Midterm 2 PDF

October 21 Edward Hall Garret Hofstead- engineer and social psychology head of human resources at IM he had access to info - can't underestimate impact on cultural values on how people interact with each other - Dunkin donuts entered indian and had a breakfas...

October 21 Edward Hall Garret Hofstead- engineer and social psychology head of human resources at IM he had access to info - can't underestimate impact on cultural values on how people interact with each other - Dunkin donuts entered indian and had a breakfast menu but nobody was going to dunkin donuts for breakfast - Micro-rituals - in India people thought breakfast is a meal you eat at home - dives into how people actually live - Mcdonalds in communist russia- they had to show people how to eat hamburgers and fries- caused friction amongst families because mcdonalds employees were making a lot of money since they were paying western salaries in hard currency - They didn’t spend penny on marketing- all through word of month Culture Dynamics In Assessing Global Markets 442 Chapter 4 - Exam: chapter 4,5,13 - No article questions Symbols - language and aesthetics - how people rescind to or appreciate beauty that is created - Edward Hall- studied how culture is basically a hidden language - High context cultures- JAPAN greater emphasis on relationships- big thing on reputation - polychronic time - less of a rush - need to allow customers to get to know you - Low context cultures -US monochronic - great emphasis on worlds, numbers, contracts, explicit and specific- no problem getting involved in brands that we don;t know reputation - SPEED highly valued - we - If an immigrant from UK to Canada - just because the countries both speak english doesn’t necessarily mean it has the same cultural language?? - Finland - software company different divisions of utility and structural steel construction and defense forces - mapping systems for countries and stuff - The commonality in the organization - all the brands started with an X - ex Xsteel  - The defense forces mapping people tried to sell things outside of government - created a product acronym is CEMA- internal soft launch - but XCEMA- this product was gonna be sold to English speaking countries - Associated with bad skin condition - Lasted 3 months - SYMBOLISM/LANGUAGE INFLUENCE - What cultures see as beautiful is different - Colors are seen different- Chinese culture white is mourning death- versus North America black is mourning - Cultural appropriation - Ralph Lauren accused of cultural appropriation - every year they use different embroidery from around the globe - How sound impacts people - vaughner and jewish people - When Ebay first launched in China- Chinese people weren’t aware of the subculture of thrifting Resistance to Change Diffusion of Innovation - how long does it take a group of people to be exposed and agree to new things - You want it to be as quick as possible - Collectivist cultures - have fewer innovators - faster rates of adoption - people are basing their interactions on relationships and everyone wants to fit in Product Life Cycle Paradox of Cultural Change “Cultural convergence” - we are becoming more alike globally - If you look at the wealthiest customer sin CHina - 84% are under 45 - In Japan only 19% are under 45 - US 30% of richest customers are under age 45 Cultural Sensitivity and Tolerance - There is increasingly negative sentiment towards globalization - New brands going into somewhere can be problematic - compared to ol brands Chapter 13 - Products and Services  - Don’t worry about BTB - not on test - 4 ps- product, price, place, promotion - Product is essential elements of marketing tool kit - Customers are becoming increasingly powerful - has lots to do with technology - Marketing in other countries is expensive Important Topics to be Addressed by Marketing - Companies that keep things standard from home -> other countries- they face problems tis not sensitive ot the competitive landscape or the other market - When Mercedes sold things to other countries - they didn’t change their pricing - like when transferred Germany to US - 20% higher - Lexus did other strategy - got a better foothold in the American market - Impact of country of origin effect Legal Codes Code law- and common law - Code law- laws are explicitly written out - Starbucks needed to buy rights back from someone in Russia - Canada- if you have a website that has a Canadian government passed laws - u need - to be a citizen and business in Canada to gave a domain name Chapter 5 - Culture, Management, Style, and Business Systems - Cultural intelligence can be just as important as IQ or EQ Required Adaptation - Adaptation is a key concept in international marketing - Seemingly insignificant situations are often the most crucial - Affirmative acceptance = open tolerance- adaptation becomes easier because empathy for another’s point of view naturally leads to ideas for meeting cultural differences Guide to Adaptation: 1) open tolerance, 2) flexibility, 3) humility, 4) justice/fairness, 5) ability to adjust to varying tempos, 6) curiosity/interest, 7) knowledge of the country, 8) liking for others, 9) ability to command respect, 10) ability to integrate oneself into the environment Degree of Adaptation - Adaptation doesn’t mean to change ways- business executive need to accommodate for differences that can cause misunderstandings - SRC- self-reference criterion important Imperatives, Electives, and Exclusives - Business custom can grouped into imperatives ( customs must be recognized and accommodate) , electives ( customs to which