International Marketing

15th edition

Philip R. Cateora, Mary C. Gilly, and John L. Graham

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 Introduction (1 of 2) 4

• Culture is pertinent to the study of international

marketing.
• Culture is pervasive in all marketing activities –
pricing, promotions, channels of distributions,
product, packaging and styling.
• The priority of needs and wants and the manner
in which they are satisfied are functions of
culture that eventually dictate styles of living.
• Markets constantly change and markets and
market behavior are part of a country’s culture.

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 Introduction (2 of 2) 4

• One cannot truly understand how markets

evolve or how they react to a marketer’s effort
without appreciating that markets are a result of
culture.
• In fact, markets are a result of the three-way
interaction of a marketer’s efforts, economic
conditions, and all other elements of the culture.
• Marketers are constantly adjusting their efforts
to cultural demands of the market, but they are
also acting as “agents of change” whenever the
product or idea being marketed is innovative.
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 Overview 4

• The importance of culture to an international

marketer
• Definition and origins of culture
• The elements of culture
• The impact of cultural change and cultural
borrowing
• Strategies of planned and unplanned change

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 Global Perspective
4
Equities and eBay – Culture
Gets in the Way
• Liberalization of the Japanese and the French capital
markets have given Japanese consumers more freedom
of choice in their investments and brought down
transaction costs for institutional and retail investors in
France.
• Culture is the overriding factor as e-Bay, the successful
online auction site in America, is facing difficulties in
Japan and France.
• For example, in Japan there is no American-style risk-
taking culture (only 12% of households invest in stocks,
while in America, about 55% invest in stocks) and in
France there are laws that restrict operations.

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 Example 4

• Yahoo website is a great example of an

organization that understands the importance of
adapting to culture:
– http://everything.yahoo.com/index.php?world
• The Chinese view of “relationship” (2 min. video)
– http://www.youtube.com/watch?v=qingy5JAt8w&fea
ture=related

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 Culture’s Pervasive Impact 4

• Culture affects every part of our lives, every day, from

birth to death, and everything in between.
• As countries move from agricultural to industrial to
services economies, birthrates decline and global
changes in values are occurring.
• Consequences of the cultural impact:
– Birth rates - Japan (Year of the Dragon and Year of the Fire
Horse)
– Consumption patterns – Alcohol and Tobacco
– Consumption consequences – Life Expectancy, Stomach cancer
• It is imperative for foreign marketers to learn to
appreciate the intricacies of cultures different from their
own if they are to effective in foreign markets.
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Birthrates (per 1000 women) 4

Exhibit 4.1

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 Consumption Patterns 4
(annual per capita)
Exhibit 4.2

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 4
Consequences of Consumption
Exhibit 4.3

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 4
Human Universals
Use Metaphors
Create Art Consider aspects of
sexuality private
Conceive of success and
failure Are ethnocentric
Have a fear of snakes
Express emotions with
Trade and transport face
Reciprocate goods
Imitate outside influences
Resist outside influences
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 4
Human Universals
Use Metaphors
Create Art

Conceive of success and Consider aspects of

failure sexuality private
Have a fear of snakes Are ethnocentric

Express emotions with

Reciprocate Trade and transport
face
goods
Resist outside influences Imitate outside influences

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 Definitions and 4
Origins of Culture
• Traditional definition of culture
– Culture is the sum of the values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted
from generation to generation.
• Individuals learn culture in three ways
– Socialization (growing up)
– Acculturation (adjusting to a new culture)
– Application (decisions about consumption and
production)

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 Origins, Elements, 4
and Consequences of Culture
Exhibit 4.4

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 Geography 4

• Exercises a profound control

– Includes climate, topography, flora, fauna, and
microbiology
– Influenced history, technology, economics, social
institutions and way of thinking
• The ideas of Jared Diamond and Philip Parker
– Jared Diamond
• Historically innovations spread faster east to west
than north to south
– Philip Parker
• Reports strong correlations between latitude
(climate) and per capita GDP
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Why do we all Love Flowers? 4

• Geography
• History
• Technology and economics
• Social institutions
• Cultural values
• Aesthetics as symbols

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 History 4

• History - Impact of specific events can be seen

reflected in technology, social institutions, cultural
values, and even consumer behavior
– Tobacco was the original source of the Virginia
colony’s economic survival in the 1600s
– American values and institutions influenced by
Adam Smith’s book The Wealth of Nations
– Military conflicts in the Middle East brought
about new cola alternatives such as Mecca Cola,
Muslim Up, and Arab Cola.

