Cultural Dynamics in Assessing Global

Markets
Today’s Agenda
 The importance of culture to an international
marketer
 The origins and elements of culture
 Differing types of cultural knowledge
 The impact of cultural borrowing
 The strategy of planned change and its
consequences
 Keeping up with and handling cultural change
Global Perspective
 Culture deals with a group’s design for living
 Since marketing concept deals with satisfying
consumer needs, a successful marketer must
be a student of culture
 When designing a product, the style, uses, and
other related marketing activities must be made
culturally acceptable
 Culture is pervasive in all marketing activities
and a marketer’s efforts become a part of the
fabric of culture
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 Global Perspective
 The manner in which we consume,
consume the priority of
needs,
needs and the manner we want to satisfy them
are the functions of our culture that mold, and
dictate our style of living
 Culture is human-made part of human
environment
 Market constantly change in response to
marketing efforts, economic conditions, and other
cultural influences
 Market and market behavior are the part of a
country’s culture
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Global Perspective
Although marketers constantly adjust their
efforts to cultural demands of the market,
they act as change agents, whenever the
product being marketed is innovative

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 Culture’s Pervasive Impact
 Culture affects every part of our lives, every day,
from birth to death, and everything in between
 It even affects how we sleep
 Spaniards sleep less than other Europeans
 Japanese children often sleep with their parents,
whereas in U.S. it is opposite
 It even affects birth rates
 In 1966, Japanese fertility rates dropped by 20%
caused by a belief that women born in the Year of the
Fire Horse, which occurred every 60 years, will lead
unhappy lives and perhaps murder their husbands
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Culture’s Pervasive Impact
 Birthrates decline as countries move from
agricultural to industrial to service economies
 Immediate cause may be govt. policies and birth
control technology, but a global change in values is
also occurring
 It affects consumption as well as production
 Spaniards feast on fish, Japanese prefer raw fish,
Italians prefer pasta etc
 Culture also influences the laws regarding the
age limits for drinking
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Culture and Marketing

 Marketers need to learn to appreciate the

intricacies of cultures different from their own, if
they are to be effective in foreign markets
 Marketing programs must be consistent with
the culture in which a marketer operates
 Success depends on how much marketing
programs are adapted to culture

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Definitions and Origins of Culture
There are many ways to think about culture

 Dutch management Prof. Hofstede refers to

culture as the ‘Software of the mind’ and argues
that it provides a guide for humans on how to
think and behave;
behave it is a problem solving tool
 James Hodgson, former U.S. ambassador to
Japan, describes culture as a ‘thicket’
 According to Hodgson, thickets are tough to get
through, but effort and patience lead to successes

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Definitions and Origins of Culture
 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
 So culture resides in the individual’s mind

 Knowledge of the origins of culture can help

marketers notice cultural differences in new
markets and foresee changes in current
markets of operation

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 Origins , Elements, and Consequences
of Culture
Origins
Geography
( climate, topography, flora, fauna, microbiology)

History

Adaptation
Technology and Political economy

Social institutions
( family, religion, school, media, government, corporations)

Socialization/Peers Imitation Elements of Culture

acculturation (values, rituals, symbols, beliefs, thought processes)

Consequences

Application Consumption Decisions

Management Style
and Behavior
Origins , Elements, and Consequences
of Culture
 Exhibit depicts causal factors and social processes
that determine and form culture and cultural
differences
 Humans make adaptations to changing environment
through innovation
 Individuals learn culture from social institutions
through: socialization (growing up) and
acculturation (adjusting to a new culture)
 Individuals absorb culture through imitation of their
peers
 Finally people make decisions about consumptions
and production based on cultural knowledge
Geography
 Geography directly affects the consumer
choice (buying heavy vs. light jacket)
 It has influenced history, technology,
economics, our social institutions, and even
the way of thinking
 Two pertinent findings on geography:
 ‘Historically innovations spread faster from east-to-
west than north-to-south’ (Jared Diamond)
 ‘Strong correlation exists between the climate and
the per capita GDP of countries’ (Philip Parker)
History
 The impact of specific events of history can be
seen reflected in technology, social institutions,
cultural values, and even consumer behavior
 The Declaration of Independence, and thereby
Americans’ values and institutions were
fundamentally influenced by the coincident 1776
publication of Adam Smith’s Wealth of Nations
 The military conflicts in the Middle East in 2003
caused new cola brands to be developed, including
Mecca Cola, Muslim Up, & Arab Cola
 The Political Economy
 In 20th century, 3 approaches to governance
competed for world dominance: fascism (fell
in 1945), communism (crumbled in 1990s)
and democracy/free enterprise
 So many bad incidents and political and legal
issues affect the culture of commerce and
consumption
 Marketer needs to appreciate the influence of
the political economy on social institutions and
cultural values, and ways of thinking
Technology
 It is the techniques used in the creation of
material goods or technological know-how
possessed by the people of a society
 It has the greatest impact on institutions and
cultural values
 Think about the impact of jet aircraft, AC, TV,
computers, Internet, birth control
 Birth control techniques have a huge effect on our life
(it freed women to develop career and men to spend
more time with kids, increased discretionary income)
Social Institutions
Elements of social institutions are:
 Family
 Religion
 School
 The media
 Government
 Corporations
Social Institutions
Directly affect the ways in which people
 relate to one another,
 organize their activities to live in harmony
with one another, and
 teach acceptable behavior to succeeding
generations and govern themselves
Social Institutions

