Chapter 4 Social and Cultural Environments SUMMARY A. Culture, a society’s “programming of the mind,” has both a pervasive and changing influence on each national market environment. Global marketers must recognize the influence of culture and be prepared to either respond to it or change it. Human behavior is a function of a person’s own unique personality and that person’s interaction with the collective forces of the particular society and culture in which he or she has lived. In particular, attitudes, values, and beliefs can vary significantly from country to country. B. Also, differences pertaining to religion, aesthetics, dietary customs, and language and communication can affect local reaction to brands or products as well as the ability of company personnel to function effectively in different cultures. A number of concepts and theoretical frameworks provide insights into these and other cultural issues. C. Cultures can be classified as high- or low-context; communication and negotiation styles can differ from country to country. Hofstede’s social value typology helps marketers understand cultures in terms of power distance, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, and long- versus short-term orientation. By understanding the self-reference criterion, global marketers can overcome the unconscious tendency for perceptual blockage and distortion. D. Rogers’ classic study on the diffusion of innovations helps explain how products are adopted over time by different adopter categories. The adoption process that consumers go through can be divided into multi-stage hierarchy of effects. Rogers’ findings concerning the characteristics of innovations can also help marketers successfully launch new products in global markets. Recent research has suggested that Asian adopter categories differ from the Western model. An awareness of environmental sensitivity can help marketers determine whether consumer and industry products must be adapted to the needs of different markets. LEARNING OBJECTIVES 1 Define culture and identify the various expressions and manifestations of culture that can impact global marketing strategies 2 Compare and contrast the key aspects of high- and low-context cultures 3 Identify and briefly explain the major dimensions of Hofstede’s social values typology 4 Understand the importance of diffusion theory and its applicability to global marketing 5 Explain the concept of environmental sensitivity and give contrasting examples of product categories that are deeply embedded in culture and those that are not DISCUSSION QUESTIONS 4-4. What are some of the elements that make up culture? How do these find expression in your native culture? Answer: This question can be especially interesting if there is multicultural representation among your students. Ask students from other countries to prepare a list of cultural anomalies’ that they have found here in the United States versus their home countries. Topics should include: food, entertainment, sports, dating, studying, dorm living and other areas. This question is designed to give students a chance to reflect upon and compare attitudes, beliefs, and values. Then students should take up the issue of aesthetics. How relevant are the performing or visual arts, both individually and to the home country population in general? Finally, language and communication issues can be explored. 4-5. What is the difference between a low-context culture and a high-context culture? Name a country that is an example of each type, and provide evidence for your answer. Answer: In a low-context culture, most of the message weight in a communication is carried on by the verbal component. A priority in such cultures is “getting it in writing,” and lawyers play an important role in creating and backing up agreements. In a high-context culture, the context of the communication carries more weight. The role of lawyers is reduced, and personal obligation and trust are emphasized proportionately. Overall, Japan is a high-context culture, while the U.S. a low-context culture. 4-6. How can Hofstede’s cultural typologies help Western marketers better understand Asian culture? Answer: Westerners seeking a better understanding of Asian culture can benefit from the findings of the Chinese Value Survey. This survey revealed a dimension of Asian culture called “Confucian Dynamism” that helps explain the growth in Asian economies. Specifically, virtuous behavior in Asian culture is reflected in persistence, observing ordered relationships, thrift, and a sense of shame. Westerners may enrich their own experience and further their business goals by absorbing some of these cultural dimensions; Westerners should also realize that it is probably futile to try to change Asian behavior that is rooted in these dimensions. 4-7. Briefly explain the social research of Everett Rogers regarding diffusion of innovations, characteristics of innovations, and adopter categories. How does the adoption process in Asia differ from the traditional Western model? Answer: Rogers’ work helps marketers understand the social processes at work when a new product is introduced into a culture or country. The adoption process consists of five steps, starting with awareness and ending with adoption. In the case of inexpensive consumer products, adoption means repeat purchase. The rate at which buyers proceed through the adoption process depends on the five characteristics of innovations: relative advantage, compatibility, complexity, divisibility, and communicability. For example, starting in 1991, Russell M. Frederickson successfully launched a chain of coffee outlets in Hong Kong. Frederickson notes that he started by offering a cup of coffee that was better than the rest (“relative advantage”) at a price that encouraged consumers to try it and come back for more (“divisibility”). The shops generated additional traffic by selling tea; regular tea-drinking patrons eventually “moved up” to coffee (“compatibility”). Finally, Frederickson staffed the outlets with at least 50% Chinese so that local consumers could learn about the products from one of their own. The shops feature posters explaining the various coffee drinks and indicating how they are pronounced (“communicability”). In view of Frederickson’s clear understanding of the diffusion process, it is not surprising that he has received many inquiries from Korea, Taiwan, and Singapore from persons wanting to start franchises. This demonstrates that both the product