Cross Cultural Marketing

UNIVERSITY OF MUMBAI
A PROJECT ON

CROSS – CULTURAL MARKETING

SUBMITTED BY Dipen Kothari

Date – 11th December 2006

PROJECT 1, SEMESTER V BACHELOR OF MANAGEMENT STUDIES

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Cross Cultural Marketing

DECLARATION

I, Dipen Kothari of H.R. College of Commerce and Economics of T.Y.B.M.S (Sem. V) hereby declare that I have completed this project on CROSS – CULTURAL MARKETING in the Academic Year 2006-2007. The information submitted is true and original to the best of my knowledge.

Signature of Student,

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Cross Cultural Marketing

CERTIFICATE

I Karishma Parekh hereby certify that Dipen Kothari of H.R. College of Commerce and Economics of T.Y.B.M.S. (Sem. V) has completed project on CROSS – CULTURAL MARKETING in the academic year 2006-2007. The information submitted is true and original to the best of my knowledge.

Signature of Project Co-ordinator

Signature of the Principal of the College/Institution

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Cross Cultural Marketing

ACKNOWLEDGMENT

This project was a great learning experience, which helped me to gain an insight of the Cross – Cultural Marketing process. It is indeed a challenge for any organization to enter into a new market and this project has thrown light upon all the important matter in Cross – Cultural Marketing. The conclusions from this project would really help me to pursue my career in International Business in a more professional way. I wish to show my gratitude towards Prof. Mrs. Vijaya Gangal whose priceless guidance has helped me gain immense knowledge about this project. I appreciate the help extended by her towards this project.

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Cross Cultural Marketing

INDEX

1. 2. 3.

SYNOPSIS HYPOTHESIS INTRODUCTION

6 7 8

   4.

Culture Characteristics For Culture Cross – Cultural Marketing

8 10 11

MAIN BODY

12

        

Eurodisney – A Cross – Cultural Disaster Factors Considered For Cross – Cultural Marketing Cross – Cultural Marketing Process Cross – Cultural Research Cross – Cultural Aspects of Products Cross – Cultural Influences On Advertising Cross – Cultural Sales promotional Techniques Cross – Cultural Issues in Sales Management Cross – Cultural Channels of Distribution

12 16 24 25 29 34 37 41 44

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The data included is secondary and primary data is in the form of real life examples of companies that have undertaken global marketing. During the course of the project we will come across the success of companies undertaking Cross – Cultural Marketing and failure of companies avoiding Cross – Cultural Marketing. Cross – Cultural Pricing Cross – Cultural Aspects of Service quality Cross – Cultural Marketing Hiccups! 48 50 52 CONCLUSION BIBLIOGRAPHY 54 58 SYNOPSIS This project is based on Cross – Cultural Marketing. This project aims at looking at the importance of Cross – Cultural Marketing in today’s corporate world. I have made an attempt to understand the requirements for conducting marketing activity in foreign countries and studied the existing Cross – Cultural Marketing process in detail. Secondary data has been collected from books and Internet has also been referred to for information. The conclusion provides guidelines for marketers for succeeding in their efforts to market the products in a foreign environment. The whole objective of the project is to show how use of correct Cross – Cultural Marketing process ensures stability and profitability of a firm going abroad. It reviews the Cross – Cultural Marketing process and provides suggestions to improve the same and make the process more effective and viable in the current competitive environment. I have taken a step-by-step approach to understand the details of Cross – Cultural Marketing process with real life examples of companies. 6 . There are a few companies that have profited from the use of this Cross – Cultural Marketing process and have been termed as success stories of successful companies.Cross Cultural Marketing    5. 6.

beliefs. HYPOTHETICAL STATEMENT : In order to cater to different demands of different cultures. morals shared by people in a particular society. but mean different in different cultures. In this project we will understand the components of culture and the Cross – Cultural Marketing process. customs. the company has to adopt a few methods to categorize differences across cultures and then carry out Cross – Culture Marketing. It becomes extremely essential for MNC’s to understand different cultures and cater to their respective needs. 7 .Cross Cultural Marketing HYPOTHESIS Culture is a way of life. Culture shapes our perceptions and responses and influences the quality of our interpersonal interactions. The influence of social and cultural factors in international marketing are complex and often extremely difficult for a firm operating in a foreign market to analyze and understand. companies indulge in product variances and inculcate Cross – Cultural Marketing. This initiates Cross – Cultural Marketing. Languages and mannerism may appear the same. It consists of values. especially if the firm is operating across a number of markets and looking for consistent methods of analyzing their markets. People from different cultures react to the same condition differently. Therefore.

The individual internalizes these institutionalized practices and often forgets their origin. others are found non-adaptive and even harmful. values become institutionalized and incorporated as a part of the cultural traditions. values. Over a period of time. including such things as expected behaviour.Cross Cultural Marketing INTRODUCTION CULTURE Culture is a system of communications that makes a human society possible that incorporates the biological and technical behaviour of human beings with their verbal and nonverbal systems of expressive behaviour. It is the instrument by which each new generation acquires the capacity to bridge the distance that separates one life from another. In the process of social evolution. lunch dinner and snacks. Some catalyst must exist that is capable of transforming private meanings into public meanings so they become understood by other (future. people find certain behaviours and values to be adaptive and helpful. useful behaviours. Shaking hands. a characteristic 8 . harmful practices are discarded and discouraged. culture is that catalyst. Culture is the sum total of a way of life. Culture provides standards and “rules” regarding when to eat and what is appropriate to eat for breakfast. language and living practices shared by the people within a region. beliefs. unborn) members of the society. Helpful practices are shared and rewarded.

it is modified or replaced. predominant values are for minimizing differences. financial) rather than another (personal. both as a sign of friendship and as protection from attack. any intrusion by the group on the rights of the individual is regarded as unwarranted. These behaviours. These norms differ between cultures. Americans may negotiate a contract while the Japanese may negotiate a personal relationship. FISH IN WATER 9 . these customs are derived from ancient Japan where a nation short on resources but long on people required the participation of all its members in an orderly manner if survival were to result. self oriented and individualistic to survive. culture gradually but continually evolves to meet the needs of society. when a specific standard no longer fully satisfies the members of a society. the impulses and needs of the individual tend to be subordinated to the good of the group whereas in the United States. Its original function had considerable usefulness and was therefore institutionalized as a social tradition. so that the resulting standard is more in line with the current needs and desires of the society. deeply rooted in their respective cultures. now. One example lies in the differences of the importance of the individual to the group. In the United States. One is the land of big “WE” the other is the land of big “I”. This individualistic approach may be derived from the frontier days when one’s nearest neighbour was miles away and one had to be very driven. The Chinese tend to accept their environment rather than seeking to change it. Thus. and compromise. have immense implications for business behaviours and marketing practices. preserving harmony. In Japan. In Japan. may have originated in the primitive practice of strangers clasping each other’s weapon arm.Cross Cultural Marketing form of greeting in many western cultures. They seek to fit or harmonize with the environment while Westerners seek control of their environment. However. values and customs continue to be followed so long as they yield satisfaction. confrontation. Cultural beliefs. One culture may focus on different aspects of an agreement (legal. and reinforcing group loyalty. thousands of years later it is functionally obsolete but it still survives as a valued custom.relationships). the prevailing customs tend for maximizing difference.

