"

Limited loyalty and incentive-oriented work ethics

Strong loyalty and fewer incentives

Business Customs and the Internet

A business website should be: Language friendly Icon friendly Color friendly Customer friendly

Business Ethics
Business ethics address the moral of what is right or appropriate. Value judgments differ among question

cultures.

Bribery & the Foreign Corrupt Practices Act (FCPA)

Variations on a Theme Bribery Extortion Lubrication FCPA (Foreign Corrupt Practices Act) makes bribery (excluding lubrication) illegal for U.S. firms

Ethical and Socially Responsible Decisions

We need to behave ethically and socially responsibly Is it legal? Is it right? Can it withstand disclosure to stockholders, company officials, and the public?

Corruption Perception Index* (Selected Countries 1999)

Country CPI 1999 Country CPI 1999

Denmark (1) Finland Singapore (7) Norway (9)

Switzerland (9) United States (18)

10 9.8 9.1 8.9

8.9 7.3

Brazil (45) S. Korea (50) China (58) Mexico (58)

India (72) Russia (82)

4.1 3.8 3.4 3.4

2.9 2.4

France (72)

6.6

Nigeria (98)

1.6

* The number in parenthesis is rank for 1999, which is based on 99 counties studied. ** The maximum score is 10.00; the minimum score is 0. A perfect score of 10.00 would be totally corrupt free country

Source: The 1999 Transparency International Corruption Perceptions Index