I n t e r n a t i o n a l M a r k e t i n g Cultural Dynamics in Assessing Global Markets Chapter t h E d i t i o n P h i l i p R. C a t e o r a M a r y C. G i l l y J o h n L. G r a h a m McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

4-2 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

4-3 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

4-4 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

4-5 Birthrates (per 1000 women) Exhibit 4.1

4-6 Patterns of Consumption (annual per capita) Exhibit 4.2

4-7 Consequences of Consumption Exhibit 4.3

4-8 Human Universals – Myth of Diversity Use metaphors Have a system of status and roles Are ethnocentric Create art Conceive of success and failure Create groups antagonistic to outsiders Imitate outside influences Resist outside influences Consider aspects of sexuality private Express emotions with face Reciprocate Use mood altering drugs Overestimate objectivity of thought Fear of snakes Recognize economic obligations in exchanges of goods and services Trade and transport of goods

4-9 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)

4-10 Origins, Elements, and Consequences of Culture Exhibit 4.4

4-11 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

4-12 We All Love Flowers – Why? Geography History Technology and economics Social institutions Cultural values Aesthetics as symbols

4-13 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

4-14 Social Institutions Family Religion School The media Government Corporations

4-15 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

4-16 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

4-17 Elements of Culture Cultural values –Individualism/Collectivism Index –Power Distance Index –Uncertainty Avoidance Index –Cultural Values and Consumer Behavior

4-18 Hofstede’s Indexes Language, and Linguistic Distance Exhibit 4.5

4-19 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

4-20 Metaphorical Journeys through 23 Nations Exhibit 4.6

4-21 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

4-22 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

4-23 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

4-24 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

4-25 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

4-26 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

4-27 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

4-28 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

4-29 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

4-30 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