Transcript Culture in Global Marketing

Culture & Global
Marketing
Importance of Culture
Culture affects market demand.
Managerial behavior is driven by his/her
cultural knowledge
Knowledge of Native culture is useful when
dealing with home markets but it has little
value when dealing in foreign markets
Culture affects the nature of business
negotiations
Culture acts as a hidden entry barrier, but it
can be overcome with cultural sensitivity, hard
work & quality
Culture Defined
Culture is the underlying value framework
that guides an individual’s behavior.
Culture is reflected perceptions, social
interactions, business interactions
Culture guides the selection of appropriate
responses in social situations
Culture is a learned behavior. People learn
do’s & don’t as they grow up
Culture across Countries
Some countries are multicultural:- India,
China, US, Russia. These countries have
several sub-cultures.
While many are monocultural. UK, France,
Germany, Columbia, Peru etc.
Culture is the “Silent Language” in
International business
 Relationship with Time, Space & Energy
 High Context – Low context cultures
 Body language
Need for cultural Adaptation
Self-Referencing : Process by which one
judges others actions with reference to one’s
own native culture. Usually “Right” &
“Wrong” decisions
Often leads to wrong opinions, Mistakes
Avoid self-referencing mistakes by cultural
adaptation.
Cultural adaptation is a learned skill & must
be mastered by Global Managers
Hofstede’s Cultural
Dimensions
Individualism Vs Collectivism
Masculine Vs Feminism
Uncertainty Avoidance Vs Risk Taking
Power Distance
Confucian Dynamism: Long term outlook,
work ethic of Chinese
Gannon’s Metaphors
Gannon’s Metaphors offer a mental anchor for
manger who has to deal with a new culture and
cannot foresee contingencies
It is a simplified, holistic representation of a culture:
 USA- Football: Individualistic, specialized, competitive
 China – Harmony : Roundness, Harmony & Fluidity
 Germany – Symphony : Discipline under a leader,
Skilled workers working together, a well oiled machine
 India – Cyclical Hindu Philosophy: Life follows a cyclical
pattern
Rapaille’s Archetypes
 Dr Rapaille simplified cultures for easier
understanding by explaining it in 7 steps of
decoding culture:
1. People don’t buy products, People buy
relationships
2. Culture can make or break your marketing plan,
sales or public relationship plans
3. Time, Space & Energy are the building blocks of
all cultures
4. Design & create products/Services to solve the
right problem
Rapaille’s Archetypes
The more Global, The more Local: Global
companies have to localize. Quality is the key
to succeed, but word quality means different
things in different countries:
 USA : It works
 Japan: Perfection
 Germany: Made according to the standard
 France: Quality = Luxury
 India: Quality = Reliable
Cultural Awareness is the key to global
success
Culture: How to do Business
The aim of business is same everywhere, but the
way to do it varies across countries
Global Managers must be able to handle Culture
shock
Similar business situations in different countries
does not imply similar opportunities. E.g: Nestle in
Africa
Culture influences Management skills. So in a new
country, its “Back-to-Basics” w.r.t learning local
culture
Culture & Managerial Skills
Culture defines a set of acceptable &
unacceptable behaviors, which forms the basis of
“Way of doing Business”
Managers learn how to do business. This process
is called Enculturalization and Socialization
 How consumers behave
 How to manage people, supplier & subordinates
 What guides the consumer behavior
Acceptable Behavior in business is usually
acceptable behavior in society
Culture & Managerial Skills
Successful mangers tend to be good at
acceptable behaviors and avoid
unacceptable behaviors
Lessens from past managerial experience in
other countries has little value in other
cultures.
Success & Failures in the past will be repeated
elsewhere, before learning the local implications
Managerial Styles
Cultures tend to generate different
managerial styles. Management styles is
heavily influenced by home country culture.
Japan High Context culture influences mangers
to read body language while in US, a low
context culture tends to ignore body language
Managers are usually inadequately trained
to handle different cultures.
Time, Money pressure compromise training.
