Culture And International Marketing Management Marketing Essay

Culture And International Marketing Management Marketing Essay Barter (2008:37) in his paper says that the management of activities over international boundaries is of particular complexity and is an overwhelming task. In expanding business operations to international countries poses numerous challenges and problems never faced or seen in domestic markets. This complexity enables international organizations with knowledge and expertise to exploit the numerous opportunities provided by such markets. The general understanding of international marketing is an organization operating in more than one country, whose marketing strategy usually formulated on the countries differences. A different perspective of the same would be a specific activity to plan, price, promote and direct the flow of ones goods and services to various locations for a profit. Global marketing is very much different from international marketing in the fact being they perceive the world markets as a single entity and their marketing strategy is stagnated with the adoption of their standardized approach in selling their products in the same way but in a different local. The international marketing environment (Cateora Graham, 2007) is a mixture of controllable and uncontrollable factors. The uniqueness of this combination dwells over the unfamiliar circumstances posed by foreign markets. Success achieved by an organization in these environments would require a variety of strategies that would enable them to understand and cope with the fluctuating levels of uncertainty in a foreign market in order to influence their outcome to a positive one. The controllable and uncontrollable factors can be defined by into key elements by understanding the functioning of an organization in a foreign market. The controllable factors that an organization has direct control over and can be easily manipulated are elements such as price, product, marketing communication and distribution. On of the major uncontrollable factors for an organization in a foreign environment is cultural forces. When organization intends to trade in a foreign market they need to explore the countries underlying culture. Culture is the core element in the study of international marketing across diverse populations. A countries culture may embody a set of values and norms (building blocks) that are put into place for the mutual understanding of a common cause, designed for their living. A stereotypical description of a countries culture would be a collective programming of the mind that separates various human groups from each other. Each culture as we see have different boundaries which serve as a control mechanism, what may be acceptable in one country may be denounced in the other. Thus in order to achieve success in an international marketing venture an organization has to first understand a countries cultural boundaries. Even though different researchers have contributed theories and developed models with Ries and Trouts definition as a base, those existing models and theories do not include the way a company should consider cultural differences when positioning itself in different international markets. Considering the fact that most researchers define positioning as something relative to the competitors position, entering a new market should involve changes in the positioning strategy as well. Overall, little study has been made regarding the way a positioning strategy changes depending on which country the company is about to enter. International marketing literature (e.g. Kotler, 2002; Doole Lowe, 2004; Griffin, 1994), however, emphasize on the cultural differences in different nations and how these differences in culture affect the way a company should enter the new market. These cultural differences are especially important in consumer markets, due to the great impact culture has on the buying behavior for the single individual (Usunier, 2000). One way for a company to gain market shares in different markets, could be to find different advantages with the same product based on the different culture in the actual market. This could hypothetically mean that a company uses a different position with a different strategy in the new market, even though the exact same product is offered and the competitors are the same. The Economic Environment The economic environment is explained by Gilligan (1986:35) he says that the economic environment influences demand in a number of ways and its potential effect upon an international marketing program needs to be examined from two separate but interrelated viewpoints .at the macro level the marketers needs to consider people want and needs the country economic policy its state of development and the economic outlook. At the micro level he needs to focus upon the firms ability to satisfy. The economic environment that to large extent defines the marketing opportunity for international operation and it is only means of a detailed analysis of this aspect of the aspect of the environment that the marketer is able to answer two fundamental questions firstly how big is the market is able the market and secondly what is the market like it is the answer to these questions which then help to determine the firms market potential and priorities and subsequently the nature of marketing task that is to be performed by we therefore by considering a number of the elements and that make up the macro and micro economic environment and then move on to discuss how they influence marketing strategy. There are a number of steps that need to be taken before you decide to enter international markets. Analyze the international marketing environment. A PEST/STEP analysis needs to be conducted on the market you enter, to assess whether it is worthwhile or not. Lets briefly look at some factors that may influence an international decision. Political factors The political stability of the nation. Is it a democracy, communist, or dictatorial regime Economical Factors Consumer wealth and expenditure within the country. National interests and inflation rate. Are quotas imposed on your product. Are there import tariffs imposed. Social Factors Language. Will language be a barrier to communication