International Marketing
16th edition
Philip R. Cateora, Mary C. Gilly, and John L. Graham
Overview
4
• The importance of culture to an international
marketer
• Definition and origins of culture
• The elements of culture
• The impact of cultural change and cultural
borrowing
• Strategies of planned and unplanned change
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Global Perspective
Equities and eBay – Culture
Gets in the Way
4
• Liberalization of the Japanese and the French capital
markets have given Japanese consumers more freedom
of choice in their investments and brought down
transaction costs for institutional and retail investors in
France.
• Culture is the overriding factor as e-Bay, the successful
online auction site in America, is facing difficulties in
Japan and France.
• For example, in Japan there is no American-style risktaking culture (only 12% of households invest in stocks,
while in America, about 55% invest in stocks) and in
France there are laws that restrict operations.
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Culture’s Pervasive Impact
4
• Culture affects every part of our lives, every day, from
birth to death, and everything in between.
• As countries move from agricultural to industrial to
services economies, birthrates decline and global
changes in values are occurring.
• Consequences of the cultural impact:
– Birth rates - Japan (Year of the Dragon and Year of the Fire
Horse)
– Consumption patterns – Alcohol and Tobacco
– Consumption consequences – Life Expectancy, Stomach cancer
• It is imperative for foreign marketers to learn to
appreciate the intricacies of cultures different from their
own if they are to effective in foreign markets.
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Birthrates (per 1000 women)
4
Exhibit 4.1
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Consumption Patterns
(annual per capita)
4
Exhibit 4.2
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Consequences of Consumption
4
Exhibit 4.3
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Definitions and
Origins of Culture
4
• 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.
• Individuals learn culture in three ways
– Socialization (growing up)
– Acculturation (adjusting to a new culture)
– Application (decisions about consumption and
production)
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Origins, Elements,
and Consequences of Culture
4
Exhibit 4.4
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Geography
4
• 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
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Why do we all Love Flowers?
•
•
•
•
•
•
4
Geography
History
Technology and economics
Social institutions
Cultural values
Aesthetics as symbols
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History
4
• 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
– American values and institutions influenced by
Adam Smith’s book The Wealth of Nations
– Military conflicts in the Middle East brought
about new cola alternatives such as Mecca Cola,
Muslim Up, and Arab Cola.
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Political Economy and
Technology
4
• 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
– Although America has the best healthcare technology,
people in many countries have greater longevity;
lifestyle choices are important
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Social Institutions (1 of 4)
•
•
•
•
•
•
4
Family
Religion
School
The media
Government
Corporations
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Family
Behaviors
Religious
Value
Systems
School
&
Education
Social
Institutions
Government
Policies
Media
Corporations
4-17
Social Institutions (3 of 4)
4
• School – the most important social institution
– Direct link between a nation’s literacy rate and its
economic development
– Difficult to communicate with a market when a
company must depend on symbols and pictures
• The media – it has replaced family time
– TV and the Internet
– American educational system produces a lower
percentage of college graduates than 12 other
countries including Russia, Japan, and France
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Social Institutions (4 of 4)
4
• Government - influences the thinking and
behaviors of adult citizens
– Propaganda through media
– Passage, promulgation, promotion, and
enforcement of laws
• Corporations - most innovations are introduced
to societies by companies
– Spread through media
– Change agents
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Elements of Culture (1 of 4)
•
•
•
•
•
4
Values
Rituals
Symbols
Beliefs
Thought processes
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Cultural
Values
Thought
Processes
Rituals
Elements
of
Culture
Beliefs
Symbols
4-22
Elements of Culture (2 of 4)
4
• Cultural values – Geert Hofstede
– Individualism/Collectivism Index
• Reflects the preference of behavior that promotes
one’s self interest
– Power Distance Index
• Measures the tolerance of social inequality
– Uncertainty Avoidance Index
• Measures the tolerance of uncertainty and
ambiguity
– Cultural Values and Consumer Behavior
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Hofstede’s Indexes
Language, and Linguistic Distance
4
Exhibit 4.5
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Elements of Culture (4 of 4)
4
• Beliefs
– Superstitions play a large role in a society’s belief
system and therefore, to make light of superstitions in
other cultures can be an expensive mistake
– The number 13 in the western hemisphere is
considered unlucky, where as the number 8 in China
connotes “prosperity”
– The practice of “Feng Shui”
• Thought processes
– Difference in perception between the East and the
West
• Focus vs. big-picture
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Cultural Sensitivity
and Tolerance
4
• Factual knowledge
• Interpretive knowledge
• Experiential knowledge
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Cultural Sensitivity
and Tolerance
4
• It is imperative that the marketer be 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
– There must be an appreciation of how cultures
change and accept or reject new ideas
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Cultural Change
4
• 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
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International Marketing
16th edition
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Cultural Borrowing
4
• A responsible effort to learn from others’ cultural
ways in the quest for better solutions to a
society’s particular problems
– Imitating diversities of other cultures make
cultures unique
– Contact can make cultures grow closer or further
apart
• Habits, foods, and customs are adapted to fit
each society’s needs
• The marketer must eventually gain cultural
empathy
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Similarities – An Illusion
4
• A common language does not guarantee a
similar interpretation of word or phrases
– Difference between British and American English
• 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
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Resistance to Change
4
• Gradual cultural growth does not occur without
some resistance
– New methods, ideas, and products are held to be
suspect before they are accepted
• Resistance to change varies between cultures
• The most important factor in determining how
much of an innovation will be accepted is the
degree of interest in the particular subject, as
well as how drastically the new will change the
old
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Planned and Unplanned
Cultural Change
4
• 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 (unplanned change)
– They can cause change (planned change)
• Cultural congruence
– Marketing products similar to ones already on the market
in a manner as congruent as possible with existing cultural
norms
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4-35
Summary (1 of 2)
4
• 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
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Summary (2 of 2)
4
• 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
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