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International Marketing

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Avoid slang. English as international language. Challenged by. German (Eastern ... even if same words are used. Read the small print. Validating secondary data ... – PowerPoint PPT presentation

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Title: International Marketing


1
International Marketing
  • Tim Beal
  • Lecture 8
  • 8 May 2001

2
Today
  • Culture
  • Market and Environment research and analysis
  • Taiwan video
  • If time
  • Exam 26 June, 9.30-11.30

3
Culture
  • What is culture?
  • Categories of cultures
  • Why is important for international marketing?
  • Role of language
  • What are the implications of culture?

4
What is culture?
  • Many definitions
  • the set of values, assumptions and beliefs shared
    in common by a group

5
Definition
  • values
  • prestige? Money? Respect of parents, peers,
    boss?
  • Assumptions
  • time appointment at 5 means 5, or 5-6, during
    evening
  • Beliefs
  • 4 is an unlucky number, white is symbol of
    puritydeath

6
Boundaries of culture
  • Boundaries are fuzzy
  • Sometimes conterminous with country
  • Samoa, Japan..
  • Many countries are multicultural
  • Stronger linkage with language
  • Chinese, German
  • What about English?

7
Culture only part of story
  • Class
  • Ethnic background
  • Religion
  • Gender

8
Class
  • Rich tend to be more cosmopolitan
  • May have more in common with rich of other
    cultures than poor of own

9
Ethnic background
  • Lots of people are members of multiple cultures
  • eg Americans - Afro-Americans, Asian-Americans,
    Hispanics, WASPS
  • WASP
  • white anglo-saxon protestants
  • New Zealand
  • Maori, Pakeha, Asian, Islander ..all NZ

10
Religion
  • Nationality no longer much guide to religion
  • Only small of Moslems are Arabs
  • Christians strong in Africa, South Korea...

11
Multiple groups - multiple cultures
  • Cultural studies started with small, relatively
    isolated cultures
  • Pacific islands (Margaret Meade in Samoa)
  • IM deals with customers subject to diffuse and
    complex cultural influences
  • Multiple layers of culture
  • eg Chinese NZer, Jewish American
  • Mixed ethnicity

12
Change
  • Culture changes
  • affected by other cultures
  • American values strong influence in IM
  • Contact with foreigners
  • Education
  • Marketing

13
Categorising cultures
  • Hofstedes four primary dimensions
  • Halls High and Low context cultures

14
Hofstede
  • Individualism - collective
  • Power distance
  • social inequality
  • Uncertainty avoidance
  • tolerance of ambiguity
  • Masculinity/femininity
  • assertiveness.caring for others

15
High context - low context cultures
  • Analysis originated by Hall
  • Relative importance of spoken and silent
    languages
  • the more important the silent, the higher the
    context

16
low and high
  • Low context
  • rely on spoken and written language for meaning
  • high context
  • use and interpret more of the elements
    surrounding explicit message
  • Swiss, Germans, ..US..Brits...Italians...Arabs...J
    apanese

17
Japanese
  • Japanese language varies with age, sex and social
    position of speaker and listener
  • same sentence will vary depending on-
  • boy with boy
  • woman with woman
  • child to parent
  • junior to senior or superior

18
Language
  • Strong connection between language and culture
  • Spoken (written explicit)
  • Silent (understood)

19
Languages in IM (I)
  • Some countries have one official language
  • England, France, Germany, Japan
  • Some have two
  • Wales, Canada, Belgium, NZ
  • Some have three or more
  • Switzerland, China, Russia

20
Languages in IM (II)
  • Difference between spoken and written language
  • most marked with Chinese
  • separation between written and spoken language
  • also a factor in English
  • UK, USA have strong regional dialects that are
    not reflected in standard written language
  • could be an issue in TV adverts

21
Languages in IM (III)
  • Official status may be important
  • reflection of large number of speakers
  • legal requirements (eg Canada)
  • Official status may reflect political situation
    rather than commercial realities
  • Welsh, Maori, Irish

22
Who speaks what?
  • First language (mother tongue)
  • Chinese 1000
  • English 350
  • Spanish 250
  • Bahasa Indonesia 225
  • Hindi 200
  • Arabic 150
  • Bengali 150

23
International languages
  • English is main business language
  • Used as lingua franca
  • often second best
  • not mother tongue of either person
  • may mask miscommunication
  • English now comes in many forms
  • American, British, Indian, Singapore...
  • Importance of global English
  • Avoid slang

24
English as international language
  • Challenged by
  • German (Eastern Europe, Turkey)
  • Spanish
  • Chinese(Pacific Asia)
  • Hindi (India)
  • vernacular renaissance
  • Vernacular websites

