An Exploratory

Examination of the
Influence of National
Culture on Gross-
National Product
Diffusion
Group 2
Nandana Zubair
Irum Rehman
Abstract
 This study examines the direct influence of
national culture on the cross-national
diffusion of innovations.
 The link between four dimensions of culture
are discussed:
◦ Individualism
◦ Masculinity
◦ Power distance
◦ Long term orientation

Impetus for conducting this
study
 This article examines the influence of
culture on the cross-national diffusion of
innovations.
 Diffusion patterns of new products and
technologies provide international
marketers with the critical understanding
of how products are adopted by a society-
an understanding of the degree to which a
new product will be successful keeping in
mind the effect of culture on the buying
pattern of buyers.
Conceptual Development
 Firms are increasingly trying to expand their
marketing efforts in pursuit of new sales
opportunities in foreign countries. Thus, it has
become important to determine how
consumers in different countries may respond
to new product introductions - this response
varies from country to country.
 A product may be rapidly accepted in one
country but it may take substantially longer
time to gain acceptance in the other country
to prevent this marketers are required to have
an insight which could enable them to study
the diffusion patterns at cross national level.
Cross-National Product
Diffusion
 Rogers (1983)- Product diffusion is the process
by which a product innovation is
communicated and accepted through certain
channels among the members of societal
system over time.
 There have been many related studies
conducted having focus several key issues:
◦ Impact of macro level-country specific effects on
products diffusion
◦ Interaction effects between two countries- “lead-lag”
time effect
◦ Changes in effect over time – understanding of
diffusion at global level of analysis

Cross National Diffusion and
Culture
1.Takada and Jain’s (1991) study focused on
the culture’s impact on the cross national
diffusion of products, exploring the
influence of high context verses low
context aspects of culture.
◦ On their study a hypothesis was form that “the
rate of diffusion is greater in countries
that are characterized by a high context
culture and homophilous communication.
That culture was shown to influence
diffusion was a significant contribution to
the diffusion and culture literature”.
Continued..
2.Helsen, Jedidi and DeSarbo (1993)
evaluated national diffusion patterns with
respect to country segmentation models.
(3 consumer products in 10 European
countries)
◦ They found little support for an association b/w
diffusion based country segmentation and
the high/low context cultural framework
classification
 3. Kumar, Ganesh and Echambadi (1998)
attempted to replicate the studies. They
concluded that although the culture does
have an impact on the diffusion of products
but there is limited evidence yet.
 Ganesh, Kumar and subramaniams study is
of particular intrest to the current study
because they operationalize the contrusct
of cultural similarity using four of
HOTSTEDE’S cultural dimensions
◦ Power distance
◦ Individualism
◦ Uncertainty avoidance
◦ Masculinity
 Our current study is also based on these
dimensions and their effect on the product
diffusion.
The Role of National Culture in
Product Diffusion.
 Several diffusion studies indicate that
consumers in different countries respond in
different ways to the introduction of a new
product.
1.Lindberg 1982- suggested that such disparities

in the diffusion process are the result of

differences in several variables including
national economies, inflation, population and
other macro- or socioeconomic factors- high
standards of living are also associated with quick
adoption rates
Continued..
2. Helsen, Jedidi and DeSarbo (1993) Argue
that macro level, socioeconomic variables
alone do not fully explain differences in diffusion
patterns of new product innovations across
national boundaries.
3. Clark (1990) People of each country posses
a “national character”, that is a specific and
stable pattern of behavior and/or personality
characteristics. (National differences between
consumer populations should also exert some
influence on the diffusion patterns of
innovations)
Continued..
4. Hofstede (1991) supports the notion stating
that countries are “a source of a
considerable amount of common mental
programming of their citizens.”
5. (With respect to adoption of innovations)

Steenkamp, Hofstede and Wedel (1999)

