International Marketing - The Role of Culture PDF

International Marketing @Universität Tübingen The role of culture Prof. Dr. Kristina Klein Agenda Introduction to international 1 marketing 2 Market selection and market entry 3 The role of culture Marketing decisions: The product 4 and the brand Marketing...

International Marketing @Universität Tübingen The role of culture Prof. Dr. Kristina Klein Agenda Introduction to international 1 marketing 2 Market selection and market entry 3 The role of culture Marketing decisions: The product 4 and the brand Marketing decisions: International 5 pricing Marketing decisions: International 6 distribution Marketing decisions: International 7 communication and advertising Agenda The importance and 3.1 elements of culture 3.2 Dimensions of culture Other cultural variables: Cultural 3.3 Stereotypes and Ethnocentrism 17.01.2025 Insensitivity to cultural differences can be harmful Euro Disney SCA, the subsidiary of Walt Disney Co., the No. 2 media conglomerate in the world, opened its first theme park under the name Euro Disney in 1992 in France. Assuming that the success of its universal appeal in Florida, California and Japan would work again, Disney replicated the same formula of fantasy and magic kingdoms in Europe. However, in France it faced huge resistance with the French linking it to an imperialism of American multinationals on the country. Considering it a threat to their culture, the French press and intellectuals strongly opposed its entry and called it a 'cultural Chernobyl'. As Euro Disney tried to recover from the troubles by reworking on the details inside the park, revamping food, rides and the price structure for the international market, many observers still believed that the cultural inadvertence still remained a threat for the company's long-term survival in the country. when first introduced, unsuccessful but after adapting to the local culture it became successful: local french food (baguettes, more alcohol), price settlements Johnson, J./Tellis, G.J. (2008), Drivers of Success for Market Entry into China and India, Journal of Marketing, 72 (May), pp. 1-13; http://articles.baltimoresun.com/1992-04-19/news/1992110078_1_mickey-mouse-cultural-chernobyl-amusement 4 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de  “Culture eats strategy for breakfast.” Peter Drucker 5 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Tasks of international marketers Study and understand the cultures of countries in which they will be doing business Understand how an unconscious reference to their own cultural values, or self-reference criterion, may influence their perception of the market Incorporate this understanding into the marketing planning process 6 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de What is culture? “Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another.” ~Geert Hofstede 7 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Other definitions of culture Shared values and meanings of the members of a society. It effects not only the underlying behavior of customers in a market but also the execution and implementation of marketing and management strategies (Kogut and Singh, 1988) “that whole complex that includes knowledge, belief, art, morals, law, custom and any other capabilities and habits” (Tylor, 1871) “[the] distinctive way of life of a group of people, their complete design for living” (Kluckhohn, 1951) “a society’s personality” (Solomon, 2009) Solomon, M./Bamossy, G./Askegaard, S. (2001), Consumer behaviour – A European perspective, p. 484 8 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Society and culture Culture comprises ways of living, built up by a group of human beings, that are transmitted from one generation to another Culture has both conscious and unconscious values, norms, attitudes, and symbols Culture is acted out in social institutions; these institutions reinforce cultural norms Culture is both physical (clothing and tools) and nonphysical (religion, attitudes, beliefs, and values) 9 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Culture also matters in b2b relationships Recommended behavior Problematic behavior Punctuality Religion, sexuality or race as topics Creating a friendly atmosphere Use of abstract instead of concrete examples Positive feedback for anecdotes Emphasis on academic titles US customers Include local attorneys in negotiations Pragmatic solutions Overly direct communication Strive for fairness Open disagreement Conservative clothing Misinterpretation of understatement British Be prepared for subtle humor Discussion of political topics customers Recognize discrete criticism Too many details Communication in French Not considering hierarchies Elegance, eloquence and enthusiasm in communication Premature discussion of details French Use intellectual and philosophical aspects Reducing conversation only to facts customers Accept delays Being put off by conversation matters Be well informed about your counterpart Compromising too early (weakness) Be serious, polite and patient Overestimating a contract Russian Clarify everything customers Keep your promises Make sure your negotiating partner has the authority to Making the other side lose face close the deal