Culture and its Impact on Global Marketing | My Assignment Tutor

BUS114 GLOBAL ECONOMIESANDINTERNATIONAL MARKETSSession 4Culture and its Impact onGlobal MarketingMondays 9.30amonline synchronous classDr Alex Muresandralex@iconcollege.ac.ukYOUR TASKS FORWEEK 4 were:• Read the articles posted on Moodle• Watch the recommended videos• Watch the free webinars by Prof SvendHollensen• Contribute to the Discussion Board onMoodle• Any challenges that you encounter pleaseraise them in class as well as via theTuesday workshops / boardLast week we covered:• Presented the opportunities LSEs and SMEshave in a global marketplace• Explained / detailed the main globaleconomy measurement tools• Identified some of the current trends in thechanging world economy• Overviewed the growing importance ofcollaborations in international trade• Covered the IMF’s predictions for 2021Session Objectives:• Finish off the global market systems• Overview the global marketsegmentation and its importance• Define culture and overview its impacton companies’ international expansion• Introduce the main models used forinternational cultural comparisonSession OutlineTheMainEconomicSystemsMAINECONOMIC SYSTEMS– free market or capitalist– planned or commandeconomic– mixed system(incl. transitional economies)The Free Market /Capitalist System• (sometimes called laissez-faire economy)• the preferred system in today’s society• holds that the economy is strongestwhen all the government does is protectindividuals’ rights.• Laissez-faire is French for “let do” or“leave us alone.”Source: CFI, 2020ahttps://www.youtube.com/watch?v=RLIlodkJsOIThe (Centrally)Planned System• the means of production are owned bythe state ‘on behalf of the people’• capital formation – the formation ofproducer goods, which are necessary toproduce other goods – is determined bythe central planners• prices of goods sold by the state aredetermined by the planning authority.• planning is centralised Source: CFI, 2020bThe MixedEconomic System• combines the elements of amarket economy and theelements of a planned economy• a synthesis of socialismand capitalism, which containsboth private enterprises andpublic enterprises• most modern economiesSource: CFI, 2020cIceland (57%)Sweden (52%)France (52.8%)United Kingdom(47.3%)United States (38.9%)Russia (34.1%)India – (27%)China – (20%)TheCOVID-19PandemicDeep Downturn in 2020, Sluggish Turnaround in 2021Source: IMF, 2020cUncertainty.• The length of the pandemic and required lockdowns• Voluntary social distancing, which will affect spending• Displaced workers’ ability to secure employment, possibly in different sectors• Scarring from firm closures and unemployed workers exiting the workforce, which maymake it more difficult for activity to bounce back once the pandemic fades• The impact of changes to strengthen workplace safety—such as staggered work shifts,enhanced hygiene and cleaning between shifts, new workplace practices relating toproximity of personnel on production lines—which incur business costs• Global supply chain reconfigurations that affect productivity as companies try toenhance their resilience to supply disruptions• The extent of cross-border spillovers from weaker external demand as well as fundingshortfallsFor the first time, all regions are projectedto experience negative growth in 2020.Source: IMF, 2020c Source: IMF, 2020c Source: IMF, 2020c Culture– comparative studies –Culture – definition1) ‘the collective programming of the mind whichdistinguishes the members of one human groupfrom another’ (Hofstede, 1980).2) ‘Is a set of socially acquired values that societyaccepts as a whole and transmit to its membersthrough language and symbols….. culture reflectsa societies shared meanings and traditions’Assael 1998is the learned ways in which a society understands,decides and communicates.over 160 definitions and there is still space left for you to write yoursHandling cultural diversityExample: Consumption of Soft Drinks (Y)Y = f (A, B, C, D, E, F, G)A = influences of other beverages’ relative prices, quality,tasteB = advertising expenditure and effectiveness, all beveragecategoriesC = availability of products in distribution channelD = cultural elements, tradition, custom, habitE = availability of raw materialsF = climatic conditions, temperature, relative humidityLayers of cultureIndividual behaviour/decision makerCompany cultureBusiness/industry cultureNational cultureInterpreting symbols• 7 bad luck in Kenya• 7 good luck in the Czech Republic• 7 magical in Benin, Africa• 10 is bad luck in Korea• 8 winning number in China• 4 is related to death in Japan• Avoid triangular shapes in Hong Kong,Korea & TaiwanIt is a negative shapeAesthetics and colour What do you associate with Red?• Active, hot, vibrant• Weddings in some Asiancultures• Poorly received in Africancountries• Positive colour inDenmarkWhat do you associate with White?Aesthetics and colour• Purity, cleanliness• Death in parts of AsiaSensuality and touch culture inSaudi Arabian versus European advertisingWhat is this?