for you? Does your host nation speak your national language? What is the meaning of your brand name in your host countrys language? Customs: what customs do you have to be aware of within the country? This is important. You need to make sure you do not offend while communicating your message. Technological The technological infrastructure of the market. Do all homes have access to energy (electricity) Standardization versus cultural adaptation Heerden and Barter state that the debate around whether marketing efforts should be standardized or adapted to country specifics has not been totally resolved. Advocates of standardization claim that global market segments are emerging and that marketing efforts not only can, but also should be standardized across markets (Melewar Vemmervik, 2004: 863). They believe that the differences across markets and cultures appear to be lessening, and this is reiterated by Herbig (1998:31) who states that there is a converging of all cultures towards one common global culture, and that marketers should endeavor to address global (international) needs, finding areas of commonality and agreement rather than focusing on trivial differences between cultures. They advocate that organizations must learn to operate as if the world was one large market ignoring superficial country differences (Toyne Walters, 1993:422). Their pursuit is also encouraged by the major benefits or advantages from standa rdization. Although product standardization is generally increasing, there are still substantial differences in company practices depending on the products marketed and where they are marketed (Czinkota Ronkainen, 2007:328). They further add, The argument that the world is becoming homogenized may actually be true only for a limited number of products that have universal brand recognition and minimal product knowledge requirements for use. By using the same marketing strategy the world over, different markets will develop a consistent image of a particular product or brand. A global brand image will avoid the confusion that customers may otherwise face when travelling to different countries and seeing foreign media, if an organization has local campaigns in each country. Standardization will result in advantages such as the creation of synergies across markets (Melewar Vemmervik, 2004: 863) as well as economies of scale, economies of scope and creation of a global brand image (Hill, 2001:544). . Advocates of adaptation, on the other hand, claim that the differences between cultures are so vast that standardization is not possible and that standardization results in lost competitive advantage and lower sales (Melewar Vemmervik, 2004: 863). This strategy entails that organizations introduce a unique product in each country, with the belief that tastes differ so much between countries that it is necessary to start anew in creating a marketing strategy for each market. Each country should be approached separately as a different market and the S.Afr.J.Bus.Manage.2008,39(2) 39 marketing strategy customized for that particular market (Herbig, 1998:34). Organizations have the ability to tailor the marketing strategy to suit local markets: and proponents of this philosophy are determined that cultural differences between nations are such that a strategy that works in one nation can fail miserably in another. They believe it is exceptionally difficult to develop a single marketing strategy that would have the desired affects worldwide. Thus, adaptation allows a marketer to take such differences into account and provides the local market with a marketing strategy that appeals to them and will be effective in its function, so creating greater sales and enhancing profits. By providing a particular international market, such as India, with what they want (e.g. a non-alcoholic beverage), an organization (such as SA Breweries) can create a distinct competitive advantage for itself because it is receptive to the needs and wants of that market. The absence of the advantages that emerge from standardization is in essence the disadvantages of a daptation, and visa versa where the absence of the advantages of adaptation constitutes the very disadvantages of standardization. Given the reality of significant cultural differences between customer needs and market conditions in international markets and, at the same time, the advantages of more uniform marketing strategies, a debate that focuses on polar extremes does not contribute to a solution (Toyne Walters, 1993:423). Viewing the standardization versus adaptation debate as a black and white issue is not necessarily correct, as there is an important middle ground (Diamantopoulos et al, 1995:38). A grey area exists between the two extremes and it is called Glocalisation. This follows a philosophy of think global, act local (Herbig, 1998:43). It can be generalized and argued that absolute standardization is rendered unfeasible as an international marketing strategy and its product -, promotion-, price-, and distribution-related decisions (Baalbaki Malhotra, 1993:20) cannot and should not ignore the influence of culture. Cross Cultural Analysis One of the most common used cross-culture theories is Geert Hofstedes culture dimensions. It consists or rather identifies five different dimensions of culture; individualism, power distance, uncertainty avoidance, masculinity, and Confucian dynamism. These dimensions are helpful in identifying and explaining cross-cultural differences in consumer behavior. It takes into consideration the differences peoples belief system and behavior in various nations and cultures. Hostedes model is measured against a range from 0 to 100 and is found to be based on quantitative research of different dimensions of 75 of the worlds countries and regions. Other models include cultural variables such as need for achievement and industriousness. Kruger and Nandan state that the cultural classifications begin with individualism versus collectivism. Individualistic cultures focus on self and the immediate family. The collectivist cultures include a social framework that includes the extended family, groups, and the organization where the members of a collectivist culture look after each other. For example, China and India have a