adaptation is helpful but not necessary) , and exclusives ( customs in which an outsider must not participate) Cultural Imperatives Cultural imperatives- a business custom that must be recognized and accommodated Cultural Electives - Behaviors or customs that cultural aliens may wish to conform to or participate in but are not required - Custom in question is not particularly important but permissible Cultural Exclusives - Are those customs or behavior patterns reserved exclusively for the locals and from which he foreigner is barred - US scores highest on Hofstede’s individualism scale - Managers and policymakers in other cultures often do not share this “greed is good” view Management Styles Around the World - There is variation in a way business is recorded around world - amplified by Covid-19 - Ethical standard differ substantially across cultures Authority and Decision Making - PDI- power distance index - In high-PDI countries such as Mexico and Malaysia, understanding the renal and statue of clients and business partners is much more important than in more egalitarian (low PDI) societies such as Denmark and Israel - - high PDI- subordinates are not likely to contradict bosses- low PDI countries they often do - As businesses grow and professional management develops, there is a shift towards decentralized decision making - Decentralized decision making allows executives at different levels of management, to exercise authority over their own functions Security and Mobility - Personal security and job mobility relate directly to basic human motivation and therefore have widespread economic and social implications - Security - word is ambiguous  - High PDI countries like France and Italy- have strong paternalistic orientation- it is assumed that individuals will work for one company for the majority of their lives - Commitment seems to be higher in companies lower on individualism and higher in power distance PDI Communication Styles - Edward T hall tells us communication is more than words - Silent languages - of time, space, things, friendships, and agreements and how they vary across cultures Face-to-Face Communication P time versus M-Time - Managers in Anglo cultures such as the US tend to be concerned with time management than managers form either Latin or Asian cultures Edward T-Hall defines two systems in the world: - Monochronic - North Americans, Swiss, Germans- concentrate at one thing at a time - M-TIME- most low context cultures operate on M-time - Polychronic Time - more dominant in high-context cultures - completion of human transaction is emphasized more than holding on to schedules - simultaneous occurrence of many things and by “ a great involvement with people” Marketing Orientation  - The extent of a company’s marketing orientation has been shown to relate positively to profits Business Ethics – the meaning of the world corruptions varies considerably around the world - ex. communist countries profits is seen as corruption The Western Focus on Bribery - Transparency International - dedicated to “curbing corruption through international and national coalitions” - Transparency International Bribe Payers Index 2011- the index ranks the likelihood of companies from 28 leading economies to win business abroad by paying bribes - Higher scores correspond to perceived lower levels of bribe paying internationally - People would assume Japan would be increasing because “relationship based culture” would attract bribery but they are decreasing on the scale Bribery and Extortion - The distinction between bribery and extortion depends on whether the activity resulted form an offer or demand for payment Lubrication and Subornation - Lubrication - involves a relatively small sum of cash ( a “tip”) - Subornation - involves giving large sums of money frequently not properly accounted or - designed to entice an official to commit and illegal act on behalf of the o the one offering the bribe - a request for officials to turn their heads Agents Fees - When a business person is uncertain of a countries rules and regulations, an agent may be hired to represent the company in that country - Ex , an attorney may be hired to file and appeal for a variance in a building code o the basis that the attorney will do more efficient and thorough job than someone unfamiliar with such procedures - Foreign Corrupt Practices Act - prohibits American executive and firms form bribing officials of foreign governments, has had a position effect Ethical Decisions Utilitarian ethics- does the action optimize the “common good” or benefits of all constituencies? And who are the pertinent constituencies? Rights of the Parties- does the action respect the rights of the individuals involved? Justice or fairness- does the action respect the canons of justice or fairness to all parties involved Culture’s Influence on Strategic Thinking - Entrepreneurial tendencies are stronger in countries with less UAI ( China) - as people in those cultures tend to prefer venturing out on their own rather than the known of working for an established company Synthesis: Relationship-Orientated vs. Information-Oriented Cultures - Low context American culture score relatively low on power distance and high on individualism, whereas high context Arab cultures score high on power distance and low on individualism Chapter 13 - Products and Services for Consumers Physical or Mandatory Requirements and Adaptation - A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product - Product homologation - changes mandated by local product and service quality - Ex of homologation - oreos were first