chapter 4kotabe & helsen's global marketing management, third edition, 2004 1 global...

Chapter 4 Kotabe & Helsen's Global Marketing Management, Third Edition, 2004

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Global Marketing ManagementGlobal Marketing Management

Masaaki Kotabe & Kristiaan HelsenMasaaki Kotabe & Kristiaan Helsen Third EditionThird Edition

John Wiley & Sons, Inc., 2004John Wiley & Sons, Inc., 2004


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Chapter 4Chapter 4

Global Cultural Environment and Global Cultural Environment and Buying BehaviorBuying Behavior


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Chapter OverviewChapter Overview

1. Defining Culture1. Defining Culture2. Elements of Culture2. Elements of Culture3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons4. Adapting to Cultures4. Adapting to Cultures5. Cultures and the Marketing Mix5. Cultures and the Marketing Mix6. Organizational Cultures6. Organizational Cultures7. Global Account Management (GAM)7. Global Account Management (GAM)8. Global Customer Relationship 8. Global Customer Relationship

Management (CRM)Management (CRM)


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IntroductionIntroduction

Buyer behavior and consumer needs are largely Buyer behavior and consumer needs are largely driven by cultural norms.driven by cultural norms.

Global business means dealing with consumers, Global business means dealing with consumers, strategic partners, distributors, and competitors strategic partners, distributors, and competitors with different cultural mindsets.with different cultural mindsets.

Within a given culture, consumption processes can Within a given culture, consumption processes can include four stages: access, buying behavior, include four stages: access, buying behavior, consumption characteristics, and disposal (see consumption characteristics, and disposal (see Exhibit 4-1).Exhibit 4-1).

Each of these stages is heavily influenced by the Each of these stages is heavily influenced by the culture in which the consumer thrives.culture in which the consumer thrives.


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1. Defining Culture1. Defining Culture

There are numerous definitions of culture. In this There are numerous definitions of culture. In this text, culture (in a business setting) is defined as text, culture (in a business setting) is defined as being a learned, shared, compelling, interrelated being a learned, shared, compelling, interrelated set of symbols whose meanings provide a set of set of symbols whose meanings provide a set of orientations for members of society.orientations for members of society.

Cultures may be defined by national borders, Cultures may be defined by national borders, especially when countries are isolated by natural especially when countries are isolated by natural barriers.barriers.

Cultures contain subcultures that have little in Cultures contain subcultures that have little in common with one another.common with one another.


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2. Elements of Culture2. Elements of Culture

Culture consists of many interrelated components. Culture consists of many interrelated components. Knowledge of a culture requires a deep Knowledge of a culture requires a deep understanding of its different parts. Following are understanding of its different parts. Following are the elements of culture:the elements of culture:– Material lifeMaterial life (technologies that are used to (technologies that are used to

produce, distribute, and consume goods and produce, distribute, and consume goods and services)services)

– LanguageLanguage (language has two parts: the spoken (language has two parts: the spoken and the silent language)and the silent language)

– Social InteractionSocial Interaction (social interactions among (social interactions among people; nuclear family, extended family; people; nuclear family, extended family;


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2. Elements of Culture (contd.)2. Elements of Culture (contd.)

reference groups)reference groups)– AestheticsAesthetics (ideas and perceptions that a culture (ideas and perceptions that a culture

upholds in terms of beauty and good taste)upholds in terms of beauty and good taste)– ReligionReligion (community’s set of beliefs that relate (community’s set of beliefs that relate

to a reality that cannot be verified empirically)to a reality that cannot be verified empirically)– EducationEducation (One of the major vehicles to (One of the major vehicles to

channel from one generation to the next)channel from one generation to the next)– Value SystemValue System (values shape people’s norms (values shape people’s norms

and standards)and standards)


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3. Cross-Cultural Comparisons3. Cross-Cultural Comparisons

Cultures differ from one another, but usually share Cultures differ from one another, but usually share certain aspects.certain aspects.

High-context culturesHigh-context cultures: Interpretation of messages : Interpretation of messages rests on contextual cues; examples: China, Korea, rests on contextual cues; examples: China, Korea, Japan, etc.).Japan, etc.).

Low-context culturesLow-context cultures: Put the most emphasis on : Put the most emphasis on written or spoken words; United States, written or spoken words; United States, Scandinavia, Germany, etc.).Scandinavia, Germany, etc.).


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Low context

High context

Contextual Background of Various Countries

Japanese

Arabian

Latin American

Spanish

Italian

English (UK)

French

English (US)

Scandinavian

German

Swiss EXPLICIT

IMPLICIT


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3. Cross-Cultural Comparisons (contd.)3. Cross-Cultural Comparisons (contd.)

