Socio-Cultural Environment and Its Impact on International Marketing

Presented by:Aakanksha SharanSwati TiwariShivani Singh

Topics to be Discussed What is Culture? The elements of Culture Social and culture environment of USA Brands launched in India by USA company Social and culture environment of India Brands launched in USA by Indian company Difference between Indian and US culture

What is Culture?

Terpstran (1987) has defined culture as follows:

"The integrated sum total of learned behavioral traits that are manifest and shared by members of society."

Culture, therefore, according to this definition, is not transmitted genealogically. It is not, also innate, but learned.

The Elements of Culture

Intangible Language Education Religion Attitudes and Values Social Organization

Tangible Technology and Material Culture

The Elements of Culture

Hofstede’s Contribution Power Distance Individualism Masculinity Uncertainty avoidance Integration Moral Discipline Human Heartedness

Language

Language reflects the nature and values of society. There may be many sub-cultural languages like dialects which may have to be accounted for. Some countries have two or three languages.

In Zimbabwe there are three languages - English, Shona and Ndebele with numerous dialects.

In Nigeria, some linguistic groups have engaged in hostile activities. Language can cause communication problems - especially in the use of media or written material. It is best to learn the language or engage someone who understands it well.

Language

In a low context culture spoken language carries the emphasis of the communication i.e. what is said is what is meant. Examples include Australia and the Netherlands.

In a high context culture verbal communications tend not to carry a direct message i.e. what is said may not be what is meant. So with a high context culture hidden cultural meaning needs to be considered, as does body language. Examples of a high context cultures include Japan and some Arabic nations.

Education

Education refers to the transmission of skills, ideas and attitudes as well as training in particular disciplines. Education can transmit cultural ideas or be used for change, for example the local university can build up an economy's performance.

Education In the People's Republic of China a nationwide system

of public education is in place, which includes primary schools, middle schools (lower and upper), and universities. Nine years of education is compulsory for all Chinese students.

In Finland school attendance is compulsory between the ages of 7 and 16, the first nine years of education (primary and secondary school) are compulsory, and the pupils go to their local school. The education after primary school is divided to the vocational and academic systems, according to the old German model.

In Uganda schooling includes 7 years of primary education, 6 years of secondary education (divided into 4 years of lower secondary and 2 years of upper secondary school), and 3 to 5 years of post-secondary education.

Education

Education levels, or lack of it, affect marketers in a number of ways:

· advertising programmes and labelling· girls and women excluded from formal education (literacy rates)· conducting market research· complex products with instructions· relations with distributors and,· support sources - finance, advancing agencies etc.

Material Culture

Material culture refers to tools, artifacts and technology. Before marketing in a foreign culture it is important to assess the material culture like transportation, power, communications and so on. Input-output tables may be useful in assessing this.

Material Culture

Trevor Baylis launched the clockwork radio upon the African market. Since batteries were expensive in Africa and power supplies in rural areas are non-existent. The clockwork radio innovation was a huge success.

China's car market grew 25% in 2006 and it has overtaken Japan to be the second-largest car market in the world with sales of 8 million vehicles. With just six car owners per 100 people (6%), compared with 90% car ownership in the US and 80% in the UK, the potential for growth in the Chinese market is immense

Aesthetics Aesthetics refer to the ideas in a culture

concerning beauty and good taste as expressed in the arts -music, art, drama and dancing and the particular appreciation of colour and form.

African music is different in form to Western music. Aesthetic differences affect design, colours,

packaging, brand names and media messages. For example, unless explained, the brand name

FAVCO would mean nothing to Western importers, in Zimbabwe most people would instantly recognise FAVCO as the brand of horticultural produce.

Religion Religion provides the best insight into a society's

behavior and helps answer the question why people behave rather than how they behave.

Religion can affect marketing in a number of ways: · religious holidays - Ramadan cannot get access to

consumers as shops are closed.· consumption patterns - fish for Catholics on Friday· economic role of women - Islam· caste systems - difficulty in getting to different costs for segmentation/niche marketing· joint and extended families - Hinduism and organizational structures;· institution of the church - Iran and its effect on advertising, "Western" images· market segments - Maylasia - Malay, Chinese and Indian cultures making market segmentation

Religion

In China in 2007 (which was the year of the pig) all advertising which included pictures of pigs was banned. This was to maintain harmony with the country's Muslim population of around 2%. The ban included pictures of sausages that contained pork, and even advertising that included an animated (cartoon) pig.

In 2005 France's Catholic Church won a court injunction to ban a clothing advertisement (by clothing designers Marithe and Francois Girbaud) based upon Leonardo da Vinci's Christ's Last Supper.

Values and Attitudes

Values and attitudes vary between nations, and even vary within nations. So if you are planning to take a product or service overseas make sure that you have a good grasp the locality before you enter the market.

