1. Global Marketing Management A European Perspective Warren J. Keegan Bodo B. Schlegelmilch Social and Cultural Environments

2. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 2 Overview zBasic Aspects of Society and Culture zAnalytical Approaches to Cultural Factors zHandling Cultural Diversity zSummary

3. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 3 Learning Objectives zUnderstanding how important cultural and social differences are in global marketing zLearning fundamental concepts that provide an understanding of cultural differences zUnderstanding where potential conflicts may arise in global business relations zKnowing how cultural differences impact the marketing of products and services

4. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 4 Basic Aspects of Society and Culture zCulture as “ways of living” zConscious and unconscious values, ideas, attitudes, and symbols that shape human behaviour zCulture is learned, not innate zCulture defines the boundaries between different groups zAll facets of culture are interrelated

5. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 5 The Search for Cultural Universals zUniversal = Mode of behaviour existing in all cultures zUniversal aspects = opportunities to standardize some or all elements of a marketing program zCultural universals: e.g., athletic sports, body adornment, religious rituals, music zE.g.: VIVA music channel employs same fundamental concept in all markets, adapted to local preferences

6. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 6 The Anthropologist’s Standpoint zGlobal marketers must understand human experience from the local point of view and become insiders with cultural empathy zGlobal marketers need combination of tough- mindedness and generosity zTough-mindedness: be secure in your own convictions and traditions zGenerosity: Appreciate the integrity and value of other ways of life

7. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 7 High- and Low-Context Cultures (1) zLow-context culture: zMessages are explicit zWords carry most of the information in communication zE.g., United States, Switzerland, Germany

8. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 8 High- and Low-Context Cultures (2) zHigh-context culture zLess information is contained in the verbal part of the message zMore information resides in the context of communication (background, associations, basic values of communicators) zE.g., Japan, Saudi Arabia

9. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 9 High- and Low-Context Cultures (3) FactorsHigh-ContextLow-Context Lawyers- less important- very important A person’s word- his/ her bond- ‘get it in writing’ Time- everything is dealt- ‘time is money’ with in its own time Negotiations- lengthy- quick Competitive- infrequent- frequent Bidding

10. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 10 Communication and Negotiation zGlobal marketers face challenges in zVerbal communication zNon-verbal communication zKnowledge and understanding of cross-cultural differences is crucial during negotiations zLists can function as guidelines, although typologies do not take particular individuals into account

11. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 11 Analytical Approaches to Cultural Factors (1) zMaslow’s hierarchy of needs SELF-ACTUALISATION ESTEEM SOCIAL NEEDS SAFETY NEEDS PSYCHOLOGICAL NEEDS

12. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 12 Analytical Approaches to Cultural Factors (2) zHofstede’s cultural typology zCultures of different nations can be compared in terms of four dimensions zPower distance zIntegration into groups zMasculinity zUncertainty avoidance

13. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 13 Analytical Approaches to Cultural Factors (3) zSelf-reference criterion (SRC) and perception zPerception of market needs is framed by own cultural experience zFour-step framework zDefine problem in terms of home country norms zDefine problem in terms of host country norms zIsolate SRC influence. See how it complicates problem zRedefine problem without SRC influence. Solve for host country market situation

14. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 14 Analytical Approaches to Cultural Factors (4) zEnvironmental Sensitivity zThe extent to which products must be adapted to the culture-specific needs of different national markets zEnvironmental sensitive products zRequire significant adaptation to the environments of various global markets (e.g., food) zEnvironmental insensitive products zDo not require significant adaptation (e.g., integrated circuits)

15. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 15 Handling Cultural Diversity (1) zImpact of social and cultural environments on marketing industrial products zIndustrial products might exhibit zLower levels of environmental sensitivity (e.g., computer chips) zHigher levels of environmental sensitivity (e.g., government policies influencing purchasing behaviour of turbine generators)

16. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 16 Handling Cultural Diversity (2) zImpact of social and cultural environments on marketing consumer products zConsumer goods are usually more sensitive to cultural diversity than industrial goods zCulture is changing so rapidly that innovative marketing may be able to change established consumption patterns rooted in cultural differences

17. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 17 Handling Cultural Diversity (3) zExample: Consumption of Soft Drinks (Y) Y = f (A, B, C, D, E, F, G) zA = influences of other beverages’ relative prices, quality, taste B = advertising expenditure and effectiveness, all beverage categories C = availability of products in distribution channel D = cultural elements, tradition, custom, habit E = availability of raw materials F = climatic conditions, temperature, relative humidity

18. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 18 Handling Cultural Diversity (4) zCulture always has been a major source for disagreement and misunderstandings zCross-cultural complications can lead to costly failures zCompanies realize the importance of training and supporting people in cultural awareness

19. Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 19 Summary zCulture has both a pervasive and changing influence on each national market environment zGlobal marketers must recognize the influence of culture zNations can be classified as high- or low-context cultures zMaslow’s hierarchy, Hofstede’s typology, and the self-reference criterion can provide clues about cultural differences and similarities