Cultural Dilemmas
Managers face cultural dilemmas due to
differences in cultures
 Universalism Vs Particularism : Doing the right thing or
doing things right?
 Individualism Vs Collectivism in decision making
 Neutral Vs Emotional
 Specific Vs General : Is it just business or the whole
person, individual or the entire firm
 Attitudes towards Time
 Attitudes towards Environment
Culture & Negotiations
Global business involves cross cultural
negotiations, establishing relationships with
suppliers, customers, distributors & other
partners
Know whom you are dealing with
“In some cultures, 10AM means ‘Sometime in
the morning’. Actual time on the clock has
little significance.”
Cross Cultural Negotiations
First Establish Trust. Skilled negotiators
identify genuine behavior of their
counterparts and work towards establishing
trust
Know their “Silent Language”
Body behavior
Cultural signaling
Culturally sensitive subjects
Know what to say and when to say
Stages of Negotiations
1. Non-Task Sounding: An initial period to know
each other better
2. Task related exchange of Information: An
extended Period where main issues are brought
up & positions clarified
3. Persuasion: Attempt to make the other side see
your point of view. Explaining positions, giving
evidence & questioning other party’s position.
4. Concessions & Agreements: Concessions are
made and agreements are signed
Limits to Cultural Sensitivity
When not to be culturally sensitive
 Global Culture: Globalization is creating a global
business culture. In business it may be inappropriate to
dress in a local way.
 Cultural Sensitivity must be inline with the business
model. If the product/Service offering does not meet the
buyer requirement, no amount of cultural sensitivity will
help
 Cultural Sensitivity does not mean giving up one’s own
culture. Successful manager will know both the cultures
Culture in B2B markets
Business Marketing Tasks
Cultural Conditioning
Organizational Culture
Relationship Marketing
Culture & Networks
Business Marketing Tasks
Establish the global firm as a dependable supplier
operating in the local market
 Understand buyer’s position
 People who influence the buying decision
 Role of the supplier’s product/Service in the buyer’s
business success
This will make the local buyer treat the global
supplier as a local firm.
E.g: Cognizant in US, BASF in US, ABB in India
Cultural Conditioning
Buyers tend to develop different styles of dealing
with vendors
 Equal or unequal relationship between supplier and
buyer
Culture’s openness to change influences buyer’s
attitude toward Risk
 Changing vendors is seen as a Risk
Often Buyer’s prefer local suppliers
Terminating Local supplier carries bad publicity &
political risks for the buyer
CEO or high executive from the vendor firm may
have to visit prospective buyer as a signal of
commitment
Organizational Culture
Organizational culture of the buyer
influences the buying decisions
Single Buyer & decision maker
Engineers, staff who use the product
Top management which signs the contract
Power Brokers who influence the final decision
Global firm must be aware of the decision
making process
Relationship Marketing
B2B sales is usually more than one single sale
Relationship marketing means marketing efforts
involving various personalized services, creation of
new & additional services and customizing a firm’s
offering to the needs of the buyer
Build trust for a long term business relationship
Upfront costs are high but it acts as a competitive
advantage & an entry barrier
 Adopt Buyer’s viewpoint
 Accept & Demand transparency
 Grow with the relationship
 Be Proactive
Culture & Networks
Relationship marketing creates a Network
between various buyers and sellers over a
period of time.
 Independent companies would have built up
dependencies with one another creating a
semi-independent companies
Network of companies often share common
culture
Foreign Entry
Culture defines “The way to do Business”
Learn & analyze local cultures before entry
Do’s & don’ts
Identify trustworthy local agents or middlemen
Identify danger signals
Know the strengths & weakness as perceived
by the local culture
Establish trust & friendships
New Culture is an operational risk
Local Marketing
Culture affects
Consumer behavior
Local demand
Buying decisions
Brand Image
First hand experience in local markets is a
must
Lessons from home country may not be
applicable abroad
Global Management
Culture influences managerial styles and
management decisions
Global managers must be knowledgeable of both
cultures (Local & Home)
A new global business culture is emerging
Sensitivity to local issues is necessary for success
Global coordination is a must for global companies