Global Marketing Management A European Perspective Social and

Global Marketing Management A European Perspective Social and Cultural Environments Warren J. Keegan Bodo B. Schlegelmilch

Overview z Basic Aspects of Society and Culture z Analytical Approaches to Cultural Factors z Handling Cultural Diversity z Summary Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 2

Learning Objectives z Understanding how important cultural and social differences are in global marketing z Learning fundamental concepts that provide an understanding of cultural differences z Understanding where potential conflicts may arise in global business relations z Knowing how cultural differences impact the marketing of products and services Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 3

Basic Aspects of Society and Culture z Culture as “ways of living” z Conscious and unconscious values, ideas, attitudes, and symbols that shape human behaviour z Culture is learned, not innate z Culture defines the boundaries between different groups z All facets of culture are interrelated Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 4

The Search for Cultural Universals z Universal = Mode of behaviour existing in all cultures z Universal aspects = opportunities to standardize some or all elements of a marketing program z Cultural universals: e. g. , athletic sports, body adornment, religious rituals, music z E. g. : VIVA music channel employs same fundamental concept in all markets, adapted to local preferences Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 5

The Anthropologist’s Standpoint z Global marketers must understand human experience from the local point of view and become insiders with cultural empathy z Global marketers need combination of toughmindedness and generosity z. Tough-mindedness: be secure in your own convictions and traditions z. Generosity: Appreciate the integrity and value of other ways of life Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 6

High- and Low-Context Cultures (1) z Low-context culture: z. Messages are explicit z. Words carry most of the information in communication z. E. g. , United States, Switzerland, Germany Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 7

High- and Low-Context Cultures (2) z High-context culture z. Less information is contained in the verbal part of the message z. More information resides in the context of communication (background, associations, basic values of communicators) z. E. g. , Japan, Saudi Arabia Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 8

High- and Low-Context Cultures (3) Factors Lawyers A person’s word Time Negotiations Competitive Bidding High-Context - less important - his/ her bond - everything is dealt with in its own time - lengthy - infrequent Low-Context - very important - ‘get it in writing’ - ‘time is money’ - quick - frequent Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 9

Communication and Negotiation z Global marketers face challenges in z. Verbal communication z. Non-verbal communication z Knowledge and understanding of cross-cultural differences is crucial during negotiations z Lists can function as guidelines, although typologies do not take particular individuals into account Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 10

Analytical Approaches to Cultural Factors (1) z Maslow’s hierarchy of needs SELF-ACTUALISATION ESTEEM SOCIAL NEEDS SAFETY NEEDS PSYCHOLOGICAL NEEDS Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 11

Analytical Approaches to Cultural Factors (2) z Hofstede’s cultural typology z Cultures of different nations can be compared in terms of four dimensions z. Power distance z. Integration into groups z. Masculinity z. Uncertainty avoidance Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 12

Analytical Approaches to Cultural Factors (3) z Self-reference criterion (SRC) and perception z Perception of market needs is framed by own cultural experience z Four-step framework z. Define problem in terms of home country norms z. Define problem in terms of host country norms z. Isolate SRC influence. See how it complicates problem z. Redefine problem without SRC influence. Solve for host country market situation Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 13

Analytical Approaches to Cultural Factors (4) z Environmental Sensitivity z The extent to which products must be adapted to the culture-specific needs of different national markets z Environmental sensitive products z. Require significant adaptation to the environments of various global markets (e. g. , food) z Environmental insensitive products z. Do not require significant adaptation (e. g. , integrated circuits) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 14

Handling Cultural Diversity (1) z Impact of social and cultural environments on marketing industrial products z Industrial products might exhibit z. Lower levels of environmental sensitivity (e. g. , computer chips) z. Higher levels of environmental sensitivity (e. g. , government policies influencing purchasing behaviour of turbine generators) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 15

Handling Cultural Diversity (2) z Impact of social and cultural environments on marketing consumer products z Consumer goods are usually more sensitive to cultural diversity than industrial goods z Culture is changing so rapidly that innovative marketing may be able to change established consumption patterns rooted in cultural differences Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 16

Handling Cultural Diversity (3) z Example: Consumption of Soft Drinks (Y) Y = f (A, B, C, D, E, F, G) z A = influences of other beverages’ relative prices, quality, taste B = advertising expenditure and effectiveness, all beverage categories C = availability of products in distribution channel D = cultural elements, tradition, custom, habit E = availability of raw materials F = climatic conditions, temperature, relative humidity Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 17

Handling Cultural Diversity (4) z Culture always has been a major source for disagreement and misunderstandings z Cross-cultural complications can lead to costly failures z Companies realize the importance of training and supporting people in cultural awareness Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 18

Summary z Culture has both a pervasive and changing influence on each national market environment z Global marketers must recognize the influence of culture z Nations can be classified as high- or low-context cultures z Maslow’s hierarchy, Hofstede’s typology, and the self -reference criterion can provide clues about cultural differences and similarities Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 3/ 19