Cultural Dynamics in Assessing Global Markets Chapter 4 Cultural Dynamics in Assessing Global Markets McGraw-Hill/Irwin International Marketing, 13/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter Learning Objectives 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

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: Efforts Economic conditions All other elements of culture The use of something new is the beginning of cultural change, and the marketer becomes a change agent.

Culture’s Pervasive Impact Culture affects every part of our lives, every day, from birth to death, and everything in between. 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

Birthrates (per 1000 women) Insert Exhibit 4.1

Patterns of Consumption (annual per capita) Insert Exhibit 4.2

Consequences of Consumption Insert Exhibit 4.3

Definitions and Origins of Culture Most traditional definitions of culture around the notion that 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 through: Socialization (growing up) Acculturation (adjusting to a new culture)

Origins, Elements, and Consequences of Culture Insert Exhibit 4.4

Definitions and Origins of Culture (cont’d) Geography The ideas of Jared Diamond and Philip Parker Helps in spread the technology History Tobacco being the original source of the Virginia colony’s economic survival in the 1600’s. The political economy Three approaches to governance competed for world dominance: Fascism Communism Democracy/Free Enterprise Technology The birth control pill; freed women to have carrier

Definitions and Origins of Culture (cont’d) Social institutions Family Favoritism of boys in some cultures Religion Misunderstanding of beliefs School No country has been successful economically with less than 50% literacy.

Definitions and Origins of Culture (cont’d) The media Media time has replaced family time Government Governments try to influence the thinking and behaviors of adult citizens. Corporations Most innovations are introduced to societies by companies

Hofstede’s Indexes, Language, and Linguistic Distance Insert Exhibit 4.5

Elements of Culture Cultural values Rituals Individualism/Collectivism Index (PDI) I&We Power Distance Index(PDI) Difference between superior& subordinate Uncertainty Avoidance Index UAI) take risk or avoid Cultural Values and Consumer Behavior Rituals Marriage Funerals

Elements of Culture (cont’d) Symbols Language Linguistic distance Aesthetics as Symbols; folklore. Music, dance address Beliefs To make light of superstitions in other cultures when doing business there can be an expensive mistake. Thought processes Difference in perception Focus vs. Big-Picture Asians tend to see all picture ,background and foreground Westerns tend to see foreground

Metaphorical Journeys through 23 Nations Insert Exhibit 4.6

Cultural Knowledge Factual knowledge vs. interpretive knowledge Has meaning as a straightforward fact about a culture but assumes additional significance when interpreted within the context of the culture. Mexico is 98% Catholic Being Catholic within Mexico 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(strange) the situation, the more sensitive, tolerant, and flexible one needs to be.

Cultural Change Cultural borrowing: Similarities: an illusion Effort to learn from others’ cultural ways in the quest for better solutions to a society’s particular problems. Similarities: an illusion A common language does not guarantee a similar interpretation of word or phrases. Just because something sells in one country doesn’t mean it will sell in another. 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.

Cultural Change (cont’d) 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 Consequences of innovation: 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 where protein deficiency is a health problem.

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.

Summary (cont’d) 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.