Introduction

Culture has been defined in a variety of ways. Hoftstede, one of the most well known
researchers of culture, defined it as "the collective programming of the mind which
distinguishes the members of one group or category of people from another." Even though
culture resides in people’s minds, its effect is greatly felt in the decisions people make and the
kind of products they buy. Companies must therefore aim to strike a fine balance between
standardisation and customisation to ensure retention of brand identity as well as addition of
branding elements to cater to the preferences of the local consumers. However, there have
been plenty of cases where companies have failed to launch a product in a new cultural region.
The fact that established brands such as McDonald’s and Walmart have faltered in cultural
analysis time and again proves how the cultural aspect of marketing has been ignored. This
has not only cost these companies a large portion of their wealth but also potential entry into a
big market. Hence for a marketer, a deep understanding of culture is essential in order to
launch a product in a new cultural setting.

Marketing Mix forms the basis of the marketing strategy of any product. It is defined as the set
of marketing elements that the marketer can control. McCarthy in 1960 suggested that the set
broadly consisted of 4 Ps- Price, Product, Promotion and Place, but can include other factors
as well. All of these elements of the marketing mix along with the marketing plan are very
crucial in determining how a product fares in a new cultural environment. 

In this paper, we will analyse a case study along with various other examples to see how the
elements of the marketing mix need to be altered according to the culture. We will then try to
develop a step by step list of factors that a marketing manager should keep in mind when
launching a product in a new cultural setting.

Literature Review

The world is increasingly becoming a smaller place and globalisation has taken over in the last
few decades. With Levitt’s proposition (1983) of global companies leading the world in the near
future on account of increasing globalisation, a lot of scholars felt that consumer demands
would now converge and could hence be standardised. However, while globalisation has led to
reduction of technological gap and convergence of overall incomes; consumer choices and
decisions are more contrasting than ever. As observed by De Mooji (2000) and Hofstede (2002),
a large difference can still be found between consumer values and consumer choices. Nisbett
in his paper (2001) suggests how culture can alter thought patterns due to certain cognitive
processes of one culture being more developed than others, thereby encouraging the study of
cross cultural differences. A lot of frameworks exist that explain cross cultural differences in
consumer behaviour, Hofstede’s framework (1984) being one of the most popular. Used by
researchers of all disciplines, his framework consists of five cultural dimensions- individualism/
collectivism, masculinity/femininity, power distance, uncertainty avoidance and long term
orientation.

Individualism/Collectivism :

A culture is collectivist if there exists a high degree of interdependence among individuals.

There is a tendency to include relatives and other members in making decisions pertaining to
one individual. Individualism, however, refers to a society with a low degree of interdependence
where people mostly tend to decide for themselves or their immediate families. As noted by
Stijn Werners (2017), the usage of the hard sell or soft sell approach depends greatly on the
type of culture. While the hard sell strategy works in most American and European countries
wherein you look forward to directly approaching the consumer, collectivist countries like India
and Japan require a soft sell approach wherein a lot of time is invested in gaining the trust of
consumers and creating a good personal relationship.

Masculinity/Femininity :

A masculine society is one which prefers qualities such as heroism, assertiveness and material
rewards in society. In masculine societies, women are more competitive and assertive. A
feminine society however prefers qualities such as cooperation, modesty, and quality of life
over the masculine qualities. In such societies, men and women both share modest and caring
views. From a marketing perspective, it becomes very essential to evaluate the type of culture
in societal issues as sensitive as this so that an appropriate marketing strategy can be used.
For example, one would opt for a neutral approach towards marketing in a low masculine
culture to appeal to both the genders equally.

Power distance :

There exists a strong hierarchical system in societies with a high power distance. Since top
level managers and heads of families are in charge of decision making, the job of marketers is
targeting and appealing these people rather than the entire population. In contrast, for cultures
with a low power distance, it is essential to target and appeal to the entire range of people who
will come to a consensus after discussing among themselves.

Uncertainty avoidance :

The degree to which a culture can tolerate ambiguity determines how a marketer customises
his product and promotional strategies. As suggested by Bert. Markgraf (2019), for a culture
that has a low ambiguity tolerance, it is important to clearly state the special features,
advantages and guarantees that come with the product. However for a group that is relatively
tolerant, generalisations about the product along with implied and estimated benefits are more
important.