The fish is at home in. 4. its environment. Facilities communications: Verbal and non-verbal. Functional: In every society. Value laden: Culture provides values and tells people what is expected of them. and comfortably unconscious of. 5. It becomes uncomfortable and aware of its environment only when it is out of the water and exposed to air. 2. CHARACTERISTICS FOR CULTURE 1. is a human creation. 8. 7. 6. Arbitrary: Cultural practices have certain arbitrariness since behaviours acceptable in one culture are not acceptable in other cultures. This results in culture shock when humans find themselves out of their natural cultural environment. Prescriptive: Culture defines and prescribes acceptable behaviours.Cross Cultural Marketing Humans are consciously aware of their own culture. mankind has been only vaguely conscious of the existence of culture and has owed this lack of consciousness to contrasts between his tribe’s own customs and those from another tribe with which he happens to be in contact. 3. Learned: Culture is not inherited genetically but is rather the result of acquired behaviour learned from other members of the society. The last thing a fish would discover would be water. This is similar to a fish in water. and is unique to human society. the water. Similarly. 10 . Dynamic: Culture is constantly changing to adapt to new situations and new sources of knowledge. the culture of that society has a functional purpose that provides guidelines for behaviour that are crucial for the survival of the group. it changes as society changes and evolves. A social phenomenon: Culture arises out of human interaction.

and the needs and wants are very much culturally based. non-verbal communications. status consciousness and food preferences.Cross Cultural Marketing 9. Any of these interactions are potential pitfalls for the unweary or careless. 11 . the core values remain the same. the firm producing it must then be ready to be adjust or revise its product offering. However. a firm’s products and services can be viewed as offering appropriate or acceptable solutions for individual or social needs. useless ones according to the society’s needs. colour.cultural differences can be seen in a variety of human interactions including but not limited to language. aesthetics. as many companies both American and otherwise have discovered to their dismay. a successful international marketer seeks to understand the cultural mores of the country to which he / she is attempting to market. religion. the differences in needs within a society. Culture a cross. manners and customs. Culture takes on new traits and discards the old. Satisfies needs: Culture exists to satisfy the needs of the people within in a society. CROSS CULTURAL MARKETING One of the most difficult. materialism. Within a cultural context. numbers. time. Long term: Contemporary cultures have resulted from thousands of years of accumulated experience and knowledge. but also the most important aspects of doing business in a foreign country is to understand the differences in cultural perceptions and values. 10. space. If a product is no longer acceptable because a value or custom related to its use does not adequately satisfy human needs or fails to satisfy or address adequately the particular cultural values of the society. Since marketing is based upon satisfying the varied needs or wants of a firm’s customers. The need to address a potential market from a cultural point of view prior to marketing to the foreign country or transact a business deal with another society separates the successful firm from the unsuccessful one.

garnering but a small fraction of the revenues as the price for its name and mystique while another company owned the park. the extra cost involved in the filter becomes the critical issue. thus accounting to losses. Consumers in wealthier countries are more aware of the health risks and willing to pay for the filter tip.Cross Cultural Marketing FILTER-TIPPED CIGARETTES Filer-tipped cigarettes often sell poorly in less developed countries. For these consumers. it was only a licenser. EXAMPLE Walt Disney Company has successfully launched TOKYO Disneyland years before. Disney was fanatically intent 12 . it would own and control the park and it would own enough land for its own hotels. Due to its arrogant behaviour WALT DISNEY stuck to its successful marketing plan. Two mistakes in the company’s sparkled past would not be repeated in Europe. irrespective of cultural differences in Europe and enforced their product in the market. However. MAIN BODY EURODISNEY – A CROSS-CULTURAL DISASTER This is an example of WALT DINSENY COMPANY which failed to recognize the importance of cross-cultural marketing and understanding cultures of the host country – EUROPE. In poor countries where the life expectancy rarely exceeds 40 years threats are much less real and can be more easily ignored.

Europeans can be in Florida within a matter of hours. pushing Euro Disney’s break-even parameters sharply higher and perhaps far beyond its ability to deliver. Disney invested only $160 million. (Responding to their concerns. The rigid legal approach was offensive to the French. Disney decided French would be the official language of EuroDisney. Tokyo has more than 3 times as many inhabitants as Paris with the per capita income 50 % higher than the Parisian native. omens were unambiguous. The firm found itself depending on its conservative dress codes (Disney prohibited facial hair and limited the use of make-up and jewellery). Of the final $4 billion price tag for the project. not first. the French Government assumed the bulk of the financial risk. Enhancements were added and the park originally budgeted at $2 billion.Cross Cultural Marketing on bringing Americana to the Europeans. a geographic luxury the Japanese do not have. Disney passed on a site in sunny Spain for a location 20 miles east of Paris. Disney World competed directly with EuroDisney for the Europeans’ entertainment dollar while Tokyo Disneyland had no such competition. Winter temperatures in Tokyo. Disney had worked hard to adapt EuroDisney to European tastes. which it believed projected a more central location. The cultural elite in Paris lambasted the project as an affront to French cultural traditions. H G Wells and Leonardo da Vinci. EuroDisney’s castle is called Le Chateau de la Belle au Bois Dormant ( sleeping beauty’s 13 .) Farmers protested the manner in which the French Government had condemned their land so that it could be sold to Disney. Tokyo Disneyland is only 6 miles from downtown Tokyo while EuroDisney is 20 miles outside Paris. After prolonged negotiations with the variety of European countries. to consider depending on lawyers to be a last. resort. including the construction of two adjoining freeway exits and a connecting suburban train line to Paris. Discovery land exhibits drew attention to Jules Verne. while cold are still bearable. Early on. Fantasyland focused on the Grimm Brothers fairy tales and Alice in Wonderland. regimented training practices and plans to ban alcohol from park facilities. ended up costing nearly $4 billion. while French winters are cold and snowy and unbearable attendants at EuroDisney in winter could have been anticipated to be 4-6 times less than Tokyo Disneyland.

Disney knew it would work because it was Disney and it had always worked in the past.Cross Cultural Marketing home). Attendance was highly seasonal and peak during the summer months: Europeans typically take one long vacation in the summer instead of short visits typical of Americans. French visitors were perplexed. Basically. however the Disney strategy was to transplant the American park to Paris. Start-up problems abounded. smile incessantly. and provide world class service to the park attendees. A multilingual staff was available (the reservations center had separate phone lines for each of twelve different languages). Disney thought Monday would be a light day with Friday’s heavy and allocated staff accordingly. Visitors spent 12% less on food and souvenirs than expected. The Visionarium showed a 360 degree movie about French culture. the actual average was closer to 2 days. For a European who 14 . A pre-opening party provided spare ribs without providing the silverware. These shorter stays lowered occupancy rates and placed unanticipated burden on the hotel’s operations because of the unexpectedly high volume of check-in and check-out activity. Europeans preferred walking. EuroDisney opened its doors. French and Dutch. Disney planners presumed hotel guests would stay an average of 3-4 days as they do at Disney World in Orlando. and check out the next morning before heading to the park for the second day. EuroDisney had Mickey Mouse and Donald Duck with French accents. A theatre featured a movie on European history. The dismal Central European winter inhibits attendance for 1-3 rd of the year. (there family vacation budgets are more modest than Americans and more carefully rationed to sustain the longer vacations. In April 1992. come back at late at night. dress uniformly. the reality was the reverse. Many guests arrive early in the morning. This arrogance worsened relations with the local French. The high American service available at Disney World and Disneyland was not easily exportable: Euro Disney’s youthful French employees did not see the need to cut their hair. Instead of riding the expensive trams. Signs are in 3 languages: English. The American management system was exported in total. rush to the park.) Disney executives believed incorrectly that they could change French attitudes of not wanting to take their children from school during the school year and to take shorter breaks many times a year rather than one long vacation in the summer.

