culture and global marketing 3422

8/6/2019 Culture and Global Marketing 3422

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Culture & Global

Marketing


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Importance of Culture

Culture affects market demand.

Managerial behavior is driven by his/her

cultural knowledge Knowledge of Native culture is useful when

dealing with home markets but it has littlevalue when dealing in foreign markets

Culture affects the nature of businessnegotiations

Culture acts as a hidden entry barrier, but itcan be overcome with cultural sensitivity,hard work & quality


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Culture Defined

Culture is the underlying value framework

that guides an individuals behavior.

Culture is reflected perceptions, socialinteractions, business interactions

Culture guides the selection of appropriate

responses in social situations Culture is a learned behavior. People learn

dos & dont as they grow up


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Culture across Countries

Some countries are multicultural:- India,China, US, Russia. These countries haveseveral sub-cultures.

While many are monocultural. UK, France,Germany, Columbia, Peru etc.

Culture is the Silent Language inInternational businessRelationship with Time, Space & Energy

High Context Low context cultures

Body language


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Need for cultural Adaptation

Self-Referencing : Process by which onejudges others actions with reference to onesown native culture. Usually Right &Wrong decisionsOften leads to wrong opinions, Mistakes

Avoid self-referencing mistakes by cultural

adaptation. Cultural adaptation is a learned skill & must

be mastered by Global Managers


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Hofstedes Cultural

Dimensions Individualism Vs Collectivism

Masculine Vs Feminism

Uncertainty Avoidance Vs Risk Taking

Power Distance

Confucian Dynamism: Long term outlook,

work ethic of Chinese


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Gannons Metaphors

Gannons Metaphors offer a mental anchor for

manger who has to deal with a new culture and

cannot foresee contingencies

It is a simplified, holistic representation of a culture:

USA- Football: Individualistic, specialized, competitive

China Harmony : Roundness, Harmony & Fluidity

Germany Symphony : Discipline under a leader,Skilled workers working together, a well oiled machine

India Cyclical Hindu Philosophy: Life follows a cyclical

pattern


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Rapailles Archetypes

Dr Rapaille simplified cultures for easierunderstanding by explaining it in 7 steps ofdecoding culture:

1. People dont buy products, People buyrelationships

2. Culture can make or break yourmarketing plan,sales orpublic relationshipplans

3. Time, Space & Energy are the building blocks ofall cultures

4. Design & create products/Services to solve theright problem


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Rapailles Archetypes

The more Global, The more Local: Globalcompanies have to localize. Quality is the keyto succeed, but word quality means differentthings in different countries:USA : It works

Japan: Perfection

Germany: Made according to the standard

France: Quality = Luxury India: Quality = Reliable

Cultural Awareness is the key to globalsuccess


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Culture: How to do Business

The aim of business is same everywhere, but theway to do it varies across countries

Global Managers must be able to handle Culture

shock Similar business situations in different countries

does not imply similar opportunities. E.g: Nestle inAfrica

Culture influences Management skills. So in a newcountry, its Back-to-Basics w.r.t learning localculture


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Culture & Managerial Skills

Culture defines a set of acceptable &unacceptable behaviors, which forms the basis of

Way of doing Business Managers learn how to do business. This process

is called Enculturalization and SocializationHow consumers behave

How to manage people, supplier & subordinates

What guides the consumer behavior

Acceptable Behavior in business is usuallyacceptable behavior in society


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Culture & Managerial Skills

Successful mangers tend to be good at

acceptable behaviors and avoid

unacceptable behaviors Lessens frompast managerial experience in

other countries has little value in other

cultures.

Success & Failures in the past will be repeated

elsewhere, before learning the local implications


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Managerial Styles

Cultures tend to generate differentmanagerial styles. Management styles isheavily influenced by home country culture.

Japan High Context culture influences mangersto read body language while in US, a lowcontext culture tends to ignore body language

Managers are usually inadequately trainedto handle different cultures.

Time, Money pressure compromise training.


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Cultural Dilemmas

Managers face cultural dilemmas due to

differences in cultures

Universalism Vs Particularism : Doing the right thing or

doing things right?

