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. 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

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

7. 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

8. Hofstede’s Classification of Triad Countries

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

10. 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

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

12. 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

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

14. 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

15. TranslationBlunders English Translations made by Japanese firm added to labels to increase prestige for their products being sold in China. ProductEnglish Translation Equivalent to Japanese Spam Liver Putty Toilet Paper My Fanny Brand Ready to Eat Pancakes Strawberry Crap Dessert Antifreeze Spray Hot Piss Brand Pediatrician’s Slogan Specialist in Deceased Children

16. Cultural Imperialism? OldNew Prime Time Heures de grande ecoute (hours of largest audience) Air Bag Coussin gonflable de protection (Inflatable cushion of protection) Cookie Sable americain American cookie The French Government is afraid of cultural pollution. There is and ongoing discussion about introducing a law that would prohibit the use of foreign words.

17. Cultural Comparison: U.S. versus Japan AmericansA Culture of Self-expression JapaneseA Culture of Self-restraint Clear expression of joy and sorrow Unequivocal expression of “Yes/No” Strong self-assertion Strong personality Excellent negotiating skills Priority of self-interest Ambiguous expression of Joy/Sorrow Equivocal expression of “Yes/No” Weak self-assertion Weak personality Poor negotiating skills Priority of harmony with others

18. Cultural Comparison: U.S. versus Japan American SocietyDignity of Individuals Japanese Society“In the Same Boat” Concept Dignity of individuals Individual work ethic Great individual freedom Respect for rules An open and transparent society Multi-cultural society A society excelling in creativity and versatility Individual decisions over consensus A society which pursues the ideal Human relations oriented Dependence on the group Lack of individual freedom Low regard for rules A closed society, lacking in transparency Mono-cultural society An orderly and uniform society Dependence on consensus A society which pursues harmony with reality

19. Cultural Comparison: U.S. versus Japan American Business Japanese Business Game concept: Business is a game in pursuit of profits under the rules of laws and contracts Efficiency-oriented and approximate accuracy simplicity, clarity, and quickness Quantity-oriented Short-term performance evaluation Easy layoffs, dismissals of employees, and selling of businesses Mutual trust-oriented business: business is based on trusting relationship among people rather than the rules of game Highly precision-oriented and perfectionism-high dependency on human awareness Quality-oriented Mid-to-long term evaluations Job security

20. Cultural Comparison: U.S. versus Japan American Business Japanese Business Top down management Heavy dependence on machinery and technology, vs. Light dependence on human resources Limited loyalty and incentive-oriented work ethics Team Oriented Heavy dependence on human resources Strong loyalty and fewer incentives