itself and the retailing concept exhibit the characteristics of the innovations described by Rogers. (Source: Russell M. Frederickson, “How to Sell Coffee in the Land of Tea,” Wall Street Journal (Jan. 23, 1995), p. A16. The third aspect of Rogers’ work is adopter categories, a way of classifying individuals in term of their innovativeness. Marketers should focus special efforts on early adopters, who make up 13.5 percent of the potential market. They exert a great deal of influence on the mass market for a product, which Rogers calls the early and late majority. OVERVIEW The conflicting priorities of commerce and conservation in Venice illustrate the ways that differences in the social and cultural environments impact marketing opportunities and dynamics around the globe. This chapter focuses on the social and cultural forces that shape and affect individual, group, and corporate behavior in the marketplace. We start with a general discussion of the basic aspects of culture and society and the emergence of a twenty-first-century global consumer culture. Next, several useful conceptual frameworks for understanding culture are presented. These include Hall’s concept of high- and low-context cultures, Maslow’s hierarchy of needs, Hofstede’s cultural typology, the self-reference criterion, and diffusion theory. The chapter also includes specific examples of the impact of culture and society on the marketing of both consumer and industrial products. ANNOTATED LECTURE/OUTLINE SOCIETY, CULTURE, AND GLOBAL CONSUMER CULTURE Both differences and similarities characterize the world’s cultures, meaning that the task of the global marketer are twofold. First, marketers must study and understand the country cultures in which they will be doing business. Second, this understanding must be incorporated into the marketing planning process. In some instances, strategies and marketing programs will have to be adapted; however, marketers should also take advantage of shared cultural characteristics and avoid unneeded and costly adaptations of the marketing mix. While marketers should be secure in their own convictions and traditions, an open mind is required to appreciate the integrity and value of other ways of life and points of view. Although “culture shock” is a normal human reaction to the new and unknown, successful global marketers strive to comprehend human experiences from the local point of view. Culture can be understood as “ways of living, built up by a group of human beings that are transmitted from one generation to another.” • (Learning Objective #1) A culture acts out its ways of living in the context of social institutions, including family, educational, religious, governmental, and business institutions. Culture includes conscious and unconscious values, ideas, attitudes, and symbols that shape human behavior and that are transmitted from one generation to the next. Culture can be divided into two broad categories: a) Material culture: the physical component or physical culture and includes physical objects and artifacts created by humans such as clothing and tools. b) Nonmaterial culture: the subjective or abstract culture and includes intangibles such as religion, perceptions, attitudes, beliefs, and values. “Cultural universals” are those elements of culture evident in all societies. These “universals” include: • athletic sports • body adornment • cooking • courtship • dancing • decorative art • education • ethics • etiquette • family feasting • food taboos • language • marriage • mealtime • medicine • mourning • music • property rights • religious rituals • residence rules • status differentiation • trade It has been argued that consumption has become the hallmark of postmodern society; cultural information and imagery flow freely across borders via satellite TV and the Internet. New global consumer cultures are emerging; these persons share meaningful sets of consumption-related symbols. This culture stems from the wired world in which there is an increasing interconnectedness of local cultures; it can be exploited by global consumer culture positioning (GCCP). Attitudes, Beliefs, and Values If we accept Hofstede’s definition of culture as “the collective programming of the mind,” then it makes sense to learn about culture by studying attitudes, beliefs, and values. An attitude is a learned tendency to respond in a consistent way to a given object or entity. Attitudes are clusters of interrelated beliefs. A belief is an organized pattern of knowledge that an individual holds to be true about the world. Attitudes and beliefs are related to values. A value is an enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct; values represent the deepest level of culture. Within any large dominant cultural group, there are likely to be subcultures, smaller groups with their own shared subset of attitudes, beliefs, and values; subcultures represent attractive niche marketing opportunities. Religion Religion is an important source of a society’s beliefs, attitudes, and values. The world’s major religions include Buddhism, Hinduism, Islam, Judaism, and Christianity. Religious tenets, practices, holidays, and history directly impact the way people of different faiths react to global marketing activities. Example: a) Hindus do not eat beef, which means that McDonald’s does not serve hamburgers in India. b) In the aftermath of the September 2001 terror attacks in New York and Washington, D.C. and the subsequent American military actions in the Middle East, some Muslims have tapped into anti-American sentiment by urging a boycott of American brands. Religious issues have also been at the heart of a dispute about whether references to God and Christianity should be included in a new European constitution that will be adopted now that the European Union has expanded its membership from fifteen to 27 countries. Aesthetics Within every culture, there is an overall sense of what is beautiful and what is not beautiful, what represents good taste as opposed to tastelessness or even obscenity, and so on. Such considerations are matters of aesthetics. Global marketers need to understand the importance of visual aesthetics embodied in the color or shape of a product, label, or package. Likewise, different parts of the world perceive aesthetic styles—various degrees of complexity, for example—differently. In some cases a standardized color can be used such as the distinctive yellow on Caterpillar’s equipment. Because color perceptions can