Chapter 2

Cultural Dynamics in Assessing global Markets

Presented by: Dr. John V. Padua

International Marketing15th edition

Philip R. Cateora, Mary C. Gilly, and John L. GrahamMcGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

4Chapter ObjectivesAt the end of this topic, students are expected to understand the following:

• The importance of culture to an international marketer

• Definition and origins of culture• The elements of culture• The impact of cultural change and

cultural borrowing• Strategies of planned and unplanned

changeRoy Philip 4-2

4Introduction (1 of 2) • Culture is pertinent to the study of

international marketing.• Culture is pervasive in all marketing

activities – pricing, promotions, channels of distributions, product, packaging and styling.

• The priority of needs and wants and the manner in which they are satisfied are functions of culture that eventually dictate styles of living.

• Markets constantly change and markets and market behavior are part of a country’s culture.

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4Introduction (2 of 2) • One cannot truly understand how markets

evolve or how they react to a marketer’s effort without appreciating that markets are a result of culture.

• In fact, markets are a result of the three-way interaction of a marketer’s efforts, economic conditions, and all other elements of the culture.

• Marketers are constantly adjusting their efforts to cultural demands of the market, but they are also acting as “agents of change” whenever the product or idea being marketed is innovative.

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4Definitions and Origins of Culture

• Traditional definition of culture – Culture is the sum of the values, rituals,

symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation.

• Individuals learn culture in three ways– Socialization (growing up)– Acculturation (adjusting to a new culture)– Application (decisions about consumption

and production)Roy Philip 4-5

4Geography

• Exercises a profound control– Includes climate, topography, flora, fauna, and

microbiology– Influenced history, technology, economics,

social institutions and way of thinking

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4History

• History - Impact of specific events can be seen reflected in technology, social institutions, cultural values, and even consumer behavior

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4Political Economy and Technology

• Political Economy - Three approaches to governance competed for world dominance– Fascism– Communism– Democracy/free enterprise

• Technology– Jet aircraft, air conditioning, televisions,

computers, Internet, etc.– None more important than the birth control

pill– Although America has the best healthcare

technology, people in many countries have greater longevity; lifestyle choices are important

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4Social Institutions (1 of 4)

• Family• Religion• School • The media• Government• Corporations

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4Social Institutions (2 of 4)

• Family– Nepotism – Role of extended family– Favoritism of boys in some cultures– Gender equality is changing

• Religion - Major Religions– First institution infants are exposed to outside

the home– Impact of values systems– Misunderstanding of beliefs– An American women jailed in Saudi Arabia for

sitting with man at StarbucksNextRoy Philip 4-10

4Major Religions

• Christianity – 2 Billion followers• Islam – 1.2 Billion followers• Hinduism – 860 Million followers• Buddhism – 360 Million followers• Confucianism – 150 Million followers

BackRoy Philip 4-11

4Social Institutions (3 of 4)

• School – the most important social institution– Direct link between a nation’s literacy rate

and its economic development– Difficult to communicate with a market

when a company must depend on symbols and pictures

• The media – it has replaced family time• TV and the Internet• American educational system produces a

lower percentage of college graduates than 12 other countries including Russia, Japan, and France

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4Social Institutions (4 of 4)

• Government - influences the thinking and behaviors of adult citizens– Propaganda through media– Passage, promulgation, promotion, and

enforcement of laws• Corporations - most innovations are

introduced to societies by companies– Spread through media– Change agents

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4Elements of Culture (1 of 4)

• Values• Rituals• Symbols• Beliefs• Thought processes

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4Elements of Culture (2 of 4)

• Cultural values – Geert Hofstede– Individualism/Collectivism Index• Reflects the preference of behavior that

promotes one’s self interest– Power Distance Index• Measures the tolerance of social inequality

– Uncertainty Avoidance Index• Measures the tolerance of uncertainty and

ambiguity– Cultural Values and Consumer Behavior

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4Elements of Culture (3 of 4)

• Rituals – patterns of behavior and interaction that are learned and repeated– Marriages , funerals, baptisms, graduations

• Symbols– Language• Linguistic distance – relationship between

language and international marketing– Aesthetics as symbols• Insensitivity to aesthetic values can offend,

create a negative impression, and, in general, render marketing efforts ineffective or even damagingNext

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4Language

• According to www.ethnologue.com: – A total of 7,413 known living languages

exist in the world– 311 being spoken in the U.S.; 297 in

Mexico, 13 in Finland, and 241 in China– EU has 20 official languages – India alone has 452 known languages!

BackRoy Philip 4-17

4Elements of Culture (4 of 4)

• Beliefs– Superstitions play a large role in a society’s

belief system and therefore, to make light of superstitions in other cultures can be an expensive mistake

– The number 13 in the western hemisphere is considered unlucky, where as the number 8 in China connotes “prosperity”

– The practice of “Feng Shui”• Thought processes– Difference in perception between the East and

the West• Focus vs. big-picture

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4Cultural Sensitivity and Tolerance

• It is imperative that the marketer be attuned to the nuances of culture so that a new culture can be viewed objectively, evaluated and appreciated– Cultures are not right or wrong, better or

worse, they are simply different– The more exotic the situation, the more

sensitive, tolerant, and flexible one needs to be

– There must be an appreciation of how cultures change and accept or reject new ideas

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4Cultural Change

• Dynamic in nature – it is a living process• Paradoxical because culture is

conservative and resists change– Changes caused by war or natural

disasters– Society seeking ways to solve problems

created by changes in environment– Culture is the means used in adjusting to

the environmental and historical components of human existence

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4Cultural Borrowing• A responsible effort to learn from others’

cultural ways in the quest for better solutions to a society’s particular problems– Imitating diversities of other cultures make

cultures unique– Contact can make cultures grow closer or

further apart• Habits, foods, and customs are adapted to

fit each society’s needs• The marketer must eventually gain

cultural empathy Roy Philip 4-21

4Similarities – An Illusion• A common language does not guarantee a

similar interpretation of word or phrases– Difference between British and American

English– http://www.woodlands-junior.kent.sch.uk/c

ustoms/questions/americanbritish/index.html

• Just because something sells in one country doesn’t mean it will sell in another– Cultural differences among member of

European Union a product of centuries of history Roy Philip 4-22

4Resistance to Change• Gradual cultural growth does not occur

without some resistance– New methods, ideas, and products are held

to be suspect before they are accepted• Resistance to change varies between

cultures• The most important factor in determining

how much of an innovation will be accepted is the degree of interest in the particular subject, as well as how drastically the new will change the old

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4Planned and Unplanned Cultural Change

• Determine which cultural factors conflict with an innovation

• Change those factors from obstacles to acceptance into stimulants for change

• Marketers have two options when introducing and innovation to a culture– They can wait (unplanned change)– They can cause change (planned change)

• Cultural congruence – Marketing products similar to ones already on the

market in a manner as congruent as possible with existing cultural norms

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