Cultural aspects affecting Promotional strategies in International Markets
Sr. No. Particulars Page Number
1. Globalization 3
2. Cultural Aspects Affecting Product 8
3. Cultural aspects affecting packaging 9
4. Grey Markets 10
5. Survey 12
6. Managing Cultural Diversity
Globalization (or Globalization) refers to the increasingly global relationships of culture, people,
and economic activity. It is generally used to refer to economic globalization: the global
distribution of the production of goods and services, through reduction of barriers to international
trade such as tariffs, export fees, and import quotas. Globalization contributes to economic
growth in developed and developing countries through increased specialization and the principle
of comparative advantage. The term can also refer to the transnational circulation of ideas,
languages, and popular culture.
Critics of globalization allege that globalization's benefits have been overstated and its costs
underestimated. Critics argue that it has decreased inter-cultural contact while increasing the
possibility of international and intra-national conflict.
International trade in manufactured goods increased more than 100 times (from $95 billion to
$12 trillion) between 1955 and 2007. China's trade with Africa rose sevenfold during 2000–07
By the early part of the 21st century more than $1.5 trillion in national currencies were traded
daily to support the expanded levels of trade and investment.
Survival in the new global business market required companies to upgrade their products and use
technology skill fully in order to survive increased competition.
According to Jagdish Bhagwati, a former adviser to the U.N. on globalization, although there are
obvious problems with overly rapid development, globalization is a very positive force that lifts
countries out of poverty. According to him, it causes a virtuous economic cycle associated with
faster economic growth.
The costs and benefits of globalization have not been equally distributed across regions and
nations. For example, manufacturing employment in the Midwestern section of the United States
declined while growing exponentially in developing countries.
Opportunities in rich countries attract skilled workers from poor countries, leading to brain
drains. For example, nurses from poorer countries come to the US to work. This phenomenon
cost Africa over $4.1 billion for the employment of 150,000 expatriate professionals
annually The Associated Chambers of Commerce and Industry estimates costs to India of
$10 billion per year.
In some developing countries labor policies provide less protection than in developed countries.
One example is the use of sweatshops by manufacturers. Clothing makers such as The Gap and
Nike were accused of contracting with factories that used child labor in violation of local and US
In the USA, the National Labor Committee proposed the Decent Working Conditions and Fair
Competition Act, which would legally require companies to respect human and worker rights by
prohibiting the import, sale, or export of sweatshop goods. Specifically, these core standards
include no child labor, no forced labor, freedom of association, right to organize and bargain
collectively, as well as the right to safe working conditions.
Business process outsourcing
In rich countries, business process outsourcing has been a double-edged sword; it enabled
cheaper services but displaced some service-sector jobs. However, in lower-cost locations such
as India, the outsourcing industry is the "primary engine of the country’s development over the
next few decades, contributing broadly to GDP growth, employment growth, and poverty
World Bank figures indicate that the number of people living on less than $1 per day-the
international standard for extreme poverty-dropped from 1.25 billion (29%) in 1990 to 986
million in 2004 (18% of the larger total population).
Critics allege globalization increased income inequality, both between and within nations. On 7
out of 8 metrics, income inequality increased in the twenty years ending 2001. Also, "incomes in
the lower deciles of world income distribution have probably fallen absolutely since the 1980s".
The article was skeptical of the World Bank's claim that the number of people living on less than
$1 a day had held steady at 1.2 billion from 1987 to 1998, because of biased methodology.
A chart that gave the inequality a very visible and comprehensible form, the so-called
'champagne glass' effect, was contained in the 1992 United Nations Development Program
Report, which showed the distribution of global income to be very uneven, with the richest 20%
of the world's population controlling 82.7% of the world's income.
Distribution of world GDP, 1989
Quintile of Population Income
Richest 20% 82.7%
Second 20% 11.7%
Third 20% 2.3%
Fourth 20% 2.4%
Poorest 20% 0.2
In December 2007, World Bank economist Branko Milanovic questioned previous empirical
research on global poverty and inequality because improved estimates of purchasing power
parity indicated that developing countries were worse off than previously believed. Milanovic
remarked, "literally hundreds of scholarly papers on convergence or divergence of countries’
incomes have been published in the last decade based on what we know now were faulty
numbers." The new data held considerable implications estimates of global inequality and
poverty levels. Earlier inequality was estimated at around 65 Gini points, versus 70 using the
The globalization of the job market had positive and negative consequences in developed
countries. White-collar workers (engineers, attorneys, scientists, professors, executives,
journalists, consultants) were able to compete successfully in the world market and command
high wages. For example, Boeing Corp. is the US' largest exporter. In late 2011 the company
closed orders worth more than $50 Billion for US aircraft, justifying the 11,000 additional
workers it hired that year. Conversely, production workers and service workers were unable to
compete directly with much lower-cost workers in developing countries. Low-wage countries
gained the low-value-added element of work formerly done in rich countries, while higher-value
work remained; for instance, the total number of people employed in manufacturing in the US
declined, but value added per worker increased.
