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International Marketing

15th edition

McGraw-Hill/Irwin

Philip R. Cateora, Mary C. Gilly, and John L. Graham

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction (1 of 2)
Culture is pertinent to the study of international
marketing.
Culture is pervasive in all marketing activities
pricing, promotions, channels of distributions,
product, packaging and styling.
The priority of needs and wants and the manner
in which they are satisfied are functions of
culture that eventually dictate styles of living.
Markets constantly change and markets and
market behavior are part of a countrys culture.
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Introduction (2 of 2)
One cannot truly understand how markets evolve
or how they react to a marketers effort without
appreciating that markets are a result of culture.
In fact, markets are a result of the three-way
interaction of a marketers efforts, economic
conditions, and all other elements of the culture.
Marketers are constantly adjusting their efforts to
cultural demands of the market, but they are also
acting as agents of change whenever the
product or idea being marketed is innovative.
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Overview
The importance of culture to an international
marketer
Definition and origins of culture
The elements of culture
The impact of cultural change and cultural
borrowing
Strategies of planned and unplanned change

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Global Perspective
Equities and eBay Culture
Gets in the Way
Liberalization of the Japanese and the French capital
markets have given Japanese consumers more freedom
of choice in their investments and brought down
transaction costs for institutional and retail investors in
France.
Culture is the overriding factor as e-Bay, the successful
online auction site in America, is facing difficulties in
Japan and France.
For example, in Japan there is no American-style risktaking culture (only 12% of households invest in stocks,
while in America, about 55% invest in stocks) and in
France there are laws that restrict operations.
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Example
Yahoo website is a great example of an
organization that understands the importance of
adapting to culture:
http://everything.yahoo.com/index.php?world

The Chinese view of relationship (2 min. video)


http://www.youtube.com/watch?
v=qingy5JAt8w&feature=related

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Cultures Pervasive Impact


Culture affects every part of our lives, every day, from
birth to death, and everything in between.
As countries move from agricultural to industrial to
services economies, birthrates decline and global changes
in values are occurring.
Consequences of the cultural impact:
Birth rates - Japan (Year of the Dragon and Year of the Fire
Horse)
Consumption patterns Alcohol and Tobacco
Consumption consequences Life Expectancy, Stomach cancer

It is imperative for foreign marketers to learn to


appreciate the intricacies of cultures different from their
own if they are to effective in foreign markets.
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Birthrates (per 1000 women)


Exhibit 4.1

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Consumption Patterns
(annual per capita)
Exhibit 4.2

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Consequences of Consumption
Exhibit 4.3

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Human Universals
Use Metaphors
Create Art

Consider aspects of
sexuality private

Conceive of success
and failure
Are ethnocentric

Have a fear of
Express emotions
snakes
Trade and transport with face
goods
Reciprocate
Imitate outside
Resist outside
influences
influences Roy Philip
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Human Universals
Use Metaphors
Create Art
Consider aspects of
sexuality private

Conceive of success
and failure

Are ethnocentric
Have a fear of
snakes
Express emotions
Reciprocate Trade and transport
with face
goods
Resist outside
Imitate outside
influences
influences
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Definitions and
Origins of Culture
Traditional definition of culture
Culture is the sum of the values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted
from generation to generation.

Individuals learn culture in three ways


Socialization (growing up)
Acculturation (adjusting to a new culture)
Application (decisions about consumption and
production)
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Origins, Elements,
and Consequences of Culture
Exhibit 4.4

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Geography
Exercises a profound control
Includes climate, topography, flora, fauna, and
microbiology
Influenced history, technology, economics, social
institutions and way of thinking
The ideas of Jared Diamond and Philip Parker
Jared Diamond
Historically innovations spread faster east to west
than north to south
Philip Parker
Reports strong correlations between latitude
(climate) and per capita GDP
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Why do we all Love Flowers?

Geography
History
Technology and economics
Social institutions
Cultural values
Aesthetics as symbols

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History
History - Impact of specific events can be seen
reflected in technology, social institutions, cultural
values, and even consumer behavior
Tobacco was the original source of the Virginia
colonys economic survival in the 1600s
American values and institutions influenced by
Adam Smiths book The Wealth of Nations
Military conflicts in the Middle East brought
about new cola alternatives such as Mecca Cola,
Muslim Up, and Arab Cola.
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Political Economy and


Technology
Political Economy - Three approaches to governance
competed for world dominance
Fascism
Communism
Democracy/free enterprise

Technology
Jet aircraft, air conditioning, televisions, computers,
Internet, etc.
None more important than the birth control pill
Although America has the best healthcare technology,
people in many countries have greater longevity;
lifestyle choices are important
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Social Institutions (1 of 4)

Family
Religion
School
The media
Government
Corporations

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Social Institutions (2 of 4)
Family
Nepotism
Role of extended family
Favoritism of boys in some cultures
Gender equality is changing
Religion - Major Religions
First institution infants are exposed to outside the
home
Impact of values systems
Misunderstanding of beliefs
An American women jailed in Saudi Arabia for sitting
with man at Starbucks
Next
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Major Religions