strong collectivist culture with tremendous respect for customs, traditions, rules and regulations that developed over centuries (Melewar, Meadows, Zheng and Rickards 2004). For the Chinese and Indian cultures, group membership revolves around the extended family that includes grand parents, aunts, uncles, and cousins as well as informal friendship groups and formal organizational groupings. Both cultures take pride in belonging to this in-group collectivism, which emphasizes the feminine aspect of the culture that is concerned with others and focuses on relationships rather than assertive, direct and competitive behavior. Over the centuries this in-group collectivism developed strong customs, traditions, informal rules and procedures to avoid risk or behavioral embarrassment. These customs and traditions explain Hofstedes concept of uncertainty avoidance. According to Hofstede uncertainty avoidance advocates predictable structured situations versus unstructured unpredictable situations. For example, Indian and Chinese families traditionally arranged marriages between families. These structured situations spill over into each countrys respect for authority, titles and status. This respect is consistent with the concept of Hofstedes Power Distance, which is exemplified by the Indian and Chinese respect toward the elderly members of their society. Despite the respect for the elders in both countries, neither culture embraces the gender differentiation dimension (Javidan and House 2001). This dimension measures the status and decision making responsibilities that women have within each culture. In the Ind ian and Chinese cultures the status of women and their decision-making responsibilities are historically limited. Although the Chinese equalitarian ideology focuses on society equality and individual and group relationships in China, gender status provides little decision-making autonomy for Chinese and Indian women compared to women in the United States. The human orientation dimension by Javidan and House encourages fairness and kindness, but is difficult to evaluate. The historic Chinese ideology promotes a caring and generous approach toward society as a whole, but this socialistic ideology focuses on society equality to promote fairness and generosity. Within the Chinese and Indian cultural systems specific individual or specific group rewards are not well developed or prevalent (Dessler 2007). Since China and India appear to be rapidly moving toward a semi-capitalistic approach to their economies, a more humanistic orientation might be developing within each country that is more in line with the more individualistic human resource approach present in western countries. Similar to the human orientation dimension the performance-oriented dimension in China and India, where a society rewards individuals and group members for improvement, remains questionable. However, Hong Kong ranks high on the performance-orientation dimension, a ccording to Javidan and House, because of the western influence from British rule. To enable the Indian and the Mainland Chinese to develop a more complete performance oriented system requires each country to move toward a free market economy. Since the Indian Government and the Chinese Government encourage their companies to compete on the world market, a more performance-oriented culture should develop and adapt to the international globalization trends in both countries. But the weak performance orientation present within China and India cultures has not permitted businesses within each country to more fully develop their human resource functions and marketing strategies (Dessler 2007). This lack of cultural assertiveness hinders Indian and Chinese companies, and their ability to develop a global aggressiveness strategy particularly in the marketing area, where building brand identification and image linkage can determine the success or failure of a product or service. Individualism Individualism is described as the relationship between an individual and his community in the society. When there is a high degree of individualism and self-interests in a society, an individual is expect to look after himself and his immediate family, becoming independent from different groups and organizations. In some societies where people from an early age are classified into groups and these groups are their major source of their identity, we see a low degree of individualism and are referred to as collectivism. Power distance People has unequal physical and intellectual capacities which some societies allows to inequality in power and wealth . All the societies of the world has such inequalities but some are more than the other Power distance occurs when resources of the society is not distributed equally. It reflects human inequality. A high power distance is an indicator that people believe that everyone has their rightful place and they understand that not everyone is treated equally. Usually income is a relatively big factor in these societies which cause these demarcations. In Philippines , India, France score high in power distance on the other hand countries such as Austria ,Denmark and Sweden slightly low in power distance while the United States lies below the mid-point A low power distance occurs in societies that believe that everyone has equal rights and also equal opportunity to change their social status. Uncertain avoidance Debate: Marketing of new products takeoff faster in countries that are low in uncertainty avoidance as compared to those countries high in uncertainty avoidance. Uncertain avoidance refers to the level of anxiety about the future. Societies which display a high in uncertainty avoidance try to beat any change in future prospect hence the creation of rules and regulations. Whereas societies where in there is a low uncertainty avoidance consist of people open to risk, as they accept and handle each day as it comes. Countries that are high in uncertainty avoidance show a lag in takeoff as compared to those that are low in uncertainty avoidance mainly for two reasons. Firstly, societies that are low in uncertainty avoidance are more open and willing to take greater risks, hence, they will more readily accept new products introduced to them on the