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Global Marketing Chapter 3 : Cultural Foundations [Elegant (V)]


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The report include the last part Chapter 3: Cultural Foundations from Global Marketing Book by Jhonny K. Johansson. Global culture, culture across countries,global culture,global marketing,meaning of …

The report include the last part Chapter 3: Cultural Foundations from Global Marketing Book by Jhonny K. Johansson. Global culture, culture across countries,global culture,global marketing,meaning of culture,self-reference criterion,silent language,SRC are the discussion topic

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  • 1. aReport OnChapter 3: Cultural FoundationsR-3 “Elegant (V)” .
  • 2. Report On Global Marketing (Course: 524) Topic: Chapter 3: Cultural FoundationsPrepared for:Syed Abul Kalam AzadProfessorDepartment of MarketingFaculty of Business of StudiesUniversity of Dhaka Prepared by: “Elegant (V)” Section: A Department of Marketing (14th) Faculty of Business Studies University of Dhaka Date of Submission: 11th March, 2013 eng. 1
  • 3. Group Profile: “Elegant (V)”We are...No. Name Roll Designation Remarks 1 Anjuman Ara 215 Member 2 Chowdhury Omor Faruque 377 Leader 3 Md. Al Amin 419 Member 4 Rumana 427 Member 5 Md. Moben Ahmed 526 Member 2
  • 4. Letter of Transmittal:11th March, 2013Syed Abul Kalam AzadProfessorDepartment of MarketingUniversity of DhakaDear Sir,Here is the report on the topic of ―Chapter 3: Cultural Foundations‖ and the analysis of it thatyou asked us to conduct.Our study of analyzing as well as learning about the global culture as well as cultural foundationshelped us to gather & acquire a lot of information & knowledge.We appreciate your choosing the the report topic. If you need any additional information orassistance in the overview of our report, please ask us.Sincerely Yours,“Elegant (V)”Section: ADepartment of Marketing (14th)Faculty of Business StudiesUniversity of Dhaka 3
  • 5. Table of Contents: No. Particulars Page No. 1 Introduction 5-15 2 The Meaning of Culture 16-20 3 Culture across Countries 21-24 4 The Silent Language 25-27 5 Self-Reference Criterion 28-32 6 Conclusion 32 4
  • 6. Cultural FoundationsIntroduction:Getting in the global mindset can be difficult. Understanding how culture plays a role in businessis imperative for the global marketer and international success.One’s culture affects almost everything they do, from birth to death- and everything in between!What exactly, is culture? There could probably a whole dictionary full of different definitions,but here is the one I like the best.Culture is, ―The collective programming of the mind which distinguishes the members of onegroup or category from those of another‖ – Geert Hofstede, Dutch cultural anthropologist.Culture is learned and shared, not something biologically programmed in our genes. As Hofstedesays, culture is ―the software of the mind.‖The origins of culture include geography, history, technology, and the political economy.Throughout history, these factors have influenced and formed the social institutions that existaround the world. Examples of social institutions include family, religion, school, media,government and corporations.These conditions are highly interrelated, constantly changing, and vary depending on geographiclocation or country. Acculturation and socialization naturally occurs, which is the process ofadopting behavior patterns based on one’s surroundings. These patterns are imitated and sharedbetween groups of people and societies through time, thus creating the elements of culture:values, rituals, symbols, beliefs and thought processes.Global Culture:Culture is seen simply as another environmental force that differs across countries, just like thepolitical system, the legal and regulatory environment, the level of economic development, andso on. But for marketers culture is more than just environment-culture is a direct determinant ofdemand and ways to do business. 5
  • 7. The traditional treatments depict the environmental differences as new and unfamiliar constraintson marketer. International marketing becomes marketing within a new set of given economic,political, legal, and cultural limits. But although this treatment might work for the otherenvironmental factors it does not do justice to culture.Culture affects the way to do business in a country and therefore influences who should run yoursubsidiary. In brief culture does not simply set new limits on the opportunity for buyers andsellers it also helps determine their goals, preferences and aspirations.Influence of Culture on International Marketing:Culture is the way that we do things around here. Culture could relate to a country (nationalculture), a distinct section of the community (sub-culture), or an organization (corporate culture).It is widely accepted that you are not born with a culture, and that it is learned. So, cultureincludes all that we have learned in relation to values and norms, customs