International Marketing

15th edition

McGraw-Hill/Irwin

Philip R. Cateora, Mary C. Gilly, and John L. Graham

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction (1 of 2)
Culture, including all of its elements, profoundly
affects management style and overall business
systems
Culture not only establishes the criteria for dayto-day business behavior but also forms general
patterns of values and motivations
Various studies have identified North Americans
as individualists, Japanese as consensus
oriented, and Europeans as elitists and rank
conscious
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Introduction (2 of 2)
A lack of empathy for and knowledge of foreign
business practices can create insurmountable
barriers to successful business relations
Knowledge of the management style the
business culture, management values, and
business methods and behaviors existing in a
country and a willingness to accommodate the
differences are important to success in an
international market
Culture has an important influence on strategic
thinking
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Overview
The necessity for adapting to cultural differences
with imperatives, electives, and exclusives
Different management styles vary around the
world
The extent and implications of gender bias in
other countries
The importance of cultural differences in
business ethics
The differences between relationship-oriented
and information-oriented cultures
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Global Perspective
Do Blondes Have More Fun in Japan?
Very odd in Japan to see a woman, who is blonde,
young, and very tall by Japanese standards, leading
business negotiations
The Japanese would not even look at the lead
negotiator because she was a woman
Mattell Inc. research showed that the original
Barbie, with her yellow hair and blue eyes, played as
well in Hong Kong as it did in Hollywood
But this standardized approach taken by Mattell
since the research caused sales to plummet
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Required Adaptation
Adaptation is a key concept in international
marketing
Ten basic criteria for adaptation
1) Open tolerance
2) Flexibility
3) Humility
4) Justice/fairness
5) Ability to adjust to varying tempos
6) Curiosity/interest
7) Knowledge of the country
8) Liking for others
9) Ability to command respect
10) Ability to integrate oneself into the environment
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Degree of Adaptation
Essential to effective adaptation
Awareness of ones own culture and the
Recognition that differences in others can cause
anxiety, frustration, and misunderstanding of the
hosts intentions

The self-reference criterion (SRC) is especially

operative in business customs
The key to adaptation is to remain American but
to develop an understanding of and willingness
to accommodate the differences that exist
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Imperatives, Electives,
and Exclusives

Cultural imperatives - Business customs and

expectations that must be met and conformed to or
avoided if relationships are to be successful

In some cultures a persons demeanor is more critical than in

others
Imperatives vary from culture to culture

Cultural electives - Relate to areas of behavior or to

customs that cultural aliens may wish to conform to or
participate in but that are not required
A cultural elective in one county may be an imperative in
another

Cultural exclusives - Customs or behavior patterns

reserved exclusively for the locals
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The Impact of American Culture

on Management Style
Master of destiny viewpoint
Independent enterprise as the instrument of
social action
Personnel selection and reward based on
merit
Decisions based on objective analysis
Wide sharing in decision making
Never-ending quest for improvement
Competition producing efficiency
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Management Styles
around the World

Authority and decision making

Management objectives and aspirations
Communication styles
Formality and tempo
P-time versus M-time
Negotiation emphasis
Marketing orientation

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Authority and Decision Making

Influencers of the authority structure of
business:
High PDI Countries
Mexico, Malaysia
Low PDI Countries
Denmark, Israel

Three typical authority patterns:

Top-level management decisions
Decentralized decisions
Committee or group decisions
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Management Objectives
and Aspirations

Security and mobility

Relate directly to basic human motivation and therefore

have widespread economic and social implications

Personal life
Worldwide study of individual aspirations, (David
McClelland)

Affiliation and social acceptance

In some countries, acceptance by neighbors and fellow
workers appears to be a predominant goal within
business

Power and achievement - South American countries

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Annual Hours Worked

Exhibit 5.1

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Communication Styles
Face-to-face communication
Managers often fail to develop even a basic understanding of just
one other language
Much business communication depends on nonverbal messages

Internet communications
Nothing about the Web will change the extent to which people
identify with their own language and cultures
78% of todays Web site content is written in English
An English e-mail message cannot be understood by 35% of
all Internet users
Country-specific Web sites
Web site should be examined for any symbols, icons, and other
nonverbal impressions that could convey and unwanted message
www.nike.com a great example of a company with a webpage
for many countries
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American Slangs
Foreign Interpretations

Lets do a deal

Whats the bottom line?

Okay or Thats okay

Thats a shame
I get a kick from that
Can we close on this?

That is too good to be true

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Arab=Lets do something
unethical
Japanese=What is your
starting bid?
Chinese Not really good,
could be better
Indian=You have insulted
me
Japanese= It hurts
Chinese= We should stop,
cancel this
Malaysian= You must be
cheating me
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Formality and Tempo

Breezy informality and haste characterize
American business relationships
Europeans not necessarily Americanized
Higher on Hofstedes Power Distance Index
(PDI)
May lead to business misunderstandings

Haste and impatience most common mistakes

made by Americans in the Middle East
For maximum success marketers must deal with
foreign executives in acceptable ways
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Contextual Background
of Various Countries
Exhibit 5.2

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P-Time versus M-Time

Monochronic time
Tend to concentrate on one thing at a time
Divide time into small units and are concerned with
promptness
Most low-context cultures operate on M-Time

Polychronic time
Dominant in high-context cultures
Characterized by the simultaneous occurrence of many
things
Allows for relationships to build and context to be
absorbed as parts of high-context cultures