Cross Cultural Marketing had visited the Disney parks in the United States. the Self. Disney World. Fewer French came than were predicted. Whereas the Japanese are fond of American pop culture. the experience was second-rate and often not considered worth the high prices charged.Reference Criterion: they had a formula that had succeeded in the United States and ( presumably) Japan. Eurodisney’s admission price was 30% higher than Orlando’s park. In retrospect. who enjoy a leisurely meal and expected to sit down at the accustomed dinner hour. forecasted attendance was nearly 12 million visitors the first year. the park was still losing money. assumed the unassumable. Arrogance and poor planning led to a tarnishing of the Disney mystique which is still being fixed. in essence. although actual attendance was substantial (9. even though conditions in Europe – lower disposable income. As of 1996. On March 15. Disney and its partners announced a restructuring agreement. 1994. the Europeans wanted their own. To them. Break-fast was erroneously initially downplayed. failed to take the time to understand its potential customers better and. and it should also work in France. The solution was to have been the now delayed adjacent MGM movie theme park. which was then put on indefinite hold. Europeans wanted more local content in their parks. albeit at a smaller rate. They did not adequately take into consideration the cultural factors that differed between Disneyland. conservative vacation. The Euro prefix was intended to provide the theme park with a pan – European branding. it was far below the break-even level of 11 million. Euro Disney’s first year resulted in a loss. The Magic Kingdom concept alone was not compelling enough to entice Europeans to extend their stay beyond one or two days. Disney failed to consider the European penchant for drinking beer and wine with meals.5 million). The park did not offer sufficient restaurant seating for its European customers. Alcohol was not served since Disney felt a family theme park should not do so. they saw no reason to tamper with it. The Disney team again and again disregarded the advice of locals. Disney. that this did not work out was indicated when the name of the park was changed during 1995 to Disneyland Paris. Disney World Japan and the European market place. detailed and craftsmanship were more important than heart-stopping rides. although adapting the park itself. 15 .

a native of Bermuda or Haiti. Language expresses the thinking patterns of a culture. FACTORS CONSIDERED FOR CROSS-CULTURAL MARKETING Language Eskimos have many words to describe the concept of snow because the difference in the forms of snow plays a much more important role in their daily life than say. Cultures are proud of their native tongue.Cross Cultural Marketing We can see from the above example how cross-cultural marketing helps in making or breaking a company’s strategies and affects its performance overseas. This 16 . It’s the spoken language that dominates as it changes more quickly and reflects the culture more directly. concerns exist in many countries that one’s language is becoming obsolete. A country’s language is the key to its culture. The words of the language are merely concepts reflecting the culture from which it is derived. In today’s modern world. what is important and what is not important to a particular culture can be ascertained by what is present and what is not present in its language. France passed a law in February 1994 which became effective in 1996 that French radio stations have to devote at least 40% of their prime-time music programming to songs in French.

The use of an English term is forbidden if an adequate French term is available. Exxon’s Japanese brand name. American films account for over 70% of all box office receipts in the European Union. the translation is likely to succeed. and use of wrong dialect. French language must be used on television and radio. If the incoming and outgoing messages agree. three-quarters of which came from the government. The law also indicates every second French song has to come from so called new talent. If there is disagreement. meanwhile. simply that they haven’t made any hits. Exxon’s replacement of Enco referred to a sewage disposal truck. citing the mediocrity and uniformity of French music production. in all the advertising. did not prosper. The solution to avoiding such faux pas is back translating: having one translator translate a document or ad from the original language to the intended language and having a second translator independently translate the message back to original language.Cross Cultural Marketing ignores the fact that English is the language of choice for the hip in France. Esso. The major blunders in language come from mistranslation. French moviegoers pay an 11% tax so the government can provide most of the funding for the French film industry. the message be 17 . Disney was taken to court because merely 7 out of 5000 items in its Paris retail store did not have French labels. France spent $16 billion to produce cultural products in France in 1994. meant stalled car when pronounced phonetically in Japanese. the law does not require that the artists show talent. France is seeking to protect its culture against what it considers the perfidious influence of the English language. and in schools and workplaces. (Parisian law requires all labels to be written in French. analysis of the message must be made. The European Union demands that 51% of all television programming be European. Critics complain that the 40% quota is too high. lack of understanding of slang or idioms in the native language. Creap (Japanese coffee creamer) and Super piss (a finnish product for unfreezing car locks) were products introduced into the United States which. Queen Margot was moderately successful in France and flopped abroad.) French consumers prefer American television and tune out French programs. not surprisingly. (Jurassic Park had lines that stretched for blocks. the high budget French films. The French government considers this invasion American cultural imperialism.

if the product were labeled an entrée. it does not eliminate the problems of whether or not the “context of use” is the same. Although back translation will solve the problems of literal translation issues. They may affirm and emphasize or contradict spoken messages. but “main course” in Israel. the Indian attributes to the American an attempt to control and dictate by means of direct physical confrontation. For example. People will tend to emphasize the non-verbal element and override the verbal if there is disagreement between the verbal expression and the body language. Non-verbal behaviours could include facial expressions. the term “Entrée” means “appetizer” in Australia. respect is shown by looking directly at the speaker. Non-verbal behaviours are more likely to be used unconsciously because they are habitual and routine behaviours. physical appearance. To look away is a sign of respect to Indians. Non-verbal behaviours either accompany verbal messages or are used independently of verbal messages. In India. Non-verbal communications Non-verbal behaviour may be defined as any behaviour intentional or unintentional. eye contact. gestures.Cross Cultural Marketing changed. postures. body movements. touch and time usages which are different from culture to culture. space. older people are 18 . beyond the words themselves that can be interpreted by a receiver as having meaning. while in the United States. An American attributes an unwillingness to engage in a frank conversation with an Indian who does not look the American directly in the eye. its price and market position would need to differ considerably in those two countries. and back translated again until both match. Over 70% of the content of any message is not contained in the verbal but in the non-verbal portion of the message.

may have the unintended effect of derailing the message when in a cross-cultural setting. CocaCola printed country flags on its cans in Spain. let alone to be thrown out in the trash. The French person meanwhile is likely to attribute weakness. casualness and insincerity to the American when the intense gaze is not returned or it is avoided. Polaroid instant photography enabled Arab men to photograph their wives and daughters without the need for strangers to handle the film in a processing lab. joking. Such noise in one’s conduct. tipping too much. using first names. although perfectly natural in communication with another of ones own culture. Beef is taboo for Hindus: Mcdonalds in India sells vegetarian burgers (made of soya beans). However. Touching an older person’s feet is not an uncommon practice in India. Muslims quickly became outraged. Historically. Both companies immediately ceased production of the offending products. Consequently.Cross Cultural Marketing automatically given respect due to their age. being overtly friendly towards the opposite sex. McDonalds printed 2 million of the bags for the promotion while Coca-Cola had produced 270 million cans bearing the flags of the 24 world cup nations participating in the games. being too egalitarian with the wrong people (usually lower class). wearing too casual clothing . In contrast. However a smart marketer can also take advantage of religion. in which spirits and ancestors are thought to have an 19 . speaking too loudly. carrying bundles. sales boomed there. working with one’s hands. The green and white flag of Saudi Arabia featured an Arabic passage (“there is no God but Allah and Mohammed is his prophet.”) that they felt should be treated with reverence. Americans also unknowingly create noise : slouching. McDonald’s did the same for its carry-out bags for its children’s meals in Britain – both in an effort to capitalize on the World Cup soccer games in 1994. Animism. a practice that shows respect for one’s seniors. camera sales in Saudi Arabia were quite limited because of Islamic traditions. Religion Religion has profound influences on the beliefs and practices around the world. the French have direct and intense eye contact that the Americans will attribute to aggressiveness and stubbornness. not commercialism. chewing gum. forgetting titles.

how it affects our work. The Chinese generally believe that a considerable amount of time should be invested in establishing a general climate of understanding. Time Time. IBM needed almost 2 yrs to secure an agreement to build a computer plant in Mexico. a certain valuing of personal relationships exists. They do not view time as a constraint or as a set of limits in which a particular task must be completed. Negotiating a joint venture in China takes an average of 2 yrs. trust. when there never seems to be enough time to get everything done. the smart businessman might want to consult an oracle about the priority of making a deal. is not an unusual right. little chance or importance is given to building long term. is a universal aspect of all cultures. and the role it plays in our worldview. In those cultures in which time is less of a constraint. expect to discuss a great many items not on the Americans’ agenda and keep the meeting going long beyond its stated time (circular logic). solid personal relationships. McDonalds negotiated for nearly 10 years to open its first hamburger restaurant in Moscow. In a culture where everyone is busy.Cross Cultural Marketing ongoing interest in the behaviour of the living. While Americans might expect a meeting to begin and end at a certain time with a series of important points discussed in between (linear logic). International deals take longer to conclude than purely domestic transactions. The organization of most European and 20 . how definite it is in our lives. Thus. Latin’s typically arrive later than the time stated. A culture’s attitude towards time determines the importance placed on the development of personal relationships in business. and willingness to help in matters quite apart from the issues brought to the table.