and traditions, beliefsand religions, rituals and artifacts (i.e. tangible symbols of a culture, such as the Sydney OperaHouse or the Great Wall of China).Therefore global marketing needs to take into account the local culture of the country in whichyou wish to market.The Terpstra and Sarathy Cultural Framework help marketing managers to assess thecultural nature of an international market. It is very straight-forward, and uses eight categories inits analysis. The Eight categories are Language, Religion, Values and Attitudes, Education,Social Organizations, Technology and Material Culture, Law and Politics and Aesthetics.Language:With language one should consider whether or not the national culture is predominantly a highcontext culture or a low context culture (Hall and Hall 1986). The concept relates to the balancebetween the verbal and the non-verbal communication. 6
  • 8. In a low context culture spoken language carries the emphasis of the communication i.e. what issaid is what is meant. Examples include Australia and the Netherlands.In a high context culture verbal communications tend not to carry a direct message i.e. what issaid may not be what is meant. So with a high context culture hidden cultural meaning needs tobe considered, as does body language. Examples of a high context cultures include Japan andsome Arabic nations.Religion:The nature and complexity of the different religions an international marketer could encounter ispretty diverse. The organization needs to make sure that their products and services are notoffensive, unlawful or distasteful to the local nation. This includes marketing promotion andbranding. In China in 2007 (which was the year of the pig) all advertising which included pictures of pigs was banned. This was to maintain harmony with the countrys Muslim population of around 2%. The ban included pictures of sausages that contained pork, and even advertising that included an animated (cartoon) pig. 7
  • 9.  In 2005 Frances Catholic Church won a court injunction to ban a clothing advertisement (by clothing designers Marithe and Francois Girbaud) based upon Leonardo da Vincis Christs Last Supper.Values and Attitudes:Values and attitudes vary between nations, and even vary within nations. So if you are planningto take a product or service overseas make sure that you have a good grasp the locality beforeyou enter the market. This could mean altering promotional material or subtle brandingmessages. There may also be an issue when managing local employees. For example, in Franceworkers tend to take vacations for the whole of August, whilst in the United States employeesmay only take a couple of weeks vacation in an entire year. In 2004, China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity. 8
  • 10.  In 2006, Tourism Australian launched its ad campaign entitled "So where the bloody hell are you?" in Britain. The $130 million (US) campaign was banned by the British Advertising Standards Authority from the United Kingdom. The campaign featured all the standard icons of Australia such as beaches, deserts, and coral reefs, as well as traditional symbols like the Opera House and the Sydney Harbor Bridge. The commentary ran: "Weve poured you a beer and weve had the camels shampooed, weve saved you a spot on the beach. Weve even got the sharks out of the pool." Then, from a bikini-clad blonde, come the tag line: "So what the bloody hell are you?"Education:The level and nature of education in each international market will vary. This may impact thetype of message or even the medium that you employ. For example, in countries with lowliteracy levels, advertisers would avoid communications which depended upon written copy, andwould favor radio advertising with an audio message or visual media such as billboards. Thelabeling of products may also be an issue. In the Peoples Republic of China a nationwide system of public education is in place, which includes primary schools, middle schools (lower and upper), and universities. Nine years of education is compulsory for all Chinese students. In Finland school attendance is compulsory between the ages of 7 and 16, the first nine years of education (primary and secondary school) are compulsory, and the pupils go to their local school. The education after primary school is divided to the vocational and academic systems, according to the old German model. In Uganda schooling includes 7 years of primary education, 6 years of secondary education (divided into 4 years of lower secondary and 2 years of upper secondary school), and 3 to 5 years of post-secondary education. 9