This resulted in growing income inequality in rich countries. This trend seems to be greater in
the United States, where it started to rise in the late 1970s, accelerating in the 21st century; it has
now reached a level comparable with that found in many developing countries.
Consumer goods exports such as televisions, radios, bicycles, and textiles into the United States,
Europe, and Japan fueled the economic expansion of Asian tiger economies.]
China exports were
worth 157.5 Billion USD in October 2011. In that year exports of goods and services constituted
39.7% of China's GDP. The increasing U.S. trade deficit with China cost 2.4 million American
jobs between 2001 and 2008, according to a study by the Economic Policy Institute (EPI). From
2000 to 2007, the United States lost a total of 3.2 million manufacturing jobs. Chinese success
cost jobs in developing countries as well as well as the West. As of 26 April 2005 "In regional
giant South Africa, some 300,000 textile workers have lost their jobs in the past two years due to
the influx of Chinese goods".
A 2007 report by PricewaterhouseCoopers LLP predicted that by 2050 the economies of
the E7 emerging economies (the BRIC countries: China, India, Brazil, and Russia, plus Mexico,
Indonesia and Turkey) would be around 50% larger than the current G7 (US, Japan, Germany,
UK, France, Italy and Canada). The report forecast that China would overtake the US as the
largest economy around 2025, followed by India in 2050. A 2010 report issued by Goldman
Sachs predicted that China was about to overtake Japan and could become the world's largest
economy by 2020.
The collapse of the subprime mortgage market in the U.S. led to a global financial
crisis and recession on a scale not seen since the Great Depression. According to critics,
government deregulation and failed regulation of Wall Street's investment banks were important
contributors to the subprime mortgage crisis.
Drug and illicit goods trade
In 2010 the United Nations Office on Drugs and Crime (UNODC) reported that the global drug
trade generated more than $320 billion a year in revenues. Worldwide, the UN estimates there
are more than 50 million regular users of heroin, cocaine and synthetic drugs. The international
trade of endangered species was second only to drug trafficking among smuggling
"industries". medicine often incorporates ingredients from all parts of plants, the leaf, stem,
flower, root, and also ingredients from animals and minerals. The use of parts of endangered
species (such as seahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws)
resulted in a black market of poachers who hunt restricted animals.
Globalization seeks to reduce the importance of nation states. Sub-state and supra-state
institutions such as the European Union, the WTO, the G8 or the International Criminal Court,
replace national functions with international agreement. Some observers attribute the relative
decline in US power to globalization, particularly due to the country's high trade deficit. This led
to a global power shift towards Asian states, particularly China that unleashed market forces and
achieved tremendous growth rates. As of 2011, China was on track to overtake the United States
Mandarin is the first language of 845 million speakers, followed by Spanish (329 million
speakers) and English (328 million speakers). However the most popular second language is
undoubtedly English, the "lingua franca" of globalization:
About 35% of the world's mail, telexes, and cables are in English.
Approximately 40% of the world's radio programs are in English.
Some 3.5 billion people have some acquaintance of the language.
English is the dominant language on the Internet.
Cultural globalisation has increased cross-cultural contacts but may be accompanied by a
decrease in the uniqueness of once-isolated communities: sushi is available in Germany as well
as Japan, but Euro-Disney outdraws the city of Paris, potentially reducing demand for
"authentic" French pastry. Globalisation's contribution to the alienation of individuals from their
traditions may be modest compared to the impact of modernity itself, as alleged by existentialists
such as Jean-Paul Sartre and Albert Camus.
Globalization expanded recreational opportunities by spreading pop culture, particularly via the
Internet and satellite television.
WHO estimates that up to 500,000 people are in flight at any one time. In 2010, international
tourism reached $919B, growing 6.5% over 2009.
The IOM found more than 200 million migrants around the world in 2008 including illegal
immigration. Remittance flows to developing countries reached $328 billion in 2008.
Non-governmental organizations influence public policy across national boundaries, including
humanitarian aid and developmental efforts.
