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International Marketing 14th Edition P h i l i p R. C a t e o r a M a r y C. G i l l y John L. Graham Cultural Dynamics in Assessing Global Markets Chapter 4 McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. What Should You Learn? • The importance of culture to an international marketer • The origins and elements of culture • The impact of cultural borrowing • The strategy of planned change and its consequences 4-2 Global Perspective Equities and eBay – Culture Gets in the Way • Culture deals with a group’s design for living • The successful marketer clearly must be a student of culture • Markets are the result of the three-way interaction of a marketer’s – Economic conditions – Efforts – All other elements of culture • The use of something new is the beginning of cultural change – The marketer becomes a change agent 4-3 Culture’s 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 to services economies’ birthrates decline • Consequences of consumption – Tobacco • Culture not only affects consumption, it also affects production – Stomach cancer in Japan 4-4 Birthrates (per 1000 women) Exhibit 4.1 4-5 Patterns of Consumption (annual per capita) Exhibit 4.2 4-6 Consequences of Consumption Exhibit 4.3 4-7 Human Universals – Myth of Diversity • Use metaphors • Have a system of status and roles • Consider aspects of sexuality private • Express emotions with face • Are ethnocentric • Reciprocate • Create art • Use mood altering drugs • Conceive of success and failure • Overestimate objectivity of thought • Create groups antagonistic to outsiders • Fear of snakes • Imitate outside influences • Resist outside influences • Recognize economic obligations in exchanges of goods and services • Trade and transport of goods 4-8 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 • Humans make adaptations to changing environments through innovation • Individuals learn culture from social institutions – Socialization (growing up) – Acculturation (adjusting to a new culture) – Application (decisions about consumption and production) 4-9 Origins, Elements, and Consequences of Culture Exhibit 4.4 4-10 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 GDP Empirical data supports climate’s apparent influence on workers’ wages Explain social phenomena using principles of physiology 4-11 We All Love Flowers – Why? • Geography • History • Technology and economics • Social institutions • Cultural values • Aesthetics as symbols 4-12 History, the Political Economy, and Technology • 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 • 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 4-13 Social Institutions • Family • Religion • School • The media • Government • Corporations 4-14 Social Institutions • Family – Nepotism – 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 to consumer behavior – No country has been successful economically with less than 50% literacy 4-15 Social 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 4-16 Elements of Culture • Cultural values – – – – Individualism/Collectivism Index Power Distance Index Uncertainty Avoidance Index Cultural Values and Consumer Behavior 4-17 Hofstede’s Indexes Language, and Linguistic Distance Exhibit 4.5 4-18 Elements 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 expensive mistake • Thought processes – Difference in perception ► Focus vs. big-picture 4-19 Metaphorical Journeys through 23 Nations Exhibit 4.6 4-20 Cultural 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 of past experience for interpretation Most frequently prone to misinterpretation Requires consultation and cooperation with bilingual natives with marketing backgrounds 4-21 Cultural Sensitivity and Tolerance • Being 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 4-22 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 4-23 Cultural Borrowing • Effort to learn from others’ cultural ways in the quest for better solutions to a society’s particular problems – Imitating diversity of other makes cultures unique – Contact can make cultures grow closer or further apart • Habits, foods, and customs are adapted to fit each society’s needs 4-24 Similarities – An Illusion • A common language does not guarantee a similar interpretation of word or phrases – May cause lack of understanding because of apparent and assumed similarities • 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 4-25 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, if ever • Resistance to genetically modified (GM) foods – Resisted by Europeans – Consumed by Asians – Not even labeled in U.S. until 2000 4-26 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 – 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 4-27 Consequences of Innovation • May inadvertently bring about change that affects very fabric 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 diet of babies in underdeveloped countries ended up being dysfunctional 4-28 Summary • 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 4-29 Summary • 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 4-30