  • 11. Social Organizations:This aspect of Terpstra and Sarathys Cultural Framework relates to how a national society isorganized. For example, what is the role of women in a society? How is the country governed -centralized or devolved? The level influence of class or casts upon a society needs to beconsidered. For example, India has an established caste system - and many Western countriesstill have an embedded class system. So social mobility could be restricted where caste and classsystems are in place. Whether or not there are strong trade unions will impact upon managementdecisions if you employ local workers.Technology and Material Culture:Technology is a term that includes many other elements. It includes questions such as is thereenergy to power our products? Is there a transport infrastructure to distribute our goods toconsumers? Does the local port have large enough cranes to offload containers from ships? Howquickly does innovation diffuse? Also of key importance, do consumers actually buy materialgoods i.e. are they materialistic? Trevor Baylis launched the clockwork radio upon the African market. Since batteries were expensive in Africa and power supplies in rural areas are non-existent. The clockwork radio innovation was a huge success. Chinas car market grew 25% in 2006 and it has overtaken Japan to be the second-largest car market in the world with sales of 8 million vehicles. With just six car owners per 100 people (6%), compared with 90% car ownership in the US and 80% in the UK, the potential for growth in the Chinese market is immense. 10
  • 12. Law and Politics:As with many aspects of Terpstra and Sarathys Cultural Framework, the underpinning socialculture will drive the political and legal landscape. The political ideology on which the society isbased will impact upon your decision to market there. For example, the United Kingdom has alargely market-driven, democratic society with laws based upon precedent and legislation, whilstIran has a political and legal system based upon the teachings and principles Islam and a Shariatradition.Aesthetics:Aesthetics relate to your senses, and the appreciation of the artistic nature of something,including its smell, taste or ambience. For example, is something beautiful? Does it have afashionable design? Was an advert delivered in good taste? Do you find the color, music orarchitecture relating to an experience pleasing? Is everything relating to branding aestheticallypleasing?Effective Cultural Signals:Body Language:Body language the often unintended signals that a person projects through dress, body position, hand, andeye movement, fidgets, and so on may provoke all sorts of culturally slanted interpretations. In countrieswith homogeneous populations such as Italy a gesture is often sufficient for information to be shared. 11
  • 13. A ―Hai‖in Japanese usually means I see rather than the more definite yes which is its literal translation. A―Hai‖ accompanied by a slight bow is a stronger statement and so on and so forth.How Cultural Differences Affect Your Global Marketing Message:Marketing across cultures worldwide is a thriving business as the world moves closer to a globaleconomy. International companies have been marketing to countries around the world for yearsand many have had some degree of success without ever taking cultural differences intoconsideration. Craft your marketing message with host country values in mind and boost yourchances of success.Understanding cultural differences is important to achieve success in any market, let alone on theworld business stage. While there are national and local cultures to consider, remember toaddress political and business cultures, when developing marketing strategies. 12
  • 14. Sociologic differences around the world largely outweigh the similarities. People in the globalcommunity are influenced and driven by different things. When responding to advertising, somevalue freedom, reward for effort and an entrepreneurial approach, while others avoidindividualism like the plague.Lack of cultural considerations not only can result in a mediocre response to product promotions,but can even impact the companys international image. Nestlé suffered significant internationalcriticism when a breast milk substitute marketed in Africa was deemed to be the cause ofmalnutrition in babies. While there was nothing wrong with their product, Nestlé was at faultbecause the company didnt consider the possibility that reduced literacy levels in Africa wouldresult in their breast milk substitute being misused.Tailor the Message to the Culture:In many national cultures significant accomplishment in life is taken as a measure of success.People who meet these standards of success are regarded highly. Consequently these culturesmore readily accept marketing presented to them along the lines of the achievement of theirgoals. However, the same type of marketing copy presented to people who consider status in lifea result of birthplace, social standing and influence (or the lack of it) isnt acceptable and will getpoor marketing results.There are countries where people fear uncertainty and risk-taking, while in others the "you-too-can-succeed" attitude thrives. Some cultures grimace at the use of terms, symbols or even colors, 13