Most cultures offer a mix of P-time and M-time behavior

As global markets expand more businesspeople from
P-time cultures are adapting to M-time.
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Speed is Relative
Exhibit 5.3

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Negotiations Emphasis
Business negotiations are perhaps the most
fundamental business rituals
The basic elements of business negotiations are
the same in any country
They relate to the product, its price and terms,
services associated with the product, and finally,
friendship between vendors and customers

One standard rule in negotiating is know

thyself first, and second, know your
counterpart
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Marketing Orientation
The extent of a companys market orientation
has been shown to relate positively to profits
Firms in other countries have not been able to
move from the traditional production, product,
and sales orientation to the marketing
orientation
Research has shown that sometimes in can be
difficult to encourage a marketing orientation
across diverse business units in global
companies
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Gender Bias
in International Business
Women represent less than 20% of the employees who
are chosen for international assignments
In many cultures (Asia, Middle East, Latin America)
women not typically found in upper levels of
management, and are treated very differently from men
Prejudices toward women in foreign countries
Cross-mentoring system instituted by Lufthansa
Executives who have had international experience are
more likely to get promoted,
have higher rewards, and have
greater occupational tenure
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Female Directors on
Corporate Boards
Exhibit 5.4

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Business Ethics
Corruption
What is Corruption?

Profits (Marxism)
Individualism (Japan)
Rampant consumerism (India)
Missionaries (China)
Intellectual property laws (Sub-Sahara Africa)
Currency speculation ( Southeast Asia)

Criticisms of Mattel and Barbie

Sales of Barbie declined worldwide after the global
standardization
Parents and government did react
Mattels strategy boosted sales of its competition
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The Western Focus on Bribery

In the 1970s, bribery became a national issue with
public disclosure of political payoffs to foreign
recipients by U.S. firms
The decision to pay a bribe creates a major conflict
between what is ethical and proper and what is
profitable and sometimes necessary for business
The Organization for Economic Corporation and
Development (OECD) and Transparency
International (TI) are combating the bribery of
foreign public officials in international business
transactions
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Transparency International
Corruption Perception Index
Exhibit 5.5

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Transparency International
Bribe Payers Index
Exhibit 5.6

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Bribery
Variations on a Theme (1 of 2)
Bribery and Extortion
Bribery is voluntary offered payment by someone seeking
unlawful advantage is bribery
Extortion takes place only if payments are extracted under
duress by someone in authority from a person seeking only what
he or she is lawfully entitled to

Subornation and Lubrication

Lubrication involves a relatively small sum of cash, a gift, or a
service given to a low-ranking official in a country where such
offerings are not prohibited by law
Subornation involves giving large sums of money, frequently not
properly accounted for, designed to entice an official to commit
an illegal act on behalf of the one offering the bribe
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Bribery
Variations on a Theme (2 of 2)
Agents Fees
When a businessperson is uncertain of a countrys
rules and regulations, an agent may be hired to
represent the company in that country
The Foreign Corrupt Practices Act (FCPA)
Change will come only from more ethically and
socially responsible decisions by both buyers and
sellers and by governments willing to take a stand
Since 1994, US businesses have bowed out of 294
major overseas commercial contracts valued at
$145 billion rather than paying bribes
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Ethical and Socially

Responsible Decisions

Difficulties arise in making decisions, establishing policies, and

engaging in business operations in five broad areas

Employment practices and policies

Consumer protection
Environmental protection
Political payments and involvement in political affairs of the country
Basic human rights and fundamental freedoms

Laws are the markers of past behavior that society has deemed
unethical or socially irresponsible
Ethical principles to help the marketer distinguish between right
and wrong, determine what ought to be done, and justify actions

Utilitarian Ethics (Does it achieve a common good?)

Rights of the Parties (Does the actions involve the rights of the
individual?)
Justice or Fairness (Does the action represent fairness for all?)
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Cultures Influence
on Strategic Thinking
British-American
Individualistic

Japan & Germany

Communitarian

In the less individualistic cultures labor and

management cooperate
A competitive, individualistic approach works well in the
context of an economic boom
Fourth kind of capitalism
Common in Chinese cultures
Predicted by culture
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A Synthesis Relationship-Oriented
vs. Information-Oriented Cultures
Studies are noting a strong relationship between Halls
high/low context and Hofstedes
Individualism/Collective and Power Distance indexes
Not every culture fits every dimension of culture in a
precise way
Information-oriented culture
United States

Relationship culture
Japan

Synthesis of cultural differences allows us to make

predictions about unfamiliar cultures
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Dimensions of Culture
A Synthesis
Exhibit 5.7

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Summary (1 of 2)
Some cultures appear to emphasize the importance of
information and competition while others focus more on
relationships and transaction cost reductions
Businesspersons working in another country must be
sensitive to the business environment and must be
willing to adapt when necessary
Understanding the culture you are entering is the only
sound basis for planning
Business behavior is derived in large part from the basic
cultural environment in which the business operates and,
as such, is subject to the extreme diversity encountered
among various cultures and subcultures
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Summary (2 of 2)
Environmental considerations significantly affect the
attitudes, behavior, and outlook of foreign
businesspeople
Varying motivational patterns inevitably affect methods
of doing business in different countries
The international trader must be constantly alert and
prepared to adapt when necessary
No matter how long in a country, the outsider is not a
local in many countries that person may always be
treated as an outsider
Assuming that knowledge of one culture will provide
acceptability in another is a critical mistake
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