Cultural Environment of Global Markets

1. Cultural Environment of Global Markets

2. What is Culture?

3. Characteristics of Cultures - Shared - Learned - Patterned - Flexible

4. Elements of Culture 4. Social Institutions - Legal System - Political System - Educational System - Role of Family - Role of Sexes 1. Cultural Paradigm - Beliefs - Religion - Superstition 2. Material Culture - Technology - Economy 5. Aesthetics - Graphic Arts - Musical Arts - Culinary Arts 3. Language

5. Elements of Culture Cultural Paradigm in the USA - Belief System “Just Do It” “Master of the universe” “Act first, think later” “Results trump ideology - Religion Historic impact of U.S. Puritan work ethics

6. Tortuga Tortuga Tortuga Comparison of Learning Techniques in Germany and Brazil Germanic Culture Latin Culture Method based on relationship between meaning and object Syllabic Method Schild + krö + te = Schildkröte Hans hat eine Schildkröte Tortuga

7. Hofstede’s Dimensions to Compare Cultures • - Individualism versus Collectivism • - Power Distance • - Uncertainty Avoidance • Long Term versus Short Term Thinking • Masculine versus Feminine • Indulgence versus Restraint

8. Hofstede’s Dimensions to Compare Cultures

9. Hofstede’s Dimensions to Compare Cultures

10. Hofstede’s Dimensions to Compare Cultures

11. Individualism and Power Distance Power Distance AUL AustraliaAUT AustriaBEL BelgiumCAN CanadaDEN DenmarkFIN FinlandFRA FranceGER GermanyGBR Great BritainIRE IrelandISR IsraelITA ItalyNET NetherlandsNZL New ZealandNOR NorwaySAF South AfricaSPA SpainSWE SwedenSWI SwitzerlandUSA United States 53 •AUT •SPA •ISR Low Individualism •FIN •SAF •GER •NOR Individualism •SWI •FRA •IRE 71 •SWE •DEN •BEL •NZL •ITA •CAN High Individualism •NET •GBR USA• AUL• +11 +28 +44 +64 +77 +94 91 Small power distance Large power distance

12. Hofstede’s Classification of Triad Countries

13. Linguistic Distance - Language and Culture are Interwoven • Whorfian Hypothesis: Language Structures Cultural Reality • Cultural Differences and Language Distance are Positively Correlated

14. Edward Hall’s High Context Versus Low Context Cultures High Context Implicit Japanese Arabian Latin American Spanish Italian English (UK) French North American Scandinavian German Swiss Austrian Low Context Explicit

15. Non-verbal Communication Language of Time Language of Space Language of Things Language of Friendship Language of Agreements

16. Implications for International Marketers 1. Determine Cultural Values Relevant for Demand - What are the Needs of the Market? - How Does Product/Promotion agree with important Elements of Culture? - Who makes Buying Decisions? - What are Important Reference Groups? 2. Determine Cultural Values Relevant for the Way Business is Conducted - Behavior at the Negotiation Table - Management of Local Employees

17. How Does Product/Promotion agree with important Elements of Culture? New Product Cultural Congruence Cultural Incongruence Adaptation Do Nothing Planned Change

18. 3. Avoid Cultural Blunders - Common Blunders:  Translation Mistakes  Do not Use Multiple Meaning Words  Do not Insist on Literal Translation but Conceptual Equivalents  Use Independent Back Translation  Cultural Misunderstandings  Subcultural Idiosyncrasies - Reasons for Blunders:  Ethnocentrism  Carelessness  Quick Decisions  Lack of Research

19. Cultural Blunders • Coca Cola in India: • Coke’s segmentation strategy had to be changed since foreign soft drinks are typically reserved for guests and special occasions in India • Coca Cola in Japan: • Diet Coke had to be renamed to Coke Light because the term diet carries an embarrassing connotation • UPS in Spain: • The brown trucks had to be repainted since they looked like hearses • UPS in Germany • The drivers uniforms had to be changed because brown shirts became unpopular after 1945 • Pampers in Japan • When Proctor & Gamble started selling its Pampers diapers in Japan, it used an image of a stork delivering a baby on the packaging. While the advertising may have worked in the U.S., it never caught on with Japanese moms and dads. After some research, the company figured out that customers were concerned and confused by the image of a stork on the packaging, since the stories of storks bringing babies to parents isn't a part of Japanese folklore. There, the story goes that giant floating peaches bring babies to their parents.

20. Translation Blunders HSBC Bank HSBC Bank was forced to rebrand its entire global private banking operations after bringing a U.S. campaign overseas. In 2009, the worldwide bank spent millions of dollars to scrap its 5-year-old "Assume Nothing" campaign. Problems arose when the message was brought overseas, where it was translated in many countries as "Do Nothing." In the end, the bank spent $10 million to change its tagline to "The world's private bank," which has a much more friendly translation. Coors American beer maker Coors discovered that slang doesn't always translate well. When bringing its cool "Turn It Loose" campaign to Spain, it appears executives forgot to ensure the translation would resonate with consumers. When translated into Spanish, the tagline used an expression that's commonly interpreted as "Suffer from diarrhea." While the campaign did make its mark on Spanish shoppers, it was for all the wrong reasons. Electrolux Swedish vacuum maker Electrolux got a quick lesson in English slang when it introduced its products in the states. Thinking it was highlighting its vacuum's high power, the Scandinavian company's ad campaign centered on the tagline "Nothing sucks like an Electrolux."

21. Gerber The company marketed baby food in Africa with a cute baby on the label without knowing that, in Ethiopia, for example, products usually have pictures on the label of what's inside since many consumers can't read. The American Dairy Association The American Dairy Association replicated its "Got Milk?" campaign in Spanish-speaking countries where it was translated into "Are You Lactating?“ Nike The company had to recall thousands of products when a decoration intended to resemble fire on the back of the shoes resembled the Arabic word for Allah. Clairol Clairol launched a curling iron called "Mist Stick" in Germany even though "mist" is German slang for manure.