  • 15. repugnant in their life experiences. Different colors appeal more in certain countries, particularlyin religious societies, than in others. For example, red is very much a color of luck to theChinese, but a warning sign to many other nationalities. In China, gold is almost always a sign ofprosperity and success. The issue of color selection in marketing applies not only to print andmedia ads, but also to web sites.Gender is a factor when considering your target market in any country, but in some societies it ismore relevant than in others. If you are selling medical supplies in the Russian Republic todayyou should be aware the vast majority of Russian doctors are women. However in countries likethe U.S., Australia and the U.K. men make up the majority of doctors.Gender esteem also has significant implications in countries like Japan, Austria and in Arabcountries where males often command ultimate decision authority over females. In contrast, inSweden the female population has a much greater say in purchasing decisions.Political Influences on Business Culture:Political influences past and present can also affect the way people view what they read or hear.Some people have never known, or have only recently had the freedom to choose for themselves.Others rely on their governments or what they consider to be their "betters" to tell them what isgood and what should be avoided. A seal of government approval in some countries will increasetrust in a particular product, while in others any mention of the government could lead the readerto throw the piece away in disgust.In societies where individual thought and action has been suppressed for hundreds of years,individuals might not have the experience or capability to go through a rational thoughtprocesses. Consequently coming up with a positive and bold action to buy your product may bedifficult for them. These people need to have everything explained to them in minute detail everystep of the way until they are confident in their decision to buy.Special Considerations in Emerging Markets:The Chinese and Indian markets in particular front the charge of emerging markets on the globalbusiness scene and will represent a significant part of world marketing growth for decades tocome. 14
  • 16. Family structures in China, Japan and other Asian countries differ greatly from those in manyother countries. Family considerations command respect in all matters, including investmentsand individual actions. Collective considerations are often uppermost in the minds of people whohave lived under such conditions all their lives. Because older family members command somuch respect and influence they are the logical target audience.One of the most evident factors in dealing with and selling to Asian cultures is the avoidance of"loss of face," The Chinese have a business culture based on the social standing and reputation ofindividuals. To do anything the Chinese consider as demeaning or reducing their personalstanding is tantamount to insulting them profusely, which they see as a loss of face. The use ofembarrassing terms or causing any unease on social issues will kill marketing copy stone dead.On the other hand, the Chinese highly respect tradition and longevity and as a result reactpositively to copy that emphasizes the history and prestige of any company trying to enter theirmarket.In India collective cultures have been a way of life for hundreds of years. The caste system ofsocial standing is paramount in Indian society and presents particular challenges to avoid causingoffence. In business circles Sindhis, Marwaris and Gujratis dominate business houses, many ofwhich were built on (and are still based on) family values and ideals.Religious beliefs play a significant role in Indian society. Religion influences every aspect oftheir lives including their response and reaction to marketing copy. Motivational sellingtechniques are considered crass to many Indians while educational, emotive and informative datais more readily accepted. 15
  • 17. The Meaning of Culture:Culture is usually defined as the underlying value framework that guides an individual’sbehavior. It is reflected in individual’s perceptions of observed events, in personal interactions,and in the selection of appropriate responses in social situation.Culture determines what is acceptable or unacceptable, important or unimportant, right or wrong,workable or unworkable. It encompasses all learned and shared, explicit or tacit, assumptions,beliefs, knowledge, norms, and values, as well as attitudes, behavior, dress, and language.We encounter and make use of the word culture several times a day and in very differentcontexts. We attend cultural programs, discuss cultural differences as well as agriculturalpractices, read about the danger of cults and cultivate good or bad habits. Even when standing inthe dairy section of the supermarket we are confronted with live and active cultures whilesearching for the right yoghurt to buy!Reflecting its Latin origin in the word cultus, past participle of colere ‐ meaning to inhabit,cultivate, foster, worship or take care of ‐ the term culture holds numerous meanings throughoutvarious disciplines such as sociology, cultural anthropology, biology