Individualism Vs Collectivism in decision making

Neutral Vs Emotional

Specific Vs General : Is it just business or the whole

person, individual or the entire firm

Attitudes towards Time

Attitudes towards Environment


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Culture & Negotiations

Global business involves cross cultural

negotiations, establishing relationships with

suppliers, customers, distributors & otherpartners

Know whom you are dealing with

In some cultures, 10AM means Sometime in

the morning. Actual time on the clock has

little significance.


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Cross Cultural Negotiations

First Establish Trust. Skilled negotiatorsidentify genuine behavior of theircounterparts and work towards establishingtrust

Know their Silent Language

Body behavior

Cultural signalingCulturally sensitive subjects

Know what to say and when to say


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Stages of Negotiations

1. Non-Task Sounding: An initial period to knoweach other better

2. Task related exchange ofInformation: Anextended Period where main issues are broughtup & positions clarified

3. Persuasion: Attempt to make the other side see

yourpoint of view. Explaining positions, givingevidence & questioning otherpartys position.

4. Concessions & Agreements: Concessions aremade and agreements are signed


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Limits to Cultural Sensitivity

When not to be culturally sensitive

Global Culture: Globalization is creating a global

business culture. In business it may be inappropriate to

dress in a local way.Cultural Sensitivity must be inline with the business

model. If the product/Service offering does not meet the

buyer requirement, no amount of cultural sensitivity will

helpCultural Sensitivity does not mean giving up ones own

culture. Successful manager will know both the cultures


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Culture in B2B markets

Business Marketing Tasks

Cultural Conditioning

Organizational Culture Relationship Marketing

Culture & Networks


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Business Marketing Tasks

Establish the global firm as a dependable supplier

operating in the local market

Understand buyers position

People who influence the buying decision

Role of the suppliers product/Service in the buyers

business success

This will make the local buyer treat the global

supplier as a local firm.

E.g: Cognizant in US, BASF in US, ABB in India


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Cultural Conditioning Buyers tend to develop different styles of dealing

with vendorsEqual or unequal relationship between supplier and

buyer

Cultures openness to change influences buyersattitude toward RiskChanging vendors is seen as a Risk

Often Buyers prefer local suppliers

Terminating Local supplier carries bad publicity &political risks for the buyer

CEO or high executive from the vendor firmmayhave to visit prospective buyer as a signal of

commitment


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Organizational Culture

Organizational culture of the buyer

influences the buying decisions

Single Buyer & decision maker

Engineers, staff who use the product

Topmanagement which signs the contract

Power Brokers who influence the final decision

Global firmmust be aware of the decision

making process


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Relationship Marketing B2B sales is usually more than one single sale

Relationshipmarketing means marketing effortsinvolving various personalized services, creation ofnew & additional services and customizing a firms

offering to the needs of the buyer Build trust for a long term business relationship

Upfront costs are high but it acts as a competitiveadvantage & an entry barrierAdopt Buyers viewpoint

Accept & Demand transparency

Grow with the relationship

Be Proactive


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Culture & Networks

Relationshipmarketing creates a Networkbetween various buyers and sellers over aperiod of time.

Independent companies would have built updependencies with one another creating asemi-independent companies

Network of companies often share common

culture Outside companies find the network hard topenetrate, Network form a barrierE.g: Keiretsu network in Japan, Glaxing in China

Military-Industry network in US


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Foreign Entry

Culture defines The way to do Business

Learn & analyze local cultures before entry

Dos & donts

Identify trustworthy local agents ormiddlemen

Identify danger signals

Know the strengths & weakness as perceivedby the local culture

Establish trust & friendships

New Culture is an operational risk


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Local Marketing

Culture affects

Consumer behavior

Local demand

Buying decisions

Brand Image

First hand experience in local markets is a

must Lessons from home country may not be

applicable abroad


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Global Management

Culture influences managerial styles and

management decisions

Global managers must be knowledgeable of both

cultures (Local & Home)

A new global business culture is emerging

Sensitivity to local issues is necessary for success

Global coordination is a must for global companies

culture and global marketing 3422

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