vary among cultures, such perceptions should be considered in product packaging and communications especially in highly competitive markets. There is nothing inherently “good” or “bad” about a color; red is popular in most countries despite being the color of blood. It represents winemaking and conveys the meaning “emotional.” In some African countries, red is poorly received, and white is associated with death in parts of Asia. Music is an aesthetic component of all cultures, accepted as a form of artistic expression and source of entertainment. In one sense music represents a “trans-culture” not identified with any particular nation; rhythm is a universal aspect of music. However, music is also characterized by stylistic variation with regional or country-specific associations (e.g., reggae with Jamaica); music exemplifies the “think global, act local” theme. Because music plays an important role in advertising, marketers must understand what style is appropriate in a given national market. Although background music can be used effectively in broadcast commercials, the type of music appropriate for a commercial in one part of the world may not be acceptable or effective in another part. Dietary Preferences Cultural influences are also quite apparent in food preparation and consumption patterns and habits. Examples: a) Domino’s Pizza pulled out of Italy because Italians perceived its product to be “too American.” In particular, the tomato sauce was too bold and the toppings were too heavy. b) To successfully launch the Subway chain in India, it was necessary to educate consumers about the benefits of the company’s sandwiches. Why? Because Indians do not normally consume bread. These examples underscore the fact that a solid understanding of food-related cultural preferences is important for any company that markets food or beverages products globally. Companies that lack cultural sensitivity are bound to make marketing mistakes. While some food preferences remain deeply embedded in culture, there is plenty of evidence that global dietary preferences are converging. For example, “fast food” is gaining increased acceptance around the world. There are several explanations for this: a) Heads of families in many countries are pressed for time and are disinclined to prepare home-cooked meals. b) Young people are experimenting with different foods. c) The global tourism boom has exposed travelers to pizza, pasta, and other ethnic foods. d) Shorter lunch hours and tighter budgets are forcing workers to find a place to grab a quick, cheap bite before returning to work. As cultural differences become less relevant, such convenience products will be purchased in any country when consumer disposable income is high enough. However, such processes can provoke nationalist backlash. • To counteract the exposure of its young citizens to le Big Mac and other American-style fast foods, the French National Council of Culinary Arts designed a course of French cuisine and “good taste” for elementary school students. Language and Communication The diversity of cultures around the world is reflected in language. Linguists divide the study of spoken or verbal language into four areas: • syntax (rules of sentence formation) • semantics (system of meaning) • phonology (system of sound patterns) • morphology (word formation). Unspoken or nonverbal communication includes gestures, touching, and other forms of body language that supplement spoken communication. The spoken and unspoken aspects of language are included in the broader linguistic field of semiotics, which is the study of signs and their meanings. In global marketing, language is a crucial tool for communicating with customers, suppliers, channel intermediaries, and others. Blunders in product names and advertising are costly. THE CULTURAL CONTEXT Can French Cuisine Regain Its Luster? For centuries, France has enjoyed a reputation as the epitome of the culinary arts. Terms such as haute cuisine, cuisine classique, and nouvelle cuisine have been used to describe various styles and eras of French cooking. Quiche, escargot, and Tournados Rossini are some of the French dishes that entered the culinary mainstream in the twentieth century. French restaurants that use luxury ingredients and boast highly coveted stars from the venerable Michelin guide have long been popular dining destinations among globetrotting gourmands. Recently, a number of authors, journalists, and food critics have chronicled a disturbing trend: the decline in France’s status as a culinary superpower. In short, France is no longer universally viewed as cutting-edge. The numbers tell part of the story: McDonald’s is France’s number one private sector employer, and the number of cafés has shrunk to 40,000 from 200,000 half a century ago. While sales of the most expensive French wines are booming, thanks to strong demand in Asia, sales of French wine made for everyday drinking is declining around the world. What is to be done? Plenty, it turns out. For example, Omnivore is an organization and magazine started by food writer Luc Dubanchet. The goal is to spread the word about le jeune cuisine, which is more casual than traditional French. Omnivore’s sponsors generally hope to generate increased awareness and sales among both chefs and restaurant patrons. In addition, a French organization called the Interprofessional Council of Bordeaux Wine (CIVB) has launched a new program to promote Bordeaux wines in global markets. Semantic issues arise in global marketing (e.g. When Good Housekeeping magazine was launched in Japan, the closest translation in Japanese meant “domestic duties”). Phonology can be an issue (e.g., Colgate discovered that in Spanish, Colgate means “go hang yourself”). Technology is providing interesting new opportunities for exploiting linguistics in the name of marketing. Young people throughout the world are using mobile phones to send text messages; it turns out that certain number combinations have meaning in particular languages. An impact of globalization on culture is the diffusion of the English language; more people speak English as a foreign language than as a native language. The challenges of nonverbal communication are formidable (e.g., In the Middle East, Westerners must not reveal the soles of their shoes or pass documents with the left hand). Westerners must pay attention not only to what they hear but also to what they see when conducting business in such cultures. Two important communication issues