and agriculture.But for the purpose of intercultural relations and research, how do we define culture and howdoes it impact us?Is it the way we dress? The way we eat or prepare food? The kind of cars we like to drive orother means of transportation we might prefer?Culture is all these things and much more. In fact, most everything we do is influenced byculture: the way we give and receive information, use time and space, or view authority:Culture is a framework of behavioral patterns, values, assumptions and experiences shared by asocial group,Culture is a mostly automatically or unconsciously applied orientation system of collectivevalues, which makes its group members’ behavior comprehensible and to a certain degreepredictable for each other, 16
  • 18. Culture is communication, it impacts how we send and interpret messages,Culture shapes human conduct within a cultural group,Culture is something we learn,Culture is like mental software and has accordingly been defined as ―the collective programmingof the mind that distinguishes the members of one group or category of people from others‖(Geert Hofstede),Culture acts as a kind of filter or lens through which we view others, affecting the way we seethem and creating multiple perspectives,Culture is often compared to an iceberg. Like the tip of an iceberg, visible aspects of culture suchas behavior, eating habits, or clothing are easy to see. Under the surface, however, hides a hugeand potentially fatal portion made up of beliefs, values, customs, experiences and assumptions.Knowledge of the deeper parts of the iceberg helps us understand the ―why‖ behind the behavior.It enables us to make more informed evaluations of global counterparts and avoidmisunderstandings that can waste time and damage relationships.The cultural framework encompasses objective reality as manifested in societal institutions andvalues and subjective reality as expressed in personal but socialized predispositions and beliefs.―Culture is no abstraction but assumes a quite physical reality.Culture manifests itself in learned behavior, as individuals grow up and gradually come tounderstand what their culture demands of them. The function of a society-―what a society does‖-are not very different across countries. Everybody has to get food. Lodging, a job, money,clothes, a significant other, success, career, status, social recognition, pride, comfort, peace ofmind, a center for his or her existence, power, some influence over others, and all the otherthings! These are the objectives of people’s behavior all over the world. The relative amount oftime and resources allocated to these activities may vary, but the tasks remain. 17
  • 19. Manifestations of Culture:Cultural differences manifest themselves in different ways and differing levels of depth. Symbolsrepresent the most superficial and values the deepest manifestations of culture, with heroes andrituals in between. Symbols are words, gestures, pictures, or objects that carry a particular meaning which is only recognized by those who share a particular culture. New symbols easily develop, old ones disappear. Symbols from one particular group are regularly copied by others. This is why symbols represent the outermost layer of a culture. Heroes are persons, past or present, real or fictitious, who possess characteristics that are highly prized in a culture. They also serve as models for behavior. Rituals are collective activities, sometimes superfluous in reaching desired objectives, but are considered as socially essential. They are therefore carried out most of the times for their own sake (ways of greetings, paying respect to others, religious and social ceremonies, etc.). The core of a culture is formed by values. They are broad tendencies for preferences of certain state of affairs to others (good-evil, right-wrong, natural-unnatural). Many values remain unconscious to those who hold them. Therefore they often cannot be discussed, nor they can be directly observed by others. Values can only be inferred from the way people act under different circumstances. Symbols, heroes, and rituals are the tangible or visual aspects of the practices of a culture. The true cultural meaning of the practices is intangible; this is revealed only when the practices are interpreted by the insiders. 18
  • 20. Symbols Heroes Rituals Values Manifestation of Culture at Different Levels of DepthLayers of Culture:People even within the same culture carry several layers of mental programming withinthemselves. Different layers of culture exist at the following levels: The national level: Associated with the nation as a whole. The regional level: Associated with ethnic, linguistic, or religious differences that exist within a nation. The gender level: Associated with gender differences (female vs. male) The generation level: Associated with the differences between grandparents and parents, parents and children. The social class level: Associated with educational opportunities and differences in occupation. The corporate level: Associated with the particular culture of an organization. Applicable to those who are employed. 19
