PP 03 Social

Global Marketing Management

Warren J. Keegan

Chapter 3 Social and Cultural Environments

Keegan: Global Marketing Management Chapter 3/ 2

Overview

Basic Aspects of Society & CultureAnalytical Approaches to Cultural Factors Impact on Industrial Products Impact on consumer ProductsCross-Cultural ComplicationsSummary


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 behaviourCulture is learned, not innateCulture defines the boundaries between different

groupsAll facets of culture are interrelated


The Search for Cultural Universals

Universal = Mode of behaviour existing in all culturesUniversal aspects = opportunities to standardize some

or all elements of a marketing programCultural universals: athletic sports, body adornment,

religious rituals, music Increasing travel & improving communications are

leading to convergence


The Anthropologist’s Standpoint

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

Need combination of tough-mindedness & generosityTough-mindedness: be secure in your own convictions &

traditionsGenerosity: Appreciate the integrity & value of other ways of life


High- and Low-Context Cultures (1)

Low-context culture:Messages are explicitWords carry most of the information in communicationUnited States, Switzerland, Germany



High-context cultureLess information is contained in the verbal part of the

messageMore information resides in the context of communication

(background, associations, basic values of communicators)Japan, Saudi Arabia



Factors High-Context Low-ContextLawyers - less important - very importantA person’s word - his/ her bond - ‘get it in writing’ Time - everything is dealt - ‘time is money’

with in its own timeNegotiations - lengthy - quickCompetitive - infrequent - frequent

Bidding


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)

Maslow’s hierarchy of needs

SELF-ACTUALISATION

ESTEEM

SOCIAL NEEDS

SAFETY NEEDS

PSYCHOLOGICAL NEEDS



Maslow’s hierarchy of needs – Asia Equivalent

STATUS

ADMIRATION

AFFILIATION

SAFETY NEEDS

PSYCHOLOGICAL NEEDS



Hofstede’s cultural typologyCultures of different nations can be compared in terms

of four dimensionsPower distance Integration into groupsMasculinityUncertainty avoidance



Self-reference criterion (SRC) and perceptionPerception of market needs is framed by own cultural

experienceFour-step framework

Define problem in terms of home country normsDefine problem in terms of host country norms Isolate SRC influence. See how it complicates problemRedefine problem without SRC influence. Solve for host

country market situation



Environmental SensitivityThe extent to which products must be adapted to the

culture-specific needs of different national marketsEnvironmental sensitive products

Require significant adaptation to the environments of various global markets

Environmental insensitive productsDo not require significant adaptation


Handling Cultural Diversity (1)

Impact of social & cultural environments on marketing industrial products

Industrial products might exhibit Lower levels of environmental sensitivity Higher levels of environmental sensitivity



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



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



Culture always has been a major source for disagreement and misunderstandings

Cross-cultural complications can lead to costly failuresCompanies 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

Maslow’s hierarchy, Hofstede’s typology, and the self-reference criterion can provide clues about cultural differences & similarities

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PP 03 Social