Geert Hofstede’s Cultural Classification Scheme Geert Hofstede’s Cultural Classification Scheme (see Exhibit 4-8a & 4-8b):(see Exhibit 4-8a & 4-8b):– Power distancePower distance: The degree of inequality : The degree of inequality

among people that is viewed as being equitableamong people that is viewed as being equitable– Uncertainty avoidanceUncertainty avoidance: The extent to which : The extent to which

people in a given culture prefer structured people in a given culture prefer structured situations with clear rules over unstructured situations with clear rules over unstructured onesones


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3. Cross-Cultural Comparisons (contd.)3. Cross-Cultural Comparisons (contd.)

– IndividualismIndividualism: The degree to which people : The degree to which people prefer to act as individuals rather than group prefer to act as individuals rather than group members.members.

– MasculinityMasculinity: The importance of “male” values : The importance of “male” values (assertiveness, success, competitive drive, (assertiveness, success, competitive drive, achievement) versus “female” values achievement) versus “female” values (solidarity, quality of life).(solidarity, quality of life).

– Long-term orientation versus short-term focusLong-term orientation versus short-term focus: : Future versus past and present orientationsFuture versus past and present orientations


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Dimension Definition Examples

Power Distance The concentration of power (physical and intellectual capabilities, power, and wealth) in certain groups and the acceptance of it.

High power distance: Korea, India, Japan, Mexico Low power distance: Australia, United States, Germany

Individualism vs. Collectivism

The importance of the individual vs. the group. Or the pursuit of self-interests vs. subordination to group interests. I.e. "I" vs. "we" orientation.

High individualism: United States, Australia, Great Britain, Canada Low individualism: Japan, Venezuela, China, Pakistan, Thailand, Mexico

Masculinity vs. Femininity

The need for achievement, assertiveness, and material success vs. the need for relationships and modesty. Masculine cultures have segregated roles, consider big beautiful, and need to show off. Feminine cultures care more for quality of life and environment than money.

Feminine: Sweden, France, Netherlands Masculine: Japan, Mexico, Britain, Germany

Uncertainty Avoidance Extent of ability to cope with uncertainty about the future without stress.

High uncertainty avoidance: Japan, France, Mexico Low uncertainty avoidance: United States,, Hong Kong, Great Britain

Long Term Orientation Values oriented toward the future, thrift, and perseverance.

Long term orientation: Hong Kong, Japan Short term orientation: United States, Great Britain, Germany

Five Cultural Dimensions


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Cross-Cultural Comparisons (contd.)Cross-Cultural Comparisons (contd.)

Project GLOBE (Global Leadership and Project GLOBE (Global Leadership and Organizational Behavior Effectiveness)Organizational Behavior Effectiveness) – Project GLOBE is a large-scale ongoing Project GLOBE is a large-scale ongoing

research project that explores cultural values research project that explores cultural values and their impact on organizational leadership in and their impact on organizational leadership in 61 countries61 countries (see Exhibit 4-9). (see Exhibit 4-9).

– The first three dimensions (uncertainty The first three dimensions (uncertainty avoidance, power distance, and collectivism) avoidance, power distance, and collectivism) are the same as Hofstede’s constructs. are the same as Hofstede’s constructs.


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– The remaining six dimensions include: The remaining six dimensions include: collectivism II, gender egalitarianism, collectivism II, gender egalitarianism, assertiveness, future orientation, performance assertiveness, future orientation, performance orientation, and humane orientation.orientation, and humane orientation.

World Value Survey:World Value Survey: – The WVS is organized by the University of The WVS is organized by the University of

Michigan.Michigan.– The WVS has been conducted multiple times The WVS has been conducted multiple times

and the population covered is very broad.and the population covered is very broad.


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The WVS encompasses two broad categories: The WVS encompasses two broad categories: traditional versus secular values, and the quality of traditional versus secular values, and the quality of life (see Exhibit 4-10).life (see Exhibit 4-10).


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4. Adapting to Cultures4. Adapting to Cultures

Global marketers need to become sensitive to Global marketers need to become sensitive to cultural biases that influence their thinking, cultural biases that influence their thinking, behavior, and decision making.behavior, and decision making.

Self-reference criterion (SRC):Self-reference criterion (SRC): Refers to the Refers to the people’s unconscious tendency to resort to their people’s unconscious tendency to resort to their own cultural experience and value systems to own cultural experience and value systems to interpret a given business situation.interpret a given business situation.

Ethnocentrism refers to the feeling of one’s own Ethnocentrism refers to the feeling of one’s own cultural superiority.cultural superiority.


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5. Culture and the Marketing Mix5. Culture and the Marketing Mix

Culture is a key pillar of the marketplace.Culture is a key pillar of the marketplace. Product PolicyProduct Policy: Certain products are more culture-: Certain products are more culture-

bound than other products. Food, beverages, and bound than other products. Food, beverages, and clothing products tend to be very culture-bound.clothing products tend to be very culture-bound.