  • 21. The modern conception of culture focuses directly on observable behavior. It recognizes thatculture not only predisposes individual toward certain behavior but eliminates other behavior.Consequently, culture creates a repertoire of behavioral skills. Culture directly influences whatpeople will do and what people can do. This interpretation of culture is very useful for globalmarketing managers. It suggests that culture is more important for how managers should decide,less to what the decision should be. Culture affects implementation and execution of strategiesmore than their formulation. 20
  • 22. Culture across Countries:There are several useful ways of classifying cultures across countries. Cultural Grouping (Scandinavian, Latin American) High (European, Multicultural Japan, India) vs. Low- (India, China, Russia, Context Culture USA) (USA, Australia, Newzeland) Variaties of CulturesHigh-Context Cultures: (Most European, Japan, India) are relational, collectivist, intuitive, andcontemplative. This means that people in these cultures emphasize interpersonalrelationships. Developing trust is an important first step to any business transaction. Accordingto Edward T. Hall, these cultures are collectivist, preferring group harmony and consensus toindividual achievement. And people in these cultures are less governed by reason than byintuition or feelings. Words are not so important as context, which might include the speaker’stone of voice, facial expression, gestures, posture—and even the person’s family history andstatus. A Japanese manager explained his culture’s communication style to an American: ―Weare a homogeneous people and don’t have to speak as much as you do here. When we say oneword, we understand ten, but here you have to say ten to understand one.‖ High-contextcommunication tends to be more indirect and more formal. Flowery language, humility, andelaborate apologies are typical.Low-Context Cultures: (USA, Australia, and New Zealand) are logical, linear, individualistic,and action-oriented. People from low-context cultures value logic, facts, and directness. Solvinga problem means lining up the facts and evaluating one after another. Decisions are based on 21
  • 23. fact rather than intuition. Discussions end with actions. And communicators are expected to bestraightforward, concise, and efficient in telling what action is expected. To be absolutely clear,they strive to use precise words and intend them to be taken literally. Explicit contracts concludenegotiations. This is very different from communicators in high-context cultures who dependless on language precision and legal documents. High-context business people may even distrustcontracts and be offended by the lack of trust they suggest. 22
  • 24. 23
  • 25. Comparison between High & Low Context Culture: High Context Culture Low Context Culture Indirect and implicit messages Direct, simple and clear messages Polychromic Monochromic High use of non-verbal communication Low use of non-verbal communication Low reliance on written communication High reliance on written communication Use intuition and feelings to make Rely on facts and evidence for decisions decisions Long-term relationships Short-term relationships Relationships are more important than Schedules are more important than schedules relationships Strong distinction between in-group and Flexible and open out-group 24
  • 26. The Silent Language:The Silent Language is a translation not from one language to another, but from a series ofcomplex, nonverbal, contexting communications into words. The silent language is one of thegreat paradoxes of culture It isnt just that people "talk" to each other without the use of words,but that there is an entire universe of behavior that is unexplored, unexamined, and very muchtaken for granted. It functions outside conscious awareness and in juxtaposition to words.Example:People of the Western world, particularly Americans, tend to think of time as something fixed innature, something around us and from which we cannot escape/ an ever-present part of theenvironment, just like the air we breathe. That it might be experienced in any other way seemsunnatural and strange, a feeling which is rarely modified even when we begin to discover howreally differently it is handled by some other people. Within the West itself certain cultures ranktime much lower in over-all importance than we do. In Latin America, time is treated rathercavalierly. In Mexico one commonly hears the expression, "Our time or your time?" "НогаAmericana, bora Mexicana?" 25
  • 27. Five Different Use of Silent Language:Mr. Hall identified five different use of silent language. The uses are given below: Space Agreement across Material culture Silent language Friendship Possessions pattern 26