Long-term and short-term orientation :

Long-term orientation focuses more on the future rather than on short-term goals while
attaching very little value to tradition, while short-term orientation values traditions and
immediate goals and obligations more than goals intended for the long-term. From a marketing
perspective, it is essential to take traditions into account and customise the marketing strategy
accordingly for a short-term oriented culture. For a culture with a long-term orientation, it is
important to showcase the long term benefits associated with the product.

As is evident from the above discussion, culture can influence consumer’s response to pretty
much everything ranging from price of the product to the advertisements aired by the
company, which makes customisation according to culture of prime importance.

Case Study : Kellogg’s Failure in India

Kellogg’s has truly become a powerful global brand in the last couple of decades or so.

It had net sales amounting to $13.54 billion in the year 2018, as per the annual report published
by the company. But, its journey to global domination was not easy. It had to face many problems
along the way; especially during its entry in developing markets.

The case study analyses how Kellogg’s entry to India was a total failure and how the company
then changed its marketing mix and other input variables; by catering to the local culture and
taste; to rectify its initial lapse in judgement.

Kellogg’s entered the Indian market in 1994 after India liberalised its economy in early 1990s. It
came with the ideology that acquiring even 2% of India’s 900 million population would be more
lucrative than its entire US operation, assuming same consumption levels. At the beginning, it
invested $65 million into launching its most successful products ‘cornflakes’ and ‘wheat-flakes’.
Early sales were promising but the company soon realised that consumers were not re-buying
their products and the sales stagnated. The above can be explained by the company’s flawed
marketing mix.

Product :

The primary reason for Kellogg’s misadventure was that it did not modify its products before
launching them in India. It introduced the same products it was offering in the US without taking
into consideration the native taste and eating preferences. Furthermore, India, being as culturally
diverse as it is, experiences different eating habits in different parts of the nation. Secondly,
Indians inherently consume boiling hot milk; which made the flakes soggy. This, obviously, did not
go well with the consumers.

Price :

The price of Kellogg’s cornflakes at the time of its launch in India was approximately twice the
price of its domestic competition, Mohan Meakin’s ‘Mohun cornflakes’. It also introduced only a
single packaging option of 450g. It did not consider purchasing habits of the locals. People could
want a smaller pack to try the new product or just because they don’t want to spend so much in
one instance.

Place :

Kellogg’s launched its products primarily in the top-end stores in metropolitan cities. This
alienated the majority of India’s population from buying its products.

Promotion :

Kellogg’s tried to depict its products as a healthy alternative to India’s fundamental breakfast;
which varies from paranthas to idlis and poha depending on where you are in the country. In doing
so, it tried to change consumer habits embedded deep in the society. It tried to portray itself as a
substitute to regular breakfast. Such a change definitely does not take place overnight, if ever.

As a result of this erroneous marketing mix, the sales took a hit and forced the company to rethink
its marketing strategy. It focused on realigning the product with the consumer needs. It changed
its marketing mix as follows to accommodate India’s taste and eating preferences.

Product :

In an attempt to grow its market share in India, Kellogg’s decided to introduce new products into
the market. It launched ‘Chocos’ in 1996 and ‘Frosties’ in 1997. These products resonated with
the consumer needs and were favourably adopted by the customers. The company also started
looking at other product groups like biscuits to incorporate the slow growth in cereals. It now tried
to customise its product offerings in accordance with the local culture and taste.

Price :

Learning from its mistakes and having gained some experience of the Indian market, Kellogg’s
revised its pricing strategy by decreasing prices of its products to some extent. It replaced
cardboard box packaging with pouches to achieve this. It also introduced more packing sizes to
tap all classes on India. Smaller pouches (60 grams) attracted a large consumer base.

Place:

Kellogg’s changed its push strategy and started rolling out its products to second tier cities also.
They were made available to people in over 60 cities as, as opposed to just metropolitans earlier,
which helped the company to invade a new consumer base.

Promotion:

Kellogg’s now tried to portray itself as a ‘fun’ brand in contrast to the earlier image of ‘health’. It
also tried to remove the ‘premium’ tag associated with its brand by making its products available
to the masses. It simultaneously modified its advertising strategy. It came up with new tag-lines
and localised its campaigns. These were accompanied by ‘below-the-line’ promotional activities
like offers on various types of cereals.

Even though Kellogg’s now holds more than 60% of the Indian market, it is facing stiff
competition from domestic and international companies. To grow more, it has started investing
more on research and development and on brand image.