WASHER THAT SPILLS DIRT A three-panel advertisement for a laundry detergent showed dirty clothes and soap in one panel followed by a busy washer in the second and the third. Americans see the deadline as more important while the French view the quality as their primary concern. traditionally. the French will opt for taking what they call a reasonable amount of extra time to get the product or project to the level of the quality they believe is necessary. Western reading 21 .Cross Cultural Marketing Japanese businesses. usually requires more time to negotiate than is the case of American firms. This affects the flow of logic. and their modes of operations. showing clean clothes. Right and left can take on different connotations: the Arabic and Hebrew languages are read from right to left while most western languages are read left to right. it usually take at least twice as much time and up to 6 times as long is often required for Japanese firms. In the case on European firms. Space While Americans feel comfortable with a space distance of three feet. concern is not on time but on precision and quality. While Americans typically opt for a deadline. Mexicans. Italians. For the French. and Arab men typically get extremely close to their counterparts. The extent to which American expectations of the duration of any negotiation can differ from those of a foreign foe was demonstrated at the Paris peace talks to end the Vietnam War: the American negotiators checked into the Ritz Hotel while the north Vietnamese leased a Villa for 2 years. on the far right.

supervisors are placed at the center to watch and control the subordinates all around them. Colour 22 . open space. the Japanese expression “sitting near the window” refers to employees who have been retired on the job.Cross Cultural Marketing Dirty clothes & soap Busy washer Clean clothes Arabic reading The ad was printed unchanged for an Arabic insert: to one familiar with the Arabic language. it appeared that clean clothes went in the washer with the detergent and after washing the detergent made them dirty! In France. In Japan. supervisors sit at one end of a room from where they can see and hear everything that is going on in the room. where no separate offices exist and the work area is one large. While window offices are of high status in the United States.

India is an ideal market for Kellogg’s to introduce its cereal. it faces an uphill battle. Germans eat bread with cheese or meat in the mornings. a man wears green to signify that his wife has been unfaithful. Food preferences Next to language. Although blue is thought to be the most masculine colour to most Americans. Since. Unlike Japan.30-40 for an Indian brand. For decades. Kellogg’s is targeting India’s vast 200 million middleclass consumers. Green denotes adventurousness in the United States and Japan but trustworthiness in China and Korea. the most popular colour is red.Cross Cultural Marketing In most parts of Asia. food and drink are the most culturally sensitive and grounded topic. milk is already a staple in most Indians’ diets. 23 . Kellogg’s assumes that people will pay a premium for convenience and speed. white represents death and must be avoided. Just 3 % of Indians eat breakfast cereal.) Kellogg’s is still optimistic. most prefer cooked breakfast. Americans think pink is feminine. as Indians are unaccustomed to waking up to western style breakfast cereals. In China. in France and Britain it is red. while Japanese eat rice-based breakfast. The lifestyle of Indians allows them plenty of time to cook and consume a leisurely hot breakfast. Even though most Indians eat a hot breakfast with traditional foods such as chapattis or dosas (fried pancake). Nonetheless. Traditionally. Black also elicits a positive response because it denotes power and trustworthiness. 120 for a box of Kellogg’s cornflakes compared to Rs. since breakfast is a well-established daily meal in India. it denotes happiness. while most of the world considers yellow as feminine. with a package featuring a minstrel in blackface. (Rs. Due to protests from African Americans. In Taiwan. both the brand name and the package have been changed. fewer cultural changes will be necessary. Examine the differences inherent in eating breakfast. darkie toothpaste was among the bet-selling brands in Asia.

PROCESS Cross-cultural Marketing Research Cross-cultural aspects of Products Cross-cultural Sales Promotional Techniques Cross-cultural Channels of Distribution Cross-cultural aspects of Pricing Cross-cultural aspects of service Quality 24 .Cross Cultural Marketing CROSS-CULTURAL MARKETING .

Cross Cultural Marketing CROSS-CULTURAL MARKETING RESEARCH The use of marketing research as business intelligence has the same utility to marketers as military intelligence has for the general staff of the armed forces. only to find out that the pre measured package didn’t dissolve in the wash. popular low – agitation washing machine. and the “fresh smell” was not relevant in Japan since most consumers hung their wash outside to dry in the fresh air. especially those problems that might arise in cross – cultural research when testing the role that certain sociological constructs play in buying behavior. The usage of marketing research in a cross – cultural context is a necessary facet to assist a marketer in minimizing potentially fatal errors. Unilever introduced a super concentrated detergent version of surf to the Japanese market. 25 . Majority of mistakes could have been avoided if proper market research would have been conducted. the product was not deigned to work in a new.

the study had taken into consideration only packaged spaghetti and not total spaghetti consumption (many Italians prefer to buy in bulk). aunts. Construct Equivalence Conceptual Equivalence Functional Equivalence Instrument Equivalence Conceptual equivalence: it deals with what the concept expresses attitude or behavior across cultures. The word “family” has different connotations in different parts of the world. it means the extended family including grandparents. In many Latin countries. Construct equivalence Construct equivalence consists of conceptual equivalence. it generally means the nuclear family of parent and children. 26 . In the United States. A Reader’s Digest study reported that French German consumers ate significantly more spaghetti than the Italians. functional equivalence and instrument equivalence.Cross Cultural Marketing Avoidable errors in Cross – Cultural Marketing Research Definition Error The way the problem is defined by each culture. uncles and cousins.

An instrument that measures a phenomenon uniformly in different countries is essential for comparative evaluation for markets. Researchers need to determine if topics are socially acceptable or not. Social desirability An item or a question in a given cultural or social context should reflect in a proper way in the respondent’s culture. Sex is a taboo subject in India.Cultural Marketing Research Success stories underscoring the value of research exist. In response. they serve as status symbols and are prominently placed in the house. in certain markets.Cross Cultural Marketing Functional equivalence: does the concept serve the same function in different cultures. While refrigerators are used to store frozen foods in some countries and to chill water and soft drinks in others. P&G’s market research indicated that Japanese mothers are very concerned with keeping their babies clean and as a result. Instrument equivalence: This measures the validity and importance of research questions. change their children’s diapers far more often than Americans do. 27 . often in the living room and not in the kitchen. Positives of Cross .

By using indirect Japanese market research techniques. simple sentences while also using a limited vocabulary and familiar words. P&G also discovered the value of storage space in the average Japanese home. which makes it difficult to justify the high prices necessary to make the home delivery business profitable. Pizza is considered as a snack food rather than a meal. domino’s reduced the size of its pizza’s and used motor scooters instead of cars to counter the Tokyo traffic. International researchers.cultural marketing research one should use short. and that researchers must be more careful than in similar domestic research. not as fast food restaurants. As a result. After consulting directly with customers. and smoked chicken were added to the menu. Ultra Pampers is now the market leader in Japan. Kentucky Fried Chicken customized its American product and strategy to suit the tastes of the Japanese consumers. rice and seaweed in their diets and dislike such pizza staples as tomato and cheese. must understand and expect that such research will be more costly. Domino’s initial market research in Japan indicated that home delivery of pizza was not feasible. it promoted the restaurants as trendy and high class. cold corn salad. which are tested for relevance. a more absorbent diaper that keeps the child drier and makes frequent changing a less messy task. The consumers who like the pizza most are the teenage girls. Any research instrument must use categories. take longer than expected. French fries were substituted for mashed potatoes. especially in viewing and analyzing the results. To succeed in cross . and fried fish. when involved in cross – cultural research.Cross Cultural Marketing P&G devised Ultra Pampers. and this often implies searching out other people’s categories in their own language. The Japanese emphasized such foods as raw fish. the sugar content in the coleslaw was reduced. the company made the diapers thinner to fit in a smaller space and take up less of the valuable home space. 28 . the segment of the Japanese population with the least disposable income. In its research effort.

Cross Cultural Marketing CROSS – CULTURAL ASPECTS OF PRODUCTS Feature s Product Brand Packagin g 29 .