Religious movements were among the earliest cultural forces to globalize, spread by force,
migration, evangelists, imperialists and traders. Christianity, Islam, Buddhism and more recently
sects such as Mormonism have taken root and influenced endemic cultures in places far from
Conversi claimed in 2010 that globalization was predominantly driven by the outward flow of
culture and economic activity from the United States and was better understood as
Americanization. For example, the two most successful global food/beverage outlets are
American companies, McDonald's and Starbucks, are often cited as examples of globalization,
with over 32,000 and 18,000 locations operating worldwide, respectively as of 2008.
Hence these are some of the effects of globalization.
Cultural Aspects Affecting Product
McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products,
French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers
salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald's
offers the McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal.
Various countries, especially in Asia, are currently serving soup. This local deviation from the
standard menu is a characteristic for which the chain is particularly known, and one which is
employed either to abide by regional food taboos (such as the religious prohibition of beef
consumption in India) or to make available foods with which the regional market is more
familiar (such as the sale of McRice in Indonesia).
McDonald's has become emblematic of globalization, sometimes referred to as the
"McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be used to informally judge these
currencies' purchasing power parity. Norway has the most expensive Big Mac in the world as of
July 2011, while the country with the least expensive Big Mac is India.
Thomas Friedman once said that no country with a McDonald's had gone to war with another.
However, the "Golden Arches Theory of Conflict Prevention" is not strictly true. Exceptions are
the 1989 United States invasion of Panama, NATO's bombing of Serbia in 1999, the 2006
Lebanon War, and the 2008 South Ossetia war.
Some observers have suggested that the company should be given credit for increasing the
standard of service in markets that it enters. A group of anthropologists in a study entitled
Golden Arches East .looked at the impact McDonald's had on East Asia, and Hong Kong in
particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to
consistently offer clean restrooms, driving customers to demand the same of other restaurants
and institutions. McDonald's have recently taken to partnering up with Sinopec, the second
largest oil company in the People's Republic of China, as it begins to take advantage of the
country's growing use of personal vehicles by opening numerous drive-thru
restaurants.McDonald's has opened a McDonald's restaurant and McCafé on the underground
premises of the French fine arts museum, the Louvre.
McDonald's has started to offer free wireless Internet access in many countries.
CULTURAL ASPECTS AFFECTING PACKAGING
The U.S. Food and Drug Administration granted the first-ever approval to use recycled content
in food packaging for Starbucks coffee cups. In 2005 Starbucks received the National Recycling
Coalition Recycling Works Award.
Starbucks bought 2.5 billion cups for stores in North America in 2007. The 10% recycled paper
cups used by Starbucks are not recyclable, because the plastic coating that prevents the cup from
leaking also prevents it from being recycled. The plastic cups used for cold drinks are also non-
recyclable in most regions. Starbucks cups were originally made using plastic No.1
(polyethylene terephthalate, PETE) but were changed to plastic No.5 (polypropylene, PP). The
former type of plastic can be recycled in most regions of the U.S. whereas the latter cannot.
Starbucks is considering using biodegradable material instead of plastic to line the cups, and is
testing composting of the existing cups. The exception to this is stores in Winnipeg, Manitoba,
Canada, where paper cups are recycled to a local company called "Wriggler's Wranch", where
they are composted. The majority of Starbucks stores do not have recycling bins; only 1/3 of
company-owned stores recycled any materials in 2007,however improvements have since been
made and recycling bins are popping up in more stores (the only thing hindering Starbucks'
ability to have bins in every store is the lack of facilities for storage and collection of recycling in
certain areas.) of the Natural Resources Defense Council says that Starbucks claimed they were
using only 10% recycled material partly because the recycled material costs more.
Starbucks gives customers a 10-cent discount when they bring their own reusable cup, and it now
uses corrugated cup sleeves made from 60 percent post-consumer recycled fiber.
A business can expect problems with grey markets where it trades across national boundaries. So
if Company Y is English it will trade in Stirling or Pound notes. If it trades in the United States
during the 2010s, to be competitive it will need to sell at a reduced price in the US. However,
there is little to stop an entrepreneur from traveling to the US, filling up a transport container
with products, which have been exported from Company Y in England, then returning them back
to England and marketing the same product at a lower price than Company Y is willing to trade.
