CULTURE

Culture is set of learned and shared values, beliefs and customs that are the
distinguishing characteristics of the members of any given society. It includes
everything the group thinks, says, does and makes – its customs, language,
attitudes and feelings. It thus encompasses a wide range of elements from
materialistic to spiritual. It’s transmitted from one generation to the next. It
provides a code of conduct.

Why understanding cultural differences is important in the international

marketing context:

Companies are expanding their operations and entering into new markets where
they need to understand foreign partners and how to do business with them and
they even need to understand the foreign consumers who they are targeting
(what drives their behavior). The process of acculturation is adjusting and
adapting to a specific culture other than one’s own – is one of the keys to success
in international operations.

1. An understanding helps marketers determine when adaptation may be

necessary.
2. An understanding helps marketers determine when commonalities allow for
regional or global approaches
3. It helps avoid cultural blunders
4. It helps understand how to build successful customer relationships across
borders

Edward T. Hall made an important distinction between cultures in terms of them

being either high context or low context cultures.
1. High Context cultures: What is being said is a limited portion of the meaning,
how it is being said, where it is being said and the body language of the speaker
have to be looked at as well (social context). A great deal if importance is paid to
non-verbal communication. For example: Japan, Saudi Arabia, and Thailand
2. Low context cultures: Attention is paid to what is being said explicitly. Little
concern is given to the non-verbal cues or the status of who is saying it. For
example: Australia and North America

High Context Cultures Low Context Cultures

Do not expect or want detailed Heavy reliance on detailed information

information in written and verbal form

Information shared with everyone Information highly centralized

Relationships are more important than Objective (information based) rather

objective data than subjective (relationship) based

Authority and status more important Competence given more/equal weight

than technical skills than position and status

Invitations to functions based on a Business meeting invitations based on

 persons status rather then competence competence

The elements of culture

1. Language (Verbal and non-verbal)
2. Religion
3. Values and attitudes
4. Manners and customs
5. Material elements
6. Aesthetics
7. Education
8. Social Institutions

1. Language: described as the mirror of culture

a) Verbal:
-This refers to how the words are spoken.
-Most people prefer to talk in their own language and being able to speak the
local language can build rapport
-Provides access to local society
-Important for company communications
-Aids in information gathering and evaluations
- Translation is important. GM had trouble selling its Chevrolet Nova in Puerto
Rica. When literally translated into Spanish, nova means star. However when
spoken it sounds like “no va”, which, means it doesn’t go. GM changed the name
of the car to Caribe.
-Use back translation approach
b) Non-Verbal:
-Non-verbal cues are important to understand especially while dealing with high
context cultures. Failure to understand can lead to communication failure.
1. Time: Monochronic versus polychromic time. Monochronic time is linear it
nature and usually operates on the basis of doing one thing at a time and
adhering to schedules. Polychronic time is where time is assumed to be cyclic in
nature and people do several things at the same time and people show up to
meetings late.
2. Space: The comfortable amount of distance between you and the person you
are talking too. In the US people usually keep a distance of 3-5 feet. Latin
Americans stay closer. North Americans feel that their personal space is being
invaded and may feel that they are being aggressive and pushy. The Latin
American may interpret the backing away as aloofness.
3. Gestures: Americans and Europeans use the thumbs up to indicate that it’s all
right, however in Greece the gesture is obscene
4. Friendship patterns: Establishing relationships before doing business- having
the feeling that one should know their business partners before doing business.
Contracts may be bound by a handshake as opposed to signing a contract –
makes western business people uneasy.
Inappropriate body language is dangerous
2. Aesthetics:
The concepts of beauty, style and expression respected in a culture. Its what is
and what is not acceptable. Sex in advertising is an example.
-Colour: It has symbolic value in a culture and has serious consequences on
product and package design. The color Black is considered the color of mourning
is the US. The color Green is associated with death in Singapore.
-Smells/perfumes
-Musical traditions: In India people love happy entertaining music combined
with festive occasions

