kotabe gmm4 ppt ch04

Chapter 4 Copyright (c) 2007 John Wiley & Sons, Inc. 1

Global Marketing Management, 4eGlobal Marketing Management, 4e

Chapter 4Chapter 4

Global Cultural Global Cultural Environment and Environment and Buying BehaviorBuying Behavior


Chapter OverviewChapter Overview

1. Defining Culture1. Defining Culture2. Elements of Culture2. Elements of Culture3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons4. Adapting to Cultures4. Adapting to Cultures5. Cultures and the Marketing Mix5. Cultures and the Marketing Mix6. Organizational Cultures6. Organizational Cultures7. Global Account Management (GAM)7. Global Account Management (GAM)8. Global Customer Relationship Management 8. Global Customer Relationship Management

(CRM)(CRM)


IntroductionIntroduction

Buyer behavior and consumer needs are largely Buyer behavior and consumer needs are largely driven by cultural norms.driven by cultural norms.

Global business means dealing with consumers, Global business means dealing with consumers, strategic partners, distributors, and competitors with strategic partners, distributors, and competitors with different cultural mindsets.different cultural mindsets.

Within a given culture, consumption processes can Within a given culture, consumption processes can include four stages: access, buying behavior, include four stages: access, buying behavior, consumption characteristics, and disposal (see consumption characteristics, and disposal (see Exhibit 4-1).Exhibit 4-1).

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


IntroductionIntroduction


1. Definition of Culture1. Definition of Culture

There are numerous definitions of culture. In this There are numerous definitions of culture. In this text, culture (in a business setting) is defined as text, culture (in a business setting) is defined as being a learned, shared, compelling, interrelated being a learned, shared, compelling, interrelated set of symbols whose meanings provide a set of set of symbols whose meanings provide a set of orientations for members of society.orientations for members of society.

Cultures may be defined by national borders, Cultures may be defined by national borders, especially when countries are isolated by natural especially when countries are isolated by natural barriers.barriers.

Cultures contain subcultures that have little in Cultures contain subcultures that have little in common with one another.common with one another.


2. Elements of Culture2. Elements of Culture Culture consists of many interrelated components. Culture consists of many interrelated components.

Knowledge of a culture requires a deep Knowledge of a culture requires a deep understanding of its different parts. Following are understanding of its different parts. Following are the elements of culture:the elements of culture:– Material life (technologies that are used to Material life (technologies that are used to

produce, distribute, and consume goods and produce, distribute, and consume goods and services)services)

– Language (language has two parts: the spoken Language (language has two parts: the spoken and the silent language)and the silent language)

– Social Interaction (social interactions among Social Interaction (social interactions among people; nuclear family, extended family; people; nuclear family, extended family; reference groups)reference groups)


2. Elements of Culture2. Elements of Culture

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

– Religion (community’s set of beliefs that relate Religion (community’s set of beliefs that relate to a reality that cannot be verified empirically)to a reality that cannot be verified empirically)

– Education (One of the major vehicles to channel Education (One of the major vehicles to channel from one generation to the next)from one generation to the next)

– Value System (values shape people’s norms Value System (values shape people’s norms and standards)and standards)


3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons Cultures differ from one another, but usually share Cultures differ from one another, but usually share

certain aspects. Recent social psychology certain aspects. Recent social psychology research reveal key cultural differences between research reveal key cultural differences between East (high) and West (low) context cultures in how East (high) and West (low) context cultures in how people perceive reality and reasoning (see below).people perceive reality and reasoning (see below).

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

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


Low context

High context

Contextual Background of Various Countries

Japanese

Arabian

Latin American

Spanish

ItalianEnglish (UK)

French

English (US)

Scandinavian

German

Swiss EXPLICIT

IMPLICIT


3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons Geert Hofstede’s Cultural Classification Geert Hofstede’s Cultural Classification

Scheme Scheme (see Exhibits 4-7A & 4-7B):(see Exhibits 4-7A & 4-7B):– Power distance: The degree of inequality Power distance: The degree of inequality

among people that is viewed as being among people that is viewed as being equitableequitable

– Uncertainty avoidance: The extent to which Uncertainty avoidance: The extent to which people in a given culture prefer structured people in a given culture prefer structured situations with clear rules over situations with clear rules over unstructured onesunstructured ones


3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons



– Individualism: The degree to which people Individualism: The degree to which people prefer to act as individuals rather than group prefer to act as individuals rather than group members.members.

– Masculinity: The importance of “male” values Masculinity: The importance of “male” values (assertiveness, success, competitive drive, (assertiveness, success, competitive drive, achievement) versus “female” values (solidarity, achievement) versus “female” values (solidarity, quality of life).quality of life).

– Long-term orientation versus short-term focus: Long-term orientation versus short-term focus: Future versus past and present orientationsFuture versus past and present orientations



Project GLOBE (Global Leadership and Project GLOBE (Global Leadership and Organizational Behavior Effectiveness)Organizational Behavior Effectiveness) – Project GLOBE is a large-scale ongoing Project GLOBE is a large-scale ongoing

research project that explores cultural values research project that explores cultural values and their impact on organizational leadership in and their impact on organizational leadership in 62 countries62 countries (see Exhibit 4-8). (see Exhibit 4-8).