  • 28. Space: Distance between two people conversing. In the Middle East men maintain an intimatedistance, often too close for comfort for western people.Material Possessions: Always speak about volumes about one’s station in life, particularly wheresocial hierarchic are well developed so that people learn what to look for. The emphasis on well-known brands in Asian markets, for example, reflects a need to clearly identify one’s positionwith signals other people readily understand.Friendship Patterns: Friendship patterns are not only reflective of your own cultural upbringingbut also involve questions of trust and responsibility.Agreement across Culture: Agreement across culture are also interpreted differentlyPerceptions of Time: Perceptions of time vary considerably between even relatively closecultures, and studies have documented the varieties of problems connected with difeerent timeperceptions. 27
  • 29. Self Reference Criterion:Introduction and Illustrations:As globalization of world rapidly changes, today’s global managers, whose company operates inmany parts of world, face many challenges in securing their business interests in other countries.When a business decides to enter the foreign market there are a several factors that a companyshould take into consideration before deciding to expand their product or service into foreignmarket. Among these factors are the cultural differences the company faces.Cultural differences exist between different countries and these differences must be known andevaluated by the marketing firm. According to Lancaster et al (2002) a number of factorscontribute a country’s overall culture including religion, education and aesthetic appreciation.In last twenty years, learning cultural differences among nations and need for greater crosscultural awareness have been seen to be a very important factor in improving and facilitatingmarketing activities of a company outside their country of origin as different cultures hasdifferent ways of doing business, different cultural assumptions, values and attitudes. Therefore,culture is important and has to be appreciated by the managers running the company. It simplycan make or break relationship and even may cost the business millions of dollars.Moreover, adaptation to the environmental differences from one market to another is seen as thekey to successful international marketing. It is vital for international marketer being able toanticipate the uncontrollable factors of both the foreign and domestic market that have greatinfluence on a marketing mix, so he or she can adjust the marketing mix to minimize the effects.After all, due to globalization of markets and products, today increasing numbers of internationalmarketing staff have to deal with ethical issues in cross cultural global economy. As a result, it isclaimed by many international marketing researchers that the concept of ―self reference criteria‖has became the fundamental importance to cultural understanding and cross cultural analysis.Self Reference Criterion (SRC):It is common that after selling a product or service successfully many firms assume that theproduct or service will, without adaptation, also be successful in foreign markets. Therefore, one 28
  • 30. of the primary barriers to global marketing, particularly for those firms approaching globalmarketing first time, is self reference criterion.Self Reference Criterion is often defined as an unconscious reference to one’s own culturalvalues, experiences and knowledge as a basis for decisions. That is to say that one’s own cultureor company knows the best how to do things ( For example, people may make thewrong business decision in foreign country by thinking how they would handle the samesituation if they were in their home country.It also refers to the assumption that what is suitable for domestic market will be suitable forforeign markets too, that is to say there is no need to test whether the product or service has to bechanged.Moreover, Professor Lars Perner also notes that self reference criterion refers to the tendency ofindividuals, often unconsciously, to use the standards of one’s own culture to evaluateothers. He gives a couple of good examples to prove his point. According to him, manyAmericans perceive more traditional or conservative societies to be ―backward‖ or―unmotivated‖ because they fail to adopt new technologies or social reforms in order to preservetheir traditional values. In 1960s, a well educated American psychology professor referred toIndia’s culture a sick, because the Hindu religion did not allow eating cows despite the severefood shortages.In addition to Self Reference Criterion, closely connected is ethnocentrism. Ethnocentrism is thetendency to view one’s culture to be superior to others (Lars Perner). Ethnocentrism has beenparticularly a problem for American managers in the beginning of 21 st century due to America’sdominance in world economy during the late 1990s. The main issues here are to consider howthese biases and stereotypes that may come in the way when dealing with members of othercultures can be avoided or minimized. Both the Self Reference Criterion and ethnocentrismreduces the ability to assess a foreign market in its true light, which could result in seriousmistakes and consequences. 29