3. Religion: Christianity, Islam, and Hinduism

It’s the shared beliefs and behaviors that provide the meaning of life and code of
conduct. International marketers must be aware of the differences in religion as
it impacts behavior and consumption.
-Restrictions on what can and cannot be eaten or consumed. For example:
Muslims eat only Halal products and they do not eat Pork. They also do
not consume alcohol. Hindu’s on the other hand do not eat beef.
-An important element of the Hindu society is extended families. This will
have an impact on the purchasing power and consumption of Hindu
Families.
-McDonalds in India – no beef and no pork. Had to do with chicken and
mutton. Created the Indian version of the big Mac – Maharaja Mac and
McAloo Tikki Burger.

4. Values and Attitudes

Values are shared beliefs or group norms that have been internalized by
individuals. Attitudes are evaluations of alternatives based on the values. Some
cultures, like the Japanese are biased against foreign employers. However in
other cultures like Chinese cooperation is valued more than competition. The
Chinese believe that relationships should be established first and then successful
transactions will follow. Guanxi is a set of relationships that are backed by
reciprocal obligations that are at the centre for getting business done in China.

5. Manners and Customs

This is especially important in negotiations. The duration of negotiations may
vary from culture to culture. For example: a simple agreement may take 2 days
to negotiate in the Middle East because the Arab party may want to talk about
unrelated issues or do something else for a while.
Potential problems arise for marketers because of an insufficient understanding
off:
1. Different ways of thinking
2. Attention to saving face: Asian cultures causing a person to loose face are
unforgivable. It is essential that the other party is allowed to win some points to
save face and maintain self-esteem.
3. Knowledge and appreciation of the host country – history, culture, government
and image of foreigners
4. Recognition of the decision making process and personal relations
5. Allocation of time for negotiations
Gift giving is another important aspect that has to be looked at while conducting
negotiations.

China India

Chinese New year (Jan/Feb) Hindu Diwali Festival (Oct/Nov)

Coffee table books, tie, pens Sweets, nuts and fruit, candleholders

Clocks, anything from Taiwan Leather objects, snake images

6. Material Elements
Material culture results from technology and its directly related to the way a
society organizes its economic activities. It looks at the availability of the
economic, social and financial infrastructures.
Economic Infrastructure:
-Transportation (roads)
-Energy (electrical power plants)
-Communications (landline, mobiles and internet)
Social Infrastructure:
-Housing
-Health
-Education
Financial Infrastructure:
-Banks
-Research firms
-Advertising agencies
Packaging problems may arise in countries due to lack of certain materials,
different specifications, and different machinery, differences in quality and
consistency or printing ink. In the US consumers are package conscious, for
example cans must be shiny and beautiful.
Cultural convergence: consumers around the world are showing greater
acceptance of equipment for personal use (mobile phones, computers and
internet). Greater acceptance translates to greater sales.
The ability for marketers to reach consumers depends or is affected by the
ownership of radios, personal computers and television.

7. Education
Plays a great role in sharing culture. Education levels in a culture can be assessed
using: - Literacy rates
-Enrollment in secondary or higher education
Education will have an impact on business functions including:
-Employee training
-Local job recruitment
-Use of visual aids or printed manuals
-Acceptance of new ideas and products

8. Social Institutions
This affects the way in which people relate to each other. The concept of kinship
or blood relations between individuals is defined in different ways in different
cultures, such as in Asian cultures. Family obligations are important in these
regions.
The division of the population in terms of classes is referred to as social
stratification. In Northern Europe most people are members of the middle class.
India is a high-stratified society, where the higher strata control most of the
buying power and decision-making positions.
Reference groups provide the values and attitudes that become influencing in
shaping behavior.
1. Primary reference groups: Family, coworkers
2. Secondary reference groups: professional associations and trade organisations
For example: In China things cannot get done without Guanxi- have to spend
time and energy maintaining the relationships. McDonalds found this out in
Beijing where it was evicted from a central building only after two years despite
having a 20-year contract. The incomer had strong Guanxi, whereas McDonalds
had not kept its relationship strong.

