Culture in Global Marketing

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					Culture & Global
       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
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
Cultural adaptation is a learned skill & must
 be mastered by Global Managers
         Hofstede’s Cultural
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
         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
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
    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
Similar business situations in different countries
 does not imply similar opportunities. E.g: Nestle in
Culture influences Management skills. So in a new
 country, its “Back-to-Basics” w.r.t learning local
    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
  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
  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
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
   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
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
       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
Outside companies find the network hard to
 penetrate, Network form a barrier
   E.g: Keiretsu network in Japan, Glaxing in China
Military-Industry network in US
             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
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

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