Research gap :

As observed in the literature review, although there has been plenty of research on the dimensions
of culture and on marketing as separate disciplines, there exists a lack of research that links the
two and studies the effects of culture on marketing management. This leads us to the problem
statement, “What are the factors that a marketing manager needs to keep in mind while extending
the company and its products to new countries and cultures in order to maintain a
standardisation- customisation continuum?”

Research objective :

Given the research gap and the problem statement, the paper has the following research
objectives:

• The paper will identify various cultural factors that play a key role in the success or failure of a
product in a new cultural environment.

• The paper will offer a step by step analysis of how the elements of the marketing mix and
marketing plan need to be altered to accommodate the cultural aspects of a consumer group.

Research Methodology and Problem Definition:

Segmentation :

Companies need to target their goods and services to specific segments across different cultures
and countries while expanding globally. This can be done using various methods. Some of them
are listed below.

• Age segmentation

• Behavioural segmentation - consumers’ knowledge, attitudes, or product or service usage

behaviours (e.g. heavy product users, light product users).

• Benefit segmentation

• Gender segmentation

• Geographic segmentation

• Income segmentation

• Intermarket segmentation

• Occasion segmentation

• Psychographic segmentation (e.g. personality, values).

• Sagacity segmentation


Choosing the right product or service, price, promotional program, and distribution channel are all
areas that can be dictated by the needs of consumer groups identified through market
segmentation.

• While introducing the product to a new country, one needs to check if the country has the
infrastructure to support the product and if the people can access it.

• Having identified potential countries, select countries that meet certain qualifying criteria
relevant to the product/service, like the appropriateness or values associated with the product.

• Then, micro-segment the market in the selected criteria by using cluster analysis and studying
customer behaviours, buying patterns and responses. 


These steps will give the company a dynamic approach to international marketing that will help
them segment the market based on consumers and at the same time align their product to the
values and beliefs associated with this new country and its people.

Example:

There does not exist a proper market for electric vehicles in India since basic infrastructure like
charging stations and policies supporting electric vehicles are yet to be developed.

Similarly, instant or ready-to-eat food is not an established market in India as Indian people value
freshly cooked meals and home cooked meals. Food has a huge significance in an Indian
household and an instantly cooked meal would never count as a proper meal, say breakfast/
lunch/dinner, but rather a solution in case of emergencies or foreign visits.

Targeting:

Targeting the right consumer segment is essential to ensure that people use the product and
promote it further.Having identified the user base, targeting influencers and early adopters can
help establish the product in the market, especially in cases where a lot of local players already
exist.

Example:

Citibank tried to target the high income bracket initially but realised that India is a country where
fortune lies at the bottom of the pyramid and hence they shifted from limited banking to mass
banking.

Positioning:

A product or service needs to be positioned in the minds of the people in order to motivate them
to try and then buy it. While marketing internationally, one needs to ensure that the way people
see the product complies with their values and habits as well as is acceptable to their culture, but
at the same time the product stands out and the consumer can differentiate the product from the
rest.

Example:

Hindustan Unilever Limited is a success story of how a company saw the opportunities in tapping
the needs and desires of the people lying at the bottom of the pyramid to position themselves as
a product that can help you achieve those aspirations. HUL identified a consumer segment that
wanted to spend less money on their products and were okay to have it in less quantities as well.
They came up with the sachet concept, which became an instant hit as people could now afford
to buy their products, like shampoos, conditioner, etc. at their convenience for as small a price
like 1 Rupee. Even though we know the unit cost is higher, but at least the people could have the
satisfaction of trying the product, maybe just for a special occasion. Not everyone can afford the
expensive conditioner bottles but a 1 Rupee sachet is affordable and satisfactory too. This
opened up the rural and poor consumer segments to try global brands and new products. This
also allowed HUL to be established as a quality and trustworthy brand in the minds of people.

Suppose a global organisation wants to open a bank in Muslim majority country then it can not
function in a normal way because, in Islam, money has no intrinsic value – money, therefore,
cannot be sold at a profit and is permitted to be used as per sharia only. The Islamic Law or
Sharia prohibits paying any fee for renting money (called riba) for specific periods of time. It also
prohibits any sort of investment in businesses that are considered haraam or against the
principles of Islam. So some changed need to be made. The company has to operate the banking
system in the form of Islamic Banking which works on the principle of interest-free banking.

