1. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 3 The Cultural Environment

2. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Culture Defined Culture - An integrated system of learned behavior patterns that are distinguishing characteristics of the members of any given society. It encompasses a wide variety of elements, from materialistic to the spiritual. Acculturation - Adjusting and adapting to a specific culture other than one’s own. It is one of the keys to success in international operations.

3. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. It is important to understand the difference between the context cultures to avoid misunderstanding of messages and intentions. High-context culture - The social context in which what is said strongly affects the meaning of the message. Low-context culture - The meaning of the message is explicitly expressed by the words and is less affected by the social context. Culture Defined

4. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Culture Defined The international manager must identify cross- cultural and intracultural differences and isolate potential opportunities and problems. The international business entity acts as a change agent by introducing new products, ideas, or practices which may lead to change in consumption. The international marketer may be accused of “cultural imperialism,” especially if the changes brought about are dramatic or if culture-specific adaptations are not made in the marketing approach.

5. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Cultural universals - Manifestations of the total way of life of a group of people. This includes elements such as body adornments, courtship, etiquette, family gestures, joking, mealtimes, music, personal names, status differentiation, and trade.

6. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 3.1 - Elements of Culture

7. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Language –Is described as the mirror of culture and is multidimensional by nature. –Include both verbal and nonverbal communication. –Aids information gathering and evaluation efforts. –Provides access to local society. –Is important for company communication. –Allows for interpretation of context.

8. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Dealing with language problem invariably requires the use of local assistance. When translation is required, one of the simplest methods of control is back-translation. Back-translation - The translating of a foreign language version back to the original language by a different person from the one who made the first translation.

9. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Managers must analyze and become familiar with the hidden language of foreign cultures. The five key topics being time, space, material possessions, friendship patterns, and business agreements.

10. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Religion provides the basis for transcultural similarities under shared beliefs and behavior. The major religions include: –Christianity - Lays stress on frugality and accumulation of wealth from hard work; consists of two significant groups Catholicism and Protestantism. –Islam - Plays a pervasive role in the life of its followers; it supports entrepreneurship and discourages exploitation.

11. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture The major religions –Hinduism - Family is an important element in Hindu society; the extended family structure has an impact on the purchasing power and consumption of Hindu families. –Buddhism - Views life as an existence of suffering; emphasizes on spiritual achievement rather than worldly goods. –Confucianism - Is characterized by a code of conduct; stresses on loyalty and relationships.

12. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Values and attitudes –Values are shared beliefs or group norms that have been internalized by individuals. –Attitudes are evaluations of alternatives based on values. –Attitudes towards change is positive in industrialized countries, while in tradition bound societies change is viewed with suspicion.

13. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Manners and customs –Understanding manners and customs is especially important in negotiations. –Potential problem areas for marketers arise from insufficient: Understanding of different ways of thinking. Attention to the necessity of saving face. Knowledge and understanding of the host country. Recognition of the decision-making process and the role of personal relations. Allocation of time for negotiations.

14. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 3.2 - When and What to Give as Gifts

15. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Manners and customs –Managers must be concerned with differences in the ways products are used. –Package sizes and labels must be adapted in many countries to suit the needs of the particular culture. –Concept tests determine the potential acceptance of a proposed new product.

16. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Manners and customs –Focus groups, consisting of eight to twelve consumers representative of the proposed target market audience, can be interviewed to check for disasters and fine-tune research findings. –In depth studies are also used to study of consumer needs across markets.

17. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Material culture results from technology and is manifested in the availability and adequacy of the following basic infrastructures. –Economic - Consists of transportation, energy, and communications systems. –Social - Refers to housing, health, and educational systems. –Financial and marketing - Provide the facilitating agencies for the international firm’s operation in a given market; for example, banks and research firms. Technological advancement also brings about cultural convergence.

18. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Aesthetics –Each culture makes a clear statement concerning good taste, as expressed in the arts and in the particular symbolism of colors, form and music. –Color is often used as a mechanism for brand identification, feature reinforcement, and differentiation.

19. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Education –Formal and informal education play a major role in the passing on and sharing of culture. –Educational levels of a culture can be assessed by using literacy rates and enrollment in higher education.

20. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Social institutions –Affect the ways in which people relate to each other. –Kinship or blood relationships - Family relations and a strong obligation to family are important factors to be considered. –Social stratification - Division of a particular population into classes, in which the higher strata control most of the buying power and decision-making positions.

21. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Social institutions –Reference groups - Provide the values and attitudes that become influential in shaping behavior; can be primary or secondary. –Social organization also determines the roles of managers and subordinates and the way they relate to one another.

22. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements of Culture Sources of cultural knowledge –The concept of cultural knowledge is broad and multifaceted and can be defined by the way it is acquired. –Factual information - Acquired through communication, research, and education. –Experiential knowledge - Acquired by being involved in a culture other than one’s own. –Interpretive knowledge - Acquired by understanding the nuances of different cultural traits and patterns; achieved through experience over a sufficient length of time.

23. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 3.6 - A Model of Cross-Cultural Behavior

24. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Analysis Dimension of culture –Individualism –Power distance –Uncertainty avoidance –Masculinity –Long-term versus short-term orientation

25. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 3.8 – Culture-Based Segmentation

26. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Analysis Self-reference criterion – The unconscious reference to one’s own cultural values. Recommendations to reduce the influence of one’s own cultural values: –Define the problem in terms of domestic and foreign cultural traits, habits, or norms. –Isolate the self-reference criterion influence in the problem and examine it to see how it complicates the problem. –Redefine the problem without the self-reference criterion influence and solve for the optimal situation.

27. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cultural Analysis Ethnocentricism - The belief that one’s own culture is superior to others. It can be controlled only by acknowledging it and properly adjusting to its possible effects in managerial decision making.

28. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Training Challenge The objective of training programs is to foster preparedness, sensitivity, patience, and flexibility in managers and other personnel. Internal educational programs used to foster culture sensitivity and acceptance of new ways of doing things include: –Culture specific information –Culture general information –Self-specific information

29. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Training Challenge Area studies - Provide factual preparation for a manager to operate in, or work with people from, a particular country. Cultural assimilator - A program in which trainees must respond to scenarios of specific situations in a particular country. Sensitivity training - Focuses on enhancing a manager’s flexibility in situations that are quite different from those at home. Field experience - Exposes a manager to a different cultural environment for a limited amount of time.

30. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 3.9 - Cross-Cultural Training Methods

31. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Making Culture Work for Marketing Success Embrace local culture. Build relationships. Employ locals to gain cultural knowledge. Help employees understand you. Adapt products and processes to local markets. Coordinate by region.