25
Danger of using English
  • May mask substantial differences in business
    practice and culture
  • May give English native speaker false sense of
    superiority and security

26
Problems of translation
  • Translation is a skilled business
  • In general, translation should be done INTO
    mother tongue
  • Need to verify translations
  • Cultural nuances can be crucial

27
Silent language
  • non-verbal communication
  • what actions, signs and symbols communicate
  • Hall claims that 90 of message in high-context
    cultures is communicated silently

28
Aspects of silent language(I)
  • Time
  • importance of being on time varies
  • Space
  • distance between people
  • Things
  • material possessions. Flaunting wealth

29
Aspects of silent language(I)
  • Friendship
  • importance of personal relationships differ
  • Agreements
  • based on laws or informal customs?

30
Self-reference criterion
  • Automatically refer to our own cultural values
  • Need to step aside and identify cultural aspect

31
James Lee - 4 step approach
  • Define problem/goal in own cultural traits,
    habits norms
  • Define in foreign terms
  • Isolate the SRC aspect
  • Redefine the problem

32
Cultural sensitivity
  • Some goods and services are more sensitive to
    culture than others
  • Closer to religious and family practices less
    likely to be changed by marketing
  • Food and drink often culturally sensitive
  • eg forbidden foods such as pork, beef, dog
  • manufactures less culturally sensitive
  • TV, cars, etc

33
Cross-cultural analysis (I)
  • Determine relevant motivations
  • what needs are fulfilled?
  • Determine behaviour patterns
  • how frequently are these products purchased?
  • Determine what cultural values are relevant to
    product
  • is product in conflict with cultural values?

34
Cross-cultural analysis (II)
  • Decision-making
  • who makes decisions? consensus? autocratic?
  • Determine appropriate promotion
  • what is valued? what is taboo?
  • eg dogs in Islamic cultures (NZ education video)
  • Determine appropriate distribution
  • What is available, what is expected?

35
Culture and IM
  • Dont assume anything
  • Every aspect of marketing mix must be re-examined
  • Utilise members of target culture
  • But dont assume that they are typical

36
Market and Environmental research and analysis
  • Environment broader term than market
  • eg wine market in China
  • Start broad then narrow
  • start with examination of broad business
    environment
  • Then focus on characteristics of wine market
  • customer tastes, distribution etc

37
research and analysis
  • Research - getting and structuring information
  • Analysis - using the information to answer
    specific questions
  • eg what price will consumers pay for my bottle of
    chardonnay?

38
(No Transcript)
39
Structure
  • Environmental frameworks
  • overview of environmental and market analysis
  • environmental analysis for screening
  • identifying promising markets
  • Use of indicators
  • pc GDP
  • Market research companies

40
Environmental frameworks
  • PEST
  • SLEPT
  • C factors
  • Overlap
  • Link with SWOT

41
PEST - political
  • Political
  • Examples?
  • Examples
  • Malaysian government and sending students abroad
  • Attitude of government to imports from NZ (lamb,
    apples)
  • Boycotts (South Africa, Japan)
  • protection of local industry

42
PEST - economic
  • Economic
  • Examples?
  • Examples
  • size of economy
  • growth rate
  • type of economy (market orientation?)

43
PEST -Social/cultural
  • Social/cultural
  • Examples?
  • Examples
  • do people drink wine?
  • Only men? What age? Class?
  • Effect of religion

44
PEST - Technological
  • Technological
  • Examples?
  • Examples
  • electrical standards (240V 110V?)
  • telecommunications
  • repair and servicing facilities

45
SLEPT
  • add Legal
  • Social/cultural, Legal, Economic, Political,
    Technological

46
SLEPT -legal
  • Legal
  • Examples?
  • Examples
  • can your goods be imported?
  • (eg Alcohol banned)
  • packaging and labelling requirements
  • permitted additives

47
C factors
  • Culture
  • separate and important factor
  • Competitors
  • Currencies
  • Specific companies may develop own frameworks
  • Key is to identify factors which will have impact
    on your marketing

48
Overview of environmental analysis
  • Researching global markets Philip Cateora
  • majority of mistakes could be avoided with better
    information
  • Information is the key component in developing
    successful marketing strategies
  • General information for market opportunity
    assessment (environmental)
  • Specific information for 4 Ps

49
International information
  • Information becomes more crucial in international
    markets
  • constraints of time and cost
  • Even large corporations face constraints
  • Research is the art of the possible
  • never enough time or money
  • Quality information is expensive

50
Objectives
  • Marketing research is the systematic gathering,
    recording, and analysing of data to provide
    information useful in marketing decision making