Product :

The fundamentals of marketing tell us that the product has to be based on the needs and desires
of the consumers, which are influenced by culture to a very large extent. Therefore, when one
extends operations to new regions, a deep understanding of culture, buying habits and religion is
very essential.

Sometimes the core need satisfied by the product at a global level becomes irrelevant and
useless in a given cultural setting. At other instances, product formalisation is at fault, with
culturally unacceptable logos or slogans. Therefore it is very important to customise your product
according to the local needs of people. MTV coming up with Indian pop and Bhangra music in
India and food outlets such as Dominos and McDonalds customising their menu according to the
tastes of local people are good examples of maintaining the standardisation-customisation
continuum.

Therefore, when moving to new regions and cultures, companies need to:

• Customise the product according to the needs of local people for the product to be relevant in
the given culture. Examples include Dominos and Pizza Hut coming up with Tandoori Paneer
and Chettinad toppings in India.

• Consider the religious scenario of the region in question to make sure the product does not
offend any religious beliefs.

• Make sure the product is in line with the laws and regulations of the region.

Place :

When you move to an international market, more factors need to be considered while deciding on
the distribution network, since you need to distribute and move your product in a totally new
environment. Distribution and supply negotiations would involve working with many different
agencies, like exporters, and one would then decide on some terms. For example, when the
Chinese are exporting good to France, they settle on terms like CFR (Cost and Freight) to get
extra perks in the agreement. But it works out for them because many ports in France are owned
by the Chinese and hence it’s profitable for them to target such a country when going global. Our
product needs to be at the right place at the right time, and that’s why in a new market you must
know all about the business practices and distribution network systems. A company needs to
analyse the distribution network and different channels in the market where they want to take their
product. For example Japan has about 5 different types of wholesalers involved in the distribution
chain.

Also, the company needs to decide how they want to distribute and sell their products, which can
be via businesses, retailers, wholesalers or directly to the consumers. Logistics associated with
your product like expected sales volume, demand etc. need to be analysed because they greatly
influence things like mode of transportation, transportation costs, storage space and costs, raw
material and profit margins.

Price :

With increasing globalisation, effective pricing has become a major task. While on one hand the
price of a product in a country has to be carefully decided keeping various economic factors in
mind (such as transport cost, tariff duties, exchange rate fluctuations etc), the availability of
products online at relatively lower prices  has increased pricing pressures on the other.

Apart from this, various cultural considerations also need to be taken into account. For example,
according to a research done on perceived price fairness in China and USA by Bolton, Hean Tat
Keh and Joseph W. Alba, it was observed that the Chinese (collectivists) are much more sensitive
to in-group price differentials rather than out-group as compared to the Americans (individualists).
Also, Ackerman and Tellis in 2001 found that the Chinese are a lot more status conscious
especially when it comes to the products they use for public consumption as opposed to those
used for private consumption. Clearly, there is a visible difference in the way collectivist and
individualist societies view prices. While consumers in individualist cultures are much less
concerned with prestige and culture and give more importance to value for money and
economically best value, the price of a product for collectivist consumers relates to their status
symbol and prestige, which is something they are generally very conscious about.

Therefore, when moving to a new cultural environment:

• One needs to identify if the culture is individualist or collectivist, and decide on the pricing
strategy accordingly.

• For collectivist societies, one would prefer keeping relatively high prices after building a positive
relationship with the consumers. For individualist societies however, one needs to constantly
monitor its rivals and decide the price of the product such that it is economically most valuable.

Promotion :

Being the element of marketing mix where most companies falter, promotional strategies need to
be carefully adapted according to the language and culture of a region. Making sure that the
translations deliver the intended message without causing any offence to the consumers has
proved to be a big task if we go by the number of failures in cross cultural brand promotion in the
past. KFCs translation of ‘finger lickin’ good’ going wrong in Hong Kong (translated to ‘eat your
fingers off’) and American Airlines Spanish translation of ‘fly in leather’ going wrong to mean ‘fly in
the nude’ are all examples of how translation errors can make big companies seem like total fools.

The choice of colours also varies with cultures and hence needs to be taken care of. Countries in
the Asia Pacific region prefer colours like orange and yellow which invoke excitement, or blue and
green which convey a sense of trust and calmness. Colours may also be associated with multiple
meanings, for example red can indicate danger but is also a sign of love and romance. The
meaning conveyed by a colour varies with culture as well, e.g. brides in the UK wear white while it
white is worn by mourners in India.