This is an example of parallel trade, which is legal - just. Therefore it is known as grey
marketing. The parties most concerned with the grey market are usually the authorized agents or
importers, or the retailers of the item in the target market. Often this is the national subsidiary of
the manufacturer, or a related company. In response to the resultant damage to their profits and
reputation, manufacturers and their official distribution chain will often seek to restrict the grey
market. Such responses can breach competition law, particularly in the European Union.
Manufacturers or their licensees often seek to enforce trademark or other intellectual-property
rights against the grey market. Such rights may be exercised against the import, sale and/or
advertisement of grey imports. In 2002, Levi Strauss, after a 4-year legal fight, prevented UK
supermarket Tesco from selling grey market jeans. However, such rights can be limited.
Examples of such limitations include the first-sale doctrine in the United States and the doctrine
of the exhaustion of rights in the European Union.
When grey-market products are advertised on Google, eBay or other legitimate web sites, it is
possible to petition for removal of any advertisements that violate trademark or copyright laws.
This can be done directly, without the involvement of legal professionals. eBay, for example,
will remove listings of such products even in countries where their purchase and use is not
against the law. Manufacturers may refuse to supply distributors and retailers (and with
commercial products, customers) that trade in grey-market goods. They may also more broadly
limit supplies in markets where prices are low. Manufacturers may refuse to honor the warranty
of an item purchased from grey-market sources, on the grounds that the higher price on the non-
grey market reflects a higher level of service even though the manufacturer does of course
control their own prices to distributors. Alternatively, they may provide the warranty service
only from the manufacturer's subsidiary in the intended country of import, not the diverted third
country where the grey goods are ultimately sold by the distributor or retailer. This response to
the grey market is especially evident in electronics goods. Local laws (or customer demand)
concerning distribution and packaging (for example, the language on labels, units of
measurement, and nutritional disclosure on foodstuffs) can be brought into play, as can national
standards certifications for certain goods.
Manufacturers may give the same item different model numbers in different countries, even
though the functions of the item are identical, so that they can identify grey imports.
Manufacturers can also use batch codes to enable similar tracing of grey imports. Parallel market
importers often de-code the product in order to avoid the identification of the supplier. In the
United States, courts have decided that decoding which blemishes the product is a material
alteration, rendering the product infringed. Parallel market importers have worked around this
limitation by developing new removal techniques.
The development of DVD region codes, and equivalent regional-lockout techniques in other
media, are examples of technological features designed to limit the flow of goods between
national markets, effectively fighting the grey market that would otherwise develop. This enables
movie studios and other content creators to charge more for the same product in one market than
in another or alternatively withhold the product from some markets for a particular time.
Consumer advocacy groups argue that this discrimination against consumers—the charging of
higher prices on the same object simply because of where they happen to live—is unjust and
anti-competitive. Since it requires governments to legislate to prevent their citizens from
purchasing goods at cheaper prices from other markets, and since this is clearly not in their
citizens' interests, many governments in democratic countries have chosen not to protect anti-
competitive technologies such as DVD region-coding.
Another example is Smokers might just find the grey market prices more attractive as the Budget
announcement will lead the organised players to hike their prices. Considering the latest budget
has announced some changes in the excise duty on cigarettes and cigars with hike in excise rates
for all non-smoking tobacco products (estimated between 11 and 18 per cent), the move has
further crippled the cigarette industry leaving the players no option but to pass it on to their
“Piracy levels, depending on country, range between 40 per cent and 80 per cent,” Reinhard
Blaukovitsch from Sony DADC, the company responsible for SecuROM, told Eurogamer as part
of an investigation into the true impact of PC game piracy. That means that between 40 and 80
per cent of total copies of a game being played are pirated. “The commercial value of global
software piracy is growing by 14 per cent annually.”
Svensson goes on to estimate that at the low end of the scale, piracyexists at a 1:1 ratio with
retail sales, meaning for every purchased copy, one is downloaded. At the high end he estimates
figures as high as 90% piracy vs. legit users.
To have a better understanding of the impacts of Cultural Aspects on Promotions by international
companies, we undertook a survey of 50 people so as have an idea of –
Influence of promotional strategies on sale
Role of culture in purchasing decision
Cultural influence on market promotional strategies
The following were the questions asked:
1) What do you consider while purchasing a product?
2) What are your expectations from a company’s promotional efforts?
Stress on Product features
Stress on local cultural values
3) If a company intends to change local cultural practices in a productive way, would you
4) Which of these advertisements do you connect with, which can or will affect your
Hero Moto Corp
Honda Motor Company
5) If a product in the market is packed and offered for sale in a traditional way, will you buy
The answers given by the respondents are summarized and graphically represented below:
1) What do you consider while purchasing a product?