PricingPricing: Pricing policies are driven by four Cs:: Pricing policies are driven by four Cs:– CustomersCustomers– Company (costs, objectives, strategy)Company (costs, objectives, strategy)– Competition Competition – Collaborators (e.g., distributors)Collaborators (e.g., distributors)


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5. Culture and the Marketing Mix 5. Culture and the Marketing Mix (contd.)(contd.)

DistributionDistribution: Cultural variables may also dictate : Cultural variables may also dictate distribution strategies.distribution strategies.

PromotionPromotion: Promotion is the most visible : Promotion is the most visible marketing mix. Culture will typically have a marketing mix. Culture will typically have a major influence on a firm’s communication major influence on a firm’s communication strategy. Local cultural taboos and norms also strategy. Local cultural taboos and norms also influence advertising styles.influence advertising styles.


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6. Organizational Cultures6. Organizational Cultures

Organizational Culture: Most companies are Organizational Culture: Most companies are characterized by their organizational (corporate) characterized by their organizational (corporate) culture.culture.

A model of organizational culture types includes A model of organizational culture types includes the following four cultures (see Exhibit 4-12):the following four cultures (see Exhibit 4-12):– Clan cultureClan culture– Adhocracy cultureAdhocracy culture– Hierarchy cultureHierarchy culture– Market cultureMarket culture


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7. Global Account Management (GAM)7. Global Account Management (GAM)

The coordination of the management of customer The coordination of the management of customer accounts across national boundaries are referred to accounts across national boundaries are referred to as as global account management (GAM).global account management (GAM).

Global Accounts’ Requirements:Global Accounts’ Requirements:» May require a single point of contactMay require a single point of contact» May demand coordination of resources for May demand coordination of resources for

serving customersserving customers» May push for uniform prices and terms of May push for uniform prices and terms of

tradetrade» May have standardized products and serviceMay have standardized products and service


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7. Global Account Management (GAM) 7. Global Account Management (GAM) (contd.)(contd.)

» May require a high degree of consistency in May require a high degree of consistency in service quality and performanceservice quality and performance

» May support in countries where the company May support in countries where the company has no presencehas no presence


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7. Global Account Management (GAM) 7. Global Account Management (GAM) (contd.)(contd.)

– Managing Global Account RelationshipsManaging Global Account Relationships::» Clarify the role of the global account Clarify the role of the global account

management team.management team.» Make incentive structure realistic.Make incentive structure realistic.» Pick the right global account managers.Pick the right global account managers.» Create a strong support network.Create a strong support network.» Make sure that the customer relationship Make sure that the customer relationship

operates at more than one level.operates at more than one level.


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8. Global Customer Relationship 8. Global Customer Relationship Management (CRM)Management (CRM)

The process of managing interaction between the The process of managing interaction between the company and its customers is called company and its customers is called customer customer relationship management (CRM):relationship management (CRM):– Helps in customer retentionHelps in customer retention– Helps in richer communication and interactive Helps in richer communication and interactive

marketingmarketing– Helps in tailored servicesHelps in tailored services– Helps to maintain a closer contact with the Helps to maintain a closer contact with the

customerscustomers


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8. Global Customer Relationship 8. Global Customer Relationship Management (CRM) (contd.)Management (CRM) (contd.)

Benefits of CRM:Benefits of CRM:– A better understanding of customers’ A better understanding of customers’

expectations and behaviorexpectations and behavior– Ability to measure the customers’ value to the Ability to measure the customers’ value to the

companycompany– Lower customer acquisition and retention costsLower customer acquisition and retention costs– Ability to interact and communicate with Ability to interact and communicate with

customers in countries where access to customers in countries where access to traditional channels is limitedtraditional channels is limited


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8. Global Customer Relationship 8. Global Customer Relationship Management (CRM) (contd.)Management (CRM) (contd.)

Guidelines for Successful CRM ImplementationGuidelines for Successful CRM Implementation::– Make the program business-driven rather than Make the program business-driven rather than

IT-drivenIT-driven– Monitor and keep track of data protection and Monitor and keep track of data protection and

privacy laws in those countries where CRM privacy laws in those countries where CRM systems are being used or are in the planning systems are being used or are in the planning stagestage

– A good data is the main pre-requisite.A good data is the main pre-requisite.– Rewards being sent out to customers are Rewards being sent out to customers are

relevant, targeted, and personal.relevant, targeted, and personal.

chapter 4kotabe & helsen's global marketing management, third edition, 2004 1 global...

Documents

global business

global account management

global cultural environment

marketing mix6

given culture

edition john wiley sons

lowcontext cultures

highcontext cultures