Being too direct Always be polite Be patient Chinese Build good personal relationships customers Document all results in detail (not just verbally) Homburg, C./Kuester,S./Krohmer,H. (2009), Marketing Management: A contemporary perspective, p. 446 10 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Guanxi – Chinese business mentality Relationships are built on a cultural platform - “Guanxi” stands for any type of relationship In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another – pre-existing relationships from school, village, family, workmates are all important The Chinese business mentality is very much one of "You scratch my back, I’ll scratch yours." In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Guanxi affects the way Westerners do business in Asia, especially in China Company A relationship Relationship Transactions based on Guanxi Customer Company A relationship based on Transactions Relationship Western style Customer relationship marketing Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 111 11 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution technologies) Tools Beliefs Social interactions (family, group); (ethnic) Decorative art Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 12 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Values and norms Values: Norms: Beliefs that a given behavior or outcome is Rules dictating what is right or wrong, desirable or good acceptable or unacceptable. Enacted norms: Explicitly decided Crescive norms: Embedded in a culture Custom: A norm handed down from the past that controls basic behaviors Mores: A custom with a strong moral overtone Conventions: Norms regarding the conduct of everyday life 13 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Ignoring values might lead to negative consequences Adidas cancelled plans for a training shoe with a shackle-like ankle cuff after consumers perceived it as an historical symbol of slavery Posted by Adidas Original on its Facebook page Since they posted a preview picture on Facebook, fans in the blogosphere voiced their strong reactions with over 2,000 comments https://www.marketingweek.com/2012/06/20/adidas-cancels-shackle-trainer-after-slavery-outcry/; Terpstra, V./Sarathy, R. (2000), International Marketing; globeone 2012 14 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultural differences: example of different value systems United States East Asian Countries Wealth is more important than equity Equity is more important than wealth Consumption is highly valued Saving is highly valued Individual is the most important part of society Group is the most important part of society Little respect is shown for age and traditional values Great respect is shown for age and traditional values Emphasis is on individual motivation Emphasis is on group motivation Cohesive and strong extended families are the norm Nuclear families are common – family ties are important Work force and societies are highly disciplined and Protestant work ethic has declined motivated Distrust of government is pervasive Public service is a moral responsibility Personal conflicts are common – many lawyers Personal conflicts are avoided – few lawyers Society is fluid; no close social ties Network of intricate social ties exists Informality is important There is a strong sense of protocol and rank Education is an investment in the prestige of the Education is an investment in individual success family 15 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Values and norms Values: Norms: Beliefs that a given behavior or outcome is Rules dictating what is right or wrong, desirable or good acceptable or unacceptable. Enacted norms: Explicitly decided Crescive norms: Embedded in a culture Custom: A norm handed down from the past that controls basic behaviors Mores: A custom with a strong moral overtone Conventions: Norms regarding the conduct of everyday life 16 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Dietary preferences Domino’s Pizza pulled out of Italy because its products were seen as “too American” with bold tomato sauce and heavy toppings. Domino’s is India’s largest foreign fast-food chain with over 700 stores. Its success is attributed to localized toppings. Dunkin’ Donuts morning business in India was slow. Indians eat breakfast at home. Business took off after it introduced the Original Tough Guy Chicken Burger for later time of day. https://abcnews.go.com/Business/dominos-opens-pizza-restaurant-italy/story?id=34314840; https://www.businesstoday.in/current/corporate/dunkin-donuts-shuts-more-half-their-stores-india-2-years/story/281001.html 17 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution Tools technologies) Beliefs Decorative art Social interactions (family, group); (ethnic) Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 18 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Subcultures smaller groups of people with their own shared subsets of attitudes, beliefs, & values (e.g., vegetarians) https://www.pinterest.de/pin/462815299201007821/; https://www.pro-medienmagazin.de/gesellschaft/gesellschaft/2012/05/29/gottes-welt-ist- bunt-da-ist-auch-schwarz-drin/; https://newspunch.com/why-dont-the-amish-get-cancer/; 19 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Subcultures