 The positions of men and women in the

society, the family, social classes, group
behavior, the definition of decency and
civility are interpreted differently within
every culture
 The position of women, the role of parents
and the use of left hand in Asia and Western
world
Social Institutions
 The roles and status positions in a society are
influenced by the dictates of social institutions
 Although the caste system in India had been
outlawed, it remains as a part of culture (Indian
prime minister, I.K. Gujral, faced problem being
a low caste person)
Social Institutions: Family

 Family forms and functions vary substantially

around the world, even around the country
 Dutch executive lives with his parents, wife and
kids in a home
 In Cairo, extended family− grandparents, married
siblings, cousins, kids− lives in the apartment
 Japanese mother cares for two children by
herself, and sleeps with them at night
Social Institutions: Family

 These differences lead to differences in how

children think and behave
 Individualism is being taught the first night the
American infant is tucked into her own separate
bassinette
 Values for egalitarianism are learned the first
time Dad washes the dishes in front of the kids
 In some cultures, favoritism of boys is found
Social Institutions: Religion
 Religion impacts value systems of a society,
the value systems directly affect marketing
 Protestants believe that one’s relationship with
God is personal, and confessions are made
directly through prayer
 Alternatively, Catholics confess to priests, setting
up a hierarchy within the Church
 Religion affects our habits, our outlook on life
and the products we buy, the way we buy
them, and even the newspapers we read
Social Institutions: Religion

 Since the influence of religion is quite strong,

marketers need to have clear understanding
of it; otherwise they will offend
 Bata engraved ‘Allah’ on Shoes and hurt Muslims
 MNCs often offend Muslims (0.8 to 1.2 billion)

 Thus, one’s own religion is not a reliable

guide of another’s beliefs
Social Institutions: School

 School affects all aspects of culture, from

economic development to consumer behavior
 Study shows a direct link between the literacy
rate of a country and its capacity for economic
growth
 W.B. “No country has been successful
economically with less than 50% literacy, but
when countries have invested in education the
economic rewards have been substantial.”
 Literacy has a profound effect on marketing
Social Institutions: The Media

 As a recent institution, media influences values

and culture
 Development of new media and the growing
number of women workforces have reduced
the influence family on culture
 American kids spend only 180 days per year in
school as opposed to 251 days in China
 Too much media is detrimental to the society
Social Institutions: Government

 Govt. has little influence, since cultural values

and thought patterns are pretty set before or
during adolescence
 Govt. only tries to influence the thinking and
behaviors of adult citizens for their “own good”
 The French govt. has been urging citizens to
procreate since the time of Napoleon. Now they
are offering a “birth bonus” of $800 given to
women in their 7th month of pregnancy
Social Institutions: Government

 In some countries govt. owns media and

regularly uses propaganda to form “favorable”
public opinion
 The govt. of Iran influences the ways of thinking
among students through the support of religious
organizations and schools
Social Institutions: Government

 Govt. influences thinking and behavior

through the passage, promulgation,
promotion, and enforcement of laws affecting
consumption and marketing behaviors
 The Irish govt. propagates excessive drinking
costs the country 2% of GDP
Social Institutions: Corporations

 Corporations influence us early via media

 Most innovations are introduced by MNCs as

they have access to ideas from around the
world
 MNCs help the process of diffusion of
innovations through efficient distribution of
new products
 Basically, MNCs work as change agents
Elements of Culture
Cultural Values