Thus. The core product is often the same. Gillette introduced plastic tubes of shaving cream that sold for half the price of its aerosol cans. facial hair is removed with a sharp edge of glass. Mercedes designs change slowly and must be carefully balanced to last as long as they do. A customer attaches value to a product in proportion to its perceived ability to help solve problems. Gillette often has to sell the idea of shaving before it can sell its blades. The effect of culture upon a product can be directly tied to the total product concept. Nothing stands out on a 30 . These psychological features are instrumental in providing customer satisfaction. In some countries. a cluster of value satisfactions. German taste is rooted in nature and its slow changes and enduring quality. As cultures vary.Cross Cultural Marketing Country origin effect A product is a bundle of utilities. In those cases where shaving is common. Products can be classified as goods or services. Automobile styling shows distinct cultural patterns. To counter the discovery that few Mexican men who used shaving cream. Gillette sends a van from village to village carrying its salesmen who are equipped with all the essentials. Any product has a bundle of psychological features just as important as its physical features. To persuade these men that shaving can be easier and more comfortable. other factors take precedence. Adoption and potential adaptation of products can be effected as much by how the product concept conflicts with the norms and mores of the culture as much as it is by its physical features. Different cultures provide different values to different psychological features. these differences are noted in tastes.

In Japan. reworking. Standardization of both the product and brand are not necessarily consistent. thus. A major cultural problem is the American system of weights and measures versus the rest of the worlds’ metric system. Some of the most obvious. But other problems also bound for the unweary. Different physical characteristics of consumers often influence product designs. and volume. and changing a bit at a time. tight streets cars are most often viewed close up. and most important. are dimensions. Conversely. a regional brand may have local features or a highly standardized brand may have local brand names. Local cultural tastes often have forced many international companies to modify components. Americans design cars to look their best from 20 – 30 feet away.Cross Cultural Marketing Mercedes. Features Features include a host of attributes. size. Brands Brands have staying power due to the promotional efforts expended by companies to create awareness and image for their brands. the unit is smaller because Japanese hospitals are smaller and the typical Japanese patient is smaller. capacity. All elements are carefully balanced. and possibly the entire product to be successful. the Japanese like those visual elements attractive to the eye when viewing the car in segments. it is this whole picture rather than details which is desired. the Japanese tend to put their cars in front of a wall whereas Westerns are apt to use nature as a backdrop. the Japanese are used to starting with a clean slate. GE medical system designed a product specifically for Japan. Swiss watchmakers make smaller watches for Japanese consumers respecting the fact the wrists of Japanese are smaller than most of the westerners. Global brands carry instant recognition 31 . While Westerns are attuned to remodeling.

Packaging Packaging considerations depend upon the market for the product. promotional considerations for packaging take on less importance. Coca – cola changed Diet Coke to Coke Light in Japan. Kinetic – Honda. Amora ketchup (a local brand) overtook Heinz by introducing plastic bottles resembling rocket ships. prestige and age. Chinese consumers tend to be more brand loyal and tend to purchase the same brand or product other members of the group recommend. European consumers buy American goods for its quality. Brand loyalty also can vary across cultures. the packaging becomes part of the promotional effort. Japanese women do not like to admit dieting and in Japan. For consumer products. and Lehar Pepsi. In Panama. they tend to be members of a small number of reference groups. 32 . In cultures where over – the – counter predominates. In France. a move Heinz matched. Goodyear sells its tires in Germany with advertisements of Indy cars.Cross Cultural Marketing and especially for international travelers represent a risk avoidance strategy versus using local brands. U. Dom – Toyota. the idea of diet implies sickness or medicine. Other name changes are not necessarily voluntary: in India. Maruti – Suzuki. because of a ban on the use of foreign brand names. Coca – cola uses Coke Lite as a brand name instead of Diet Coke in France since the term “diet” is restricted due to medical connotations and suggests poor health.S law levies taxes on certain chemicals destined for toxic waste dumps. for example. packaging is usually plain and functional in nature. Aunt Jenima pancake mix and ritz crackers are sold in cans rather than in boxes because of high humidity. Consumer products can be marketed by self . Government requirements can also greatly influence a product’s final design. hybrid brand names are the norm.service or over the counter. In the case of a product targeted at a business.

wine and cheese. and Johnnie Walker a Scotch whisky. In countries where another country’s image is high. Consumers have vague but definite stereotypes associated with various countries and products. 33 . To the Japanese. Scotland is associated with Scotch whisky. form is as important as function. Products made in Germany are more highly regarded by American than French consumers. China has launched a “buy Chinese” campaign. and wrapping an item in three layers is standard practice. This effect can also potentially cause the near extinction of local brands if they are deemed inferior. Packaging must be beautiful and of high quality. Laver Brothers sells Lux soap in stylish boxes because more than half of all soap bar purchases in Japan are made during the two gift – giving seasons (winter and summer). the type of product and the image of the company and its brand. France with perfume. a premium price may be charged for those types of products. The country. Country – of – origin effect The country – of – origin effect is an influence that the country of manufacture has on a consumer’s positive or negative perception of a product. Industrialized countries generally have the highest quality image. it is expected to be aesthetically pleasing as well as functional. American and European consumer products have become so popular in China that they have eclipsed their Chinese counterparts. a poorly packaged product conveys an impression of poor quality. Italy with pasta. influence the magnitude of the effect upon the global consumer.Cross Cultural Marketing The typical Japanese consumer will not purchase a product that is not well wrapped. while channel No. and America with cigarette. 5 gains by being a French perfume. Packaging paper used for wrapping and bags are of excellent quality. An Italian whiskey or German wine or Scotch perfume would be negatively influenced by the effect.

34 . Korea is a word-ofmouth advertising country: a customer’s testimony is more effective than television or newspaper advertising. The concept of family is important to the Chinese and is thus played up in advertisements. Non-verbal or visual advertising is most likely to satisfy a company’s global market objectives. In Japan.Cross Cultural Marketing CULTURAL INFLUENCES ON ADVERTISING The way cultures react to communications and messages differ. Chinese consumers tend to rely more on word-of-mouth communications. family member. In Saudi Arabia. Those that ignore them fail. it should be noted that body motions are interpreted differently among cultures. or opinion leader. Symbols are not universal. (and many Arab nations) it is against the law to publicly advertise symbols that contain Christian or Jewish connotations. snakes symbolize danger in Sweden while they represent wisdom in Korea. However. pointing to one’s own chest with a forefinger indicates that the person want a bath. Koreans value the testimony of a friend. Advertisers that understand these differences succeed. Likewise.

whereas the Germans tend to applaud technical perfection. truck owner and success ensued. a Japanese husband was shown in the room while his wife was bathing. When the commercial was revised so that the man was removed from the scene. the directness was not well received. but the same message and image had been used in Germany without any controversy. P&G found that its ads for Camay soap did not work in Japan because the ad featured men complimenting women on their appearance. Cultures in general do show distinct differences regarding tastes for their advertisements. the commercial was very successful. American commercials are more information laden than British commercials. As always. The rugged cowboy image of the Marlboro Man was unsuccessful in Hong Kong where the urban population did not identify with horseback riding in the countryside. A typical British ad will always contain some element of fun. The French use humour more frequently in advertising than Americans. an invasion of privacy the Japanese consumers found distasteful. if not fatal. French advertisements use more emotional appeals than American advertisements. In another Camay commercial. A Nivea print advertisement was banned in the United States for indecent exposure. Sexual appeals are more frequently used in French advertisements than in American ones.Cross Cultural Marketing Cross – cultural advertising Cultural differences can create problems when potential customers translate the message into their own cognition. but American advertisements contain more information cues. but with a male voice narrating. when dealing with different cultures. translation problems can be. Japanese Advertising 35 . at least embarrassing. better dressed. which tend to be more entertaining. Philip Morris changed its ad to reflect a younger.