and ethnicity Subdivision of ethnicity Race – common biological heritage – Asian, Africans, Ethnic Subculture: A self-perpetuating group of Caucasian consumers who are held together by common cultural or genetic ties, distinctive origin – you are born with Nationality – common national origin, often your ethnicity characterized by distinctive language or accent; Italian, Greek, Slav, Turkish, Chinese, Korean, Indian (but all = Members of a given ethnic group: Germans) Descend from common forebears Religion – where a common (for the group) but unique system of worship is a distinct feature – Christians, Often live close to one another – various Jews, Sikhs “enclaves” in a city American Ethnic Subcultures: African Americans; Tend to marry within their own group Hispanic Americans; Asian Americans Share a common sense of togetherness German Ethnic Subcultures: Italian, Turkish, Greek, Give certain objects meanings unique to their own Slavs group Why should we care? Helpful in order to Ethnicity and marketing strategies: Segmenting consumers on their ethnicity can be target the right segment with right offer effective BUT be careful of ethnic stereotypes make correct predictions about sales increase effectiveness of your marketing activities (e.g., advertising) Solomon, M./Bamossy, G./Askegaar, S. (2002): Consumer Behaviour – A European Perspective, pp. 528 20 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Meeting the needs of ethnic subcultures Specialized ethnic media, like this magazine for Muslim women, are springing up to meet the needs of underserved subcultures. 21 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de De-Ethniticization Refers to the process whereby a product formerly associated with a specific ethnic group is detached from its roots and marketed to other subcultures 22 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Culture appropriation: the example of Dior https://www.bbc.com/news/newsbeat-46297329 23 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution technologies) Tools Beliefs Social interactions (family, group); (ethnic) Decorative art Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 24 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Aesthetics The sense of what is beautiful and what is not beautiful What represents good taste as opposed to tastelessness or even obscenity Visual-embodied in the color or shape of a product, label, or package Styles-various degrees of complexity, for example, are perceived differently around the world Consists of Design Color Music https://www.tutor2u.net/business/reference/product-design; http://playwriteband.com/see/ 25 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Aesthetics and color Red- represents witchcraft and death in many African countries, but is a positive color in Denmark White-identified with purity and cleanliness in the West, with death in parts of Asia Grey-means inexpensive in Japan and China, but high quality and expensive in the U.S. https://visual.ly/community/infographic/business/color-emotion-guide 26 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The number 7 Bad luck in Kenya Good luck in the Czech Republic Magical connotation in Belgium 27 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Music Found in all cultures Rhythm is universal Styles are associated with countries or regions: salsa & Cuba, reggae & Jamaica, blues, rap, rock, country & U.S. Understand what music style is appropriate in advertising; varies by culture and government regulations 28 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution technologies) Tools Beliefs Social interactions (family, group); (ethnic) Decorative art Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) holidays as opportunity to launch new products and gain more customers Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 29 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Religion Nature and complexity of different religions is pretty diverse An organization needs to make sure that their products and services are not offensive, unlawful or distasteful to a local nation Examples: In 2011 United Colors of Benetton had to stop its “Unhate” campaign. The Italian firm withdrew the photograph featuring Pope Benedict XVI kissing a senior Egyptian imam on the lips after the Vatican denounced it as an unacceptable provocation In China, 2007 was the year of the pig. All advertising with pigs was banned to maintain harmony with the country’s Muslim population. The ban included pictures of sausages that contained pork, and even advertising that included (cartoon) pigs. Terpstra, V./Sarathy, R. (2000), International Marketing, pp. 102-108, http://www.dailymail.co.uk/news/article-2062423/Benetton-Unhate- advert-Pope-kissing-imam-withdrawn-Vatican-calls-disrespectful.html 30 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution Tools technologies) Beliefs Decorative art Social interactions (family, group); (ethnic) Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 31 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Education Not everybody can read! Widespread illiteracy has to be considered when creating advertising material, brand communication, product packaging, etc. Literacy rates around