Sources of cultural knowledge

Cultural knowledge can be defined by the way it is acquired.
Objective information or factual is obtained from others through communication,
research and education. Experiential knowledge can be acquired only by being
involved in a culture other than ones own.

Source of information Type of information

General Country-Specific

Objective -Impact of GDP -Tariff barriers

-Regional integration -Government regulations

Experiential -Corporate adjustment to -Product acceptance

internationalization -Program
appropriateness

Managers ranking of factors involved in acquiring international expertise:

1. Business travel
2. Assignments overseas
3. Reading/TV
4. Training programs
5. Pre career activities

Cultural Analysis
To try and understand the differences between cultures models and checklists
can be used. Models show important variables and how they are related. They
should be periodically be checked against reality. Cultural analysis can provide
guidelines for marketing mix development.
Two major causes of most international business problems:
1. Self reference criterion (SRC): The unconscious reference to ones own cultural
values. Recognizing and admitting this is often quite difficult. If Kellogg wants to
introduce breakfast cereals into markets where breakfast is traditionally not
eaten or milk is consumed less, managers must carefully consider how to instill
the new habits.
2. Ethnocentrism: The belief that ones own culture is superior to others.

Hofstede’s Cultural dimensions:

Geert Hofstede conducted a global survey among IBM employees and identified 4
dimensions for cultural differences. His work with Bond added a fifth element –
Long term/ Short-term orientation.
1. Power Distance: This is the degree to which the less powerful people accept
the existence of inequality and the unequal distribution of power. Inequality
exists in almost all cultures but the degree to which it is accepted varies. A high
power distance country would be Malaysia, Thailand, and India. A low power
distance country would be Austria, Australia and United States.
2. Uncertainty avoidance: The degree to which people feel threatened by
uncertain or unknown situations. Those in a high uncertainty avoidance cultures
are nervous of situations that they consider unstructured, unclear or
unpredictable. Emphasis is placed on job security and retirement plans. For
example: Thailand, Japan
Those in low uncertainty avoidance cultures tend to take more risks and are
more relaxed. For example: Australia, US
3. Individual/Collectivism: Collective societies ties between the group are strong,
people look out for each other and work towards achieving group goals. For
example: Thailand. Individualistic societies ties between the groups are loose
and individual achievement and freedom is stressed upon. For example:
Australia, US.
4. Masculine/Feminine: Masculine cultures stress material success and
assertiveness. For example: Australia and US. Feminine cultures stress on
quality of life and caring for the weak. For example: Thailand.
5. Long term/Short term orientation: Values associated with LTO are thrift and
perseverance (such as in China). Values associated with STO are more social,
more materialistic and more self-centered – as in Australia.

Methods to reduce the influence of ones own culture include:

1. Defining the problem or goal in terms of the domestic culture
2. Defining the problem or goal in terms of the foreign culture
3. Isolating self reference criterion
4. Redefining the problem with out the self reference criterion

Training
Today’s training must take into consideration not only outsiders to the firm but
interaction within the corporate family as well. Internal education programs are
to include:
1. Culture specific information
2. Cultural general information
3. Self-Specific information
Many companies use mentors to facilitate the learning process.
Making culture work
1. Embrace local culture: showing sensitivity to local culture helps local
acceptance and builds employee morale.
2. Build relationships: Some markets require long-term commitment on part of
the marketer. For example: company officials of 3M visited China and
entertained Chinese officials at HQ – the efforts paid off as the government made
3M the first WFOE in the market.
3. Employ locals to gain knowledge: Know customers purchasing habits and
what drives behavior. 3M employees as many locals as it can.
4. Help employees understand you:
5. Adapt products and processes to local markets: McDonalds in India
6. Coordinate by region: 3M encourage product managers from different parts of
Asia to hold regular meeting and share insights and strategies. For example:
Designers in Singapore found that customers use its nomad household mats in
their cars!