may emerge: • Sequencing concerns whether the discussion goes directly from point A to point B or seems to go off on tangents. • Phasing pertains to whether certain important agenda items are discussed immediately or after the parties have taken some time to establish rapport Marketing’s Impact on Culture Universal aspects of the cultural environment represent opportunities for global marketers to standardize a marketing program. The astute global marketer often discovers that much of the apparent cultural diversity in the world turns out to be different ways of accomplishing the same thing. Increased travel and improved communications have contributed to a convergence of tastes and preferences in many product categories. However, the impact of marketing and of global capitalism on culture can be controversial; sociologist Ritzer laments the “McDonaldization of culture.” As a response, the international Slow Food movement boasts 70,000 members in dozens of countries; it is founded on the idea that things should not taste the same everywhere (Exhibit 4-5). HIGH- AND LOW-CONTEXT CULTURES • (Learning Objective #2) Edward T. Hall forwarded the concept of high- and low-context to explain cultural orientations. In a low-context culture, messages are explicit and specific; words carry most of the communication power. In a high-context culture, less information is contained in the verbal part of a message. More information resides in the context of communication, including the background, associations, and basic values of the communicators. High-context cultures function with much less legal paperwork than low-context cultures (e.g., Japan and Saudi Arabia place emphasis on a person’s values and social position). In a low-context culture such as the U.S., Switzerland, or Germany, deals are made with less information about character, background, and values of the participants. Much more reliance is placed upon words and numbers. In a high-context culture, a person’s word is his bond. There is less need to anticipate legal contingencies because the culture emphasizes obligations and trust as important values. In these cultures, shared feelings of obligation and honor take the place of impersonal legal sanctions. Exceptions to the general tendency are found in subcultures. The U.S. is a low-context culture with high-context subcultures (e.g., the world of the central banker, for example, is a “gentleman’s” world. The word of the banker is many times sufficient for the borrowing of millions of dollars). (Table 4-1 summarizes some of the ways in which high- and low- context cultures differ). HOFSTEDE’S CULTURAL TYPOLOGY • (Learning Objective #3) Hofstede is well known for research studies of social values suggesting that the cultures of different nations can be compared in terms of five dimensions. Three of the dimensions refer to expected social behavior, one dimension is concerned with “man’s search for Truth,” and one dimension reflects the importance of time. The dimensions are: 1. Power distance: This is the extent to which the less powerful members of a society accept power to be distributed unequally. “All societies are unequal, but some are more unequal than others.” High power distance: Hong Kong and France. Low power distance: Germany, Austria, Scandinavia and the Netherlands. 2. Individualist cultures: each member of society is primarily concerned with his or her own interests and those of the immediate family. Collectivist cultures, all of society's members are integrated into cohesive in-groups. High Individualism – U.S. and Europe Low Individualism – Japan and other Asian countries 3. Masculinity: This dimension describes a society in which men are expected to be assertive, competitive, and concerned with material success, and women fulfill the role of nurturer. Examples are Japan and Austria. Femininity, by contrast, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly competitive behavior. Examples are Spain, Taiwan, the Netherlands, and the Scandinavian countries. 4. Uncertainty avoidance: This is the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. Members of uncertainty accepting cultures are more tolerant of persons whose opinions differ from their own. Examples: Denmark, Sweden, Ireland, and the United States. At the other end are Greece and Portugal. For cultural dimensions in Asia, researchers developed a Chinese Value Survey (CVS) a) A long-term orientation (LTO) versus short-term orientation to assess the sense of immediacy within a culture, whether gratification should be immediate or deferred. b) Long-term values include persistence (perseverance), a general tenacity in the pursuit of a goal. c) Ordering relationships by status reflects the presence of societal hierarchies, and observing this order indicates the acceptance of complementary relations. d) Thrift manifests itself in high savings rates. e) A sense of shame leads to sensitivity in social contacts. These values are held within high-performing Asian countries such as Hong Kong, Taiwan, and Japan, but these values alone do not lead to economic growth. The existence of a market and a supportive political context are also required (e.g. India has been held back by market restrictions until recently). Hofstede’s work provides marketers insights that can guide them in a range of activities, including product development, interacting with joint venture partners, and conducting sales meetings. For example, understanding the time orientation of one’s native culture compared to that of others is crucial. In Japan, Brazil, and India, building a relationship with a potential business partner takes precedence over transacting the deal. People from cultures that emphasize the short term must adapt to the slower pace of business in some countries. The Japanese concept of gaman (persistence) provides insight into the willingness of Japanese corporations to pursue research and development projects for which the odds of short-term success appear low. By understanding the dimension of uncertainty avoidance, global marketers are better equipped to assess the amount of risk with which buyers are comfortable. In countries with high levels of uncertainty avoidance, marketers should stress warranties, money-back guarantees, and other risk-reducing features. Power distance, reflects the degree of trust; the higher the power distance (PDI), the lower the level of trust; companies in high PDI cultures prefer sole ownership of subsidiaries to provide more control. The