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 Political Economy and 4
Technology
• Political Economy - Three approaches to governance
competed for world dominance
– Fascism
– Communism
– Democracy/free enterprise
• Technology
– Jet aircraft, air conditioning, televisions, computers,
Internet, etc.
– None more important than the birth control pill
– Although America has the best healthcare technology,
people in many countries have greater longevity;
lifestyle choices are important
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Social Institutions (1 of 4) 4

• Family
• Religion
• School
• The media
• Government
• Corporations

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Social Institutions (2 of 4) 4

• Family
– Nepotism
– Role of extended family
– Favoritism of boys in some cultures
– Gender equality is changing
• Religion - Major Religions
– First institution infants are exposed to outside the
home
– Impact of values systems
– Misunderstanding of beliefs
– An American women jailed in Saudi Arabia for sitting
with man at Starbucks
Next
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 Major Religions 4

• Christianity – 2 Billion followers

• Islam – 1.2 Billion followers
• Hinduism – 860 Million followers
• Buddhism – 360 Million followers
• Confucianism – 150 Million followers

Back
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Social Institutions (3 of 4) 4

• School – the most important social institution

– Direct link between a nation’s literacy rate and its
economic development
– Difficult to communicate with a market when a
company must depend on symbols and pictures
• The media – it has replaced family time
• TV and the Internet
• American educational system produces a lower
percentage of college graduates than 12 other
countries including Russia, Japan, and France

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Social Institutions (4 of 4) 4

• Government - influences the thinking and

behaviors of adult citizens
– Propaganda through media
– Passage, promulgation, promotion, and
enforcement of laws
• Corporations - most innovations are introduced
to societies by companies
– Spread through media
– Change agents

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Elements of Culture (1 of 4) 4

• Values
• Rituals
• Symbols
• Beliefs
• Thought processes

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Elements of Culture (2 of 4) 4

• Cultural values – Geert Hofstede

– Individualism/Collectivism Index
• Reflects the preference of behavior that promotes
one’s self interest
– Power Distance Index
• Measures the tolerance of social inequality
– Uncertainty Avoidance Index
• Measures the tolerance of uncertainty and
ambiguity
– Cultural Values and Consumer Behavior

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 Hofstede’s Indexes 4
Language, and Linguistic Distance

Exhibit 4.6

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Elements of Culture (3 of 4) 4

• Rituals – patterns of behavior and interaction that are

learned and repeated
– Marriages , funerals, baptisms, graduations
• Symbols
– Language
• Linguistic distance – relationship between
language and international marketing
– Aesthetics as symbols
• Insensitivity to aesthetic values can offend, create a
negative impression, and, in general, render
marketing efforts ineffective or even damaging
Next
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 Language 4

• According to www.ethnologue.com:
– A total of 7,413 known living languages exist
in the world
– 311 being spoken in the U.S.; 297 in Mexico,
13 in Finland, and 241 in China
– EU has 20 official languages
– India alone has 452 known languages!

Back
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Elements of Culture (4 of 4) 4

• Beliefs
– Superstitions play a large role in a society’s belief
system and therefore, to make light of superstitions in
other cultures can be an expensive mistake
– The number 13 in the western hemisphere is
considered unlucky, where as the number 8 in China
connotes “prosperity”
– The practice of “Feng Shui”
• Thought processes
– Difference in perception between the East and the
West
• Focus vs. big-picture
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 Cultural Sensitivity 4
and Tolerance
• It is imperative that the marketer be attuned to
the nuances of culture so that a new culture can
be viewed objectively, evaluated and appreciated
– Cultures are not right or wrong, better or worse,
they are simply different
– The more exotic the situation, the more sensitive,
tolerant, and flexible one needs to be
– There must be an appreciation of how cultures
change and accept or reject new ideas

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 Cultural Change 4

• Dynamic in nature – it is a living process

• Paradoxical because culture is conservative and
resists change
– Changes caused by war or natural disasters
– Society seeking ways to solve problems created by
changes in environment
– Culture is the means used in adjusting to the
environmental and historical components of
human existence

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 Cultural Borrowing 4

• A responsible effort to learn from others’ cultural

ways in the quest for better solutions to a
society’s particular problems
– Imitating diversities of other cultures make
cultures unique
– Contact can make cultures grow closer or further
apart
• Habits, foods, and customs are adapted to fit
each society’s needs
• The marketer must eventually gain cultural
empathy
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 Similarities – An Illusion 4

• A common language does not guarantee a

similar interpretation of word or phrases
– Difference between British and American English
– http://www.woodlands-
junior.kent.sch.uk/customs/questions/americanb
ritish/index.html
• Just because something sells in one country
doesn’t mean it will sell in another
– Cultural differences among member of
European Union a product of centuries of
history
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 Resistance to Change 4

• Gradual cultural growth does not occur without

some resistance
– New methods, ideas, and products are held to be
suspect before they are accepted
• Resistance to change varies between cultures
• The most important factor in determining how
much of an innovation will be accepted is the
degree of interest in the particular subject, as
well as how drastically the new will change the
old

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 Planned and Unplanned 4

Cultural Change
• Determine which cultural factors conflict with an
innovation
• Change those factors from obstacles to acceptance into
stimulants for change
• Marketers have two options when introducing and
innovation to a culture
– They can wait (unplanned change)
– They can cause change (planned change)
• Cultural congruence
– Marketing products similar to ones already on the market
in a manner as congruent as possible with existing cultural
norms

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 Summary (1 of 2) 4

• A complete and thorough appreciation of the

origins and elements of culture may well be the
single most important gain to a foreign marketer
in the preparation of marketing plans and
strategies
• Marketers can control the product offered to a
market – its promotion, price, and eventual
distribution methods – but they have only
limited control over the cultural environment
within which these plans must be implemented

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 Summary (2 of 2) 4

• When a company is operating

internationally each new environment that
is influenced by elements unfamiliar and
sometimes unrecognizable to the marketer
complicates the task
• Special effort and study are needed to
absorb enough understanding of the
foreign culture to cope with the
uncontrollable features
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