Apart from this, it is also important to advertise the product from an appropriate channel (Radio,
television, electronic or word of mouth) which could vary from region to region. Hence, before
moving to a new culture, the following factors must be kept in mind:

• All promotional material has appropriate translations which convey the same meaning as
intended.

• The colours used while promoting the product are chosen keeping the cultural aspects in mind.

• Promotion is done through an appropriate advertising channel, which may vary across cultures
and countries.

Results and Discussion :

Topic General info Examples Inference

Product -  Based on the - MTV India: Initially focussed -Important to customise the
needs and desires of only on Western rock, rap product according to the culture
people, which vary and pop but has now for it to be useful and relevant in
with varying cultures.
 accommodated Indian the new region

- Both product core genres such as bhangra. -Essential to keep religious

and formalization - McDonald’s has aspects in mind and not offend
need to be analyzed customised its burgers to any religious group
before extending to Indian tastes and offers
new cultural regions. chicken and fish burgers
instead of beef. In Mexico
McDonald’s burgers come
with chilli sauce.      
- Nike outraged a Muslim
group by bringing out a logo
for a line of trainers that
looked like Allah’s name in
Arabic
Place - The distribution - In Japan, selling products - The distribution channel should
channel used for the via local partners is preferred be carefully decided keeping
product should be due to high value of cultural aspects in mind; sales
such that the product interpersonal relationship in through local partners are
is easily accessible to Japanese culture.                preferred in cultures that value
local consumers.
- In Nordic countries, online interpersonal relationships while
- Channel distribution sales models are more online selling is preferred in
is based on division valued than local partners. individualistic cultures that opt for
of labor which in turn convenience.
is a function of the
culture of a region.

Price - Price is determined - Ackerman and Tellis (2001) - Price creates a different degree
by the  customer found out  that Chinese of perceived value among
perceived value of consumers are very consumers in different cultures.

the product.
conscious with regard to - Price delivers strong symbolic
- Competition and gifts and the products they meanings (e.g., status, prestige,
target groups need to use for public consumption belonging) to people in
be considered in than they are for products collectivistic societies whereas
addition to factors meant for private consumers in an individualistic
such as cost of consumption. society may look for the
transport, tariffs and economically best option.

import duties, - Price must ultimately it must

exchange rate cover your costs, contribute to
fluctuations, the your image by communicating the
general economic perceived value of your product,
situation of the counter the competition’s offer,
country and avoid deadly price wars.

Promotion - Promotional - American Airlines’ Spanish - Promotional strategies need to

strategies that work translation of the slogan ‘fly be carefully adapted according to
well in one country in leather’ read ‘Vuelo en the culture of the place. 

may not appeal to Cuero’, with ‘en cuero’ being - Factors such as language
people of another.
a slang term for ‘in the nude’. translation and choice of color
- Strategies need to - KFC’s ‘finger lickin’ good’ need to be considered while
be adapted slogan is used the world developing promotional
according to culture over, but its Chinese strategies.
to be able to reach translation in Hong Kong
the masses in an came out as ‘eat your fingers
inoffensive, effective off ’. Needless to say, most
manner. customers opted for the fries
instead.            
- Red is considered lucky in
China and is worn by brides
in India, whilst white is worn
by mourners in India and
China and brides in the
United Kingdom.
 Segmentation - Companies must - India does not have the - Segment on basis of
target their products basic infrastructure to demography and not geography

and services at support the launch of electric - Identify the countries that have
specific segments vehicles  
the infrastructure to support the
across different product and qualify a certain
countries. - India does not have a criteria

culture to consume Ready to - Develop micro-segments

 eat/instant food

Targeting - Target audience are - When Citibank entered the - Focus market research efforts
the people who use Indian market, the firm’s on identifying influencers and
or influence the use targeted only high-income early adopters.
of the product. earners. But it soon realised
that it made sense to do
target the masses.

Conclusion :

This paper has been able to identify the various cultural factors that influence the success or
failure of a product launched in a new region. Through the case study on Kellogg’s, the paper
establishes how elements of the marketing mix are influenced by culture, and how proper analysis
and customisation can eventually lead to the success of the product.

The paper also cites other examples that link Hofstede’s cultural dimensions and elements of the
marketing mix, eventually providing a step by step analysis of the factors to be kept in mind while
altering the elements in the marketing mix to accommodate the culture of the consumer group.

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