masculinity-femininity dimension manifests itself in the importance of achievement and possessions (masculine values), compared with helpfulness and social support (feminine values). An aggressive, achievement-oriented salesperson is better matched to Japan than Denmark. THE CULTURAL CONTEXT Applying Hofstede’s Typology to Denmark What is Denmark really like? The following profile captures Denmark in terms of Hofstede’s cultural values framework (see Exhibit 4-6). Future Orientation: The extent to which a society encourages and rewards future-oriented behaviors such as planning, investing in the future, and delaying gratification. Denmark scores highly. In the Danish business environment, it is normal to prepare and discuss 5-year budgets and business plans that are then adjusted yearly. Also, the Danish population is aware of the importance of saving for retirement. The Ministry of Economic Affairs hopes to establish a world-class innovation center in Denmark. The center would elevate Denmark to the top ranks of countries with consumer-driven innovation. Gender Differentiation: The extent to which a society maximizes gender role differences. Denmark scores low. In Denmark, gender role differences are insignificant. Danish women are strong and believe they can do anything that a man can. Danish women are very focused on equality, both in the home and at work. It is very common for fathers to take equal part in cleaning and other duties around the house. Uncertainty Avoidance: The extent to which the members of a society are accepting of ambiguous situations or comfortable with unfamiliar situations. Denmark scores low; in other words, it is an uncertainty-accepting society. Danes generally are not afraid of taking chances; they are comfortable doing things that are not carefully thought out or planned. Denmark’s “flexicurity” policy combines free labor markets (workers can be fired) with adjustable welfare benefits, including financial support and free job training for the unemployed. The Danish social system provides a close-knit safety system to fall back on. Power Distance: The degree to which members of a society expect power to be unequally shared. Denmark scores low, which results in very flat and informal organizational structures and the wide use of various matrix models. Janteloven, or “the law of Jante,” deeply affects how Scandinavian people act and are expected to act. The term originated with writer Aksel Sandemose who wrote a novel about Jante, a village where one is not supposed to believe he or she is better or smarter than anyone else. Humility is important, and this limits power distance. Individualism/Collectivism: The degree to which societal institutions encourage individuals to be integrated into groups within organizations and society. Denmark scores highly on individualism. In-group Collectivism and Institutional Collectivism: The extent to which members of a society take pride in membership in small groups such as their family and circle of close friends and the organizations in which they are employed. Denmark scores highly in institutional collectivism and low in in-group collectivism. Throughout much of Asia, the collectivist orientation is dominant. The U.S. is a highly individualist culture. In highly individualistic cultures, ads often feature one person; in collectivist countries, ads feature groups. Using Hofstede’s framework can provide useful insights into the creation of culturally appropriate consumer brand images. THE SELF-REFERENCE CRITERION AND PERCEPTION A person’s perception of market needs is framed by his or her own cultural experience. A framework for reducing perceptual blockage and distortion was developed by James Lee. The unconscious reference to one’s own cultural values is the self-reference criterion (SRC). To eliminate or reduce cultural myopia, Lee proposed a four-step framework. • Define the problem or goal in terms of home country cultural traits, habits, and norms. • Define the problem or goal in terms of host-country cultural traits, habits, and norms. Make no value judgments. • Isolate the SRC influence and examine it carefully to see if it complicates the problem. • Redefine the problem without the SRC influence and solve for the host-country market situation. SRC teaches that a vital, critical skill of the global marketer is unbiased perception, the ability to see a culture. SRC can be a negative force in global business leading to misunderstanding and failure. A person must suspend assumptions based on prior experience and success and add new knowledge about human behavior and motivation. DIFFUSION THEORY • (Learning Objective #4) Sociologist Everett Rogers distilled his research into three concepts that are extremely useful to global marketers: the adoption process, characteristics of innovations, and adopter categories. An innovation is something new. However, a product already introduced in one market may be an innovation elsewhere because it is new and different for the targeted market. Managers find themselves marketing products that may be, simultaneously, innovations in some markets and mature or declining products in other markets. The Adoption Process The adoption process - the mental stages from the first knowledge of an innovation to product adoption or purchase: • Awareness. The customer becomes aware for the first time of the product or innovation. Global marketers create awareness through general exposure to advertising messages. • Interest. The customer is interested enough to learn more. The customer will engage in research and seek information. • Evaluation. The individual mentally assesses the product's benefits and decides whether or not to try it. • Trial. Most customers will not purchase expensive products without a "trial." For inexpensive products, an initial single purchase is defined as trial. • Adoption. The individual either makes an initial purchase or continues to purchase a product. Sales reps and word of mouth are forces in the decision to buy. Characteristics of Innovations Five factors affect the rate of adoption: • Relative advantage: How a new product compares with existing products or methods. • Compatibility: How consistent a product is with existing values and past experiences. • Complexity: How difficult the new product is to understand and use. • Divisibility: How easy it is to try a product on a limited basis without great expense. • Communicability. How well the benefits or value of a product are communicated. Adopter