Cultural Dynamics in Assessing Global Markets

Chapter 4

Importance of Culture to International Marketing Efforts

“Culture gets in the Way”eBay example

• Japan’s cultural ideas about selling “castoffs” and buying from strangers (garage sales)

• France has laws restricting operations except to a few “government-certified auctioneers”

Importance of Culture• Successful businesses must be open to the

learning of cultures of different countries• Culture effects every part of marketing (pricing,

promotion, placing distribution, packaging…)

Definition of Culture

Definitions of Culture:Authors definition: “the sum total of knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by humans..”Geert Hofstede: culture as the “software of the mind… provides a guide for humans on how to think and behave”Edward Hall: cultural differences are invisible and that if marketers ignore them it often huts both companies and careers.

Exhibit 4.4 “Origins, Elements, and Consequences of Culture

Adaptation occurs through• Socialization,Acculturation & Adaptation:

– Through growing up and adjusting to new cultures

Origins of culture come from• Geography ( ex. climate connection to GDP)• History• Political Economy• Technology• Social Institutions (family, religion, school,

media government corporations

Exhibit 4.4 “Origins, Elements, and Consequences of Culture

Geert Hofstede 4 dimensions of Culture (exhibit 4.5 pg. 105)

1. Individualism/Collectivism Index (IDV)– Scores High in IDV reflect more individualistic

behaviors (U.S., Australia, Great Britain)

2. Power Distance Index (PDI)• Measures the power between superiors and

subordinates within a social system – Higher PDI scores are hierarchical (Arab countries,

Guatemala, Mexico, Venezuela)– Tend to have general mistrust of others

Exhibit 4.4 “Origins, Elements, and Consequences of Culture

Geert Hofstede 4 dimensions of Culture (exhibit 4.5 pg. 105)

3. Uncertainty Avoidance Index (UAI)• Measures tolerance of uncertainty and ambiguity

– Higher UAI scores mean intolerance of ambiguity and distrust new behaviors and ideas (Japan, France, Greece)

4. Masculinity/Femininity Index (MAS)• Focuses on assertiveness and achievement• Proven least useful in measuring values within

cultures

Elements of CultureRituals

Patterns of behavior and interactions that are learnedSee Crossing Borders 4.1 pg. 107 (“It’s Not the Gift That Counts, but How You Present it”)

SymbolsLanguage & linguistic distance (exhibit 4.5)Aesthetics (art, folklore, music, drama and dance)

Beliefs Myths, superstitions, or other cultural beliefs

Thought Processes

Cultural Knowledge2 Types of Cultural Knowledge

1. Factual knowledge• Straightforward fact about a culture

– See Crossing Borders 4.3 pg. 113 (“Gaining Cultural Awareness…”)

2. Interpretive knowledge• Feeling that requires some insight as to how a culture

exists• It is dependent upon experiences and can lead to

incorrect conclusions when using (SRC)

Cultural Sensitivity and Tolerance• Successful International marketing companies are

sensitive to differences in cultures and view them objectively

Cultural Change

“Cultural Borrowing”Countries often times “borrow” the solutions from other cultures and countries that have experienced similar types of issues and problems• Similarities can be an Illusion:

– Need to be careful borrowing from other cultures where differences may be so subtle that the international marketer overlooks very important information

Cultural Change

Resistance ChangeCultures will accept or resist change based on how disruptive the change

Planned & Unplanned Cultural ChangeInternational Marketers have two options when introducing new products/services to a culture

• 1. They can wait for the change to occur• 2. They can cause the change

– McDonald’s example in Japan

Cultural Change

Consequences of Innovation or Change

International Businesses can bring about functional or dysfunctional change• When product diffusion occurs, social

change may also take place as a result of the acceptance of that product

• Businesses do not intend to bring dysfunctional change, but it can happen

– Nestle example in Nicaragua