This could mean altering promotional material or subtle branding messages. There may also be an issue when managing local employees.

For example, in France workers tend to take vacations for the whole of August, whilst in the United States employees may only take a couple of week's vacation in an entire year.

Values and Attitudes In 2004, China banned a Nike television commercial showing

U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity.

In 2006, Tourism Australian launched its ad campaign entitled "So where the bloody hell are you?" in Britain. The $130 million (US) campaign was banned by the British Advertising Standards Authority from the United Kingdom. The campaign featured all the standard icons of Australia such as beaches, deserts, and coral reefs, as well as traditional symbols like the Opera House and the Sydney Harbour Bridge. The commentary ran: "We've poured you a beer and we've had the camels shampooed, we've saved you a spot on the beach. We've even got the sharks out of the pool,". Then, from a bikini-clad blonde, come the tag line: "So where the bloody hell are you?"

Social Organization

What is the role of women in a society? How is the country governed - centralized or devolved? The level influence of class or casts upon a society needs to be considered. For example, India has an established caste system - and many Western countries still have an embedded class system. So social mobility could be restricted where caste and class systems are in place. Whether or not there are strong trade unions will impact upon management decisions if you employ local workers.

Hofstede’s Contribution

Power Distance Individualism Masculinity Uncertainty avoidance Integration Moral Discipline Human Heartedness

Social and culture environment of India

India is so diverse, with so many different ethnic, religious and linguistic communities, that it is hardly possible to speak of its culture and society, better to speak of its multiplicity of cultures and societies.

Language and Education

India is a mosaic of linguistic communities with hundreds of spoken languages and dialects belonging to four linguistics families.

Indo-European language, with its Sanskrit roots, which has shaped Hindi -the official language mostly spoken in Northern India, Dravidian languages, such as Tamil, which predominate in the southern States, as well as pockets of Austro-Asiatic and Tibeto-Burman languages.

Attitudes and Value

There is a hierarchical social structure, the caste system which, as a composite social structure, is unique to India.

It is at the root of the social life that is in the family, traditionally joint and patriarchal, a third unique model of adaptability of India.

Demography of Population

The population of India is so diverse that it has challenged the capacity of the Modern State to handle the cohabitation of the numerous different ethnic, religious and linguistic communities

 India is the second most populous country in the world, with over 1.18 billion people (estimate for April, 2010), more than a sixth of the world's population

Contd….

Already containing 17.31% of the world's population, India is projected to be the world's most populous country by 2025, surpassing China, its population exceeding 1.6 billion people by 2050.

India has more than 50% of its population below the age of 25 and more than 65% hovers below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India's dependency ratio should be just over 0.4

Religion

India is also a religious mosaic, with Muslims, Christian, Sikhs, and a myriad of others minorities (Buddhist, Jain, Parse, Jew, etc.) coexisting with the Hindu majority (82% of the population).

The Muslim minority which makes up 12.5 % of the national population, therefore over a 150 millions people, makes India the third Muslim country in the world

The Christian community is far less important demographically (2,3%) but politically significant .

Mc Donald’s

Much higher degree of adaptability. 40% vegetarians- Vegetarian selection to

suit Indian tastes. Maharaja Mac replaced Big Mac, Chicken

Patty. Respect for local culture- Special Indian

Menu, No beef or pork items in the menu. McAloo burger, Veg Salad Sandwich,

McMasala & McImli sauces

Contd….

Common Menu- Chicken Nuggets, Fillet-O- Fish,fries, sodas, shakes.

Garlic free sauces to get in “hard core”vegetarian customers.

Re-formulated own products using spices favoured by Indians.

Eggless sandwich sauces, Soft serves & McShakes.

Freshest chicken, fish and vegetable products Only vegetable oil used as a cooking medium

Failures of brands

Failure of Kellogg’s due to high prices and not matching the Indian pallet.

KFC was banned in India in 1997, due to the launching of unacceptable beef products in India.

Pepsi’s ‘come alive’ slogan was considered offensive in some places as to the locals it meant ‘come out of the grave’.

Brands to Launched

Stores for Diesel and Paul & Shark brought to India by Reliance Brands

Departmental store chain Shoppers Stop plans to launch the Playboy brand and around six other international labels in Indian market

Wal mart is coming to India in a joint venture with Bharti.

Contd……

Tesco planning to set up a reatil outlet in India.

Hugo Boss watches, the MGI Luxury Asia Pacific Ltd and it has recently signed a special contract with the Titan Industries in order to do the marketing and distribution of the Hugo Boss watches in India in a better way. 