the world Countries with the lowest literacy rates # Country Literacy Rates 1 Niger 15 % 2 Guinea 25 % 3 South Sudan 27 % 4 Benin 29 % 5 Burkina Faso 29 % Worldatlas, 2018 UN Human Development Report 2011; http://data.worldbank.org/indicator/SE.ADT.LITR.ZS?order=wbapi_data_value_2010+wbapi_data_value&sort=asc; https://www.worldatlas.com/articles/the-highest-literacy-rates-in-the-world.html 32 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Education: Literacy Type and medium of messages for advertising and product labeling have to be adapted, e.g., in countries with low literacy levels, advertisers have to avoid written messages  better: radio advertising with audio messages or visual media which show pictures and symbols Examples: Gillette MACH3 Gillette Guard in ARIEL in Germany ARIEL in India with Turbo in France India with without pictures picture of washing machine picture 33 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Material and non-material culture Physical Culture Abstract Culture Cultural (internal) elements Clothing Attitudes Material life (production and distribution Tools technologies) Beliefs Decorative art Social interactions (family, group); (ethnic) Values subgroups Body adornment Norms Aesthetics (what is beautiful, what is tasteful?) Homes Religion Upbringing and education Language (verbal and nonverbal) Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, p. 78; Kotabe, M./Helsen, K. (2004), Global Marketing Management, pp. 106-118. 34 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Language fails 1. Esso Oil discovered that its name translates into “stalled car” in Japanese 2. In Puerto Rico, the automobile name Matador means “killer” 3. Umbro named a sneaker Zyklon, the name of the gas used in Nazi concentration camps 4. Irish Mist (an alcoholic beverage) translates into “dung” or “manure” in German 5. Kellogg had to rename its Bran Buds cereal in Sweden; the name roughly translated to “burned farmer” 6. Schweppes Tonic Water translated into “Schweppes Toilet Water” in Italian 7. “Come Alive With Pepsi” translated into “Pepsi brings your ancestors back from the dead” in Chinese 35 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Language and communication In China, it is bad luck to give these three items. 36 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de What might help to avoid fails in general? Be aware of the self-reference criterion Unconscious reference to one’s own cultural values; creates cultural myopia How to reduce cultural myopia: 1. Define the problem or goal in terms of home country cultural traits 2. Define the problem in terms of host-country cultural traits; make no value judgments 3. Isolate the SCR influence and examine it 4. Redefine the problem without the SCR influence and solve for the host country situation Copenhagen Business School 37 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Disney in France & Tokyo and the self-reference criterion 1. Unlimited demand for American culture. Tokyo a huge success. No alcohol in parks. 2. Europeans, especially the French, are sensitive about American cultural imperialism. Disney characters are based on European folk tales. Real castles here! 3. American & Japanese conditions are different. Modify design for European success. 4. Redesign the theme park in keeping with European cultural norms; allow the French to put their identify on the park. Copenhagen Business School 38 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Agenda The importance and elements of 3.1 culture 3.2 Dimensions of culture Other cultural variables: Cultural 3.3 Stereotypes and Ethnocentrism Typologies of culture High vs. low context cultures (Hall) The cultural dimensions of Hofstede Inglehart’s World Value System The Schwartz value system 40 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de High and low context cultures High-Context-Cultures Low-Context-Cultures Information resides in context Messages are explicit and specific Emphasis on background, basic values, societal Words carry all information status Reliance on legal paperwork Less emphasis on legal paperwork Focus on non-personal documentation of credibility Focus on personal reputation Examples: Switzerland, U.S.A., Germany Examples: Saudi Arabia, Japan  Consider in advertising spoken language carries the  Consider in advertising hidden cultural meaning emphasis of the communication, i.e., what is said is needs to be considered as does body language what is Keegan, W.J./Schlegelmilch, B.B. (2001), Global Marketing Management: A European Perspective, pp. 81-83 41 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Contextual background of different countries High context Japanese IMPLICIT Arabian Latin American Spanish Italian English (UK) French English (US) Scandinavian German Low context Swiss EXPLICIT Kotabe, M./Helsen, K. (2004), Global Marketing Management. 42 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Typologies of culture High vs. low context cultures (Hall) The cultural dimensions of Hofstede not marketing related, based on observation of organizational cultures Inglehart’s World Value System The Schwartz value system 43 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Hofstede‘s cultural typology – The 5 dimensions The 5 cultural dimensions by Hofstede can guide international marketers “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.