“consumers in some countries may be on
average higher in innovativeness than
consumers in other countries."
 There fore, National
culture is fundamental
factor that distinguishes
consumers of one
country from those of
another.
 Hall’s conceptualization of culture as a one-
dimensional construct in which countries
are grouped into two or sometimes three
categories (i.e. high/low or
high/medium/low context cultures) may be
too board of a classification approach for a
concept as complex as culture at least
within the domain of empirically driven,
cross-culture diffusion studies.
 Our study however attempts to overcome
this “broad stroke” approach to culture by
employing Hofstede’s culture model.
HYPOTHESIS
DEVELOPMENT
 Whether dimensional elements of a
society culture offer additional explanation
for the differences in diffusion patterns
observed across countries
 We also examine and discuss the
relationship between national diffusion
rates of technological innovations and
Hofstede's five national culture dimensions.
Hofstede's Cultural
dimensions
 “culture is the collective programming of the
mind when distinguishes the members of one
group or category of people from another.”
 These dimensions largely account for cross-
cultural differences in people’s values, beliefs,
and behavior patterns worldwide.
 These dimensions as mentioned before are:
◦ Uncertainty avoidance
◦ Individualism-collectivism
◦ Masculinity-femininity
◦ Power distance
◦ Long term orientation
Uncertainty Avoidance
 Uncertainty avoidance is “the extent to which
members of a culture feel threatened by
uncertain or unknown situations”
 Cultures that are high in uncertainty avoidance
possess an intolerance for anxiety toward
uncertain or ambiguous situations thus
members reduce their activities that provide
desired predictability to their lives.
 Culture that are low in uncertainty avoidance
accept uncertainty and its inevitability:
members wants variety in their lives.
 Low uncertainty avoidance cultures are more
prepared to give benefit of doubt to unknown
situations, peoples, and ideas.
  A technological product innovations functional
attributes are both new and unproved
compared with produces that have previously
been introduced and used by consumers-
“unknown entities”
◦ High uncertainty avoidance culture may be un sure
of the benefits the innovation provides thus they
may delay the purchase.
 The uncertainty that is related to innovations
should increase in high-uncertainty avoidance
cultures whereas low uncertainty avoidance
cultures more readily tolerate uncertainty
have willingness to take risks.
◦ High uncertainty avoidance- “what is different is
dangerous”
◦ Low uncertainty avoidance- “what is different is
curious”

 H1: The culture
dimensions of
uncertainty avoidance is
negatively associated
with the diffusion rate of
a technological product
innovation
Individualism-Collectivism
 Individualism–collectivism is related to the
degree to which the interests of the group
prevail over those of the individual.
 Individualist cultures are characterized by loose
ties among people and the expectation that
people primarily take care of
 themselves and their immediate family.
 Members of collectivist cultures are integrated
into strong, cohesive groups that are
characterized by loyalty and trust, as well as
 a focus on the extended family
Continued..
 The two extremes of the individualism–
collectivism continuum can be contrasted
as the “we” society versus the “me”
society
 Communication in high-context cultures is
such that much of a communication’s
information resides in the context of the
communication as opposed to the explicit
spoken message.
 In low-context cultures, the message is
explicit in the spoken (or written) aspect of
the communication
 “High context communication fits the collectivist
society, and low context communication is
typical of individualist cultures.”
 Takada and Jain (1991) find that the diffusion
rates in countries with high-context cultures
are faster than the diffusion rates in countries
with low-context cultures, thus providing an
indication that the degree of individualism
embraced by a society should have a negative
association with the diffusion rate of a country.
 The rate of diffusion of a product innovation is
highly dependent on the communication
process of the consumers.
H2: The cultural dimension of
individualism is negatively
associated with the diffusion rate of a
technological
product innovation.

 The collectivist culture provides a

communication context in which the
acceptance of new product innovations is
enhanced; the opposite phenomenon is
true in an individualist culture.
Masculinity–Femininity
 Masculinity–femininity refers to traditional,
stereotypical gender roles of society in
which:
◦ assertiveness and competitiveness define
masculinity
◦ nurturing, caring, and a focus on quality of life
distinguish femininity.
 In a masculine culture, these roles are clear
and distinct across male and female
members, whereas in a feminine culture,
both female and male members possess
equivalent qualities of each role
Continued..
 Hofstede (2001) observes that, in general, people in a
masculine society believe that a person “lives to work,”
whereas people in a feminine society more widely
adopt a “work-to live” philosophy.
 In masculine countries, “money and things are
important.”
 Achievement is measured in terms of wealth and the
recognition that it buys.
 The materialistic, possession-oriented nature of
masculine cultures suggests that the acquisition of
goods and, in particular, new products is valued in
these societies. Thus, the adoption of new product
innovations is more likely accelerated in such societies
compared with the less materialistic, person oriented,
quality-of-life emphasis of feminine societies.
 H3: The cultural dimension of
masculinity is positively
associated with the diffusion rate
of a technological
product innovation.
Power Distance

 Measures the extent to which less powerful

members of organizations accept the
unequal distribution of power
 It measures:
◦ How far social inequalities are accepted by a
society
Power Distance
 Low-Power Distance
 High-Power
Culture: Distance Culture:
 Inequality is  Powerful are entitled
considered an to privileges and
undesirable aim to impress
condition others
 Powerful people  Believes in Visible
should attempt to signs of status,
appear less “their status is
powerful enhanced by
 “Status symbol are symbolic behavior
which makes them
FROWNED (sign of
look as powerful as
disapproval) upon”
possible”