Contd……

International brands such as Arredo Classic, Art Design Group, B.T.C. International, Bastex, Bizzarri, Cantori, Desirée, Effebiquattro, Elledue Arredamenti, Flou, Friulintagli Industries, Gardesa, Girasole, Gold Line, Gori Cucine, Laboratorio del Marmo, Lumina, Matteograssi, Mepsystem, Mida, Mobilificio Tre Ci, Nord Light,  Paola Lenti, Pordenone Export, Presotto, Reflex, Riva Mobili d'Arte,  Scavolini, Segis, Sicis, Stellare Mobili 2, Stival, Tonin Casa , Tonon & C., Uffix, Vitemper are looking to enter the Indian market

Social and culture environment of USA

Ethnic Diversity- America is home to people of every background,

every color, and every origin. 76% are White (also called Caucasian in English), 14%

are Hispanic, 12% are Black or African American, 4% are Asian, 0.8% are Native American or Alaska Native, and 0.1% are Pacific Islander

Self Reliance – Many Americans are taught to be self-reliant at an

early age. To understand real world things, many parents

encourage their children to work part-time jobs after school to learn the value of work and money.

approximately 74 % of Americans 18 years of age and over live independently of their parents.

Gender Equality A large number of women in America hold full time

jobs outside the home. parenting is seen as the responsibility of both the

mother and father, In a recent poll, 65% of married men in America say

they split household chores equally with their spouses, but only 47% of married women polled agreed!

Religion Some of the most common religions in America are

Protestant (52%), Catholic (24%), Judaic (1%), Muslim (1%), and Mormon (2%)

approximately 44% of Americans attend a place of worship at least once a week.

According to a recent Gallup poll, almost 9 out of 10 Americans said that they believe in God or a higher power, but only 54% of those surveyed would label themselves as “religious”

The “Melting Pot” America is often referred to as “the melting pot” due

to its unique blend of different cultures, nationalities, and backgrounds.

American population comprises approximately 53.3% are from Latin America, 25% from Asia, 13.7% from Europe, and 8% from the rest of the world (US Census 2002)

18% of the population speaks a language other than English at home

After English, the most commonly spoken language is Spanish, with 14.3% of the population claiming it as their primary language

No official language exists at Federal Level in US.

The Mobile Society Of residents born in the United States, 68% currently reside

in the same state where they were born. Reasons for moving include going away to college, starting

a new job, lower cost of living, better weather, desire for a different lifestyle, etc.

Education The literacy rate in America is 97% 85% of Americans have a high school education or higher

and 27% have a bachelor’s degree or higher It has been reported that 79% of all undergraduates in

America work while taking classes. Family

Median age for getting married for women is 25.3 years whereas for men is 26.9 years.

Approximately 50% of marriages in the U.S. end in divorce. American couples have an average of 2 children Many families in the suburbs live in private homes, but

apartment living is common in larger cities.

Individualism Leaving people by themselves and not asking many

personal questions is often a sign of respect in America culture.

Also, for a person to act competitively is considered normal and even desirable. Individual success is highly valued.

Charity/Volunteerism Charity and volunteer work are American traditions. 63% of Americans donated to charity.

Brands

Himalya International: India's first frozen food company which exports its products to North America, has launched real fruit blended yogurts in Metro cities under brand name Himalya Fresh.

Hamam: one of the oldest Indian beauty soap brands, has created itself as a trustworthy brand in the market. It is a natural soap category with low pricing.

It was owned by Tata Oil Mills Company (TOMCO). It was taken over by Hindustan Unilever Limited when it

acquired TOMCO in the year 1993.

Brands

Kissan:The preserved food division of United Breweries Group (UB Group) was not doing well as compared to its liquor division.

UB Group sold its food section along with Kissan brand to Hindustan Unilever Limited.

Kwality: This brand of ice cream found in every nooks and corner was a pioneer in the field of ice cream manufacturing in India.

Kwality later ventured out from ice cream sector to restaurants.

In 1995, Kwality tied up with Hindustan Unilever Limited, move that took this Indian brand to international market.

Brands

Lakme: It started as a subsidiary of Tata Group in 1952.  This Indian cosmetic brand was not making any profit.

Tata Group took the second option and Lakme Limited formed a joint venture of 50-50 with Hindustan Unilever Limited in 1996

In year 1998 sold this brand to Hindustan Unilever Limited, a conglomerate in consumer goods sector.

Viva and Maltova: This favorite Indian heath drink was brought by GlaxoSmithKline Beecham Consumer Healthcare Linited  from Jagatjit Industries in the year 2000

it has become a market leader in Indian health drink market.

Difference between Indian and US culture

Indians are very much family oriented.

Indians respect family values

Indians are more competitive

Indians are a lazy lot working places and

stores are located near the Indian home

Education costs more in India

Food is cheaper in India

The Americans are individual oriented.

the individual values gets prominence than the family values.

Americans have great regard to time and its value

Americans are less competitive.

Education cost is less compared to india

Food is expensive

Conclusion

Thus, from all the examples discussed above we can conclude that socio-cultural environment has a lot of impact on the international marketing and also on the 4P’s of marketing.

Thank You!