Culture And Global Marketing

Culture & Global Marketing

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 little value when dealing in foreign markets
Culture affects the nature of business negotiations
Culture acts as a hidden entry barrier, but it can be overcome with cultural sensitivity, hard work & quality

Culture Defined
Culture is the underlying value framework that guides an individual’s behavior.
Culture is reflected perceptions, social interactions, business interactions
Culture guides the selection of appropriate responses in social situations
Culture is a learned behavior. People learn do’s & don’t as they grow up

Culture across Countries
Some countries are multicultural:- India, China, US, Russia. These countries have several sub-cultures.
While many are monocultural. UK, France, Germany, Columbia, Peru etc.
Culture is the “Silent Language” in International business
Relationship with Time, Space & Energy
High Context – Low context cultures
Body language

Need for cultural Adaptation
Self-Referencing : Process by which one judges others actions with reference to one’s own native culture. Usually “Right” & “Wrong” decisions
Often leads to wrong opinions, Mistakes
Avoid self-referencing mistakes by cultural adaptation.
Cultural adaptation is a learned skill & must be mastered by Global Managers

Hofstede’s Cultural Dimensions
Individualism Vs Collectivism
Masculine Vs Feminism
Uncertainty Avoidance Vs Risk Taking
Power Distance
Confucian Dynamism: Long term outlook, work ethic of Chinese

Gannon’s Metaphors
Gannon’s 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

Rapaille’s Archetypes
Dr Rapaille simplified cultures for easier understanding by explaining it in 7 steps of decoding culture:
People don’t buy products, People buy relationships
Culture can make or break your marketing plan, sales or public relationship plans
Time, Space & Energy are the building blocks of all cultures
Design & create products/Services to solve the right problem

Rapaille’s Archetypes
The more Global, The more Local: Global companies have to localize. Quality is the key to succeed, but word quality means different things 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 global success

Culture: How to do Business
The aim of business is same everywhere, but the way 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 in Africa
Culture influences Management skills. So in a new country, its “Back-to-Basics” w.r.t learning local culture

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 Socialization
How consumers behave
How to manage people, supplier & subordinates
What guides the consumer behavior
Acceptable Behavior in business is usually acceptable behavior in society

Culture & Managerial Skills
Successful mangers tend to be good at acceptable behaviors and avoid unacceptable behaviors
Lessens from past 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

Managerial Styles
Cultures tend to generate different managerial styles. Management styles is heavily influenced by home country culture.
Japan High Context culture influences mangers to read body language while in US, a low context culture tends to ignore body language
Managers are usually inadequately trained to handle different cultures.
Time, Money pressure compromise training.

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

Culture & Negotiations
Global business involves cross cultural negotiations, establishing relationships with suppliers, customers, distributors & other partners
Know whom you are dealing with
“ In some cultures, 10AM means ‘Sometime in the morning’. Actual time on the clock has little significance.”

Cross Cultural Negotiations
First Establish Trust. Skilled negotiators identify genuine behavior of their counterparts and work towards establishing trust
Know their “Silent Language”
Body behavior
Cultural signaling
Culturally sensitive subjects
Know what to say and when to say

Stages of Negotiations
Non-Task Sounding: An initial period to know each other better
Task related exchange of Information: An extended Period where main issues are brought up & positions clarified
Persuasion: Attempt to make the other side see your point of view. Explaining positions, giving evidence & questioning other party’s position.
Concessions & Agreements: Concessions are made and agreements are signed

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 help
Cultural Sensitivity does not mean giving up one’s own culture. Successful manager will know both the cultures

Culture in B2B markets
Business Marketing Tasks
Cultural Conditioning
Organizational Culture
Relationship Marketing
Culture & Networks

Business Marketing Tasks
Establish the global firm as a dependable supplier operating in the local market
Understand buyer’s position
People who influence the buying decision
Role of the supplier’s product/Service in the buyer’s 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

Cultural Conditioning
Buyers tend to develop different styles of dealing with vendors
Equal or unequal relationship between supplier and buyer
Culture’s openness to change influences buyer’s attitude toward Risk
Changing vendors is seen as a Risk
Often Buyer’s prefer local suppliers
Terminating Local supplier carries bad publicity & political risks for the buyer
CEO or high executive from the vendor firm may have to visit prospective buyer as a signal of commitment

Organizational Culture
Organizational culture of the buyer influences the buying decisions
Single Buyer & decision maker
Engineers, staff who use the product
Top management which signs the contract
Power Brokers who influence the final decision
Global firm must be aware of the decision making process

Relationship Marketing
B2B sales is usually more than one single sale
Relationship marketing means marketing efforts involving various personalized services, creation of new & additional services and customizing a firm’s offering to the needs of the buyer
Build trust for a long term business relationship
Upfront costs are high but it acts as a competitive advantage & an entry barrier
Adopt Buyer’s viewpoint
Accept & Demand transparency
Grow with the relationship
Be Proactive

Culture & Networks
Relationship marketing creates a Network between various buyers and sellers over a period of time.
Independent companies would have built up dependencies with one another creating a semi-independent companies
Network of companies often share common culture
Outside companies find the network hard to penetrate, Network form a barrier
E.g: Keiretsu network in Japan, Glaxing in China
Military-Industry network in US

Foreign Entry
Culture defines “The way to do Business”
Learn & analyze local cultures before entry
Do’s & don’ts
Identify trustworthy local agents or middlemen
Identify danger signals
Know the strengths & weakness as perceived by the local culture
Establish trust & friendships
New Culture is an operational risk

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

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

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Culture And Global Marketing

by Arun Kottolli on Sep 10, 2007

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Culture And Global Marketing — Presentation Transcript