The following responses show that major criteria while purchasing a product are the Product
features along with influence from promotions of the company as well as brand image.
2) What are your expectations from a company’s promotional efforts?
Majority of respondents prefer that an international company promotes their product in a manner
which is consistent with the local cultural values rather than the company which gives emphasis
only on the product features.
Stress on Product features
Stress on local cultural
3) If a company intends to change local cultural practices in a productive way, would you
Most people prefer such company because of major reason that it can lead to development of
local community. This preference can give the multinational companies an advantage that its
sales might increase. This exhibits that adaptation to local culture and social work can be
effectively used as promotional tool.
For example, Lifebuoy’s initiative- “In Safe Hands” in countries like Brazil, Australia,
Indonesia, is a marketing support package for the public sector to bring sustainable hand washing
practices within the community to life. In Safe Hands assists public sector organizations in:
Bringing about behavioral change
Developing effective integrated communication campaigns
Leveraging the programme's partnership with The World Bank through its Water &
4) Which of these advertisements do you connect with, which can or will affect your purchase?
Most people prefer “Hero Moto Corp” because of long time brand heritage and their tagline
“Desh ki Dhadkan” and “Hum Main Hain Hero”. Through this promotion every Indian connects
easily with company and believes that he is courageous and powerful just like its product. This
exhibits that a promotion that is related to local cultural values is beneficial for the company.
Rest of the people prefers Honda because of excellence of the product.
Hero Moto Corp
Honda Motor Company
5) If a product in the market is packed and offered for sale in a traditional way, will you buy that
Majority of respondents said yes, they prefer that product shall be packed in a traditional way.
This can be explained with the example of Cadbury. People in India prefer Cadbury for all the
occasions and festivals mainly because the chocolates are packed according to the festival that is
In conclusion, what we inferred from the survey is that Cultural aspects affects promotion to a
great extent. Also promotion to an extent can influence the culture of a community.
Managing Cultural Diversity
IKEA: Case study
IKEA is a privately held, international home products company that designs and sells ready-to-
assemble furniture such as beds and desks, appliances and home accessories. The company is the
world's largest furniture retailer. Founded in 1943 by 17-year-old Ingvar Kamprad in Sweden,
the company is named as an acronym comprising the initials of the founder's name
(Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd,
in Småland, South Sweden).
The firm is known for the attention it gives to cost control, operational details and continuous
product development, allowing it to lower its prices by an average of two to three per cent over
the decade to 2010, while continuing its global expansion.
The groups of companies that form IKEA are all controlled by INGKA Holding B.V., a Dutch
corporation, which in turn is controlled by a tax-exempt, not-for-profit Dutch foundation. The
IKEA trademark and concept is controlled by a series of corporations that can be traced to
the Netherlands Antilles and to the Interogo Foundation in Liechtenstein.
Rather than being sold pre-assembled, much of IKEA's furniture is designed to be self-
assembled. The company claims that this helps reduce costs and use of packaging by not
shipping air; the volume of a bookcase, for example, is considerably less if it is shipped
unassembled rather than assembled. This is also practical for many of the chain's European
customers, where public transport is commonly used, with the flat-pack methods allowing for
easier transport via public transportation.
IKEA contends that it has been a pioneering force in sustainable approaches to mass consumer
culture. Kamprad refers to the concept as "democratic design," meaning that the company applies
an integrated approach to manufacturing and design (see also environmental design). In response
to the explosion of human population and material expectations in the 20th and 21st century, the
company implements economies of scale, capturing material streams and creating manufacturing
processes that hold costs and resource use down, such as the extensive use of MDF (medium-
density fiberboard). MDF, mistakenly called "particle board", is engineered wood fiber glued
under heat and pressure to create a building material of superior strength which is resistant to
warp. IKEA uses cabinet-grade and furniture-grade MDF in all of its MDF products, such as
PAX wardrobes and kitchen cupboards. IKEA also uses wood, plastic, and other materials for
furniture and other products. The intended result is flexible, adaptable home furnishings, scalable
both to smaller homes and dwellings as well as large houses.
IKEA’s entry in U.S.A
The furniture industry has long been localized with most players from the industry concentrating
on the domestic market only. Swedish furniture industry boasted of the best player in the market,
like IKEA, who for the first time decided to go global. They entered the U.S.A. market in 1985,
but achieved limited success. They decided to go in for an ethnocentric view of global marketing
with their products being shipped after un- assembling the parts to bring down shipping costs.