“ when his work became more relevant in Asian countries Individual- Masculinity- Uncertainty Dimension of Power Distance Collective Femininity Avoidance Time Dimension Dimension Dimension Dimension Orientation Keegan, W./Green, M.C. (2011), Global Marketing, p.155, www.geert-hofstede.com 44 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Power distance Power Distance (high vs. low) The degree of inequality among people Implications for International that is viewed as being normal Marketing The extent to which the less powerful members of organizations and institutions Dimension affects the evaluation of (like the family) accept and expect that alternatives for entering international power is distributed unequally markets Companies in high power distance also relates to seniority. high respect often to older people --> who gives cultures prefer sole ownership of advices in an organization to whom subsidiaries, because of more control Examples of countries with high power distance: South Companies in low power distance American countries, India, China cultures are more apt to use joint ventures Examples of countries with low power distance: Denmark, Netherlands, Great Britain, USA Keegan, W./Green, M.C. (2011), Global Marketing, pp. 155-157, www.geert-hofstede.com 45 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Individualism vs. collectivism Individualism (vs. Collectivism) The degree to which people prefer to act as individuals rather than members of a group A reflection of the degree to which individuals in a society are Implications for International integrated into groups Marketing In individualistic cultures, each member of society is primarily concerned with his or her own interest and those of the immediate Dimension affects adaptation of family communication In collectivistic cultures, people are integrated into strong, In individualistic cultures, one cohesive in-groups, often extended families which continue person should be featured protecting them in exchange for unquestioning loyalty In collectivistic cultures, a group should be featured Examples of individualistic countries: Germany, Netherlands, Great Britain, USA, France Examples of collectivist countries: China, Colombia, Pakistan, West Africa, Indonesia Keegan, W./Green, M.C. (2011), Global Marketing, pp. 155-157, www.geert-hofstede.com 46 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Masculinity vs. femininity Masculinity (vs. Femininity) Masculinity describes a society in which men are expected to be Implications for International Marketing assertive, competitive, and concerned with material success, and women fulfill the role of nurturer and are concerned with issues such as the welfare of children Dimension affects the choice of sales Femininity describes a society in which the social roles of men and personnel women overlap, with neither gender exhibiting overly ambitious or Aggressive, achievement-orientated competitive behavior salespersons are better matched to The importance of “male” values (assertiveness, success, competitive drive, achievement) versus “female” values (solidarity, customers from a masculine culture quality of life) than to a feminine culture Managers from masculine cultures tend to prefer male business partners Examples of masculine countries: Arab countries, India, Germany, Great Britain, USA Examples of female countries: France, Sweden, Norway, Netherlands, Denmark Keegan, W./Green, M.C. (2011), Global Marketing, pp.155-157, www.geert-hofstede.com 47 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de  Stift- und Warentest as an objective for what products are the most efficient uncertainty avoiding countries trust banking professors, Uncertainty avoidance men in suit etc. --> serious people (e.g. investing to ETF) Uncertainty Avoidance (vs. Uncertainty Acceptance) Implications for International The degree to which people in a given culture prefer structured situations with clear Marketing rules over unstructured situations The extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured (novel, unknown, surprising, different from usual) Dimension affects brand loyalty situations and product-related services Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and by a belief in absolute Truth Customers of uncertainty They are also more emotional, and motivated by inner nervous energy avoiding cultures Uncertainty accepting cultures, are more tolerant of opinions different from what they Are conscious of brand are used to They try to have as few rules as possible, and they are relativist and allow many names currents to flow side by side Are likely to exhibit high People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions brand loyalty, and Prefer money-back Examples of uncertainty avoiding countries: guarantees, warranties, and Japan, France, Mexico, Brazil, Argentina, Greece other risk-reducing Examples of uncertainty accepting countries: features Denmark, Jamaica, China, USA, Great Britain Keegan, W./Green, M.C. (2011), Global Marketing, pp. 155-157, www.geert-hofstede.com 48 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Long-term