market. Secondly, societies high in uncertainty avoidance consider change as dangerous and are more intolerant towards accepting change than societies in low uncertainty avoidance. Thus, we see that countries low in uncertainty avoidance will embrace a new product more easily than countries that are higher in uncertainty avoidance. Masculinity Debate: Products new to the market takeoff faster in countries having higher masculinity than those countries have a lower masculine society. Men, in most cultures tend to be more assertive as compare to the women who are more nurturing. The male behavior is associated with autonomy, aggression, exhibition, and dominance, while female behavior is associated with nurturance, affiliation, and humility. Masculinity and feminity refer to the sex role patter in society at large, to the extent it is characterized by male or female characteristics. Masculinity is usually expected to take of mainly for two reasons according to Hofstede, firstly, masculine societies attach more value to recognition and wealth, while feminine societies attach more value to human contact and living environment. The adoption of new products allows consumer to exhibit their wealth and success, which may more compatible with masculine societies. Consumer in a masculine society may show higher innovativeness, as compared to consumers in more feminine societies. Secondly, in a masculine society people tend to make decisions independently and admire the strong and the independent. When a new product first emerges, adoptions are few and require independent decisions by innovators. When we observe both societies we see that the masculine society is more accepting to a new product as their decisions are independent whereas in the feminine society the decision on a new product is made in a group decision, which may cause a low acceptance level of the new pro duct. Hence masculine countries show a faster takeoff than feminine countries. Confucian dynamism Confucian dynamism reflects culture to the degree they are universalistic and particularistic. Universalistic means that what is true can be applied everywhere and particularistic means that unique relationships and circumstances are more important considering in determining what is right and good rather than abstract rules. Religion The nature and complexity of the different religions an international marketer could encounter is pretty diverse. The organization needs to make sure that their products and services are not offensive, unlawful or distasteful to the local nation. This includes marketing promotion and branding. There was a controversy in China in 2007 (which was the year of the pig) all advertising which included pictures of pigs was banned. This was to maintain harmony with the countrys Muslim population of around 2%. The ban included pictures of sausages that contained pork, and even advertising that included an animated (cartoon) pig. In the year 2005 Frances Catholic Church won a court injunction to ban a clothing advertisement (by clothing designers Marithe and Francois Girbaud) based upon Leonardo da Vincis Christs Last Supper. Need for Achievement Debate: Countries which have a high need for achievement display a faster takeoff than countries low in the need for achievement. The need for achievement, Murray (1938) describes the tendency or desire to do things as rapidly and/or as well as possible. Need for achievement includes successfully and independently overcoming obstacles, competing with and surpassing others, and high self-regard. Veroff et al. (1962) associate a high need for achievement particularly with working harder, being less satisfied with current success, and being more oriented to the future fruits of work. All these traits may lend themselves to greater eagerness for adopting new products and greater willingness to experiment with new products as soon as they are available. Industriousness Debate: New products take off faster in countries with high industriousness than those with low industriousness. Industrious people are inclined to work and tend to value the fruits of work more than less industrious people. The industriousness of a population can affect the speed of takeoff for supply and demand reasons. Such people realize that innovations can make work more productive as well as make their rest from work more productive, so industrious people tend to be more receptive to innovations as well as to work harder to develop innovations. Thus, when a new product is available, industrious entrepreneurs, retailers, and distributors are likely to work harder to make this product available to the general population. At the same time, the people themselves are more likely to search for, try out, and adopt the new product. Thus, the new product is likely to take off faster in an industrious culture than in one that is not industrious. These different dimensions are useful for companies, who are in the process of expanding and developing its business, as they give an insight about how to act in foreign cultures. All the dimensions can be helpful in winning potential customers by adapting the marketing activities to the specific culture. Especially, the masculinity dimension is an important dimension for companies to consider when it comes to marketing in different cultures and entering new markets. Information Access Prior research suggests that peoples access to information strongly affects the speed at which they adopt a new product (Rogers 1995). Therefore, we may expect that a new product takes off faster in countries in which inhabitants have easy access to information than in other countries. We identify three factors that capture different dimensions of information access: media intensity, mobility, and education. Values and Attitudes The importance of values and attitudes vary between nations, and even vary within nations. So if you are planning to take a product or service overseas make sure that you have a good grasp the locality before you enter the market. This could mean altering promotional material or subtle branding messages. There may also be an issue when managing local employees. For example, in France workers tend to take vacations for the whole of August, whilst in the United States employees