 Create a global theme. produce good feelings. “Engine” was a straightforward. 36 . Japanese advertising is emotional. suggestive and indirect. “Bird” was by far the more successful ad. let alone attack or put down a rival. Requirements for cross – cultural advertising  Understand local regulations and their effects on advertising.  Do not assume that just because a commercial appeals at home it ill also appeal to foreigners with equal effectiveness. Direct comparisons with the competition are almost never used in Japan. The accepted Japanese industry norm is to avoid slandering and attacking competitors. Japanese ads may be humorous and appeal to the consumer’s intelligence. “Bird” had the same message. and create a happy atmosphere. but localize to particular markets as necessary. featuring bright colours. Toyota created two versions of a Japanese ad for one of its automobiles. but superimposed on it a scene of an open road and the symbol of a bird. Japanese ads are visually attractive and eye catching. Mechanical qualities are often taken for granted by the Japanese. while Western advertising has more a verbal. It is taboo for any company to acknowledge the existence of its rivals. direct message and is logical. The mobility of having a car affords the average Japanese consumer psychological escape and freedom. however they do not convey much product information. so the emotional aspects are more important.Cross Cultural Marketing Japanese advertising is designed to appeal to emotions. The Japanese often use symbols and strong gestures in their television commercials. well symbolized by the open road and the bird. to the point presentation of mechanical excellence of the new car.

 Clearly designate the target audience within the target market. CROSS. customize objectives for each target market designated and do so with the culture in mind.Cross Cultural Marketing  As advertising objectives vary from market to market.  Examine media alternatives available within the target market.  Review local agency availability and capabilities.CULTURAL SALES PROMOTIONAL TECHNIQUES Coupons Sales Promotion Techniques Public Relations Gift Giving 37 .

sweepstakes. the title sponsor must generally buy two – thirds of the television advertising time. 38 . In addition. contests and event sponsorships. The great disparity in income throughout the world is an important obstacle to worldwide product standardization. firms must either modify their product or produce a different. personal selling and publicity. Corporate event sponsorships are big in Japan. less costly product.Cross Cultural Marketing Sales Promotion consists of those promotional activities other than advertising. To achieve market penetration. Major tennis tournaments go for one – tenth of that amount. The use of promotion requires some sophistication on the part of the retailers in the targeted country. Coca – Cola spends over $2 million a year in Japan on community sports programs with its independent bottlers spending half as much. Sales promotions are likely to be less effective where mass media coverage is poor. games. it typically costs several million dollars for a tournament on the Japanese Professional Golfers Tour. Common promotional tools include coupons. Differences in preferences for sales promotional tools are a direct expression of cultural differences.

The company was investigating several other substitute marketing programs including “everyday low prices”. greater coupon usage can be found. The use of couponing is advised when considerable price sensitivity exists for the product category or when brand switching is common. In general. in those advanced cultures such as the United States and the UK. coupons are not an efficient promotional tool and they offer only limited benefits to manufactures. Coupons also require well-developed print media for new product introductions. In general. Couponing elsewhere around the globe has seen variable results. coupon distribution and redemption is related to the marketing sophistication of the culture. Couponing increases competition and reduces profits. This kind of price discrimination is profitable for the seller when the cost of couponing is sufficiently low. while in cultures where marketing sophistication is relatively low but increasing. even dying out in some countries. Coupons provide a catalyst for consumers to choose one brand over another when homogeneity between brands is perceived. and consumers. a manufacturer can attract some consumers who are otherwise more inclined to buy a competing brand. The use of coupons is often an effective way to give new users for a brand and to stimulate repeat purchases. P&G studies have indicated that for most consumers.Cross Cultural Marketing Coupons By offering a rebate through coupons. P&G in December 1995 to notify several selected markets that it was eliminating coupons. it appears that coupon usage is decreasing. 39 . Sending out coupon allows the sellers to separate market segments with different degrees of consumer brand loyalty. coupons require literacy and some sophistication on the part of retailers and consumers. Coupons also require a well-developed backward channel to handle their redemption. distributors.

Public relations can be a major influence at the corporate level as well. showing the idea of a tie established by the gift.Cross Cultural Marketing Public Relations The Japanese have little concept of public relations in the American sense. Each group is very sensitive about its existence. than to worry about the public relations consequences for their country. China’s Communist – led system is to blame with its principle that the center of power is identical with the center of truth. Traditionally. meant “to pour. Japanese society has been closed – made up of exclusive groups and groups within groups. On the other hand. Giving away a personal object means giving away a part of one’s spiritual essence and creates a bond between oneself and the recipient. The bad press and boycotts that come with doing business with dictators can outweigh the benefits. it is acceptable for a boss to give his secretary roses to express appreciation for helping to close a big deal. responsibilities and privileges and is basically hostile to all other groups. this idea serves as basis for gift giving: everything is linked to its original owner. to give a drink” and was the oldest form of honour. even when they are not. Gift Giving The original meaning of gift giving in Germany. China generally lacks skill in public relations. Since the Japanese are very modest and self – effacing. It is more important for leaders in Beijing to show that they are in control. They have little need for corporate public relations. in Germany and in many Latin 40 . In archaic societies. In United States. it was only synonymous with the term “bond” because gifts were often directly bound or pinned to the body of the recipient. The tendency of the Japanese to be closemouthed and even secretive about their business is a result of several cultural and economic factors. That is why PepsiCo sold its minority share in its joint venture bottling company in Burma to its Burmese partners. schenken (giving). they cannot understand self – promotion.

for example. such action would be seen as a sign of romantic attachment and therefore inappropriate. The Swiss say Americans are too absolute in their claims. Since bargaining still dominates the exchange process in Saudi Arabia. In Europe. between strangers. Over and under giving can cause embarrassment and be counterproductive. each time with a higher level of management. a sale requires even more time than in Europe. selling is not considered to be a socially acceptable occupation. Asians believe Americans are not sufficiently humble and become skeptical when they feel Americans are over confident.Cross Cultural Marketing countries. Americans tend to be extraordinarily preoccupied with the tangible aspects of a product during the sales presentation instead of the people side. finds that a sale in the United States requires an average of two calls per sale. by mail or phone. attention to rank is essential. in France. expending more time and cost. If the president receives a gift equal to that given to the vice president. Only in the United States and a few other countries it is normal to do business from a distance. sales person are routinely 41 . Manufacturing Data Systems Inc. as in everything else in Japan. The British believe that Americans talk too much about nothing or talk about things Americans know about. in Europe. the former will feel insulted and the latter embarrassed. a producer of computer software. In gift giving. (MDSI). Gifts must be graded according to rank. Electrolux finds its direct sales force requires an average of only five demonstrations to make a sale in Malaysia. but 20 in the Philippines. In Japan. CROSS – CULTURAL ISSUES IN SALES MANAGEMENT The sales management process varies greatly across cultural and political borders. merchants are heavily dependent upon personal selling to conduct their transactions. In many cultures sales people are not held in high esteem. One must attempt to match the recipient’s status. frequent callbacks are necessary.

A proper Frenchman neither likes instant familiarity nor refers to strangers by their first names. executives walk around their desks. In Brazil. insurance salespeople are careful to pick a good day before asking a customer’s signature on a life insurance policy. Salespeople from one tribal or religious group often cannot sell to another such group in their own country. formal or casual. Germans dislike overstatement. The English do not. it is important to dress as your customer dresses. In the first meeting with their prospective partners. as a rule. the Brazilians were told they were going door to door selling the product. An American company invested a large amount of money in recruiting and training forty young Brazilians in sales techniques for an entire week. Customs and manners are also important. The Brazilians were appalled. In Switzerland and Germany. the expected result of these banquets is a 42 . Malaysia and India this negative perception limits the sale process to persons of similar social strata. the Americans placed copies of the proposed contract in front of the astonished Japanese. instead. Visiting salespeople should expect to be invited to long banquets when selling to and negotiating with the Chinese. Cultural influences on sales process Religious or cultural beliefs often influence the selling process.Cross Cultural Marketing referred to as “consultants” or “commercial attaches”. In Thailand. One American firm arrived in Japan to negotiate a joint venture agreement with a contract already in hand. it is beneath the dignity of Brazilian men to ring door bells and talk to women about a product. Car salespeople in Japan deliver a car to a consumer on a lucky day. On the following Monday. The Japanese perceived the behavior of the Americans in presenting a legal contract at the beginning of the first meeting extremely rude and inept and decided it would not be wise to conduct further business with such a firm. make deals over the phone. contractors check for an auspicious day before breaking ground. it is considered rude to shake hands across desks.