Categories Adopter categories are classifications of individuals in a market on the basis of innovativeness. (See Figure 4-3) Five categories have been assigned to the segments of a normal distribution: • The first 2.5 percent to purchase a product are innovators. • The next 13.5 percent are early adopters • The next 34 percent are the early majority • The next 34 percent are the late majority • The final 16 percent are laggards. Innovators are more venturesome, more cosmopolitan, and wealthier than those who adopt later. Earlier adopters are the most influential people in their communities and have great influence on the early and late majority, the bulk of the adopters of any product. Early adopters tend to be younger, with higher social status, and a more favorable financial position than later adopters. Persuading innovators and early adopters to purchase a product is critical; these groups must make the first move in order for eventual penetration of a product into the broader market. Diffusion of Innovations in Pacific Rim Countries Since Japan, South Korea, and Taiwan are high-context, homogeneous cultures while the U.S. is a low-context, heterogeneous culture, research showed that Asia had faster diffusion rates. Adoption would proceed more quickly in markets where innovations were introduced late, allowing time to assess the relative advantages, compatibility, and other product attributes. The Asian adopter behavior differs from Western behavior. There are fewer Asian innovators since risk avoidance is high. When Asian consumers become aware that others tried the product, they quickly follow suit. MARKETING IMPLICATIONS OF SOCIAL AND CULTURAL ENVIRONMENTS The various cultural factors described earlier can exert important influences on consumer and industrial products marketed around the globe. Environmental sensitivity reflects the extent to which products must be adapted to the culture-specific needs of different national markets. • (Learning Objective #5) At one end of the continuum are environmentally insensitive products that do not require significant adaptation; at the other are products that are sensitive to environmental factors. The greater the environmental sensitivity, the more managers must address country-specific economic, regulatory, technological, social, and cultural environmental conditions. Intel’s microprocessors can be sold anywhere because a chip is a chip, but food products have high environmental sensitivity because of sensitivity to climate and culture. The sensitivity of products can be represented on a two-dimensional scale (Figure 4-5). The horizontal axis shows environmental sensitivity, the vertical axis the degree for product adaptation needed. At the upper right of Figure 4-5 are products with high environmental sensitivity. Food sometimes falls into this category because it is sensitive to climate and culture. Research studies show that, independent of social class and income, culture is a significant influence on consumption behavior and durable goods ownership. Consumer products are probably more sensitive to cultural difference than are industrial products. Hunger is a basic physiological need in Maslow’s hierarchy; everyone needs to eat, but what we want to eat can be strongly influenced by culture. Evidence from the front lines of the marketing wars suggests that food is probably the most sensitive category of consumer products. Hydration is a universal physiological need (see Exhibit 4-8). As is the case with food and cooking, however, the particular liquids people want to drink can be strongly influenced by culture. Coffee is a beverage category that illustrates the point. On the European continent, coffee has been consumed for centuries. By contrast, Britain has historically been a nation of tea drinkers, and the notion of afternoon tea is firmly entrenched in British culture. CASES Case 4-1: Is Tourism the Savior or the Scourge of Venice? Overview: Cruise ships are not the only marketing-related issue that has ruffled some feathers in Venice and resulted in public debate. Venice’s unique setting results in severe seasonal flooding; in the winter, tide surges known as acqua alta (“high water”) cause severe structural damage to buildings and make it hard for pedestrians to navigate the city’s narrow streets. The conflicting priorities of commerce and conservation in Venice illustrate the ways that differences in the social and cultural environments impact marketing opportunities and dynamics around the globe. Clearly, Venice’s cultural riches constitute a magnet for tourists. It remains to be seen, however, whether the rising tide of tourism and other commercial ventures is sustainable. Discussion Questions 4-8. What critical thinking issues are raised in this case? Answer: The conflicting priorities of commerce and conservation in Venice illustrate the ways that differences in the social and cultural environments impact marketing opportunities and dynamics around the globe. 4-9. The case presents various points of view on the issue of tourism in Venice. Whose perspective(s), if any, do you agree with? Answer: It would align with the perspective that advocates for balancing tourism with preserving Venice’s cultural and environmental integrity. While tourism brings economic benefits, it’s crucial to address the negative impacts on the city’s infrastructure and local residents. Sustainable tourism practices and stricter regulations can help maintain Venice’s heritage while benefiting from its global appeal. 4-10. Should companies that contribute to historic renovation projects be allowed to place advertising on the buildings? Answer: The answers will vary by student. The student must address the paradox of Venice and how this advertising will affect the way Venice is being positioned. Allowing companies to place advertising on historic renovation projects can provide valuable funding for preservation but risks compromising the aesthetic and historical integrity of the buildings. A balanced approach might involve restrictions on the size and visibility of ads, ensuring they don’t detract from the building’s historical value while still supporting renovation efforts. 4-11. In June 2011, city officials in Venice approved a tax on tourists staying in the city. Do you think this is a fair and effective way to generate revenue and limit the number of tourists? Answer: A tax on tourists in Venice can be a fair and effective way to generate revenue while potentially discouraging overtourism. It helps cover the costs associated with managing the influx of visitors and preserving the city's infrastructure. However, its effectiveness depends on setting a reasonable rate and using the revenue to improve tourist services and mitigate the impact on local residents. 