INTERNATIONAL MARKETING

( MS-213 ) By

DR. LOKESH JINDAL

Overview
Basic Aspects of Society & Culture Analytical Approaches to Cultural Factors Impact on Industrial Products Impact on consumer Products Cross-Cultural Complications Summary

Learning Objectives
Understanding how important cultural & 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

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

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: athletic sports, body adornment, religious rituals, music Increasing travel & improving communications are leading to convergence

The Anthropologists Standpoint

Must understand human experience from the local point of view & become insiders with cultural empathy

Need combination of tough-mindedness & generosity

Tough-mindedness: be secure in your own convictions & traditions Generosity: Appreciate the integrity & value of other ways of life

High- and Low-Context Cultures (1)

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

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) Japan, Saudi Arabia

Communication and Negotiation

Challenges in:
Verbal communication Non-verbal communication Knowledge & understanding of cross-cultural differences is crucial during negotiations You can buy in your home-country language but you need to learn your customers language to sell.

Analytical Approaches to Cultural Factors (1)

Maslows hierarchy of needs SELF-ACTUALISATION ESTEEM SOCIAL NEEDS SAFETY NEEDS PSYCHOLOGICAL NEEDS

Analytical Approaches to Cultural Factors (2)

Maslows hierarchy of needs Asia Equivalent STATUS ADMIRATION AFFILIATION SAFETY NEEDS PSYCHOLOGICAL NEEDS

Analytical Approaches to Cultural Factors (3)

Hofstedes cultural typology Cultures of different nations can be compared in terms of four dimensions
Power distance (Hong Kong, France v/s Germany, Austria) Individualist v/s Collectivist Culture (US, Europe v/s Japan, Asia) Masculinity v/s Femininity ( Japan, Austria v/s Spain, Taiwan, Netherlands) Uncertainty avoidance (Greece, Portugal v/s Southeast Asia)

Analytical Approaches to Cultural Factors (4)

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

Analytical Approaches to Cultural Factors (5)

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

Environmental insensitive products

Do not require significant adaptation

Handling Cultural Diversity (1)

Impact of social & 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

Handling Cultural Diversity (2)

Example: Consumption of Soft Drinks (Y) Y = f (A, B, C, D, E, F, G)
A = influences of other beverages relative prices, quality, taste B = advertising expenditure and effectiveness, all beverage categories C = availability of products in distribution channel D = cultural elements, tradition, custom, habit E = availability of raw materials F = climatic conditions, temperature, relative humidity

Handling Cultural Diversity (3)

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

Cultural Diversity
Why People Fail:
Ethnocentric Orientation
Ignorance Arrogance Time Factor

Summary
Culture has both a pervasive & 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 & similarities

THANK YOU