Another innovative move by IKEA was the move to involve the customer in its value chain to
bring down costs drastically. With IKEA’s products the customer did the assembling himself at
home. IKEA also had a very successful culture that facilitated its expansion into various
countries. However, this ethnocentric view did not turn out to be successful in the USA where in
they ran into a few problems like different tastes in furniture and cultural change. In addition,
more competition and changes in Swedish laws on furniture made expansion into the USA very
difficult. Longer shipping periods added to the expansion woes and IKEA had to adopt a more
adapted culture to enhance sales in the USA.
IKEA’s most important company specific advantage was its value for money. IKEA used this
advantage for its expansion plans all over the world. When they failed in the USA, they had to
highlight this specific advantage to bail themselves out of the financial crux they had gotten
Convenient to use and rigid in structure was another company specific advantage that IKEA
could have looked at as IKEA focuses on involving customers in the assembling process. This
advantage could be a big hit in markets like the USA where each person has the basic expertise
in home working such as plumbing and fixing furniture.
One more company specific advantage that IKEA has is its legacy of quality in different
countries. IKEA has always maintained the best quality in all the countries that it has opened
Country specific cultural slogans like “low price but not at any price” which highlighted quality
were welcomed by the US citizens.
Cultural adaptations made by IKEA
IKEA’s streamlined and contemporary "Scandinavian" style was still achieved. What is really
the core of the IKEA approach was still maintained through predominantly (4/5) universally
accepted product range with local minor adaptations. Many of the locally introduced adaptations
were later introduced into other countries' IKEA outlets worldwide - therefore it can be
concluded that they were "pilot-tested" in the USA but subsequently widely accepted.
Economies of scale were still being achieved. The main characteristics of the IKEA concept
were therefore preserved. Furthermore, for the "typical IKEA customer" it seems that their
perceptions can be matched world-wide, throughout IKEA outlets, and in their eyes be seen
equal to their expectations (i.e. wide variety, streamlined and contemporary "good" design, for
"young people of all ages"). Although the original formula is now a bit more flexible, the core of
it is preserved and appears to be working for all IKEA outlets internationally. It can be argued
that minor adaptations do not amount to a defeat to their original approach.
IKEA realized the causes of its reducing profits in U.S.A. and decided to make necessary
adaptations in order to survive and grow in the market. High costs of importing: IKEA did not
locally manufacture its products in the USA for a very long time. The goods and products were
being imported from IKEA’s manufacturing base in Sweden. T he transportation costs from
Europe to the American Markets on a frequent basis were eating up IKEA’s markets. Thus, the
company decided to start local production and in a matter of few years, IKEA started
manufacturing products for its American markets upto the extent of 80%. This led to reduced
production costs, leading to increasing profits for the company.
One cultural factor that IKEA did not take into consideration while diversifying into USA was
the difference in European and American physique! Americans, as opposed to their European
counterparts, were a little bulky and preferred furniture of larger sizes. In fact, in the initial
stages, the flower vases being sold by IKEA were being used as water glasses by their American
customers! In order to experiment this problem, IKEA first decided to increase the sizes of their
chest drawers, as the American customers were complaining of the drawers to be too small to
store warm clothes. When IKEA started producing chest drawers of larger sizes, they recorded
increase in the sales of chest drawers upto 40%. Thus, IKEA decided to expand the size of
furniture for the Americans, leading to IKEA’s success in USA.
Another rare observation into the American culture revealed to the company that American’s
don’t like standing in lines, a problem the company never faced in Sweden. Americans seemed
to get restless and irritated when they were made to stand in lines at cash registers of the shop. In
order to overcome this problem, IKEA installed cash registers at convenient locations in the
store, in order to reduce the line. This made the American customer happy, leading to IKEA’s
Also, IKEA observed that Americans preferred next-day delivery of their products. This service
was made available by IKEA. The company also inculcated a returns policy for its American
customers, a policy it never introduced in the European Market.
In conclusion, IKEA made certain adaptations for the US market, but did not completely change
its methodologies. In the words of Anders Moberg, IKEA chief executive, “IKEA adapted but
did not destroy its original formula for the American culture.
Axe Deodorant: Case study
Axe deodorant was first launched in the year 1983. It has been there in the market for the last
26years and is currently the beat selling brand of Unilever. It has earned an iconic status in most
of the markets it has entered. The story is no different for India.
