Culture And Global Marketing

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Culture And Global Marketing

  1. 1. Culture & Global Marketing
  2. 2. Importance of Culture <ul><li>Culture affects market demand. </li></ul><ul><li>Managerial behavior is driven by his/her cultural knowledge </li></ul><ul><li>Knowledge of Native culture is useful when dealing with home markets but it has little value when dealing in foreign markets </li></ul><ul><li>Culture affects the nature of business negotiations </li></ul><ul><li>Culture acts as a hidden entry barrier, but it can be overcome with cultural sensitivity, hard work & quality </li></ul>
  3. 3. Culture Defined <ul><li>Culture is the underlying value framework that guides an individual’s behavior. </li></ul><ul><li>Culture is reflected perceptions, social interactions, business interactions </li></ul><ul><li>Culture guides the selection of appropriate responses in social situations </li></ul><ul><li>Culture is a learned behavior. People learn do’s & don’t as they grow up </li></ul>
  4. 4. Culture across Countries <ul><li>Some countries are multicultural:- India, China, US, Russia. These countries have several sub-cultures. </li></ul><ul><li>While many are monocultural. UK, France, Germany, Columbia, Peru etc. </li></ul><ul><li>Culture is the “Silent Language” in International business </li></ul><ul><ul><li>Relationship with Time, Space & Energy </li></ul></ul><ul><ul><li>High Context – Low context cultures </li></ul></ul><ul><ul><li>Body language </li></ul></ul>
  5. 5. Need for cultural Adaptation <ul><li>Self-Referencing : Process by which one judges others actions with reference to one’s own native culture. Usually “Right” & “Wrong” decisions </li></ul><ul><ul><li>Often leads to wrong opinions, Mistakes </li></ul></ul><ul><li>Avoid self-referencing mistakes by cultural adaptation. </li></ul><ul><li>Cultural adaptation is a learned skill & must be mastered by Global Managers </li></ul>
  6. 6. Hofstede’s Cultural Dimensions <ul><li>Individualism Vs Collectivism </li></ul><ul><li>Masculine Vs Feminism </li></ul><ul><li>Uncertainty Avoidance Vs Risk Taking </li></ul><ul><li>Power Distance </li></ul><ul><li>Confucian Dynamism: Long term outlook, work ethic of Chinese </li></ul>
  7. 7. Gannon’s Metaphors <ul><li>Gannon’s Metaphors offer a mental anchor for manger who has to deal with a new culture and cannot foresee contingencies </li></ul><ul><li>It is a simplified, holistic representation of a culture: </li></ul><ul><ul><li>USA- Football: Individualistic, specialized, competitive </li></ul></ul><ul><ul><li>China – Harmony : Roundness, Harmony & Fluidity </li></ul></ul><ul><ul><li>Germany – Symphony : Discipline under a leader, Skilled workers working together, a well oiled machine </li></ul></ul><ul><ul><li>India – Cyclical Hindu Philosophy: Life follows a cyclical pattern </li></ul></ul>
  8. 8. Rapaille’s Archetypes <ul><li>Dr Rapaille simplified cultures for easier understanding by explaining it in 7 steps of decoding culture: </li></ul><ul><li>People don’t buy products, People buy relationships </li></ul><ul><li>Culture can make or break your marketing plan, sales or public relationship plans </li></ul><ul><li>Time, Space & Energy are the building blocks of all cultures </li></ul><ul><li>Design & create products/Services to solve the right problem </li></ul>
  9. 9. Rapaille’s Archetypes <ul><li>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: </li></ul><ul><ul><li>USA : It works </li></ul></ul><ul><ul><li>Japan: Perfection </li></ul></ul><ul><ul><li>Germany: Made according to the standard </li></ul></ul><ul><ul><li>France: Quality = Luxury </li></ul></ul><ul><ul><li>India: Quality = Reliable </li></ul></ul><ul><li>Cultural Awareness is the key to global success </li></ul>
  10. 10. Culture: How to do Business <ul><li>The aim of business is same everywhere, but the way to do it varies across countries </li></ul><ul><li>Global Managers must be able to handle Culture shock </li></ul><ul><li>Similar business situations in different countries does not imply similar opportunities. E.g: Nestle in Africa </li></ul><ul><li>Culture influences Management skills. So in a new country, its “Back-to-Basics” w.r.t learning local culture </li></ul>
