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International Marketing

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International Marketing ­ MKT630
VU
Lesson # 15
INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS
Affect of Cultures on Business Practices
Causes of cultural differences and change:
Cultural value systems are set early in life and are difficult to change. By the age of ten most children
have their basic value system in place, such as;
evil vs good
·
dirty vs clean
·
ugly vs beautiful
·
unnatural vs natural
·
abnormal vs normal
·
paradoxical vs logical
·
irrational vs rational
·
Culture is transmitted by various patterns:
from parent to child
­
from teacher to pupil
­
from social leader to follower
­
from one age peer to another
­
Change in culture may come through
­ choice or imposition
­ contact with other cultures
Isolation tends to stabilize a culture and contact tends to create cultural borrowing
Language and religion also affect cultural stability
Behavioral practices affecting businesses:
In any culture a variety of behavioral practices affect the way businesses are conducted. Some of the
common behavioral practices affecting businesses are given below;
group affiliations
·
role of competence
·
attitudes towards gender, age & family
·
importance of occupation
·
communications
·
­ language, context
­ silent language
attitudes towards work
·
other behavioral differences
·
degree of self-reliance
·
preference for autocratic vs consultative management
·
attitudes towards self-determination vs fatalism
·
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International Marketing ­ MKT630
VU
Some management styles:
Scholars like Herzberg have researched cultures of countries around the world and have categorized
countries according to business practices;
· Theory "X" - workers are generally irresponsible, unwilling to work and must be persuaded to
perform their obligations
· Theory "Y" - given an appropriate work environment and in absence of exceptional disincentives,
workers are dedicated to their tasks, are generally self motivated
· Decision making
USA - authoritarian
·
Western Europe - limited co-determination
·
Japan - with consensus
·
Latin America ­ paternalistic
·
· Corporate emphasis
North America - short-term profit
·
Western Europe - employee & corporate interests
·
Japan - close cooperation between govt. & business
·
Latin America - highly govt. regulated
·
Hofstede's dimensions of national culture:
· Power distance - extent to which power in organizations is unequally distributed
high power distance - centralized tall, pyramid organizations, people at lower strata with lower
­
qualifications (Philippines, Mexico, South Korea, India)
­ Low power distance - less centralized, flatter organizations, people at lower strata with higher
qualifications (Austria)
· Uncertainty avoidance - extent to which society feels threatened by uncertain or ambiguous
situations
­ high uncertainty avoidance - structured organizational activities, more written rules, less risk
taking by managers, lower labor turnover, less ambitious employees (Germany, Japan & Spain)
­ low uncertainty avoidance (Denmark & Great Britain)
· Individualism - Collectivism
individualism - tendency of people to look after themselves and their immediate family (normally
­
high in wealthy countries)
­ collectivism - people belong to groups or collectives and look after each other in exchange for
loyalty (normally high in poor countries)
· Masculinity - Femininity
masculinity - dominant values of society are success, money, advancement (large-scale
­
enterprises and economic growth considered important, situations of higher job stress and
employees kept under higher degree of control - Japan)
­ femininity - dominant values of society are caring for others and quality of life (greater
importance on cooperation, friendlier atmosphere, employment security, low job stress and
employees allowed considerable freedom - small scale enterprises and emphasis on conservation
of environment - more women hold higher level jobs - Norway)
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International Marketing ­ MKT630
VU
Culture is a human medium:
·
there is not one aspect of human life that is not touched and altered by culture
·
this means personality
·
how people express themselves (including shows & emotions)
·
the way they think
·
how they walk
·
how problems are solved
·
how their cities are planned & laid-out
·
how transportation systems function & are organized
·
how economics & government systems work & are put together
Cultural influences on consumer behavior:
· Hierarchy of needs, which distorts demand across product categories.
· Culture based values, especially on individualistic or collective orientations, which influence
purchase behavior and decision process (individual vs family)
· Institutions which influence consumer behavior
· Influences through cultural variations in personal factors of consumer behavior, brand loyalty,
consumer involvement, perceived risk, cognitive style.
Level of context needed:
HIGH CONTEXT
· JAPANESE
· CHINESE
· GREEK
· ARABS
· SPANISH
· ITALIAN
· ENGLISH
· NORTH AMERICAN
· FRENCH
· SCANDINAVIAN
· GERMAN
LOW CONTEXT
Impact of national cultures on marketing:
· Material culture & marketing
types of products suitable for individual markets
­
types of media available
­
distribution systems / storage facilities
­
· Imperialism
alien products are agents of change in host culture
­
· Language as a culture mirror
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International Marketing ­ MKT630
VU
most obvious difference between cultures
­
English has large vocabulary of commercial & industrial words
­
Eskimo has many words to describe snow
­
· Cultural events & marketing opportunities
Eid, Christmas, Chinese New Year etc.
­
· Cultural sensitivities to products , colors etc.
Reconciliation of cultural differences by international marketer:
·
Cultural awareness
­ managers must be aware of what cultural differences are and how these differences would
influence basic functions of management
­ managers must decide carefully whether and to what extent they should adopt home-country
practices to foreign environment
­ international managers need to identify the roles that individuals play in process of cultural
change and in acceptance of change
­ cultural elements which may resist change should be identified and understood before planning
any organizational change
­ products, services and advertising should also fit needs and perceptions of host culture
·
grouping countries together
·
fitting needs to company position
­ not all companies need to have same degree of cultural awareness
­ the more a change upsets important cultural values, the more resistance it will face
­ cost of change may exceed the benefits gained
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Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION