Global Marketing Management
Masaaki Kotabe & Kristiaan Helsen
Third Edition
John Wiley & Sons, Inc., 2004
Chapter 4
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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Chapter 4
Global Cultural Environment and
Buying Behavior
Chapter 4
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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Chapter Overview
1.
2.
3.
4.
5.
6.
7.
8.
Defining Culture
Elements of Culture
Cross-Cultural Comparisons
Adapting to Cultures
Cultures and the Marketing Mix
Organizational Cultures
Global Account Management (GAM)
Global Customer Relationship
Management (CRM)
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Introduction
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Buyer behavior and consumer needs are largely
driven by cultural norms.
Global business means dealing with consumers,
strategic partners, distributors, and competitors
with different cultural mindsets.
Within a given culture, consumption processes can
include four stages: access, buying behavior,
consumption characteristics, and disposal (see
Exhibit 4-1).
Each of these stages is heavily influenced by the
culture in which the consumer thrives.
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1. Defining Culture
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There are numerous definitions of culture. In this
text, culture (in a business setting) is defined as
being a learned, shared, compelling, interrelated
set of symbols whose meanings provide a set of
orientations for members of society.
Cultures may be defined by national borders,
especially when countries are isolated by natural
barriers.
Cultures contain subcultures that have little in
common with one another.
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2. Elements of Culture

Culture consists of many interrelated components.
Knowledge of a culture requires a deep
understanding of its different parts. Following are
the elements of culture:
– Material life (technologies that are used to
produce, distribute, and consume goods and
services)
– Language (language has two parts: the spoken
and the silent language)
– Social Interaction (social interactions among
people; nuclear family, extended family;
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2. Elements of Culture (contd.)
–
–
–
–
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reference groups)
Aesthetics (ideas and perceptions that a culture
upholds in terms of beauty and good taste)
Religion (community’s set of beliefs that relate
to a reality that cannot be verified empirically)
Education (One of the major vehicles to
channel from one generation to the next)
Value System (values shape people’s norms and
standards)
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3. Cross-Cultural Comparisons
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Cultures differ from one another, but usually share
certain aspects.
High-context cultures: Interpretation of messages
rests on contextual cues; examples: China, Korea,
Japan, etc.).
Low-context cultures: Put the most emphasis on
written or spoken words; United States,
Scandinavia, Germany, etc.).
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Contextual Background of Various Countries
Japanese
High context
IMPLICIT
Arabian
Latin American
Spanish
Italian
English (UK)
French
English (US)
Scandinavian
Low context
German
Swiss
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EXPLICIT
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3. Cross-Cultural Comparisons (contd.)

Geert Hofstede’s Cultural Classification Scheme
(see Exhibit 4-8a & 4-8b):
– Power distance: The degree of inequality
among people that is viewed as being equitable
– Uncertainty avoidance: The extent to which
people in a given culture prefer structured
situations with clear rules over unstructured
ones
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3. Cross-Cultural Comparisons (contd.)
– Individualism: The degree to which people
prefer to act as individuals rather than group
members.
– Masculinity: The importance of “male” values
(assertiveness, success, competitive drive,
achievement) versus “female” values
(solidarity, quality of life).
– Long-term orientation versus short-term focus:
Future versus past and present orientations
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Five Cultural Dimensions
Dimension
Definition
Examples
Power Distance
The concentration of power (physical and intellectual High power distance: Korea, India, Japan, Mexico
capabilities, power, and wealth) in certain groups and
the acceptance of it.
Low power distance:
Australia, United States, Germany
Individualism vs.
Collectivism
The importance of the individual vs. the group. Or the High individualism:
pursuit of self-interests vs. subordination to group United States, Australia, Great Britain, Canada
interests. I.e. "I" vs. "we" orientation.
Low individualism:
Japan, Venezuela, China, Pakistan, Thailand,
Mexico
The need for achievement, assertiveness, and material Feminine:
success vs. the need for relationships and modesty. Sweden, France, Netherlands
Masculine cultures have segregated roles, consider big
beautiful, and need to show off. Feminine cultures Masculine:
care more for quality of life and environment than Japan, Mexico, Britain, Germany
money.
Masculinity vs.
Femininity
Uncertainty Avoidance
Extent of ability to cope with uncertainty about the High uncertainty avoidance:
future without stress.
Japan, France, Mexico
Low uncertainty avoidance:
United States,, Hong Kong, Great Britain
Long Term Orientation
Values oriented toward the future, thrift, and Long term orientation:
perseverance.
Hong Kong, Japan
Short term orientation:
United States, Great Britain, Germany
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Cross-Cultural Comparisons (contd.)
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Project GLOBE (Global Leadership and
Organizational Behavior Effectiveness)
– Project GLOBE is a large-scale ongoing
research project that explores cultural values
and their impact on organizational leadership in
61 countries (see Exhibit 4-9).
– The first three dimensions (uncertainty
avoidance, power distance, and collectivism)
are the same as Hofstede’s constructs.
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Cross-Cultural Comparisons (contd.)