They will go through the motions and show they are making a sincere effort to meet the request. even if it is impossible. the guest is believed not to have had a good time. In any company. the selling profession lacks respect. they will never say no. “there is a little bit of a problem. at the installation. not marketing and sales as in many an American company. neither a letter nor a phone call is sufficient – a personal visit is mandated. otherwise. In Japan. and even when an engineer adds a piece of hardware or software. as in any cross – cultural situation. Labour costs were higher than expected because the supplier polished and 43 .” this implies that a task will not be completed at all unless special action is taken. A computer salesperson should be present for meetings before installation.Cross Cultural Marketing drunken guest. but that it is not serious. the Japanese want to get the whole thing over with as soon as possible. could provide its share of obstacles. the people say “no problem” frequently. Suggestions for cross – cultural sales management 1. Unlike the Chinese. Become culturally sensitive and seek out cultural differences and the implications they may have for the sales process. the sales division is shunned by most self – respecting salary men. Language. When they say. Japanese salespeople usually have poor selling skills. this actually means there is a bit of a problem. In the Japanese business culture. In Mainland China. and enhancing the value of their wares and managing to raise their prices slowly over time. When a change in a delivery schedule is inevitable. no matter how illogical or impractical. A contract between Boeing and a Japanese supplier called for the delivery of fuselage panels to have a “mirror finish”. When a Japanese company asks suppliers to do something. who will spend hours bargaining. the route to the top goes through manufacturing. New employees are almost forced to spend time in sales division before moving on. The Japanese salesperson’s role does not stop with the purchase order.

and margins are high. International channel alternatives are many. brokers. Distribution is slow and inefficient in underdeveloped countries because the population is widely scattered. or often with an industrial distributor or manufacturer’s representative acting as intermediary between two endpoints. All Boeing wanted was a shiny surface. trading companies. Expect a slower selling cycle. Be respectful of local business protocol. Know when to talk business and when not to. state trading companies and franchises are among the potential intermediaries. For consumer goods. usually directly between manufacturer and the customer via the direct sales force of the manufacturer. A channel provides the services needed to make a product available when it is demanded and in the quantities demanded by the customer. Distributors. import merchants. cooperative exporters. agents. 3. 2. costs of capital are high. CROSS – CULTURAL CHANNELS OF DISTRIBUTION A channel of distribution is the path the goods take from the manufacturer to the ultimate user.Cross Cultural Marketing polished the panels to achieve what is believed to be the desired finish. channels are usually longer and typically have one or two levels of wholesalers before reaching the retailer and the final consumers. One should walk a fine line between being ethnocentric and being totally polycentric. jobbers. 44 . 4. the path is short. commission houses. Research the business protocol for countries in which one plans to do business. a literal interpretation. Distribution in underdeveloped countries is characterized by small intermediaries. middlemen are few. inventories are low. Developing countries are typically sellers’ markets where the balance of power within the channel tilts towards the supplier. For business – to – business goods.

magazines can be found in retail stores in the United States while new agents are the exclusive channel for magazines in the UK. which makes distribution overly difficult. the suppliers are typically provided with a superior position as the providers in an undersupplied economy.Cross Cultural Marketing Coupled with the fact that the typical dealer in developing countries such as India is small and is attributed a relatively lower social status. while in France. Cultural influences on distribution channels Channels must differ by country and culture since where consumers buy certain goods also differs country by country. Baby foods are predominantly distributed through 45 . The attitude toward the middlemen in underdeveloped countries is generally negative. In addition. This feeling exists because the people tend to emphasize production and consider the intermediary unproductive. this leads to asymmetrical power relationships and communication flows that are mostly unidirectional from suppliers to dealers. it is found in most drugstores as well. few locals act as intermediaries. Kodak Film has become Korea’s most popular brand of colour film through its link with the Doosan Group. contact lens solution is only found in stores that sell eye – glasses. assisted its bottlers in marketing. In Germany. The importance of distribution even in a closed society can be seen in the example of Korea. promoting and selling its products by training its sales agents. The result is often that this function is done on the side or secretly. the vacuum is usually filled by foreigners. and even providing marketing kits for the retail outlets. while Coca – cola. In such economies. not being allowed to participate in the distribution business. since intermediaries in such undeveloped markets are typically not considered productive by the locals.

S stores dropped below 400. P&G entered the Japanese market for disposable diapers by giving away millions of samples to customers. P&G’s marketing task was to convince Japanese mothers that they are not lazy or uncaring if they use disposable diapers. In Germany. mail – order sales are important. departmental stores and family shops.Cross Cultural Marketing pharmacies in Italy. In Norway. In Japan. McDonald’s put its first European fast food outlet in a suburb of Amsterdam. which they did by setting up special displays showcasing the P&G product in Supermarkets. Over 80% of Kenya’s retail and wholesale businesses are controlled by Asians. the number of U. In the Netherlands. they control almost one quarter of food sales in Switzerland and claim one third of Swiss households as members. Sometimes what works in the United States does not work elsewhere in the world. This not only provided consumers with a free taste of the product but also established obligatory relationships through out the distribution channel. it is not so in Portugal. Wholesalers and retailers had to return the favour. regional distributors predominate. Franchising Franchising is growing in popularity in every corner of the globe. the converse is also true. The Reason: controversial ads (AIDS. Consumer cooperatives have traditionally been popular in Europe. rainbow condoms) may have been acceptable in liberal Europe. initial inspection of the 46 . in both cases.S stores five years previously. half of the total number of U. the companies found that most Europeans and Japanese live in central cities and are less mobile than the average American. but backfired in more conservative American locals. Central city locations were more efficient. buyer’ cooperatives deal directly with manufacturers. productive and profitable. Although the number of Benetton stores worldwide reached 7000 in the early 1990s. Procter & Gamble worked with this traditional system. much of its success is attributed to the 94% success rate it has achieved in the United States. When McDonald’s chose a French partner it did so after extensive review and reference checking. However. while Germans can buy them in grocery stores. Italian distribution is characterized by a very fragmented retail and wholesale structure. thinking it would be just like a suburb in Chicago.

they would not stay on the books for long. outlets.S. If the regulations were not acceptable to the country’s dominant culture. Sweden has its town planners decide on the locations of retail outlets. It is argued that trademarks cause prices to rise without a corresponding increase in the quality of product and / or service. Europe and Japan. by gazing at the regulatory restrictions that affect international channels of distribution. Developing countries often discriminate against franchising because it is viewed as a marketing system rather than as an economic contribution to the country. we are also examining culture. Therefore. offer a variety of interesting and restrictive practices within the distribution network. the French are less concerned about cleanliness than are American attitudes at home. Thee countries fear that persuasive advertising will lead to resource misallocation and ultimately to an adverse balance of payments. for families and for women and children. The major problem was that many of the outlets’ customers were American tourists expecting American standards. and separate seating areas are provided for men.Cross Cultural Marketing French restaurant alarmed the American staff. Big Boy serves no pork in Saudi Arabia. Culture and the norms within a culture certainly affect the regulations and legal standards within a country. Many European countries protected owners of small shops by regulating the placement and types of new stores that could enter the market. male waiters are substituted for waitresses. These habits were not viewed negatively by he French partner or by most of the French consumers. Regulatory restrictions on cross – cultural distribution Although regulations and non – tariff barriers are not culture bound. Other franchises have adapted well to foreign cultures. Many Asian countries view franchise agreements as instruments of exploitation. as well as elderly and handicap customers will be served. An often 47 . even though industrialized and developed. so that thinly populated areas. Hygiene habits were observed that were considered unacceptable in its U.

but to price it likewise would cause BMW to lose much of its image quality. In other cultures termination can be a costly and lengthy process. Export pricing involves a marketer in a firm’s home market. In the U.performance is a relatively simple and accepted practice. Incomes. for the same product in two different 48 . CROSS – CULTURAL PRICING Pricing effect is affected by factors such as cost differentials.S. demand – based. and national laws. cultural habits. For instance. Two major pricing tasks face the international marketer: pricing for export and pricing for the foreign market. and consumer preferences differ from country to country. BMW may have a comparable cost as an Oldsmobile.Cross Cultural Marketing overlooked but critical factor is termination rights of the intermediary in another country. image and quality may be the primary determinants. All three influence desire for a product and hence elasticity necessarily differs between any two countries or cultures. Each culture has its own preference on pricing strategies and of which techniques to use. Thus. demand conditions. cross – border pricing. Each technique has its advantages and disadvantages. profit. Foreign market pricing involves setting the price that will be paid by local buyers within the foreign market. The final determinant of price may be irrelevant to costs. market. Pricing can be set by any number of techniques including cost. termination for non .

