Cultural Dynamics in Assessing Global Markets Chapter 4 Cultural Dynamics in Assessing Global Markets

Culture Culture is the human-made part of human environment – the sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits acquired by humans as members of society. Markets are not static but constantly change often as the result of the culture of a group of people.

Three Definitions 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” “software of the mind, problem-solving tool” (Hofstede) “An invisible barrier… a completely different way of organizing life, of thinking, and of conceiving the underlying assumptions about the family and the state, the economic system, and even Man himself” (Hall)

Culture Continued Culture affects everything about us including how we sleep and go to the toilet and when to have sex. The Japanese are more likely to have their children sleep with them. The Chinese use low-to-the-ground toilets. The Chinese have more babies in auspicious calendar years. Patterns of consumption differ by culture too (page 96).

Culture’s Pervasive Impact Culture influences every part of our lives Cultures impact on birth rates –Birthrates have implications for sellers of diapers, toys, schools, and colleges

Culture’s Pervasive Impact Consumption of different types of food influences cultureConsumption –Chocolate by Swiss, seafood by Japanese preference, beef by British, wines by France and Italy Even diseases are influenced by culture –stomach cancer in Japan, and lung cancer in Spain

Exhibit 4.2 Patterns of Consumption (annual per capita) Source: EuroMonitor International, 2010,

Cultural Values Hofstede, who studied over 90,000 people in 66 countries, found that the cultures differed along four primary dimensions –Individualism/Collective Index (IDV), which focuses on self-orientation –Power Distance Index (PDI), which focuses on authority orientation –Uncertainty Avoidance Index (UAI), which focuses on risk orientation; and –Masculinity/Femininity Index (MAS), which focuses on assertiveness and achievement

Elements of Culture: Examples Cultural values: individualism vs. collectivism, power distance, uncertainty avoidance, masculinity/femininity. Cultural values and consumer behavior 1. Some societies value the collective (South Pacific) and will consume goods that affect the entire group (Sizes of portions in some fast food stores in the South Pacific too small to feed family). 2. Some societies are less equal than others. This means status and order of relationships is very important. (People in Fiji who are Ratus (cheifs) can have access to more goods than the common people.

Elements of Culture: Examples 3. Some societies value uncertainty avoidance. These societies will take less risks. 4. Some societies are less willing to accept femininity and think that anything feminine takes second place.

Religious Value Systems School & Education Government Policies Social Institutions Family Behaviors Corporations Media 4-11

Social Institutions 1.Family behavior varies across the world, e.g., extended families living together to Dad washing dishes 2.Religious value systems differ across the world, e.g., Muslims not allowed to eat pork and Hindus not allowed to consume beef 3.School and education, and literacy rates affect culture and economic growth

Social Institutions 4.Media (magazines, TV, the Internet) influences culture and behavior 5.Government policies influence the thinking and behaviors citizens of adult citizens, e.g., the French government offers new “birth bonuses” of $800 given to women as an incentive to increase family size 6.Corporations influence culture via the products they market, e.g., MTV

Rituals Thought Processes Beliefs Cultural Values Symbols Elements of Culture 4-14

Elements of Culture: Examples Rituals: these are very much apart of culture such as the rituals of the ancient Egyptians in the Book of the Dead. Symbols: Language as well as other items that represent important ideas or beliefs in the society. Aesthetics: the arts, folklore, music, drama and dance of a society Beliefs: something we take to be true about world. Thought processes also vary across cultures –“Asian and Western” thinking –Other examples?

Cultural Knowledge Factual knowledge vs interpretive knowledge. It is important to have facts about a society. Interpretive knowledge is a feeling or intuition about how things are done in that society. Both types of knowledge help with cultural sensitivity which is being attuned to the nuances of culture. We do not pass value judgments on the society. There may be similarities in two countries such as language but we must be aware of the differences as well and not make assumptions that since there are similarities, our product will be accepted in both societies.