Socio cultural factors affecting global marketingPresentation Transcript
Cross-cultural Marketing• Domestic and internationalcompanies are confronted with thetask of marketing products andservices to diverse cultural groups• Understanding local culturearound the world is becoming oneof the most profitable ways ofmarketing products and services
Cultural Analysis• Successful implementation of a marketing plan in one country does not mean it will be successful in another• Cultural analysis is the study and classification of non-economic factors• Being able to operate in a multi cultural environment it is important to know and be aware of the cultural differences• The Self Reference Criteria enables firms to identify customer needs in foreign markets and not transfer the domestic ones
Criticisms of Hofstede’s Five Cultural dimensions• Used because of its popularity not it’s accuracy• Considered superior as it can be easily replicated• Leads to laziness, as most research in the field is an extension
Cultural Orientation Variables1) Time – perceptions vary in different cultures, high value of time (Germany, China), acceptable to be late (France)2) Space – boundary during conversation, in the “West” men avoid touching, while in Asia & Latin America people get close.3) Friendship – inter-personal relations is a product of culture, has a role in building international business relations4) Status – material possessions mean different things in different cultures, and influence business attitudes (USA, Middle East)
Business Agreements• Rules for negotiation vary from country to country – 3 categories1) Rules that are spelled out technically as law2) Moral practices mutually agreed upon and taught to young as a set of principles3) Informal customs to which all conform without being able to state the exact rule
Ethical Issues• Bribery- the payment of money, typically to a foreign official in exchange for him/her violating some official duty.• Pricing – includes unfair differential pricing, questionable invoicing• Products/Technology –banned for use in the home country but permitted in the host• Tax Evasion Practices - used specifically to evade tax such as transfer pricing
• Illegal/Immoral Activities in the Host Country – practices such as: polluting the environment, maintaining unsafe working conditions; copying where protection of patents, trademarks or copyrights has not been enforced• Cultural Differences – between cultures involving potential misunderstandings related to the traditional requirements of the exchange process (e.g., transactions) may be regarded by one culture as bribes but be acceptable business practices in another culture.
Strategies for resolving ethical conflict• Avoiding: Strategy for the stronger of two parties.• Forcing: One party forces its will on the other.• Education and Persuasion: communicating the benefits of employee safety and human resources management policy.• Infiltration: The spread of an idea or principle in a society. Another strategy• Accommodation: when one party adapts to the ethic of the other.• Collaboration & problem-solving: focus is on uncovering problems in the ethical relationship and solving those problems to mutual satisfaction.
•International marketers must be aware of cultural differences when conducting international business•Must be able to adapt business strategies to cultural requirementsof the country Than k Y ou!
Questions:1)What is the role of MNCs in the production of genderidentities at global level?2)How would you go about establishing a global businessin a multi-cultural country, such as South Africa?