Axe deodorant was launched in India during 1999. It was launched as a high price product and
initially the promotion was kept low. Axe at that time was the leading men’s deodorant brand in
Europe and was popular in India in the Grey market. HLL had the brands denim and Rexona and
was ruling the market. Axe was priced at premium above the Denim brand which was positioned
as male deodorant brand.
At the beginning the product promotion was not fine tuned according to the Indian market and
the same advertisement that ran in Europe were used for Indian markets. The brand is targeted at
male aged 16-25. All its campaign revolve round this central theme of seduction where girls
makes the first move. This has a lot of subliminal implications. The brand assumes that men like
to be seduced. The feeling of being seduced gives a big boost of self confidence to a man.
Although many brands take this proposition. Axe just made it perfect.
Along with these, the brand also engaged with new fragrance and campaigns. In 2005, Axe Axe
had a high profile launch of its new fragrance CLICK and before thet there was axe land
campaign and followed by axe academy then axe voodoo and phenomenon. In the recent years ,
it has launched call me campaign.axe is one of the rare brands that have embraced new media to
the maximum extent. The brand has started its internet based marketing initiative in India with
axe land which involved a virtual trip to the axe world. Also to promote its chocolate variant, it
declared November as the month of chocolate. Yahoo web page was used extensively it promote
Ads for Hindustan Unilever’s male deodorant brand Axe may get taken off Indian Television in
the near future. The Information and Broadcast Ministry is considering taking action against
what they consider are ‘obscene’ or overtly sexual deodorant commercials, and Axe, Zatak, and
Wildstone advertisements are in their immediate crosshairs. And they seem to be quite serious
Axe has always used the basic insight – in fact, the very basic animal instinct – of the male
species’ attraction towards the opposite sex to position and sell the brand. And quite
successfully. They have never been shy of stating their “get laid” message in most explicit
insinuation in their advertising campaigns. India is an important emerging market for male
deodorants, and a number of new players are trying to copy Axe’s positioning by jumping on the
“get the girls” bandwagon.
But this is now crossing limits of what is considered acceptable in India. Some say that messages
can be considered as “obscene” much faster in India than in other markets and cultures, and a
number of MNCs operating in India claim that their communication for India is often mellowed
Axe continues its approach of showing (attractive) females being attracted to the guy wearing
Axe, be it the “chocolate boy” (see below) or whatever. It is the ad in which a normal guy turns
into chocolate after using the Axe chocolate flavour deodorants. And needless to say, girls are
immediately attracted to him, all over him to “devour” him!
The Wildstone advertisement shows a married woman getting attracted to a guy who wears the
deo during the Durga Puja.
The Zatak ad shows a sister-in-law getting attracted to her younger brother-in-law. She drops her
mangalsutra (sacred black thread /necklace denoting marriage).
Copying an insight / idea to sell has always been rampant in the market, but this also needs to be
seen is the Indian context. Playing with concepts – and associated values – like mangalsutra and
Durga puja is definitely objectable, in cultural and ethical value terms in India.
Various obscene advertisements have been banned before here. The Amul Macho Advertisement
for “yeah toh bada toing hai” (“this is a toing thing” – ‘toing’ does not have a meaning but has
been portrayed sexily in this advertisement) was banned for the same reason. It used the slogan
“Crafted for Fantasies,” and was taken off the air, as it portrayed a woman swept away by
pleasant fantasies while washing her husband’s underwear at the local washing spot, much to the
embarrassment of other women nearby.
I wonder how Axe (and competitive brands) may modify its message – or the framing thereof –
to a more subtle approach while keeping its core positioning of (sexually) attracting females.
Another emotional space? A re-framing of the same message in culturally more acceptable
ways? Injecting more humour and slapstick into it? Can’t wait to see what will happen, because
the market is growing rapidly and none of the established and emerging players will want to miss
Tropicana: Case Study
Tropicana Products is an American based company, and was founded in 1947 by Anthony T.
Rossi in Bradenton, Florida, U.S.A. Since 1998 it has been owned by PepsiCo, Inc. Tropicana's
headquarters are in Chicago, Illinois.
Anthony T. Rossi (1900–1993) was born in Italy on the island of Sicily. He had the equivalent
of a high school education, and immigrated to the United States when he was 21 years old. He
drove a taxicab, was a grocer in New York, farmed in Virginia and then moved to Florida in
1940 where he farmed and was a restaurateur. His first involvement with
the Florida citrus industry was fresh fruit gift boxes sold by Macy's and Gimbel's department
stores in New York City, New York.
