Culture, Branding, and Global Markets

• This session explores global and national dimensions related to international markets.
• It is lecture 2 in a series.

Lecture Structure

• Lecture 1a & b focuses on understanding the globalized marketplace.
• Lecture 2a & b focuses on the global and national dimensions of IM
• Lecture 3a & b delves into competing in international markets.

Session Breakdown

• Seminar 1 involves an assignment comparing global vs. local companies.
• Seminar 2 includes a case study of L'Oréal in China.
• Seminar 3 presents a case study of Samsung around the world.

Lecture 2a: Culture and Global Markets

• Culture is important when considering international markets.
• The global consumer culture also matters when setting up the marketing mix
• There are some cultural analyses you can perform instead of just using Hofstede's models.

Lecture 2b: Origin, Branding, and Entry

• Culture of origin affects global markets.
• Global branding can create an "image" across borders.
• How to enter a Foreign market is important in international marketing

Culture Fundamentals

• Culture includes learned ways of living, norms, values, habits, and customs.
• Culture is expressed through artifacts and social institutions like politics, law, family, and religion.
• Culture is generally an assumed factor that is hardly noticed on a day to day level.
• It is a lens through which people view the world.
• Artifacts originate in "arte factum", from Latin origins.
• Artifacts are physical expressions of abstract culture such as knowledge, beliefs, values and traditions.
• Culture is a socially shared compilation of significance.
• It is learned through socialization and acculturation.
• Culture provides frameworks for actions which is how people view their world.
• It is not static but changes as daily practices of culture adapt and alter it.
• Norms, values, beliefs, heroes, institutions, myths, customs, practices and rites are all part of culture.

Cultural Differences

• In France, families gather to dine together, whereas in Senegal, families share from the same bowl.
• In Paris, older apartments featured small kitchens by the housekeeper's door, however renovated apartments have kitchens as central, open spaces.
• Material, spiritual, and aesthetic influences shape habits and tastes for every country.

Culture's Impact

• It shapes our tastes, relationships, and standards.
• Historic events, social classes, and values influence relationships between social groups.
• Standards of beauty, perception of time, and attitudes toward bureaucracy are impacted by culture.
• Brazilian historical class, American historical racial segregation and quest for equality in France all help to shape modern culture.

Heading Towards Global Culture

• Increased globalization is heading towards a unified global consumer base.
• Local institutional environment, ideology, values, and beliefs are increasingly similar because of the influence of global media.
• It does not mean that we will all consume the same way

Homogeneity vs. Heterogeneity

• Forces of homogeneity have transnational companies that focus on internationalization and standardization.
• Neoliberal ideology includes minimal government intervention, heightened competition, and individualism.
• Consumerism is the idea that consumption equals wellbeing and success.
• There are also many forces of heterogeneity which include resistance movements, anti-coke movements, and local consumption.
• Local appropriation consists of global brands/products while adapting and preserving locality, such as the french burger scene.
• Creolization of global consumption occurs through mixed practices like fusion food.
• Some consumer groups share qualities across borders
• Class and Lifestyle are two such examples

Global Segments

• Objective standards of living, aspirations and ideologies and spending habits is the objective.
• They cross international boundaries, forming lifestyle/class based sectors.

Pyramid Bottom

• 70% of the world's consumers belong to this segment.
• The global GDP of this segment is US$12.5 trillion and is larger than leading economies.
• Much of the population is centered in 9 countries: China, India, Mexico, Brazil, Russia, Indonesia, Turkey, South Africa, Thailand.
• It has the following characteristics:
  • Average capita income is less than US$ 1,500 annually
  • Little cultural capital.
  • Manual labor.
  • Limited infrastructure.
  • Minimal market access.
• This includes inclusion with fair labor, dignity, and consumerism are vital to this group.
• Accessibility of consumerism, circulation and local economic prospects must be focused by companies.
• Consumers should be budget conscious and quick to adopt new tech.
• "Casas Bahia" a retail chain within Brazil is known for providing credit options to those with a low income.
• "Ala" is a product from Unilever that sells at a low price to South American consumers.

Emerging Middle Class

• Annual incomes range from $4.3K - 18.2K, or $730 - 4.3K.
• Discretionary funds that add upto 1/3 of annual income.
• Workers with steady and official employment.
• They hold aspirational dreams, and are believers in Western ideals.
• Projected spending is around $15 trillion by 2025.
• Emerging markets have fast growth, especially in China and India.
• A majority of them identify and align with these statements:
  • Social constructed standards are important.
  • Pragmatic, mass minded and budget conscious.
  • They search for consumer related skills to define their flair.