Rituals

Symbols
 Language
 Aesthetics as symbols

Beliefs

Thought
Cultural Values
 Fundamental differences in cultural values
among countries underlie cultural diversity
 Hofstede studied over 90,000 people in 66
countries and found that cultures differed
along 4 primary dimensions:
 Individualism/Collectivism Index (IDV)
 Power Distance Index (PDI)
 Uncertainty Avoidance Index (UAI)
 Masculinity/Femininity Index (MAS)
 Cultural Values: Hofstede’s Indexes
Power Uncertainty Individualism Masculinity
Country Distance Avoidance Collectivism Femininity
11 70 55 79
Austria
65 94 75 54
Belgium
18 23 74 16
Denmark
33 59 63 26
Finland
68 86 71 43
France
35 65 67 66
Germany
28 35 70 68
Ireland
50 75 76 70
Italy
54 92 46 95
Japan
38 53 80 14
Netherlands
31 50 69 8
Norway
57 86 51 42
Spain
31 29 71 5
Sweden
34 58 68 70
Switzerland
35 35 89 66
United Kingdom
40 46 91 62
United States
76 88 27 21
Yugoslavia
Cultural Values: The Individualism/Collectivism Index
(IDV)
 IDV index refers to the preference for behavior
that promotes one’s self-interest
 High IDV scores reflect ‘I’ mentality, and loose ties
among members and tend to reward and accept
individual initiative
 Low scores in IDV reflect ‘we’ mentality and close
ties among members
 Collectivism pertains to societies in which people
are integrated into strong, cohesive groups
Cultural Values: The Power Distance Index (PDI)

 PDI measures the tolerance of social power

inequality
 High PDI scores tend to be hierarchical, where
social role, manipulation, inheritances are sources
of power and status
 Low PDI scores tend to value equality and reflect
more egalitarian views, where knowledge and
respect are the sources of power
Cultural Values: The Uncertainty Avoidance Index
(UAI)
 UAI measures the tolerance of uncertainty
and ambiguity among members of a society
 High UAI scores are highly intolerant of
ambiguity, anxiety, and stress and as a result
tend to be distrustful of new ideas or behaviors
 Low scores are associated with a low level of
anxiety and stress, a tolerance of deviance and
dissent, and a willingness to take risks
Cultural Values: The Masculinity/Femininity Index
(MAS)

 MAS index measures the assertiveness and

achievement by male members
 High scores reflect highly male dominated
cultures as opposed to dominated by both
 Less useful in consumer behavior and business
Cultural Values and Consumer Behavior

 Cultural values help marketer predict the speed

of diffusion of innovation, the amount of risk one
is ready to assume, consumer behavior etc
 Japanese and French investors are willing to take on
less risk in stock market investment as their UAI
scores are high, Japan (UAI-92) and France (UAI-86)
as opposed to U.S.A (UAI-46)
 The speed of innovation in Japan and France are
low because their IDV scores are low: Japan (IDV-
46) and France (IDV-71) as opposed to USA
Rituals
 Defined as the patterns of behavior and
interaction that are learned and repeated
 Major rituals are associated with major events in
life like, marriage ceremonies, and funerals
 Little rituals are dinner at a restaurant, visit to a
department store, class in the morning
 Rituals vary and they coordinate everyday
interactions and occasions, and they let
people know what to expect
Symbols
 ‘Culture is communication’
communication and there exists
‘the language of time, space, things,
friendships and agreement.’ (E. T. Hall)
 Learning to correctly interpret the symbols
surrounding us is a key part of socialization
 This learning begins immediately after birth as
we begin to hear the spoken language, see the
facial expression, feel the touch etc
 Here, we will cover the symbolic system with
language
Symbols- Language
 In some parts of the world, language is itself
thought of a social institution
 In Canada, language is an issue of political
disputes
 The number of spoken languages worldwide
is declining and so does the cultural diversity
 Don’t overestimate the importance of
understanding the language of a country
 Successful marketer must achieve expert
communication
Symbols- Language

 Ad copywriter should be concerned less with

obvious differences between languages and
more with the idiomatic meanings expressed
 Tambo means a ‘roadside inn’ in Bolivia, Colombia,
Ecuador, and Peru; ‘a diary firm ’ in Argentina and
Uruguay; and a ‘brothel ’ in Chile
 Crossing wider language differences increases
transaction costs
Symbols- Language