In 1947, Rossi settled in Palmetto, Florida and began packing fruit gift boxes and jars of
sectioned fruit for salads under the name Manatee River Packing Company. As the fruit segment
business grew, the company moved to a larger location in east Bradenton, Florida and changed
its name to Fruit Industries. The ingredients for the fresh fruit salads on the menu of New York’s
famed Waldorf-Astoria Hotel were supplied by Fruit Industries. At the east Bradenton location,
Rossi began producing frozen concentrate orange juice as a natural extension of the fruit section
In 1952, with growth of the orange juice business in mind, Rossi purchased the Grapefruit
Canning Company in Bradenton. The fresh fruit segments and orange juice business were so
successful that he discontinued production of fruit boxes. He developed flash pasteurization in
1954, a process that rapidly raised the temperature of juice for a short time to preserve its fresh
taste. For the first time, consumers could have the fresh taste of pure not-from-concentrate juice
in a ready to serve chilled package. The juice, Tropicana Pure Premium, became the company’s
flagship product. In 1957, the company’s name was changed to Tropicana Products, Inc. to
reflect the growing appeal of the Tropicana brand.
It is now enjoyed almost everywhere in the world. Carefully nurtured for over 50 years,
Tropicana has matured into one of the most respected beverage brands. Widely regarded as the
world's no. 1 juice brand, it is today available in 63 countries.
Tropicana continues to select the best fruit to manufacture high-quality juices and original
products, pioneer innovative processes and explore new markets for its products. It is committed
to fostering healthy lifestyles by ensuring that its products are naturally nutritious and provide
the daily benefits that one needs.
In India, Tropicana was launched in 2004 and it comes in two categories: 100% Juices (sold as
Tropicana 100%) and Juice Beverages & Nectars (sold as Tropicana).
Did You Know?
20 oranges=1L Tropicana 100% Orange juice
8 apples=1L Tropicana 100% Apple juice
1.3 Kg Mixed fruits=1L Tropicana 100% Mixed fruit juice
“Eat breakfast like a king, lunch like a prince, and dinner like a pauper”
- A quote by Adelle Davis (American Nutritionist & Writer)
The above quote describes the importance of breakfast in one’s life. It is necessary to have a
healthy and nutritious breakfast so as to be ready for the whole days work. A good breakfast
gives you the required energy to kick start your day.
Breakfast is important as there is a gap of 10 – 12 hrs without food as your last meal would have
been dinner. Our body is similar to a car in the fact that it needs fuel to run, and like a car, the
better you look after your body, the longer and better our body will run.
Our bodies must be fuelled several times each day so that we function efficiently and carry out
our daily tasks as best we can. In the morning, after many hours without food, it is essential to
refuel in order to provide the necessary nutrients and energy to get us through the first part of the
It is from our brain that messages are sent to other parts of the body to get them moving and
working well. If our brain is not fed, it will act in a slow and sluggish manner, which will impact
greatly on the rest of our body.
The brain requires glucose or blood sugar to provide it with energy to function, whilst the
muscles of our body need glucose to activate them and get the body working physically. To work
and feel well, our blood sugar levels must be maintained at a certain level. After long periods
without food, our blood sugar levels fall, causing tiredness and irritability amongst other
symptoms that occur when you need food.
As Indians are getting busier with their schedules more and more people are skipping breakfast.
The average Indian is fixed for time in the morning. This is well depicted in the new Tropicana
advertisements on television. The successfully running TVCs capture breakfast disruptions like
important calls from the office, few more winks of sleep leading to incomplete breakfast. The
TVC showcase morning breakfast battles including egg vs mobile phone and dosa vs pillow, to
highlight this gap. The pillow standing for extra sleep overpowers the dosa, and a call from the
boss takes priority over the egg.
A normal Indian breakfast consists of milk, poha, upma, fafda, idli, dosa, paratha, tea, coffee,
jalebi, samosa, batata vada, cornflakes, sandwiches, bread, eggs etc.
An Indian breakfast normally never contained juice in the morning. To change this culture
Tropicana came up with this new advertising campaign of drinking juice in the morning instead
of breakfast or with breakfast. This advertisement seems to be affective and it helping its market
share in India.
The fruit based juice industry is growing at a healthy rate since the last couple of years.
Real juice of has the biggest market share with about 50-55% while Tropicana is second with
After this advertisement Tropicana has been growing at rate greater than Real juice and its eating
into the market share of Real juice to increase its market share.
The marketing of Tropicana as 100% juice which contains 9 fruit nutrients is changing the
culture of Indians to start drinking juice in the mornings as it is a healthy option.