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  1. Cultural Dynamics in Assessing Global Markets Chapter 4

  2. Importance of Culture to International Marketing Efforts • “Culture gets in the Way” • eBay example • Japan’s cultural ideas about selling “castoffs” and buying from strangers (garage sales) • France has laws restricting operations except to a few “government-certified auctioneers” • Importance of Culture • Successful businesses must be open to the learning of cultures of different countries • Culture effects every part of marketing (pricing, promotion, placing distribution, packaging…)

  3. Definition of Culture • Definitions of Culture: • Authors definition: “the sum total of knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by humans..” • Geert Hofstede: culture as the “software of the mind… provides a guide for humans on how to think and behave” • Edward Hall: cultural differences are invisible and that if marketers ignore them it often huts both companies and careers.

  4. Exhibit 4.4 “Origins, Elements, and Consequences of Culture • Adaptation occurs through • Socialization,Acculturation & Adaptation: • Through growing up and adjusting to new cultures • Origins of culture come from • Geography ( ex. climate connection to GDP) • History • Political Economy • Technology • Social Institutions (family, religion, school, media government corporations

  5. Exhibit 4.4 “Origins, Elements, and Consequences of Culture • Geert Hofstede 4 dimensions of Culture (exhibit 4.5 pg. 105) • 1. Individualism/Collectivism Index (IDV) • Scores High in IDV reflect more individualistic behaviors (U.S., Australia, Great Britain) • 2. Power Distance Index (PDI) • Measures the power between superiors and subordinates within a social system • Higher PDI scores are hierarchical (Arab countries, Guatemala, Mexico, Venezuela) • Tend to have general mistrust of others

  6. Exhibit 4.4 “Origins, Elements, and Consequences of Culture • Geert Hofstede 4 dimensions of Culture (exhibit 4.5 pg. 105) • 3. Uncertainty Avoidance Index (UAI) • Measures tolerance of uncertainty and ambiguity • Higher UAI scores mean intolerance of ambiguity and distrust new behaviors and ideas (Japan, France, Greece) • 4. Masculinity/Femininity Index (MAS) • Focuses on assertiveness and achievement • Proven least useful in measuring values within cultures

  7. Elements of Culture • Rituals • Patterns of behavior and interactions that are learned • See Crossing Borders 4.1 pg. 107 (“It’s Not the Gift That Counts, but How You Present it”) • Symbols • Language & linguistic distance (exhibit 4.5) • Aesthetics (art, folklore, music, drama and dance) • Beliefs • Myths, superstitions, or other cultural beliefs • Thought Processes

  8. Cultural Knowledge • 2 Types of Cultural Knowledge • 1. Factual knowledge • Straightforward fact about a culture • See Crossing Borders 4.3 pg. 113 (“Gaining Cultural Awareness…”) • 2. Interpretive knowledge • Feeling that requires some insight as to how a culture exists • It is dependent upon experiences and can lead to incorrect conclusions when using (SRC) • Cultural Sensitivity and Tolerance • Successful International marketing companies are sensitive to differences in cultures and view them objectively

  9. Cultural Change • “Cultural Borrowing” • Countries often times “borrow” the solutions from other cultures and countries that have experienced similar types of issues and problems • Similarities can be an Illusion: • Need to be careful borrowing from other cultures where differences may be so subtle that the international marketer overlooks very important information

  10. Cultural Change • Resistance Change • Cultures will accept or resist change based on how disruptive the change • Planned & Unplanned Cultural Change • International Marketers have two options when introducing new products/services to a culture • 1. They can wait for the change to occur • 2. They can cause the change • McDonald’s example in Japan

  11. Cultural Change • Consequences of Innovation or Change • International Businesses can bring about functional or dysfunctional change • When product diffusion occurs, social change may also take place as a result of the acceptance of that product • Businesses do not intend to bring dysfunctional change, but it can happen • Nestle example in Nicaragua