Global Marketing Management A European Perspective

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Global MarketingManagementA European Perspective
Social and Cultural Environments

• Warren J. Keegan
• Bodo B. Schlegelmilch

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Overview

• Basic Aspects of Society and Culture
• Analytical Approaches to Cultural Factors
• Handling Cultural Diversity
• Summary

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Learning Objectives

• Understanding how important cultural and social
  differences are in global marketing
• Learning fundamental concepts that provide an
  understanding of cultural differences
• Understanding where potential conflicts may arise
  in global business relations
• Knowing how cultural differences impact the
  marketing of products and services

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Basic Aspects of Society and Culture

• Culture as ways of living
• Conscious and unconscious values, ideas,
  attitudes, and symbols that shape human behaviour
• Culture is learned, not innate
• Culture defines the boundaries between different
  groups
• All facets of culture are interrelated

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The Search for Cultural Universals

• Universal Mode of behaviour existing in all
  cultures
• Universal aspects opportunities to standardize
  some or all elements of a marketing program
• Cultural universals e.g., athletic sports, body
  adornment, religious rituals, music
• E.g. VIVA music channel employs same fundamental
  concept in all markets, adapted to local
  preferences

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The Anthropologists Standpoint

• Global marketers must understand human experience
  from the local point of view and become insiders
  with cultural empathy
• Global marketers need combination of
  tough-mindedness and generosity
• Tough-mindedness be secure in your own
  convictions and traditions
• Generosity Appreciate the integrity and value of
  other ways of life

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High- and Low-Context Cultures (1)

• Low-context culture
• Messages are explicit
• Words carry most of the information in
  communication
• E.g., United States, Switzerland, Germany

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High- and Low-Context Cultures (2)

• High-context culture
• Less information is contained in the verbal part
  of the message
• More information resides in the context of
  communication (background, associations, basic
  values of communicators)
• E.g., Japan, Saudi Arabia

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High- and Low-Context Cultures (3)

• Factors High-Context Low-Context
• Lawyers - less important - very important
• A persons word - his/ her bond - get it in
  writing
• Time - everything is dealt - time is money
  with in its own time
• Negotiations - lengthy - quick
• Competitive - infrequent - frequentBidding

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Communication and Negotiation

• Global marketers face challenges in
• Verbal communication
• Non-verbal communication
• Knowledge and understanding of cross-cultural
  differences is crucial during negotiations
• Lists can function as guidelines, although
  typologies do not take particular individuals
  into account

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Analytical Approaches to Cultural Factors (1)

• Maslows hierarchy of needs

SELF-ACTUALISATION
ESTEEM
SOCIAL NEEDS
SAFETY NEEDS
PSYCHOLOGICAL NEEDS
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Analytical Approaches to Cultural Factors (2)

• Hofstedes cultural typology
• Cultures of different nations can be compared in
  terms of four dimensions
• Power distance
• Integration into groups
• Masculinity
• Uncertainty avoidance

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Analytical Approaches to Cultural Factors (3)

• Self-reference criterion (SRC) and perception
• Perception of market needs is framed by own
  cultural experience
• Four-step framework
• Define problem in terms of home country norms
• Define problem in terms of host country norms
• Isolate SRC influence. See how it complicates
  problem
• Redefine problem without SRC influence. Solve for
  host country market situation

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Analytical Approaches to Cultural Factors (4)

• Environmental Sensitivity
• The extent to which products must be adapted to
  the culture-specific needs of different national
  markets
• Environmental sensitive products
• Require significant adaptation to the
  environments of various global markets (e.g.,
  food)
• Environmental insensitive products
• Do not require significant adaptation (e.g.,
  integrated circuits)

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Handling Cultural Diversity (1)

• Impact of social and cultural environments on
  marketing industrial products
• Industrial products might exhibit
• Lower levels of environmental sensitivity (e.g.,
  computer chips)
• Higher levels of environmental sensitivity (e.g.,
  government policies influencing purchasing
  behaviour of turbine generators)

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Handling Cultural Diversity (2)

• Impact of social and cultural environments on
  marketing consumer products
• Consumer goods are usually more sensitive to
  cultural diversity than industrial goods
• Culture is changing so rapidly that innovative
  marketing may be able to change established
  consumption patterns rooted in cultural
  differences

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Handling Cultural Diversity (3)

• Example Consumption of Soft Drinks (Y)
• Y f (A, B, C, D, E, F, G)
• A influences of other beverages relative
  prices, quality, tasteB advertising
  expenditure and effectiveness, all beverage
  categoriesC availability of products in
  distribution channelD cultural elements,
  tradition, custom, habitE availability of raw
  materialsF climatic conditions, temperature,
  relative humidity

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Handling Cultural Diversity (4)

• Culture always has been a major source for
  disagreement and misunderstandings
• Cross-cultural complications can lead to costly
  failures
• Companies realize the importance of training and
  supporting people in cultural awareness

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Summary

• Culture has both a pervasive and changing
  influence on each national market environment
• Global marketers must recognize the influence of
  culture
• Nations can be classified as high- or low-context
  cultures
• Maslows hierarchy, Hofstedes typology, and the
  self-reference criterion can provide clues about
  cultural differences and similarities