may only take a couple of weeks vacation in an entire year. The Chinese government banned China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity in the year 2004. Technology and Material Culture Debate: The sale of new product depends on the level of technology and material culture Technology includes facilities such as there energy to power the products . Transport infrastructure to distribute our goods to consumers . The local port have large enough cranes to offload containers from ships How quickly does innovation diffuse is also of key importance, do consumers actually buy material goods i.e. are they materialistic. A clockwork radio was launched byTrevor Baylis in the African market. Since batteries were expensive in Africa and power supplies in rural areas are non-existent. The clockwork radio innovation was a huge success that was due to introduction of new technology. The car market grew 25% in 2006in China and it has overtaken Japan to be the second-largest car market in the world with sales of 8 million vehicles. With just six car owners per 100 people (6%), compared with 90% car ownership in the US and 80% in the UK, the potential for growth in the Chinese market is immense. Media Intensity Debate: Countries high in media intensity display a faster takeoff than those with low media intensity coverage. Mass media such as newspapers, radio, and television play an important role in creating awareness of a new product among potential adopters (Beal and Rogers 1960) and influencing acceptance of a new product (Katz and Lazarsfeld 1955). Mass media may also lead to greater ability of consumers to detect superior new products, and thus increase the rate at which, and the likelihood that, consumers will adopt them. Mass media also contribute to the cosmopolitanism of consumers of a country, especially if it concerns cosmopolite channels (Rogers 1995). Through cosmopolite channels, consumers in a target country can access information about innovations that have been introduced in other countries, even before the innovation is introduced in the target country (Gatignon et al. 1989). Such information can hasten the takeoff of the innovation in the target country. Mobility Debate: New products take off faster in countries high in mobility Various studies indicate that the higher the mobility of a countrys citizens, the more rapidly new products penetrates the social system. Interpersonal interaction affects the way and the rate consumers learn about various new products. Education Debate: Products takeoff faster in countries with citizen who have enjoyed higher education than those who havent had any. Education as we know it exposes people to a constant and steady stream of embracing new ideas. Introduction of technology in education also sensitizes the importance of human progress; this in turn makes them more receptive to innovations. It is a well known fact from research today that educated people are more responsive and quicker to adapt and accept a new product as compared to non-educated people. Finland follows old German model of education the education after primary school is divided to the vocational and academic systems. School attendance is compulsory between the ages of 7 and 16, the first nine years of education (primary and secondary school) are compulsory, and the pupils go to their local school. In Uganda schooling includes 7 years of primary education, 6 years of secondary education (divided into 4 years of lower secondary and 2 years of upper secondary school), and 3 to 5 years of post-secondary education. Nine years of education is compulsory for all Chinese students. case of the Peoples Republic of China a nationwide system of public education is in place, which includes primary schools, middle schools (lower and upper), and universities. Conclusion Exploring the world international markets in a way in which culture and marketing affects and are affected by ones other culture is an eye opener to any organization contemplating to venture forth into international markets. The finding indicates that culture plays a very important role in the formulation of an international marketing strategy. Marketers cannot assume homogeneity of cultures across the globe and it is surmised that there are not similarities and congruencies among the cultures within and between countries. Heerden and Barter state that the international marketer needs to study the target market to learn what elements of the strategy might be standardized to allow for economies of scale to be achieved, but at the same time, know which elements to customize so as not to render the entire strategy unsuccessful. It is to be noted that the marketer needs to account for local culture by building it into the marketing strategy, and not expect that the culture will adapt and accept the strategy provided. Generally, the responses suggest that a marketers strategy should suit the local culture in order to reach them and have the desired effect on the target market, and not the other way around because such evolutions could take an extensive amount of time in order to achieve marketing goals. If a marketer can create a relatively standardized and cross-cultural strategy that translates across most cultures, then the goals of marketing across countries would be achieved at a minimal spend. Krueger and Nandan state that As economic and political integration transpires through globalization, local and national customs, traditions, standards, and boundaries begin to dissolve, which leads to an extremely complex diverse global environment, and provides businesses with the need and the opportunity to read, identify, and develop new cultural competence. To exemplify the risk and dilemmas associated with different cultural implications. For example, different cultures develop less visible formal and informal rituals. In Japan formal gift giving is a widely accepted ritualistic standard of courtesy. In the United States gift giving is perceived as a bribe in business. The Japanese have a low tolerance for ambiguity and are very formal, indirect and patient in their business dealings. In contrast, the United States culture has a high tolerance for ambiguity and is informal, direct, punctual, and time oriented. These cultural