– The remaining six dimensions include:
collectivism II, gender egalitarianism,
assertiveness, future orientation, performance
orientation, and humane orientation.
World Value Survey:
– The WVS is organized by the University of
Michigan.
– The WVS has been conducted multiple times
and the population covered is very broad.
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Cross-Cultural Comparisons (contd.)

The WVS encompasses two broad categories:
traditional versus secular values, and the quality of
life (see Exhibit 4-10).
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4. Adapting to Cultures
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Global marketers need to become sensitive to
cultural biases that influence their thinking,
behavior, and decision making.
Self-reference criterion (SRC): Refers to the
people’s unconscious tendency to resort to their
own cultural experience and value systems to
interpret a given business situation.
Ethnocentrism refers to the feeling of one’s own
cultural superiority.
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5. Culture and the Marketing Mix
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Culture is a key pillar of the marketplace.
Product Policy: Certain products are more
culture-bound than other products. Food,
beverages, and clothing products tend to be very
culture-bound.
Pricing: Pricing policies are driven by four Cs:
– Customers
– Company (costs, objectives, strategy)
– Competition
– Collaborators (e.g., distributors)
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5. Culture and the Marketing Mix
(contd.)
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Distribution: Cultural variables may also dictate
distribution strategies.
Promotion: Promotion is the most visible
marketing mix. Culture will typically have a
major influence on a firm’s communication
strategy. Local cultural taboos and norms also
influence advertising styles.
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6. Organizational Cultures
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Organizational Culture: Most companies are
characterized by their organizational (corporate)
culture.
A model of organizational culture types includes
the following four cultures (see Exhibit 4-12):
– Clan culture
– Adhocracy culture
– Hierarchy culture
– Market culture
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7. Global Account Management (GAM)
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The coordination of the management of customer
accounts across national boundaries are referred to
as global account management (GAM).
Global Accounts’ Requirements:
» May require a single point of contact
» May demand coordination of resources for
serving customers
» May push for uniform prices and terms of
trade
» May have standardized products and service
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7. Global Account Management (GAM)
(contd.)
» May require a high degree of consistency in
service quality and performance
» May support in countries where the company
has no presence
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7. Global Account Management (GAM)
(contd.)
– Managing Global Account Relationships:
» Clarify the role of the global account
management team.
» Make incentive structure realistic.
» Pick the right global account managers.
» Create a strong support network.
» Make sure that the customer relationship
operates at more than one level.
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8. Global Customer Relationship
Management (CRM)
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The process of managing interaction between the
company and its customers is called customer
relationship management (CRM):
– Helps in customer retention
– Helps in richer communication and interactive
marketing
– Helps in tailored services
– Helps to maintain a closer contact with the
customers
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8. Global Customer Relationship
Management (CRM) (contd.)

Benefits of CRM:
– A better understanding of customers’
expectations and behavior
– Ability to measure the customers’ value to the
company
– Lower customer acquisition and retention costs
– Ability to interact and communicate with
customers in countries where access to
traditional channels is limited
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8. Global Customer Relationship
Management (CRM) (contd.)

Guidelines for Successful CRM Implementation:
– Make the program business-driven rather than
IT-driven
– Monitor and keep track of data protection and
privacy laws in those countries where CRM
systems are being used or are in the planning
stage
– A good data is the main pre-requisite.
– Rewards being sent out to customers are
relevant, targeted, and personal.
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Copyright © John Wiley & Sons, Inc. 2004
Chapter 4
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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