Power Distance
 Low-Power  High-Power
Distance Culture: Distance Culture:
 Attempt to  Powerful people
minimize social tend to preserve,
inequality if not increase,
their power and
should
predisposed to
acquiring new
products to
display their
power and
position
In countries high in power
distance

Trea Powerful
Powerf t With respect &
ul obedience
 Less powerful have dependence on those
with power who influences the diffusion of
innovations
 Powerful members influences the less
powerful member in purchase decisions in
acquisition of new product innovations
Citizens of…
Low-Power  High-Power
Distance Distance
countries: countries:
 Less confidence
 More confidence
 Often distrust the
 From the influence
press of media
◦ Take quick notice
◦ Pay close attention
◦ Place trust in new
product
In t urn, enhancing new productinformation
diffusion
rat es in high-power-dist ance count ries
Cont…
 Low-Power Distance  High-Power
cultures: Distance cultures:
 More modest
 Adoption of new
expectations on product
benefits of technological
technology innovations is more
rapid

H4: The cultural dimension of power distance is

positively associated with the diffusion rate of a
technological product innovation

Long-Term Orientation
Related to culture’s orientation to the future
 Long-term Orientation Short-term Orientation


 Persistence  Personal steadiness

(perseverance) and stability
 Ordering relationships -Protecting your
by status ‘face’
 Thrift -Respect or tradition
 Having a sense of -Reciprocation of
shame greetings, favors,
and gifts
 A steady progression  Expect quick results
toward long-term  Experiences
goals materialist
consumption
pressures
  Long-term Short-term
Orientation Orientation
 Cultures emphasize  Countries show a
savings and sensitivity to social
cautious use of trends in
resources consumption
 More comfortable  Have likening of
with slow adopting new
adaptation of product innovations
tradition to a ◦ Focus on status
modern context obligations
◦ Material acquisition
positions
 Accept new products
that enhances their
social status
H5: The cultural dimension of long-term orientation
is negatively associated with the diffusion rate of
a technological product innovation.

Methodology:
Scope Of Study
 Selected 7 technological innovations of high
purchase value
 Product penetration date obtained from 13
European countries because:
◦ Have long history of developed capitalist
markets
 Tellis
Stremersch
Yin 2003
◦ Thus reliable data on product introductions are
available for this region
Methodology:
Scope Of Study
 Product penetration date obtained from 13
European countries because:
◦ European countries have unique cultural
identities
◦ Providing variation across focal construct of
national culture
 We used penetration data to operationalize
the models and outline the culture at
nation-state level, so using country as a
substitute for culture for practical purposes
Methodology:
Scope Of Study
 Hofstede (2001) argues that cultural data
should indeed be collected at the national
level
 Hofstede (1980) and Clark (1990) note that
the country is a political entity
Methodology:
Scope Of Study
 Use the effect of a key socioeconomic
aspect of a country’s economic
infrastructure, real gross domestic product
(GDP) per capita, as a control variable in
this study (Lenar-towicz and Roth 1999)
Models
 used the Mansfield model to measure the
diffusion rate
 Mansfield (1961) illustrates:
◦ The growth over time in the number of
consumers who adopt an innovation should
conform to a logistic function, an S-shaped
growth curve, as follows (Blackman 1974):
where
Fj(t) = the proportion of households in country j
that adopt
the innovation by time t;
aj = a constant that positions the curve of
innovation in
country j on the time scale;
bj = the growth rate coefficient of the innovation in
country j; and
Fj = the ultimate penetration that the innovation
can
capture in country j in the long run, given by
Maxt[Fj(t)] (Olshavsky 1980).
Results
 Tested the first four hypotheses using
hierarchical regression
 National culture dimensions of:
◦ Uncertainty avoidance (H1)
◦ Individualism (H2)
◦ Masculinity (H3)
◦ Power distance(h4)
Discussion And Implication
 Prior research (e.g., Helsen, Jedidi, and
DeSarbo 1993; Kumar, Ganesh, and
Echambadi 1998; Takada and Jain 1991;
Tellefsen and Takada 1999) has found
mixed results
 We did not find an association between
uncertainty avoidance and the rate of
diffusion
Discussion And Implication
 This study supports Takada and Jain’s (1991)
theory, which predicts a slower diffusion
rate for low-context cultures than for high-
context cultures
 individualism is negatively related to the
diffusion rate
 Hofstede (1991) states that Hall’s (1976;
Hall and Hall 1987) low-context culture is
closely related to an individualist culture
Discussion And Implication
 Masculinity had a positive association with
the diffusion of technological innovations
 supports Rogers’s (1983) observation of
traditional societies values compared with
the more modern cultural types
Discussion And Implication
 results indicate negative relationship exists
between the cultural dimension of long-
term orientation and the diffusion rate
THANK YOU