orientation Long-Term Orientation (vs. Short-Term Orientation) Future versus past and present orientations Is interpreted as concerning “a society’s search for virtue”, rather than a search for truth. It assesses the sense of immediacy within a culture, whether gratification should be immediate or deferred Implications for International Marketing Values associated with Long Term Orientation are thrift and perseverance Dimension affects the relationship with Values associated with Short Term Orientation are respect for business partners: tradition, fulfilling social obligations, and protecting one’s ‘face’ In long-term orientated cultures Both the positively and the negatively rated values of this dimension building a relationship with a potential are found in the teaching of Confucius (Chinese philosopher who lived business partner takes precedence over around 500 BC) transacting the deal Managers from short-term oriented cultures must adapt to the slower pace of business in these countries Examples of long-term orientated countries: India, China, Japan, Thailand Examples of short-term orientated countries: Germany, Australia, Poland, USA, East and West Africa 49 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de additional addition to the model Dimension 6: Indulgence versus Restraint Indulgence stands for a tendency to enable the relatively free gratification of basic and natural human desires associated with enjoying life and having fun. Restraint reflects a conviction that such gratification needs to be regulated by strict social norms. Example: Indulgent Society Restrained Society (United States) (Russia) Higher percentage of happy people --> video with smiling in Lower percentage of happy people the US vs. other countries A perception of personal life control A perception of helplessness; what happens to me is not my own business High importance of leisure Low importance of leisure High importance of having friends Low importance of having friends Less moral discipline Moral discipline Loosely prescribed gender roles Strictly prescribed gender roles Smiling as a norm Smiling as suspect Freedom of speech is important Freedom of speech is not a primary concern Hofstede, G., Hofstede, G. J., Minkov, M. (2010). Cultures and Organizations: Software of the Mind. 3rdEdition. p. 297 50 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Country differences example IKEA catalogue: -power distance: the boy climbing wall --> symbol of achievement, success (China) -indulgence: the boy is playing rather than achieving something similar (Denmark) -masculinity: the boy is perceived strong --> higher masculinity (China) -individualism: the rooms on the left are separated (Denmark), on the right the play area and living room are combined (China) https://www.hofstede-insights.com/product/compare-countries/ 51 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultural differences have a strong influence on brand perception The Red Bull brand was analysed in six countries (Germany, Great Britain, the Netherlands, Austria, Singapore and the USA). Red Bull is one of the world's most standardized brands. A significant difference is found in the evaluation of the dimensions of the brand personality. For example, the characteristic "success" shapes the brand personality of Red Bull particularly strongly in individualistic countries such as the USA, but only very slightly in collectivist countries such as Singapore. From this it can be concluded that the national culture strongly influences the perception and evaluation of brand images. Thus, the goal of a consistent worldwide image can only be achieved through internationally differentiated market cultivation that takes into account the national culture. Foscht et al. (2008), pp. 134; https://energydrink-ca.redbull.com/en/when-to-drink-red-bull 52 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Typologies of culture High vs. low context cultures (Hall) The cultural dimensions of Hofstede Inglehart’s World Value System The Schwartz value system 53 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Two dimensions of cross-cultural variation – The WVS map of the world Variation in people‘s prevailing value orientations is enormous, yet in many aspects it can be boiled down to just two dimensions of cross-cultural variation Weak vs. strong SECULAR-RATIONAL Values: With secular-rational values getting weaker, one approaches the mythical ideal of a sacred community, With these values getting stronger, one approaches the rational ideal of a secular community.  This polarity is about ideals of the COMMUNITY Weak vs. strong SELF-EXPRESSION Values: With self-expression values getting weaker, one approaches the conformist ideal of a restrained individual, With these values getting stronger, one approaches the ideal of an expressive individual.  