  11. 11. Culture & Managerial Skills <ul><li>Culture defines a set of acceptable & unacceptable behaviors, which forms the basis of “Way of doing Business” </li></ul><ul><li>Managers learn how to do business. This process is called Enculturalization and Socialization </li></ul><ul><ul><li>How consumers behave </li></ul></ul><ul><ul><li>How to manage people, supplier & subordinates </li></ul></ul><ul><ul><li>What guides the consumer behavior </li></ul></ul><ul><li>Acceptable Behavior in business is usually acceptable behavior in society </li></ul>
  12. 12. Culture & Managerial Skills <ul><li>Successful mangers tend to be good at acceptable behaviors and avoid unacceptable behaviors </li></ul><ul><li>Lessens from past managerial experience in other countries has little value in other cultures. </li></ul><ul><ul><li>Success & Failures in the past will be repeated elsewhere, before learning the local implications </li></ul></ul>
  13. 13. Managerial Styles <ul><li>Cultures tend to generate different managerial styles. Management styles is heavily influenced by home country culture. </li></ul><ul><ul><li>Japan High Context culture influences mangers to read body language while in US, a low context culture tends to ignore body language </li></ul></ul><ul><li>Managers are usually inadequately trained to handle different cultures. </li></ul><ul><ul><li>Time, Money pressure compromise training. </li></ul></ul>
  14. 14. Cultural Dilemmas <ul><li>Managers face cultural dilemmas due to differences in cultures </li></ul><ul><ul><li>Universalism Vs Particularism : Doing the right thing or doing things right? </li></ul></ul><ul><ul><li>Individualism Vs Collectivism in decision making </li></ul></ul><ul><ul><li>Neutral Vs Emotional </li></ul></ul><ul><ul><li>Specific Vs General : Is it just business or the whole person, individual or the entire firm </li></ul></ul><ul><ul><li>Attitudes towards Time </li></ul></ul><ul><ul><li>Attitudes towards Environment </li></ul></ul>
  15. 15. Culture & Negotiations <ul><li>Global business involves cross cultural negotiations, establishing relationships with suppliers, customers, distributors & other partners </li></ul><ul><ul><li>Know whom you are dealing with </li></ul></ul><ul><li>“ In some cultures, 10AM means ‘Sometime in the morning’. Actual time on the clock has little significance.” </li></ul>
  16. 16. Cross Cultural Negotiations <ul><li>First Establish Trust. Skilled negotiators identify genuine behavior of their counterparts and work towards establishing trust </li></ul><ul><li>Know their “Silent Language” </li></ul><ul><ul><li>Body behavior </li></ul></ul><ul><ul><li>Cultural signaling </li></ul></ul><ul><ul><li>Culturally sensitive subjects </li></ul></ul><ul><li>Know what to say and when to say </li></ul>
  17. 17. Stages of Negotiations <ul><li>Non-Task Sounding: An initial period to know each other better </li></ul><ul><li>Task related exchange of Information: An extended Period where main issues are brought up & positions clarified </li></ul><ul><li>Persuasion: Attempt to make the other side see your point of view. Explaining positions, giving evidence & questioning other party’s position. </li></ul><ul><li>Concessions & Agreements: Concessions are made and agreements are signed </li></ul>
  18. 18. Limits to Cultural Sensitivity <ul><li>When not to be culturally sensitive </li></ul><ul><ul><li>Global Culture: Globalization is creating a global business culture. In business it may be inappropriate to dress in a local way. </li></ul></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>Cultural Sensitivity does not mean giving up one’s own culture. Successful manager will know both the cultures </li></ul></ul>
  19. 19. Culture in B2B markets <ul><li>Business Marketing Tasks </li></ul><ul><li>Cultural Conditioning </li></ul><ul><li>Organizational Culture </li></ul><ul><li>Relationship Marketing </li></ul><ul><li>Culture & Networks </li></ul>