51
Systematic and useful
  • systematic
  • what you do for one market you should do for the
    others to enable comparisons
  • learn from mistakes
  • gain experience - build up institutional
    knowledge
  • Useful
  • not knowledge for its own sake
  • tool for decision making

52
Tools and techniques
  • Basically the same whatever the market
  • Used for same purposes
  • marketing decisions
  • Questions vary
  • Availability of techniques, data, etc vary

53
Types of research
  • General information about country, area, market
  • country ltgt market
  • information about trends to forecast marketing
    requirements
  • Specific market information

54
General to specific
  • Broad picture
  • which countries drink/import wine?
  • Select promising countries for further research
    (screening)
  • Go into more depth
  • perhaps exclude further countries (iterative
    process)

55
Ending up
  • End with specific answers for marketing decision
    making
  • Which distributor should we use?
  • What should our pricing strategy be?
  • What should the package look like?

56
What happens in practice?
  • Information and analysis is expensive
  • IM extends the boundaries for what is required
  • Reluctance

57
International domestic
  • When companies go from domestic to international
    they need to spend money on things that werent
    necessary before
  • They knew their customers, the laws, the
    geography
  • Learning curve
  • But domestic markets becoming more multicultural
    gtgt requiring more research

58
Examples
  • Kid R us in Puerto Rico
  • Didnt realise that kids wore uniforms to school
  • Clothes too heavy for hotter climate
  • US auto manufacturers exported left-hand drive
    cars to Japan
  • Japanese drive on left

59
Research process
  • Define problem and objectives
  • Determine sources of information
  • Compile information
  • Analyse, interpret and present the results

60
Define problem and objectives
  • Self reference criterion blinds us to questions
  • Questions are usually based on assumptions
  • eg hot milk-based drinks

61
hot milk-based drinks
  • UK - evening, sleep-inducing
  • Thailand - morning for stimulation
  • US - either morning or evening but only in cold
    weather
  • Need to step back to ask the right questions

62
Availability of data
  • Varies considerably from country to country
  • Lot in US..not so much in China
  • Data collected by government, trade associations,
    private companies
  • Data may be collected but not made available
  • eg security reasons

63
Reliability of data
  • Healthy scepticism
  • Why is data collected?
  • eg tax
  • What are incentives for falsification?
  • tax, customs, etc
  • World exports gt world imports
  • Why?
  • Tariffs apply to imports not exports

64
Comparability of data
  • Time periods may vary
  • Categories may be different
  • even if same words are used
  • Read the small print

65
Validating secondary data
  • Who collected and why?
  • why would it be falsely reported?
  • For what purpose was it collected?
  • How collected (methodology)?
  • Is data consistent?
  • internally
  • with other know data

66
Secondary gtgtPrimary
  • Secondary data starting point
  • then move on to primary data
  • Market selection example of process at work
  • Paper by Nick Ashill and Graeme Solloway
  • Discuss next week under strategy

67
Examples of indicators
  • Political stability
  • Economic growth rate
  • pc GDP
  • Disposable income

68
pc GDP
  • pc GDP/GNP most popular single measure of wealth
  • Country A - pc GDP US30,000
  • Country B - pc GDP US300
  • Customers in A are 100 times richer than in B
  • But are they?

69
Limitations of pc GDP
  • pc - hence an average
  • distribution not equal
  • Even in poor countries rich and middle class
    can be affluent markets

70
distribution of wealth
  • distribution of wealth varies
  • social class
  • ethnicity
  • may be related to class
  • geographical location
  • eg Chinese coastal provinces
  • Auckland versus Invercargill

71
Exchange rate fluctuations
  • As currency fluctuates against US so does
    apparent GDP
  • real changes less than currency fluctuation
  • Lot of economy is domestic
  • leads to questioning of appropriateness of
    trade-based exchange rates

72
Purchasing power parity rates
  • measures relative purchasing power of currencies
    over same types of goods and services
  • Still uncertain but gives better indication of
    real wealth
  • Differences between two calculations can be
    dramatic

73
China
  • conventional calculation - US300-370
  • PPP - I770-1044
  • Moreover, disposable income high in relation to
    pc GDP
  • rents, etc. low
  • Unequal distribution of income
  • Undeclared income

74
China - market opportunity?
  • gtgtmuch more market opportunity than conventional
    pc GDP figures suggest
  • Same happens in many other poor countries
  • eg India - 100-120 million middle class
  • More data in the reader

75
Market research in action
  • Examples in reader, course webpage
  • Quality information is expensive
  • But lack of quality information is more expensive
  • missed opportunities
  • expensive mistakes

76
Today and next week
  • Today
  • Culture
  • Environmental analysis
  • Market research
  • Next week
  • Global strategy and distribution
  • Korea
  • video
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