This polarity is about ideals of the INDIVIDUAL Scores for countries are updated every 5 years and are freely downloadable from: http://www.worldvaluessurvey.org/ Inglehart, R./Baker, W. (2000), Modernization, Cultural Change and the Persistence of Traditional Values, American Sociological Review, (February), pp. 19-51 54 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de  example: Lufthansa and lgbtq+ community --> not advertising in Arabic countries Weak vs. strong secular-rational values.56 (+).56 High Importance of Emphasize (-) Low Importance of Religion RELIGIOSITY Religion.67 (+).67 Strong Pride on Own Nationality Emphasize (-) PATRIOTISM No Strong Pride on Own Nationality STRONG WEAK More Respect for.57 (+).57 SECULAR- SECULAR- Authority Needed Respect (-) AUTHORITY More Respect Not RATIONAL RATIONAL Needed Obedience, not VALUES VALUES (-).39.39 independence taught (+) Teach Independence, not OBEDIENCE obedience taught Refusal of Divorce as (-).49 Emphasize traditional Acceptance of Divorce Unjustified (+).49 FAMILY STRUCTURES Welzel (2006), „A Human Development View on Value Change Trends“; available at: http%3A%2F%2Falingavreliuc.files.wordpress.com%2F2010%2F10%2Fcwvc.pptx&ei=yTG_UYTxF4PP0QW924HwCw&usg=AFQjCNHwBCz REIk_7rzsBMhJkBTFSn6-8Q&bvm=bv.47883778,d.d2k&cad=rja 55 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Weak vs. strong self-expression values.57 (-) (+).57 Strong Liberty Emphasize civil and Weak Liberty Aspirations Aspirations political (-) FREEDOM.60 Support and practice (+) Participation in Petition Abstinence from.60 Signing STRONG WEAK Signing Petitions public (-) EXPRESSION SELF- SELF- Acceptance of Rejection of.58 EXPRESSION EXPRESSION.58 Tolerate (+) Homosexuality Homosexuality NONCONFORMITY VALUES VALUES Weak Sense of Self- (-) Feel Strong Sense of Self-.57 Direction SELF-DIRECTION.57 (+) Direction Refusal of Trust in Sense Expression of Trust in Other People (-) HUMAN TRUST Other People.37.37 (+) Welzel (2006), „A Human Development View on Value Change Trends“; available at: http%3A%2F%2Falingavreliuc.files.wordpress.com%2F2010%2F10%2Fcwvc.pptx&ei=yTG_UYTxF4PP0QW924HwCw&usg=AFQjCNHwBCz REIk_7rzsBMhJkBTFSn6-8Q&bvm=bv.47883778,d.d2k&cad=rja 56 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The World Value Survey cultural map 2010-2014 http://www.worldvaluessurvey.org/WVSContents.jsp 57 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de The usefulness of the WVS for marketing decisions Market selection and segmentation (e.g., the identified country segments) Criterion to assess market potential of countries or country segments Value orientation of people in many countries in Islamic, South Asia, and Africa are driven in large part by their need for survival and security (low SEV) and follow basic traditional values (low SRV such as the importance of religion and family values) Value orientation of people in countries in the post-industrial phase of economic development such as Protestant Europe and English Speaking are driven largely by their need for self- expression because economic progress and welfare provides an overwhelming sense of security (high on both SRV and SEV). New product development Emphases in communication messages and brand positioning Time dimension – Development of needs ( business opportunities) 58 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Typologies of culture High vs. low context cultures (Hall) The cultural dimensions of Hofstede Inglehart’s World Value System The Schwartz value system 59 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Schwartz‘ value theories Two separate theories of value related constructs Individual-level theory Culture-level theory Values represent broad, desirable goals that serve as standards for evaluating whether actions, events, and people are good or bad Individual values: goals that derive from what it means to be human, to be a biological organism who participates in social interaction and who must adapt to the demands of group life Cultural values: goals that derive from the nature of societies (every society must coordinate activities among individuals and groups, adapt individual and group activity to the social and physical environment, and motivate individuals to perform their roles in ways that meet expectations) Basic values are an aspect of the personality system of individuals; cultural value orientations are an aspect of the cultural system of societies Schwartz (2008). Values: Cultural and Individual, in: F.J.R. van de Vijver (Eds.), A. Chasiotis, & S.M. Breugelmans, Fundamental quesitons in cross-cultural psychology (pp. 463-493). Cambridge: Cambridge University Press. 2011 60 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultural value orientations Value constructs that reflect the nature of societies or other large, solidary groups (e.g., ethnic groups) Key societal goals: maintaining social order, containing social conflict, encouraging productivity and innovation and regulating social change Value emphases in a society: conceptions of what is good and desirable (cultural ideals); find expression in the complex of beliefs, practices, symbols and specific norms and personal values prevalent in a society By living in a particular social system, individuals experience the normative value emphases of their society’s culture (particularly in societal institutions, e.g., schools, in law courts) Schwartz (2008). Values: Cultural and Individual, in: F.J.R. van de Vijver (Eds.), A. Chasiotis, & S.M. Breugelmans, Fundamental quesitons in cross-cultural psychology (pp. 463-493). Cambridge: Cambridge University Press. 