Christianity 2 Billion followers


Islam 1.2 Billion followers
Hinduism 860 Million followers
Buddhism 360 Million followers
Confucianism 150 Million followers

Back
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Social Institutions (3 of 4)
School the most important social institution
Direct link between a nations literacy rate and its
economic development
Difficult to communicate with a market when a
company must depend on symbols and pictures

The media it has replaced family time


TV and the Internet
American educational system produces a lower
percentage of college graduates than 12 other
countries including Russia, Japan, and France
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Social Institutions (4 of 4)
Government - influences the thinking and
behaviors of adult citizens
Propaganda through media
Passage, promulgation, promotion, and
enforcement of laws
Corporations - most innovations are introduced
to societies by companies
Spread through media
Change agents
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Elements of Culture (1 of 4)

Values
Rituals
Symbols
Beliefs
Thought processes

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Elements of Culture (2 of 4)
Cultural values Geert Hofstede
Individualism/Collectivism Index
Reflects the preference of behavior that promotes
ones self interest

Power Distance Index


Measures the tolerance of social inequality

Uncertainty Avoidance Index


Measures the tolerance of uncertainty and
ambiguity

Cultural Values and Consumer Behavior


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Hofstedes Indexes
Language, and Linguistic Distance
Exhibit 4.6

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Elements of Culture (3 of 4)
Rituals patterns of behavior and interaction that are
learned and repeated
Marriages , funerals, baptisms, graduations
Symbols
Language
Linguistic distance relationship between
language and international marketing
Aesthetics as symbols
Insensitivity to aesthetic values can offend, create a
negative impression, and, in general, render
marketing efforts ineffective or even damaging
Next
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Language
According to www.ethnologue.com:
A total of 7,413 known living languages exist
in the world
311 being spoken in the U.S.; 297 in Mexico,
13 in Finland, and 241 in China
EU has 20 official languages
India alone has 452 known languages!
Back
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Elements of Culture (4 of 4)
Beliefs
Superstitions play a large role in a societys belief
system and therefore, to make light of superstitions in
other cultures can be an expensive mistake
The number 13 in the western hemisphere is
considered unlucky, where as the number 8 in China
connotes prosperity
The practice of Feng Shui
Thought processes
Difference in perception between the East and the
West
Focus vs. big-picture
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Cultural Sensitivity
and Tolerance
It is imperative that the marketer be attuned to
the nuances of culture so that a new culture can
be viewed objectively, evaluated and appreciated
Cultures are not right or wrong, better or worse,
they are simply different
The more exotic the situation, the more sensitive,
tolerant, and flexible one needs to be
There must be an appreciation of how cultures
change and accept or reject new ideas

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Cultural Change
Dynamic in nature it is a living process
Paradoxical because culture is conservative and
resists change
Changes caused by war or natural disasters
Society seeking ways to solve problems created by
changes in environment
Culture is the means used in adjusting to the
environmental and historical components of
human existence
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Cultural Borrowing
A responsible effort to learn from others cultural
ways in the quest for better solutions to a societys
particular problems
Imitating diversities of other cultures make
cultures unique
Contact can make cultures grow closer or further
apart

Habits, foods, and customs are adapted to fit each


societys needs
The marketer must eventually gain cultural
empathy
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Similarities An Illusion
A common language does not guarantee a similar
interpretation of word or phrases
Difference between British and American English
http://www.woodlandsjunior.kent.sch.uk/customs/questions/americanbr
itish/index.html

Just because something sells in one country


doesnt mean it will sell in another
Cultural differences among member of
European Union a product of centuries of
history
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Resistance to Change
Gradual cultural growth does not occur without
some resistance
New methods, ideas, and products are held to be
suspect before they are accepted

Resistance to change varies between cultures


The most important factor in determining how
much of an innovation will be accepted is the
degree of interest in the particular subject, as
well as how drastically the new will change the
old
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Planned and Unplanned


Cultural Change
Determine which cultural factors conflict with an
innovation
Change those factors from obstacles to acceptance into
stimulants for change
Marketers have two options when introducing and
innovation to a culture
They can wait (unplanned change)
They can cause change (planned change)

Cultural congruence
Marketing products similar to ones already on the market
in a manner as congruent as possible with existing cultural
norms
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Summary (1 of 2)
A complete and thorough appreciation of the
origins and elements of culture may well be the
single most important gain to a foreign marketer
in the preparation of marketing plans and
strategies
Marketers can control the product offered to a
market its promotion, price, and eventual
distribution methods but they have only
limited control over the cultural environment
within which these plans must be implemented
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Summary (2 of 2)
When a company is operating
internationally each new environment that
is influenced by elements unfamiliar and
sometimes unrecognizable to the marketer
complicates the task
Special effort and study are needed to
absorb enough understanding of the
foreign culture to cope with the
uncontrollable features
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