  • 31. The Instinctive Nature of Self Reference Criterion:When faced with set of facts or problems, people tend to react naturally on the basis of theknowledge that they acquired over their life time. That knowledge is product of one’s culture.One never thinks about a reaction or how to react but simply instinctively reacts. Therefore,when faced problem or situation in another culture, the tendency is to react too instinctively andrefer to one’s Self Reference Criterion for a solution.However, this reaction is based on meanings, values, symbols, norms and behavior relevant toone’s own culture rather than rational thinking. Unfortunately, as we know, the values and normof behaviors one’s reactions based on are usually different from, those of foreign culture. As aresult, such decisions and reactions are often not good ones ( of Self Reference Criterion in Different Cultures:To demonstrate effects of Self Reference Criterion we can simply consider misunderstandings orconflicts can happen between people of different cultures as the meaning of time, the attitudestowards the other people can be perceived different in different cultures. For example, in somecultures distance between individuals very close whereas it is much uncomfortable forAmericans. When someone from different culture approaches an American too closely, withoutknowing that is normal behavior in other cultures, American reacts adversely and tries to keepthe distance. This results in confusion for both parties. Foreigner assumes American cold andunfriendly while American thinks that foreigners are pushy. It is clear that both sides reactaccording to their values of their own Self Reference Criterion, making both victims of culturalmisunderstanding.According Perner ( that there are different perspectives exist indifferent cultures on several issues such as: Monochromic cultures tend to value precise scheduling and doing one thing at a time, whereas in polychromic cultures promptness valued less and multiple task can be done simultaneously. Space is perceived differently across different cultures. 30
  • 32.  Symbol has different meaning in different culture. For example, white is seen as symbol purity in US, but it is symbol of a death in China.The Effects of Self Reference Criterion on Decision Making:The ethnocentrism and Self Reference Criterion can influence an assessment of appropriatenessof a product’s domestically designed marketing mix for a foreign market. However, theinfluence of both Self Reference Criterion and the ethnocentrism can be controlled effectivesimply by recognizing their effects on our behavior. It is crucial to have greater awareness of theneed to be sensitive to differences and to ask questions and identify cultural values before doingbusiness in another country. Case of Vicks company can be very food example to this. Beforeentering Germany, they carried out researches and questionnaires. As a result, it has been foundthat in German ―Vicks‖ sounds like the rudest slang equivalent of ―sexual intercourse‖. So thename changed to ―Wicks‖ before introducing the product in Germany and the company avoidedmaking serious mistakes.However, the case of Disneyland proved that how Self Reference Criterion can also make allefforts worthless if appropriate actions not taken. When they have opened their business inFrance, they faced a tremendous problem and lost billions of dollars. This was big mistake madeby Disneyland stemming from reliance on their Self Reference Criterion in making decision.How to Isolate Self Reference Criterion Effects when Entering into International Markets:As we seen above, perception of market needs can be blocked by one’s own cultural experienceand knowledge. To reduce this perception and isolate effects of Self Reference Criterion Lee in1965 ( suggested a four point approach:A) Define the problem or goal in terms of home country traits, habits and normsB) Define the problem or goal in terms of foreign culture traits, habits and normsC) Isolate the Self Reference Criterion influence in the problem and examine it carefully to seehow it complicates patternD) Redefine the problem without the Self Reference Criterion influence and solve for theforeign market situation 31
  • 33. Though there are some problems with this approach, it still gives useful guidelines on the extentfor the need of standardization in marketing planning.Conclusion:In summarizing, it is clear that adverse effects of Self Reference Criterion can be prevented andturned into benefits by being aware of cultural differences and recognizing the importance ofthose differences. Firms that enter into global market for the first time need to carry out in-depthmarketing research into the concept of ―self reference criterion‖ and its importance. They mustfollow procedure of marketing research step by step to get feasible and intelligent decisions inthe international marketing (Kotler et al, 1999). 32