global marketing - global cultural environamental & buying behavior

GLOBALMARKETING

MANAGEMENTSixth Edition

MASAAKI KOTABKE | KRISTIAAN HELSEN

Chapter 4 PowerPointGlobal Cultural Environment and

Buying Behavior

Chapter Overview

1. Definition of Culture2. Elements of Culture3. Cross-Cultural Comparisons4. Adapting to Cultures5. Cultures and the Marketing Mix6. Organizational Cultures7. Global Account Management (GAM)8. Global Customer Relationship Management (CRM)

Chapter 4 Copyright © 2013 John Wiley & Sons, Inc. 2

Introduction

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 (Exhibit 4-1).

Each of these stages is heavily influenced by the culture in which the consumer thrives.


1. Definition of Culture

• 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.


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)• Blunders of translation are common either direction

(Exhibit 4-2)• Back-translation can help avoid problems


Exhibit 4-2: How Not To Sell Abroad


2. Elements of Culture

– Social Interaction (social interactions among people; nuclear family, extended family; reference groups) (Exhibit 4-3).

– Aesthetics (ideas and perceptions that a culture upholds in terms of beauty and good taste) (Exhibit 4-4).

– Religion (community’s set of beliefs relating to a reality that cannot be verified empirically) (Exhibit 4-5).

– Education (One of the major vehicles to channel from one generation to the next) (Exhibit 4-6).

– Value System (values shape people’s norms and standards) (Exhibit 4-7).


Exhibit 4-3: Rules to Start Cracking the Guanxi Code in China


Exhibit 4-4: Car Color Preferences


Exhibit 4-6: Dentsu Lifestyle Survey


3. Cross-Cultural Comparisons

Cultures differ from one another, but usually share certain aspects. Recent social psychology research reveal key cultural differences between East (high) and West (low) context cultures in how people perceive reality and reasoning (see below).

High-context cultures: Interpretation of messages rests on contextual cues; e.g., China, Korea, Japan.

Low-context cultures: Put the most emphasis on written or spoken words; e.g., USA, Scandinavia, Germany.


Low context

High context Japanese

Arabian

Latin American

Spanish

ItalianEnglish (UK)

French

English (US)

Scandinavian

German

Swiss EXPLICIT

IMPLICIT




• Geert Hofstede’s Cultural Classification Scheme:– 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



– 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.



• 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 62 countries (Exhibit 4-9).

– The first three dimensions (uncertainty avoidance, power distance, and collectivism) are the same as Hofstede’s constructs.



The remaining six dimensions include: collectivism II, gender egalitarianism, assertiveness, future orientation, performance orientation, and humane orientation.

World Value SurveyWorld Value Survey: The WVS is organized by the University of Michigan. The WVS has been conducted multiple times and the

population covered is much broader than in other similar studies.

The WVS encompasses two broad categories: traditional versus secular values, and the quality of life (Exhibit 4-9).


Exhibit 4-9: World Value Survey


4. Adaptation to Cultures

• 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.


5. Culture and the Marketing Mix

• 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)


5. Culture and the Marketing Mix

• Distribution: Cultural variables may also dictate distribution strategies.

• Promotion: Promotion is the most visible element of the marketing mix. Culture will typically have a major influence on a firm’s communication strategy. Local cultural taboos and norms also influence advertising styles.(See Exhibit 4-10.)


Exhibit 4-10: Starbucks Logo in Saudi Arabia


6. Organizational Cultures

• Organizational Culture: Most companies are characterized by their organizational (corporate) culture.

• A model of organizational culture types includes the following four cultures (Exhibit 4-11):– Clan culture– Adhocracy culture– Hierarchy culture– Market culture

• Additional business cultures exist in countries as well (Exhibit 4-12).


8. Global Customer Relationship Management (CRM)

• 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



• 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



• 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 database is the main pre-requisite.– Rewards being sent out to customers are relevant,

targeted, and personal.