  20. 20. Business Marketing Tasks <ul><li>Establish the global firm as a dependable supplier operating in the local market </li></ul><ul><ul><li>Understand buyer’s position </li></ul></ul><ul><ul><li>People who influence the buying decision </li></ul></ul><ul><ul><li>Role of the supplier’s product/Service in the buyer’s business success </li></ul></ul><ul><li>This will make the local buyer treat the global supplier as a local firm. </li></ul><ul><li>E.g: Cognizant in US, BASF in US, ABB in India </li></ul>
  21. 21. Cultural Conditioning <ul><li>Buyers tend to develop different styles of dealing with vendors </li></ul><ul><ul><li>Equal or unequal relationship between supplier and buyer </li></ul></ul><ul><li>Culture’s openness to change influences buyer’s attitude toward Risk </li></ul><ul><ul><li>Changing vendors is seen as a Risk </li></ul></ul><ul><li>Often Buyer’s prefer local suppliers </li></ul><ul><li>Terminating Local supplier carries bad publicity & political risks for the buyer </li></ul><ul><li>CEO or high executive from the vendor firm may have to visit prospective buyer as a signal of commitment </li></ul>
  22. 22. Organizational Culture <ul><li>Organizational culture of the buyer influences the buying decisions </li></ul><ul><ul><li>Single Buyer & decision maker </li></ul></ul><ul><ul><li>Engineers, staff who use the product </li></ul></ul><ul><ul><li>Top management which signs the contract </li></ul></ul><ul><ul><li>Power Brokers who influence the final decision </li></ul></ul><ul><li>Global firm must be aware of the decision making process </li></ul>
  23. 23. Relationship Marketing <ul><li>B2B sales is usually more than one single sale </li></ul><ul><li>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 </li></ul><ul><li>Build trust for a long term business relationship </li></ul><ul><li>Upfront costs are high but it acts as a competitive advantage & an entry barrier </li></ul><ul><ul><li>Adopt Buyer’s viewpoint </li></ul></ul><ul><ul><li>Accept & Demand transparency </li></ul></ul><ul><ul><li>Grow with the relationship </li></ul></ul><ul><ul><li>Be Proactive </li></ul></ul>
  24. 24. Culture & Networks <ul><li>Relationship marketing creates a Network between various buyers and sellers over a period of time. </li></ul><ul><li>Independent companies would have built up dependencies with one another creating a semi-independent companies </li></ul><ul><li>Network of companies often share common culture </li></ul><ul><li>Outside companies find the network hard to penetrate, Network form a barrier </li></ul><ul><ul><li>E.g: Keiretsu network in Japan, Glaxing in China </li></ul></ul><ul><li>Military-Industry network in US </li></ul>
  25. 25. Foreign Entry <ul><li>Culture defines “The way to do Business” </li></ul><ul><li>Learn & analyze local cultures before entry </li></ul><ul><ul><li>Do’s & don’ts </li></ul></ul><ul><ul><li>Identify trustworthy local agents or middlemen </li></ul></ul><ul><ul><li>Identify danger signals </li></ul></ul><ul><ul><li>Know the strengths & weakness as perceived by the local culture </li></ul></ul><ul><li>Establish trust & friendships </li></ul><ul><li>New Culture is an operational risk </li></ul>
  26. 26. Local Marketing <ul><li>Culture affects </li></ul><ul><ul><li>Consumer behavior </li></ul></ul><ul><ul><li>Local demand </li></ul></ul><ul><ul><li>Buying decisions </li></ul></ul><ul><ul><li>Brand Image </li></ul></ul><ul><li>First hand experience in local markets is a must </li></ul><ul><li>Lessons from home country may not be applicable abroad </li></ul>
  27. 27. Global Management <ul><li>Culture influences managerial styles and management decisions </li></ul><ul><li>Global managers must be knowledgeable of both cultures (Local & Home) </li></ul><ul><li>A new global business culture is emerging </li></ul><ul><li>Sensitivity to local issues is necessary for success </li></ul><ul><li>Global coordination is a must for global companies </li></ul>

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