2011 61 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Schwartz‘s cultural values – cultural-level value structure (adapted from Schwartz, 1994) Values that discriminate among cultures Seven value types Three bipolar dimensions that express contradictions Autonomy vs. Embeddedness/Conservatism Hierarchy vs. Egalitarianism Mastery vs. Harmony A societal emphasis on the cultural orientation at one pole of a dimension typically accompanies a de-emphasis on the polar type with which it tends to conflict Cultural value orientations are also interrelated based on compatibility among their basic assumptions Schwartz, S. H. (1999). A theory of cultural values and some implications for work. Applied Psychology: An International Review, 48 (1), p. 13 (adapted version); see also: Schwartz, S.H. (1994b), Beyond Individualism–Collectivism: New cultural dimensions of values, in: Kim, U./Triandis, H.C./Kagitcibasi, C./Choi, S-C./Yoon, G. (Eds.), Individualism and collectivism: Theory, method and applications (pp.85–119) 62 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultures of actual societies are arrayed along three dimensions (1/2) Idea: All societies confront and must cope with basic problems in regulating human activity in order to survive Defining the boundaries between the persona and the group and the optimal relations between them Ensuring coordination among people to produce goods and services in a way that preserve the social fabric Regulating the utilization of human and natural resources Cultural value orientations prescribe how institutions should function and how people should behave in order to best deal with the key problems societies face similar to individualism vs. collectivism --> similarities in different models Autonomy vs. Embeddedness (possible question in exam: which models share ideas? Explain them) Relates to the first problem: To what extent should people be treated as autonomous versus as embedded in their groups? “Autonomy”: people should cultivate and express their own preferences, feelings, ideas, and abilities “Embeddedness”: people are treated as entities embedded in the collectivity Schwartz (2008). Values: Cultural and Individual, in: F.J.R. van de Vijver (Eds.), A. Chasiotis, & S.M. Breugelmans, Fundamental quesitons in cross-cultural psychology (pp. 463-493). Cambridge: Cambridge University Press. 2011 63 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Cultures of actual societies are arrayed along three dimensions (2/2) Egalitarianism vs. Hierarchy similar to power distance Relates to the second problem: How can human interdependencies be managed in a way that elicits coordinated, productive activity rather than disruptive behavior or withholding of effort? “Egalitarian culture”: urges people to recognize one another as moral equals who share basic interests as human beings “Hierarchy culture”: relies on hierarchical systems of ascribed roles to insure responsible, productive behavior Harmony vs. Mastery Relates to the third problem: To what extent should individuals and groups control and change their social and natural environment vs. leaving it undisturbed and unchanged? “Harmony cultures”: emphasis on fitting into the social and natural world (preservation and acceptance) “Mastery cultures”: encouragement of active self-assertion by individuals or groups in order to aster the natural and social environment and thereby attain group or personal goals Schwartz (2008). Values: Cultural and Individual, in: F.J.R. van de Vijver (Eds.), A. Chasiotis, & S.M. Breugelmans, Fundamental quesitons in cross-cultural psychology (pp. 463-493). Cambridge: Cambridge University Press. 2011 64 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Agenda The importance and elements of 3.1 culture 3.2 Dimensions of culture 3.3 Other cultural variables: Cultural Stereotypes and Ethnocentrism Using stereotypes positively – the country-of-origin effect Consumers make inferences based on a brand’s country-of-origin. This ad for Barilla pasta shows pictures of Parma, Italy, and of delicious looking Italian pasta. Barilla wants consumers to infer that since the Barilla brand is Italian, it must produce great tasting pasta. 66 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Ethnocentrism Consumer Ethnocentrism Originally the beliefs held by American consumers about the appropriateness, indeed morality, of purchasing foreign-made products  understanding of what purchase behavior is (un)acceptable to the ingroup Purchasing imported products is wrong because it hurts the domestic economy, causes loss of jobs, and is plainly unpatriotic Managerial relevance Strength of ethnocentric tendencies: use of “Make American/Hire American” promotional campaigns Identification of specific regional areas: broadcast, newspaper advertising customized to ethnocentric inclinations Store location depending on product portfolio (balance of imported vs. “local” products) Shimp, T. A./Sharma, S. (1987), Consumer Ethnocentrism: Construction and Validation of the CETSCALE, Journal Of Marketing Research, 24(3), pp. 280-289 67 © Univ.-Prof. Dr. Kristina Klein, markstones Institute of Marketing, Branding & Technology, www.markstones.de Universität Bremen Prof. Dr. Kristina Klein Max-von-Laue-Straße 1 Gebäude WiWi 2 F3210 [email protected] 0421 218-66970