introduced in 1996, but the company didn’t adapt to Chinese tastes until 9 years later- now they are the top selling biscuit in the country - after consumer research suggested reducing the sugar content and reducing package sizes and prices Green Marketing and Product Development Green marketing - term used to identify concern with the environmental consequences of a variety of marketing activities - Proctor and Gamble introduced Lenor, a fabric softener in super concentrated form, and sold it in a plastic refill pouch that reduced packing by 85 percent Products and Culture - The market relates to more than a products physical form and primary function - The values and customs within a culture confer much of the importance of these benefits - product is sum of the physical and psychological satisfaction it provides the user  - Research also has shown that firms with strong organizational identities can have more difficulty in adapting products adequately Innovative Products and Adaptation - Any idea perceived as new by a group of people is “innovation” from a sociological viewpoint - Diffusion - the adoption or spread across markers by increasing numbers of consumers Diffusion of Innovations - The goals of the diffusion researcher and the marketer are to shorten the time lag between introduction of an idea or product and its widespread adoption - 3 extraneous variables affect the rate of diffusion - - 1) the degree of perceived newness - 2) the perceived attributes of the innovation - 3) the method used to communicate the idea - The more innovative a product is perceived to be, the more difficult it is to gain market acceptance 5 Characteristics of Innovation 1) Relative advantage ( the perceived marginal value of the new product relative to the old) 2) Compatibility - tis compatibility with acceptable behavior, norms, values and so forth) 3) Complexity ( the degree of complexity associated with product use) 4) Triabuilty ( the degree of economic and/or social risk associated with product use) 5) Observability ( the ease with which the products benefits can be communicated) - The evaluator must remember that it is the perception of product characteristics by the potential adopter, not the marketer, that is crucial to the evaluation Production of Innovations - 3 main factors seem to favor conversion in pharmaceutical industryL 1) patience 2) focus on few important innovation 3) experience - Product Component Model - a tool for characterizing how a product may be adapted to a new market by separating the product’s many dimensions into three components: support services, packaging, and core component Core Component - The core component - consists of the physical product- the platform that contains the essential technology - and all its designs and functional features - It is on the product platform that the product variations can be added or deleted to satisfy local differences - Major adjustments in the platform aspect of the core component may be costly because a change in the platform can affect product processes and this require additional capital investment Packaging COMPONENT - Packaging component - includes style features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product’s package Support Services Component - The support services includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts Marketing Consumer Services Globally - Services are distinguished by four unique characteristics - intangibility, inseparability, heterogeneity, and perishability - and thus require special consideration - Products are often classified as tangible, whereas services are intangible - The intangibility of services results in characteristics unique to a service: it is inseparable in that its creation cannot be separated by its consumption; and it is heterogenous in that it is individually produced and is thus is unique; and it is perishable in that once created it cannot be stored but must be consumed simultaneously with its creation  - It's easy to forget that in low-literacy countries, pictures and symbols are taken literally as instructions and information Brands in International Markets - Global brand is defined worldwide use of a name, term, sign, symbol ( visual and/or auditory), design, or combination of thereof intended to identify goods or services of one seller and to differentiate them from those of competitors - A successful brand is the most valuable resource a company has - Brand image is at the very core of business identity and strategy Global Brands - Naturally, companies with strong brands strive to use those brands globally - Perceived “globaness” can lead to increases in sales National Brands - Company is described a preferring brands to be local, people to be regional, and technology to be global - Ex. ex. Unilever company introduced Omo detergent brand ( sold in many other countries), but also purchased a local brand, Pollena 2000 Country-of-Origin Effect and Global Brands - Consumer associates value of the product with the brand - Country-of-origin-effect (COE)- can be defined as any influence that the country of manufacture, assembly, or design has on a consumer;s positive or negative perception of a product - Ethnocentrism also can have country-of-origin effects; feelings of national pride - the “buy local” effect - can influence attitudes towards foreign products - One might generalize that more technical the product, the less positive is the perception of something manufactured in a less-developed or newly industrializing country - More knowledgeable consumers are more sensitive to a products COE than those less knowledgeable