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



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

World Value Survey:World Value Survey: – The WVS is organized by the University of The WVS is organized by the University of

Michigan.Michigan.– The WVS has been conducted multiple times The WVS has been conducted multiple times

and the population covered is much broader and the population covered is much broader than in other similar studies.than in other similar studies.


3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons The WVS encompasses two broad categories: The WVS encompasses two broad categories:

traditional versus secular values, and the quality of traditional versus secular values, and the quality of life (see Exhibit 4-9).life (see Exhibit 4-9).


4. Adaptation to Cultures4. Adaptation to Cultures

Global marketers need to become sensitive to Global marketers need to become sensitive to cultural biases that influence their thinking, cultural biases that influence their thinking, behavior, and decision making.behavior, and decision making.

Self-reference criterion (SRC):Self-reference criterion (SRC): Refers to the Refers to the people’s unconscious tendency to resort to their people’s unconscious tendency to resort to their own cultural experience and value systems to own cultural experience and value systems to interpret a given business situation.interpret a given business situation.

Ethnocentrism refers to the feeling of one’s own Ethnocentrism refers to the feeling of one’s own cultural superiority.cultural superiority.


5. Culture and the Marketing Mix5. Culture and the Marketing Mix

Culture is a key pillar of the marketplace.Culture is a key pillar of the marketplace. Product PolicyProduct Policy: Certain products are more culture-: Certain products are more culture-

bound than other products. Food, beverages, and bound than other products. Food, beverages, and clothing products tend to be very culture-bound.clothing products tend to be very culture-bound.

PricingPricing: Pricing policies are driven by four Cs:: Pricing policies are driven by four Cs:– CustomersCustomers– Company (costs, objectives, strategy)Company (costs, objectives, strategy)– Competition Competition – Collaborators (e.g., distributors)Collaborators (e.g., distributors)


5. Culture and the Marketing Mix5. Culture and the Marketing Mix

DistributionDistribution: Cultural variables may also dictate : Cultural variables may also dictate distribution strategies.distribution strategies.

PromotionPromotion: Promotion is the most visible : Promotion is the most visible marketing mix. Culture will typically have a major marketing mix. Culture will typically have a major influence on a firm’s communication strategy. influence on a firm’s communication strategy. Local cultural taboos and norms also influence Local cultural taboos and norms also influence advertising styles.advertising styles.


6. Organizational Cultures6. Organizational Cultures

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

A model of organizational culture types includes A model of organizational culture types includes the following four cultures (see Exhibit 4-11):the following four cultures (see Exhibit 4-11):– Clan cultureClan culture– Adhocracy cultureAdhocracy culture– Hierarchy cultureHierarchy culture– Market cultureMarket culture


7. Organizational Cultures7. Organizational Cultures


7. Global Account Management (GAM)7. Global Account Management (GAM) The coordination of the management of customer accounts The coordination of the management of customer accounts

across national boundaries are referred to as across national boundaries are referred to as global global account management (GAM).account management (GAM).

Global Accounts’ Requirements:Global Accounts’ Requirements: May require a single point of contactMay require a single point of contact May demand coordination of resources for serving May demand coordination of resources for serving

customerscustomers May push for uniform prices and terms of tradeMay push for uniform prices and terms of trade May have standardized products and serviceMay have standardized products and service May require a high degree of consistency in service May require a high degree of consistency in service

quality and performancequality and performance May support in countries where the company has no May support in countries where the company has no

presencepresence


7. Global Account Management (GAM)7. Global Account Management (GAM)

– Managing Global Account Relationships:Managing Global Account Relationships: Clarify the role of the global account Clarify the role of the global account

management team.management team. Make incentive structure realistic.Make incentive structure realistic. Pick the right global account managers.Pick the right global account managers. Create a strong support network.Create a strong support network. Make sure that the customer relationship Make sure that the customer relationship

operates at more than one level.operates at more than one level. GAM should be flexible and dynamic.GAM should be flexible and dynamic.


8. Global Customer Relationship 8. Global Customer Relationship Management (CRM)Management (CRM)

The process of managing interaction between the The process of managing interaction between the company and its customers is called company and its customers is called customer customer relationship management (CRM):relationship management (CRM):– Helps in customer retentionHelps in customer retention– Helps in richer communication and interactive Helps in richer communication and interactive

marketingmarketing– Helps in tailored servicesHelps in tailored services– Helps to maintain a closer contact with the Helps to maintain a closer contact with the

customerscustomers



Benefits of CRM:Benefits of CRM:– A better understanding of customers’ A better understanding of customers’

expectations and behaviorexpectations and behavior– Ability to measure the customers’ value to the Ability to measure the customers’ value to the

companycompany– Lower customer acquisition and retention costsLower customer acquisition and retention costs– Ability to interact and communicate with Ability to interact and communicate with

customers in countries where access to customers in countries where access to traditional channels is limitedtraditional channels is limited



Guidelines for Successful CRM ImplementationGuidelines for Successful CRM Implementation::– Make the program business-driven rather than Make the program business-driven rather than

IT-drivenIT-driven– Monitor and keep track of data protection and Monitor and keep track of data protection and

privacy laws in those countries where CRM privacy laws in those countries where CRM systems are being used or are in the planning systems are being used or are in the planning stagestage

– A good data is the main pre-requisite.A good data is the main pre-requisite.– Rewards being sent out to customers are Rewards being sent out to customers are

relevant, targeted, and personal.relevant, targeted, and personal.

kotabe gmm4 ppt ch04

Documents