4-12. Do you think that Venice’s tourist officials should use marketing communications to provide information that would direct visitors to areas of the city that are “less touristy”? Answer: The student’s answers will vary however, they must address the social implications that “a different type of tourist” will present. Yes, Venice’s tourist officials should use marketing communications to direct visitors to less touristy areas. This strategy can help distribute tourist traffic more evenly, alleviate pressure on heavily visited spots, and offer a richer experience by showcasing the city's diverse attractions. It also helps preserve the character of popular areas and supports local businesses in quieter neighborhoods. Case 4-2: Soccer and the Fashion World Overview: Marketers have already learned to reap big profits from the connection between soccer and the fashion world. Soccer stars achieve celebrity status, are household names in many parts of the world, and enjoy seemingly universal appeal. Fans don clothes featuring team names and colors. Little wonder, then, that a recent print advertising campaign for luxury goods marketer Louis Vuitton featured football. In fall 2010, the FIFA collection was launched in the United States and 11 other countries. The collection’s five separate lines target both men and women. Other sports organizations have attempted to launch branded clothing lines in the United States, with mixed success. FIFA is not the only global marketer seeking revenue growth by boosting soccer’s popularity in America. Discussion Questions 4-13. Is FIFA’s “sartorial strategy” likely to influence Americans’ perceptions of soccer? Answer: Personal opinion question based on student’s perceptions of American dress – are we a nation of “snappy dressers” or are we a nation of jeans, flip-flops, and tee shirts? If the answer is the second one, then no FIFA’s strategy will not work in the United States. If the answer is the first one—well maybe American’s will turn to FIFA clothing as a brand to dress snappy! 4-14. Discuss your thoughts on whether soccer can be transformed into a mainstream sport in the United States? Answer: Again, student answers will vary depending upon their interest in/disinterest in soccer. One factor that works against soccer as a mainstream sport in the US is its TV presentation – not conducive for free commercial television stations to support. Soccer has the potential to become a mainstream sport in the United States due to its growing popularity, especially among youth and diverse communities. Increased investment in grassroots programs, better promotion of domestic leagues, and successful international competitions can further drive its growth. However, it will need to compete with established American sports like football and basketball for broader mainstream acceptance. 4-15. With the 2010 World Cup in South Africa, FIFA faced a number of challenges pertaining to security, ticketing, and transportation. The 2014 World Cup will be held in Brazil, where key infrastructure areas such as telecommunications and airports are underdeveloped. What must FIFA do to ensure the 2014 World Cup is successful? Answer: Work with the Brazilian government to upgrade, improve, and generally create a world class country and city on such issues as: security, ticketing, infrastructure, transportation, accommodations, and other major issues prior to the start of the games. TEACHING TOOLS AND EXERCISES Additional Cases: "Tailoring Your Strategy to Fit the Culture" by Marieke de Mooij, Insight Magazine, June 2010; IIR026-PDF-ENG. "EMC2: Delivering Customer Centricity" by Thomas Steenburgh and Jill Avery, April 2011. Harvard Business School 511124-PDF-ENG. "Dacia Duster SUV" by Marina Apaydin, Hantulie Oana, and Nicoleta, January 2011, Richard Ivey School, Product Number 910A31-PDF-ENG. “Marketing: Who’s Really Minding the Store Globally”? Linda C. Ueltschy,; Irene Herremans; John K. Ryans Jr. HBS BH190. “Colgate Max Fresh: Global Brand Roll-Out”, John A. Quelch, Jacquie Labatt-Randle, HBS 508009. Activity: Students should be preparing or presenting their Cultural-Economic Analysis and Marketing Plan for their country and product as outlined in Chapter 1. Out-Of-Class Reading: As an outside reading assignment, students will read how expanding into adjacent markets is tougher than it looks; three-quarters of the time, the effort fails. Here is how to change those odds dramatically. Zook, Chris, and Allen, James. “Growth Outside the Core.” Harvard Business Review 81, no. 12 (December, 2003), pp. 67-73. Cross-Cultural Differences: To assess cross-cultural differences, students will talk to people from a different country. They can check with the office responsible for coordinating international students to obtain names. Interview at least three people and get responses to the following questions: (a) What country do you come from? (b) What is your first language? (c) Describe you country’s culture in terms of the role of women in the workforce, the benefits provided to employees, how managers treat their employees, and general management practices. (d) What were the greatest difficulties you had in adapting to your new culture? (e) What advice would you give me if I were in a marketing management position in your country? Internet Exercise: Have students go to the homepage of The Internationalist (www.internationalist.com). Here they can start to explore the world. Have them browse around the sites and then click on International Business. They should select 2-3 countries in which they have an interest. Students are to write a 1-page impression of findings regarding the culture of these countries and should be prepared to discuss those findings with the class. Videos: U.K. Bellwether Report: Marketers Are Pessimistic About 2012 – European Companies are scaling back marketing plans for 2012. http://adage.com/article/global-news/u-k-bellwether-report-marketers-pessimistic-2012/232201/ Four Seasons Embraces Digital Marketing, Virtual Experiences – How they are coping with advertising changes worldwide, and the new moves they are making. http://adage.com/article/cmo-interviews/seasons-embraces-digital-marketing-virtual-experiences/232055/ Film: Assign the film “Rising Sun.” The movie is a murder mystery based on the culture clash between Los Angeles police and Japanese multinational business interests. It is entertaining and educational at the same time. SUGGESTED READING Books Abegglen, James C., and George Stalk Jr. Kaisha, The Japanese Corporation. New York: Basic Books, 1985. Alfino, Mark, John S. Caputo, and Robin Wynyard. McDonaldization Revisited: Critical Essays on Consumer Culture. Westport, CT: Praeger, 1998. Benedict, Ruth. Patterns of Culture. Boston: Houghton Mifflin, 1959. Brislin, R. W., W. J. Lonner, and R. M. Thorndike. Cross-Cultural Research Methods. New York: John Wiley & Sons, 1973. Dale, Peter N. The Myth of Japanese Uniqueness. New York: St. Martin's Press, 1986. Featherstone, Mike, ed. Global Culture: Nationalism, Globalization and Modernity. London: Sage Publications, 1990. Hall, Edward T. Beyond Culture. Garden City, N.Y.: Anchor, 1976. _____ and Mildred Reed Hall. Hidden Differences: Doing Business with the Japanese. New York: Doubleday, 1990. _____ and Mildred Reed Hall. Understanding Cultural Differences. Yarmouth, ME: Intercultural Press, 1990. Harris, Philip R., and Robert T. Moran. Managing Cultural Differences: High Performance Strategies for a New World of Business, 3d ed. Houston: Gulf Publishing Company, 1991. Hofstede, Geert. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill, 1991. Lewis, Richard D. When Cultures Collide. London: Nicholas Brealey Publishing, 2000. Moran, R. and W. Stripp. Dynamics of Successful International Business Negotiations. Houston: Gulf Publishing Company, 1991. Articles Alden, Dana L., Jan-Benedict Steenkamp, and Rajeev Batra. “Brand Positioning through Advertising in Asia, North America, and Europe: The Role of Global Consumer Culture.” Journal of Marketing 63, no. 1 (January 1999), pp. 75-87. Bonvillian, Gary, and Willliam A. Nowlin. “Cultural Awareness: An Essential Element of Doing Business Abroad.” Business Horizons 37, no. 6 (November 1994), p. 44. Dulek, Ronald E., John S. Fielden, and John S. Hill. “International Communications: An Executive Primer.” Business Horizons 34, no. 1 (January/February 1991), pp. 20-25. Fedor, Kenneth J. and William B. Werther, Jr. “Making Sense of Cultural Factors in International Alliances.” Organizational Dynamics, 24, no. 4 (Spring 1995), pp. 33-48. Fitzgerald, Nora. “Oceans Apart, but Closer than You Think.” World Trade, (February 1996), p. 58. Ford, John B., Michael S. LaTour, and Tony L. Henthorne. “Perceptions of Marital Roles in Purchase Decision Processes: A Cross Cultural Study,” Journal of the Academy of Marketing Science, 23, no. 2 (Spring, 1995), pp. 120-131. Ford, John B., and Earl D. Honeycutt, Jr. “Japanese National Culture as a Basis for Understanding Japanese Business Practices.” Business Horizons 35, no. 6 (November/December 1992), pp. 27-34. Froz, Nadeen and Taghi Ramin. “Understnding Cultural Variables is Critical to Success in International Business.” International Journal of Mangement 21, no. 3 (2004), pp. 307-324. Herbig, Paul A., and Hugh E Kramer. “Do’s and Don’ts of Cross-Cultural Negotiations.” Industrial Marketing Management 21, no. 4 (November 1992), pp. 287-298. Hofstede, Geert, and Michael Harris Bond. “The Confucius Connection: From Cultural Roots to Economic Growth.” Organizational Dynamics, (Spring 1988), pp. 5-21. Jacobs, Laurence E., Charles Keown, Reginald Worthley, and Kyung-I Ghymn. “Cross-Cultural Colour Comparisons: Global Marketers Beware!” International Marketing Review 8, no. 3 (1991), pp. 21-30. Kim, Donghoon, Yigang Pan, and Heung Soo Park. “High- Versus Low-Context Culture: A Comparison of Chinese, Korean, and American Cultures.” Psychology & Marketing 15, no. 6 (September 1998), pp. 507-521. Lewis, Maureen. “Why Cross-Cultural Training Simulations Work.” Journal of European Industrial Training, 29, no. 7 (2005), pp. 595-598. Lin, Carloyn A. “Cultural Values Reflected in Chinese and American Television Advertising.” Journal of Advertising 30, no. 4 (Winter 2001) pp. 83-94. Manrai, Lalita A., and Ajay K. Manrai. “Current Issues in the Cross-Cultural and Cross-National Consumer Research.” Journal of International Consumer Marketing 8, no. 3-4 (1996), pp. 9-22. Menger, Richard. “Japanese and American Negotiators: Overcoming Cultural Barriers to Understanding.” Academy of Management Executive 13, no. 4 (November 1999), pp. 100-101. Mintu, Alma T., and Roger J. Calantone. “A Comparative Approach to International Marketing Negotiation.” Journal of Applied Business Research 7, no. 4 (Fall 1991), pp. 90-97. Money, R. Bruce, Mary C. Gilly, and John L. Graham. “Explorations of National Culture and Word-of-Mouth Referral Behavior in the Purchase of Industrial Services in the United States and Japan.” Journal of Marketing 62, no. 4 (October 1998), pp. 76-87. Reardon, Kathleen Kelley, and Robert E. Spekman. “Starting Out Right: Negotiating Lessons for Domestic and Cross-Cultural Business Alliances.” Business Horizons 37, no. 1 (January-February 1994), pp. 71-79. Ross, Martin S. “The Effects of Culture and Socioeconomics on the Performance of Global Brand Image Strategies.” Journal of Marketing Research 32 (May 1995), pp. 163-175. Shane, Scott A. “The Effect of Cultural Differences in Perceptions of Transactions Costs on National Differences in the Preference for International Joint Ventures.” Asia Pacific Journal of Management 10, no. 1 (1993), pp. 57-69. Sivakumar, K., and Cheryl Nakata. “The Stampede toward Hofstede's Framework: Avoiding the Sample Design Pit in Cross-Cultural Research.” Journal of International Business Studies 32, no. 3 (2001), pp. 555-574. Schneider, Susan C., and Arnoud De Meyer. “Interpreting and Responding to Strategic Issues: The Impact of National Culture.” Strategic Management Journal 12, no. 4 (May 1991), pp. 307-320. Tung, Rosalie L. “Handshakes Across the Sea: Cross-Cultural Negotiating for Business Success.” Organizational Dynamics 19, no. 3 (Winter 1991), pp. 30-40. Usunier, Jean-Claude G. “Business Time Perception and National Cultures: A Comparative Survey.” Management International Review 31, no. 3 (Third Quarter 1991), pp. 197-217. Yeh, Ryh-song, and John J. Lawrence. “Individualism and Confucian Dynamism: A Note on Hofstede's Cultural Root to Economic Growth.” Journal of International Business Studies 26, no. 3 (1995), pp. 655-669. Solution Manual for Global Marketing Warren J. Keegan, Mark C. Green 9780133545005, 9781292017389
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