Assessing the environment

Political factors Barriers to entry – quotas, tariffs, regulations Opportunities See Disney case for the ways in which governments give incentives for inward investment Political needs Prestige, sovereignty, welfare, security (Terpstra) Popularity and votes Policies reflect current public opinion and underlying cultural attitudes (see Cola Wars in India on my website)

Social factors What is the cultural/psychic distance between you and the new market? Avoid ethnocentricity/self referencing criteria –Judging other cultures by your own experience and values

How to understand culture Analytical or scientific approach Holistic approach - like learning music Hofstede’s four dimensions Hall’s context approach Look at your chosen countries’ scores on these tables and charts and compare them to the scores for Great Britain

see Usunier p 76-9 Surveyed employees of same multinational in 53 countries Four main areas of difference in cultural attitudes to work & organisation Carried out in 1960s but still widely quoted Hofstede, G (1980)Culture's Consequences

POWER DISTANCE –between boss and employee –Would you be afraid to question decisions openly? –Do you respect people for the position they hold or do they have to earn your respect INDIVIDUALISM or COLLECTIVISM –Which is more important? –belonging to the team, being an insider –or looking after yourself, achieving personal goals? High PD and collectivism tend to go together

UNCERTAINTY AVOIDANCE –Do you take risks, break rules to get things done? –or reduce risk by rules and rituals? –Are you comfortable with complexity and ambiguity? –Or do you like things simple and clear- cut, right or wrong? Is Britain becoming a higher uncertainty avoidance culture today?

MASCULINITY –Which are valued most? –"Male"assertiveness, money making, possessions –"Feminine" nuturing relationships, quality of life Hofstede claimed his findings could be used to explain consumer culture and to plan advertising strategies

Two examples

Hall, E (1960) The silent language How importance is the context of what is said? Low context culture –Say what you mean. Put it in writing. Be precise High Context –Read between the lines. My word is my bond. Personal contact and trust.

The continuum Usunier based on Hall Germans Scandinavians North Americans British French Italians, Spanish Latin Americans Arabs Japanese Explicit Implicit Messages Low High Context

How does culture affect marketing? (Engel et al) Product usage - symbolic meanings –eg of food, clothing, leisure activities Motivation (needs, problems, solutions) Consumer decision making –family roles, social influences, criteria for choice Communication –meaning of words, images, body language Ways of doing business