Mass Affluent Consumer

• US$ 130,000 is the average annual income for the segment.
• Employed experts and minor trading industry owners.
• There are more than 55 years of age in 2/3 of the population of the U.S.
• Are young and tech savvy within the countries of India, and China.
• The segment represents 11-20% of households in the U.S. or 35 to 65 M, and 2.5% or 32 M in China.
• Represents 40% of consumption spreading within the U.S., and 75% in China.
• They want VIP experience for tourism, sports, healthcare and banking.
• Luxury and distinctive product and service seeking.
• This segment is highly engaged and well connected.
• Exclusive and erratic are two words that sum up this segment.

Champagne Primary Targets

• Mass affluent = exclusivity.
• New middle class = consumer culture.
• Bottom of the pyramid = economic growth and civil rights advocacy

Hofstede's Cultural Dimensions

• Hofstede states that culture programs the collective mind which sets people of a certain group or category apart.
• Power distance involves the level of social pecking order which is accepted.
• Collectivism versus Indivualism looks at how to determine which aspects of care are taken on by people.
• Femininity versus masculinity considers assertiveness and competition
• Uncertainty avoidance takes into account uncertainty and ambiguity.
• Long x Short term orientation considers the appreciation of real efforts when thinking ahead.
• Free expression and accepting natural impulses for better quality-of-life is seen in the analysis of Indulgence x Restraint.

Critique to Hofstede

• Research from an essentialist approach looks for dimensions common across each differing culture to predict consumer behavior.
• Research from an interpretive approach views consumer culture as dynamic/complex in context.
• To understand consumer actions, you need to analyze the manifestations within the culture's historical context.
• There are more things to consider than models, you must look at historical analysis, and culture must examined by assessing specific examples

Local Analysis

• Skin whitening cream marketing in India has to be interpreted carefully.
• Beauty product marketing needs to be tailored in each country due to perception, such as what Dove discovered in Russia.
• The following should be regarded in tandem, as they work together.
• International growth should acknowledge that local contexts still matter.
• Essentialist and Interpretivist solutions provide a more comprehensive interpretation and can function in tandem.

Culture of Origin Breakdown

• It takes into account reactions to a product regarding the nation of origin, whether positive or negative.
• It is commonly focused on an entire group of products rather than just one singular label.
• Countries invest in brand recognition by tying up their society, past and technical capabilities.
• Country of design (COD) references exactly where the design is created.
• Brand=Ownership is Country of Brand.
• COM means country of manufacturing.
• COO tactics has varying outcomes of what is regarded as familiar, authentic, and likeable by consumers.
• With overseas consumers, that can portray the idea of a connection with history, prestige and modernity.

Branding

• Efforts brands employ to cultivate a uniform identity throughout countries can be considered global branding.
• Different forms of placement may vary.

Positioning

• Global positioning is connected with values of globalness/universality.
• Transnational consumer segment are global youths/elites.
• Technical items typically have similar trends regardless of their nation.
• Emotional items are the high touch products.

Other Positioning Types

• Product and brands connected to a country are well suited to Positioning COO.
• A standard placement includes highlighting benefits, excellent value, user groups, or contenders.

Structuration of Brands

• Corporate level involves branding with the use of each company asset.
• Independent sub labels are also considered when it comes to visual/ communication means.
• Product marking focuses to highlight the fact that a company is not visible.

Perception Is Key

• Perceptions in unique districts is important.
• Starbucks is not the same in Italy as it is in Brazil.
• In America and Japan, Honda is known as high quality, innovative and exciting.

Entering Foreign market

• Overseas production enterprises or marketing institutions are not permitted by the government's strategy.
• Direct export or use of specialized participants is often an export that originates inside country.
• You must review the market, the internal assets and international industry design to successfully access a new market.

Entry Strategies

• Exporting, licensing and franchising, management or contract manufacturing, joint venture (partnership) and direct investment.
• Exporting is a tactic in such that a company exports a commodity which originates from the base.
• The benefits to exporting is minimal exposure/ venture, versatile to remove, with a plethora of outlets.
• Cons: minimal knowledge on market, lack of power in action, and low ability towards assist individuals.

Franchising and Licensing

• A Licenser provides a permission to create a product which is sold on License country with unique brands
• Licensing is better when looking at low investment and flexibility.
• Joint ventures include less power overall, are expensive at times.

Management/Manufacturing Contract

• Contract manufacturing is outsourced.
• Contract management has a focus on maintaining the reputation via quality and focus on the marketing and potential and development.

Joint Venture

• It involves partners which forms an enterprise where each shareholders will own a stake.
• The upside is access to the local's knowledge, with the downside being high overheads and high power conflict.

Direct Investment

• Foreign investment with high degrees of returns and potential.
• Could be from acquisitions of old brands or newly developed business.
• There can be benefits from the Government but very high costs from infrastructure risks.

Pattern Breaking

• Born Global involves having a universal system.
• Standard needs through buyers with minimal participants.
• These need to have high grade, expandable, highly adaptable assets and tech.
• Relationships of like minded entrepreneurs should be involved.