_____ includes time, space, material possessions,friendship patterns, and business agreements. It ismore important in high-context than low-contextcultures.Non-verbal language (Hollensen)Edward T. Hall – context Globalculturesand products MODS – aBritish youthsubculture goneglobalSmall FacesTwiggyThe Rolling StonesBradley WigginsCelebrity modsPete DohertyLambretta vs VespaGenuine Scooters was founded by a couple of guys sellingscooter parts out of an old warehouse in Chicago. They hadone thing in mind: Bring a better scooter to the United States.The first model, Stella, arrived and the scooter culture began to expand in waysnever thought possible.The Buddy soon stole America’s heart and,from urban warriors to back road cruisers,the line-up now hadsomething for everyone.1967 Merc London originally drew influences from, and was targeted towards, the mod culture. Many of the garments thatwere available then are still available today. Merc produce Heritage Harrington jackets, polo shirts, knitwear, sta-prest trousers& many other absolute essential mod garments.https://www.madcapengland.com/FROM RALPH LAUREN TO CALVIN KLEIN, AREDEFINITION OF THE MOD FASHION ANDJAPANESE MINIMALISMhttps://geerthofstede.com/landing-page/Source: Hollensen, 2001Uncertainty Avoidance Versus Power Distance 1) POWER DISTANCE= ‘measures the extent of toleration to unequal distributionof power in organisations and society’= organisations: perceptual gap between ‘boss’ and ‘subordinate’HIGH means hierarchy is strong (LAT AM,CEE, FRA, BEL, THAI, TUR,HKG, PHI)LOW means the intention to minimise the difference in power(SCAN, US, GER, ISR, GB)Power Distance is the extentto which the less powerfulmembers oforganisations andinstitutions (like the family)accept and expectthat power is distributedunequally.This dimension is thought todate from the advent ofagriculture, and with it, oflarge-scale societies. Untilthat time, a person wouldknow their group membersand leaders personally. Thisis not possible where tens ofthousands and more have tocoordinate their lives.Without acceptance ofleadership by powerfulentities, none of today’ssocieties could run. 2) UNCERTAINTY AVOIDANCE= dealing with the uncertain future and environment= the degree to which people experience uneasiness inambiguous situations and their degree of tollerance for deviantor innovative ideas or behavioursSTRONG: feel threatened by uncertainty and try to control it(GRE, JPN, FRA)WEAK: feel happy with ambiguity and uncertainy and arehappy to roll with punches (UK, IRE, the US, CAN)Uncertainty avoidancedeals with a society’stolerance foruncertainty andambiguity.Uncertainty avoidancehas nothing to do withrisk avoidance, nor withfollowing rules.It has to do with anxietyand distrust in the face ofthe unknown, andconversely, with a wishto have fixed habits andrituals, and to know thetruth. 3) INDIVIDUALISM -COLLECTIVISMI: preference for a loosely knit social framework in societyin which individuals are supposed to take care of themselvesand their families5 most: the US, AUS, UK, CAN, NEDC: preference for a tightly knit social framework in whichindividuals can expect their relatives, family, clan to look afterthem, in exchange for unquestionning loyaltySouth America: CHI, PER, COL VENIndividualism is the extent towhich people feelindependent, as opposed tobeing interdependent asmembers of larger wholes.Individualism does not meanegoism. It means thatindividual choices anddecisions are expected.Collectivism does not meancloseness. It means that one“knows one’s place” in life,which is determined socially.With a metaphor fromphysics, people in anindividualistic society aremore like atoms flyingaround in a gas while thosein collectivist societies aremore like atoms fixed in acrystal. clusters: ASIA: CHI, SIN, THA, TAICEE, 4) MASCULINITY – FEMININITYM: tough-mindedwhen dominant values favour assertiveness, earningmoney showing off possessions, caring little for othersdegree of admiration for success, sympathy for unfortunate,preference for being better than othersHigh masculinity cultures – ‘live to work’– roles differentiated by gender– men should dominateE.g. Japan, Austria, USAMasculinity is the extentto which the use of forcein endorsed socially.In a masculine society,men are supposed to betough. Men are supposedto be from Mars, womenfrom Venus. Winning isimportant for bothgenders. Quantity isimportant and big isbeautiful.4) MASCULINITY – FEMININITY= F: a preference for relationships, modesty, caring for theweak and the quality of lifeHigh femininity / low masculinity cultures:–need for smooth social relationships–employee and social welfare has higher priority thangrowth and efficiencyE.g.: Sweden, Netherlands, DenmarkOrganisation: there is a service ideal, work is part of lifeIn a feminine society, thegenders are emotionallycloser. Competing is not soopenly endorsed, and thereis sympathy for theunderdog.This is NOT aboutindividuals, but aboutexpected emotional genderroles. Masculine societiesare much more openlygendered than femininesocieties.What correlates with Hofstede’s dimensions? (see Hofstede 2001)• Individualism+ purchase insurance, havedogs, own a motor home forleisure, read more books,have an answering machine• Masculinity+ status purchases (watches,jewellery), importance of carengine power, business classtravel, confidence inadvertising– Partner involvement in carchoice, women as mainshoppers• Power Distance+ confidence in the press,lack of confidence inpolice, child obedience• Uncertainty Avoidance+ buying new (vs used) cars,buying precious metalsand gems, use of mineralwater– buying stocks, use ofinternet and other media,eating ice-cream, frozenfood, confectionary andsnacksCultural relevance to globalmarketing decision– culture always has been a major source fordisagreement and misunderstandings– cross-cultural complications can lead to costlyfailures– influences consumers– culture changes– culture is interactive– research studies, as limited as they areprovide clues on similarities and differencesbetween world culturesRecap:• Finished off the global market systems• Overviewed the global marketsegmentation and its importance• Defined culture and overviewed itsimpact on companies’ internationalexpansion• Introduced the main models used forinternational cultural comparison