 Language has a direct influence on cultural

values and expectations
 As linguistic distance from English increases,
individualism decreases
 The relationship between spoken language and
cultural values has other implications
 As English language spreads around the world via
school and Internet, cultural values of individualism
and egalitarianism will spread with it
Symbols- Language

 Caution needs to be taken when translating

an ad slogan from one language to another
 Marketers must take time to ensure that a
translation is done correctly, otherwise they
may offend or come across seeming ridiculous
 The name Vicks was changed into Wicks in
Germany, because it has a very crude/slang
meaning in German language

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Symbols- Aesthetics as Symbols

 Art (even a dance or a song) communicates

 ‘A picture is worth a thousand words’

 As we acquire our culture we learn the meaning

of symbolic system represented in aesthetics, i.e.
arts, folklore, music, drama, and dance
 Customers everywhere respond to images, myths
and metaphors that define their personal and
national identities and relationships within a context
of culture and product benefits
Symbols- Aesthetics as Symbols
 Knowledge of aesthetics helps interpret “the
symbolic meanings of various methods of artistic
expression, color, and standards of beauty in
each culture.”
 Marketers must know the correct interpretation
of a country’s aesthetic values
 Insensitivity to aesthetic values can offend, create a
negative impression, and render marketing efforts
ineffective
Symbols- Aesthetics as Symbols

 Strong symbolic meanings may be overlooked, if

one is not familiar with a culture’s aesthetic
values
 Four means death in Japan; thus, tea cups are sold
in sets of five in Japan, not four
 The Japanese revere the crane as being lucky
because it is said to live a thousand years
 Product styling, ad, and package designs must
be aesthetically pleasing
Beliefs

 Most beliefs come from religious training and

it is not possible to consider true faith and
spirituality
 The relationship between superstition and
religion is not at all clear at all
 One explanation of the origin of Western
aversion to the number 13 has to do with Jesus
sitting with his 12 disciples at the Last Supper
Beliefs
 But many of our beliefs are secular in nature

 What Westerners call superstition plays a large

role in a society’s belief system in some parts of
the world
 In parts of Asia, ghosts, fortune telling, palmistry,
blood types, head-bump reading, phases of the
moon, faith healers, demons, and soothsayers are
the integral elements of society
 Japanese concern about being born during the Year
of Fire Horse
 Beliefs

 Too often, one person’s beliefs are another

person’s funny story
 It’s a mistake to discount the importance of
myths, beliefs, superstitions, or other cultural
beliefs
 For a marketer, it would be an expensive mistake
to make light of superstitions in other cultures
 Thought Processes

 Ways of thinking vary across cultures

 There are some differences in “Asian and

Western” thinking
 Asians tend to see the whole picture and can report
details about the background and foreground, while
Westerners focus on the foreground and can provide
great details about central figures, but see almost
nothing in the background
Conclusions

 Each of the five elements must be evaluated

in light of how they might affect a proposed
marketing program
 Newer products and extensive programs need
greater consideration of cultural factors
Cultural Knowledge
Two kinds of knowledge about culture:
 Factual knowledge
 Interpretive knowledge
Factual Knowledge
 It is obvious and can be easily discovered and
a marketer must learn, absorb, and anticipate
 Different meanings of colors, different tastes, and
other traits indigenous to a culture are facts
 It has meaning as a straightforward fact but
assumes additional significance when
interpreted within the context of the culture
 That Mexico is 98% Roman Catholic is a fact. But
equally important is what it means to be a Catholic
in Mexico vs. being Catholic in Spain or Italy
Interpretive Knowledge

 It is an ability to understand and appreciate

fully the nuances of different cultural traits and
patterns
 It is something deeper and needs insight (like
feeling)
 It depends on past experience for
interpretation and is prone to misinterpretation
if SRC is used
Conclusions
 There is a difference between knowing the
facts and understanding the facts, which need
factual knowledge
 Factual knowledge can be learned from
published materials, but to appreciate the
culture fully it is necessary:
 To live with people in other cultures
 To have consultation and cooperation with bilingual
nationals with marketing backgrounds
Cultural Sensitivity
 “Being attuned to the nuances of culture to
objectively view, evaluate and appreciate a
new culture”
 To be successful, cultural sensitivity or cultural
empathy must be carefully cultivated
 Important step in cultural sensitivity is to
recognize that cultures are not right or wrong,
better or worse; they are simply different
Cultural Sensitivity
 The same cultural traits can be amusing,
annoying, peculiar, or repulsive in different
cultures
 After bath deodorizing body is a ritual that is seen in
many cultures as compulsive, while some cultures are
less concerned with it
 Marketer needs to be more sensitive, tolerant,
and flexible, the situation is more exotic
 Being culturally sensitive reduces conflict and
increases success
Cultural Change

 Culture is dynamic in nature (living process)

 Here, 2 paradoxical questions are important
 Is cultural change constant?
 Is culture conservative (resistance to change)?

 The dynamic nature of culture is significant in

assessing new markets, even though changes
face resistance
Cultural Change
Ways societies change:
 By war (change in Japan after World War II)
 By natural disaster
 By seeking best ways to solve problems created
by changes in its environment
Accident and inventions have provided some
solutions
Cultural borrowing can be means of getting solutions
and it is common to all cultures
Cultural Borrowing

 “A responsible effort to learn from others’

cultural ways in the quest for better solutions
to a society’s particular problems.”
 Although behaviors are borrowed from other
cultures, they are combined in a unique manner
that becomes typical for a particular society
 Thus, unique cultures are the result of
imitating a diversity of others
Similarities: An Illusion
 For the inexperienced marketer, ‘similar-but-
different’ aspect of culture creates illusions of
similarity that usually do not exist
 Several nationalities can speak the same
language, or have similar race and heritage,
but similarities may not exist in other respects
 A product, or promotional message readily
acceptable in one culture, may not be acceptable
in another
Similarities: An Illusion
 A common language does not guarantee a
similar interpretation of word or phrases
 In USA a bathroom, refers to a toilet, while in UK it
means a place to take a tub bath
 In USA, one uses the word ‘elevator’ instead of ‘lift’
which is used in UK
 Even economically unified Europe has cultural
differences among the members of EU
Similarities: An Illusion

 Even different subcultures may exist in a

country and hinder homogenization
 Thus, a marketer must assess each country
thoroughly in terms of proposed product,
and never rely on often-used axiom that ‘if it
sells in one country, it will surely sells in
another.’
Resistance to Change
 Human culture changes, although cultural
change faces resistance
 The degree of resistance to new patterns varies
 In some situations, new elements are accepted
completely and quickly, while in others resistance is
so strong that acceptance is never forthcoming
 Hofsted’s data show that:
 Acceptance of innovation varies across cultures and
its quick acceptance depends on higher IDV score,
and lower PDI and UAI scores
Resistance to Change
 Acceptance of innovation depends on:
 the degree of interest in the subject
 how drastically the new will change the old

 Resistance to cultural change can be

overcome
 Change occurs when resistance slowly yields to
acceptance
 Gradually there comes an awareness of the
need for change, and then it becomes difficult
to prevent acceptance
Planned and Unplanned Cultural Change

 Planned cultural change needs to:

 determine which cultural factors conflict with an innovation,
and
 change those factors from obstacles to acceptance into
stimulants for change
 Two options of marketers when introducing any
innovation to a culture:
 They can wait
 They can cause change
Planned and Unplanned Cultural Change

 Not all marketing efforts require change to be

accepted
 Successful marketing must accompany a
strategy of cultural congruence which involves:
“marketing products similar to ones already on
the market in a manner as congruent as
possible with existing cultural norms, thereby
minimizing resistance.”
Planned and Unplanned Cultural Change

 Unplanned change is to introduce a

product and hope for the best
 Most Japanese were predominantly fish eaters,
have increased their intake of animal fat and
protein to the point that fat and protein now
exceed vegetable intake
 Marketing strategy is judged culturally in
terms of acceptance, resistance, or rejection
Consequences of Innovation

 When product diffusion occurs, a process of

social change also occurs
 The consequences of diffusion of an
innovation may be functional (positive
effects) or dysfunctional (negative effects),
depending on the desirability of the effects
on social system
Consequences of Innovation
 The introduction of a processed feeding formula into
the diet of babies in underdeveloped countries
where protein deficiency is a health problem would
have all the functional consequences. However, in
many situations, the dysfunctional consequences far
exceeded benefits. In Nicaragua, a significant
number of babies were changed from breast-feeding
to bottle feeding before the age of 6 months and
got infected with dysentery and diarrhea
 Thus, a marketer’s concern is with perceived
functional consequences