This strategy involves aggressively setting low prices to win market domination and then rapidly improving production to bring costs in the prices.Cross Cultural Marketing countries or cultures. P&G also discovered that once it discounted its product in Japan. P&G introduced Cheer into Japan by discounting its price. This is similar to Texas Instruments’ famous learning curves approach. Cost – plus pricing is not the recognized price – setting formula as found in the West.S.S. The main weapon of a sales department is low price. Small retailers have limited shelf space and do not like to carry discounted products because of the lower per unit profit earned. U. English. Japanese marketers spend as much time discussing the right price for an article as they do discussing the right price for an article as they do discussing the product or its promotion. and Italian. Companies must then reconcile costs with selling price. Once a price is established for a product in Japan. The price has to be what the consumer expects to pay. This makes initial price setting more important than in the West because prices must not change. a common practice in the U. French and Japanese firms use predominantly cost – oriented ones. two different prices may be demanded and received.. The cultural background of parent company executives often influences a pricing strategy. Management must first set the price and then see how costs can be brought into line. Canadian and Scandinavian prefer market systems. considerable difficulty exists in raising it. Wholesalers were alienated because they made less money due to lower margins. one has to pick a price that one expects to be bound to for many years. This only lowered the soap’s reputation in Japan. it is extremely hard to raise the price again. German and Dutch firms tend to use combination systems. Japanese Pricing Strategy 49 . The selling price is dictated by competition with other companies in the same industry.

A manufacturer fixes the retail price of each product. particularly abroad. opportunities for growth at world market level are considerable. tells wholesaler the price at which each product is to be distributed to retailers. When operating overseas. ecological concerns. Services make up 20 to 30 percent of world trade and have a growth rate estimated to be up to 20% annually. The growth in services internationally can be attributed to two principal factors: changing lifestyles affected by affluence. CROSS – CULTURAL ASPECTS OF SERVICE QUALITY Services continue to increase in importance within national economies. Yet. to maintain and perhaps expand market share in their export markets. which impact profits in their home currency. Services have particular product dimensions that make global service that make global service marketing management different from that of physical goods. and the variety and complexity of products available on the market. But as long as the Japanese companies have adequate financial backing they have a high probability of success. 50 . Thus. and demands that retail stores throughout Japan strictly observe the retail price is set by the manufacturer.tariff barriers are aimed at services. and the changing world affected by the increased complexity of life. leisure time. Market penetration traditionally has been a much more important pricing objective than quick profit taking with a skimming approach. barriers to services exist and can be immense. Japanese exporters absorb significant cost. the Japanese concentrate on pursuing market share rather than profits.Cross Cultural Marketing An aggressive penetration pricing strategy in Japan is directed toward gaining and holding market share. The Japanese system of sales price determination is known as tatenesei. and women in paid employment. most of the non .

cultural services Several potential problems of the service industry are found when the subject of internationalization is discussed. technology and information that can be combined with local labour to recreate the imported service locally. The fourth potential problem is of cultural transferability. 51 . barriers to labour mobility across countries exist. services tend to export capital. Retail establishments. Consumer services in particular travel poorly. All service operations have some physical aspects. Services tend to be labour intensive and internationally. as such. this is especially true for financial instruments and skills. due to their need for physical plants.Cross Cultural Marketing Potential Hurdles in cross . A second potential barrier is the mobility of the service product offered. A bank needs a building and a vault. Mobility is prized in international trade. the required physical infrastructure must be present. are not as mobile as are insurance industries. Some markets may be more culturally indifferent to particular services or prefer particular services than others. Some services are more mobile than others. In order for a service entity to be successful. The third potential hurdle is infrastructure.

and therefore cannot be the king. Research CPC International wanted to introduce Knorr dehydrated soups to America. They initiated market research by taste test comparisons. Americans indicated their preference for the taste of knorr. Knorr even reformulated its European product to make sure the 52 . but must be Queen of Beers.Cross Cultural Marketing CROSS – CULTURAL MARKETING HICCUPS ! Language A Spanish translation for Budweiser: King of Beer used the wrong gender. Beer (cerveza) is a noun of the feminine gender in Spanish. “Cue” toothpaste was introduced in France by Colgate – Palmolive who did not realize that Cue in French is a pornographic word.

Upon positive receipt of the extensive tests showing strong preference for the Knorr product. On the other hand. not a battery. Packaging Packaging can become an integral part of a product’s success or failure. Hungarians wear wedding bands on the right. failure resulted. The taste panel tests did not simulate the actual market environment for the soup. Hungarians saw an unwed mother. Lego’s Bunny Set promotion. The model was wearing a ring on her left hand.Cross Cultural Marketing soups appealed to American tastes. and only did so after Tyco had severely eroded its market share. Hungarian consumers thought the ad was touting a bunny toy. CPC decided to go ahead. Advertising Misunderstanding or a lack of understanding of differences between cultures also have led to a number of advertising mistakes: Ralston Purina used a toy bunny in Hungary in ads for its Eveready Energizer batteries. When a baby care company advertised soap to Hungarian consumers showing a young woman holding her baby. where the block toys reside in a bunny – shaped storage case – failed to impress the Japanese. Lego was slow to match Tyco’s storage case buckets in the United States. The questions asked did not reflect the true scenario. When American consumers discovered that the soups had to be prepared and were not ready to eat. 53 . straight into a disaster. The Japanese considered the bunny pack as superfluous and objected to the notion of being forced to waste money on unwanted products. All the taste tests were performed with already made soups.

companies have to cater to the demands of different consumers and provide the desired products. Taking into account the success and failures of companies who have gone abroad I would suggest a few guidelines for the international marketers. inquires after the Saudi’s wife. understand. exposing the sole of his shoe. companies indulge in product variances and inculcate Cross – cultural marketing”. Companies failing to do so would fail in the corporate world. this enforces companies to be market sensitive. The Americans sits down and crosses his legs.  Be sensitive to the taboos and develop cultural empathy. the American had unwillingly offended the Saudi five times.Cross Cultural Marketing Sales Management An American salesperson visits a Saudi official for an introductory meeting for a new product. The Saudi offers the American coffee. this stands true as seen through the project. all companies who decide to go global have to adhere to the cross – cultural marketing process. accept and respect another’s culture and differences. Now. 54 . Gone are the days when companies could “Push” the products in the market.  Never assume transferability of a concept from one culture to another.throat competition the consumer is the “King”. CONCLUSION As mentioned in the hypothesis “in order to cater to different demands of different cultures. and assertively pursues the deal. He passes documents to Saudi with his left hand. In today’s cut . which is politely refused.  Recognize. Within the first ten minutes of the business conference.

Employ active rather than passive words. everyone should. it should likewise in Beijing.  Note the particular attributes where substantial differences exist. International marketers should avoid the Self – Reference Criterion (SRC). examine marketing Texan Iced Tea to the United Kingdom:  Examine those cultural and environmental attributes of the product they wish to market that make it a success in their home market. As an example. if it sells well in Peoria. simple sentences while also using a limited vocabulary and familiar words.g. and the best option is not to enter. but that they may operate differently in private. it does not mean they don’t want to buy American goods.  Changes in the product or promotion must be made to account for the differences noted.  Compare these attributes to those found in the target market. SRC is the concept that if I like and use a product.: Just because local business people in developing countries tell you they don’t like Americans. Repeat nouns rather than using 55 . In some cases. differences are too great.Cross Cultural Marketing E. Suggestions for Cross – Cultural Marketing Process Cross – cultural research One should use short. It simply means they are expected to say certain things in public.

labeling and quality standards of products. An understanding of how a product is currently being utilized within the cultural norms will help marketers to recognize which aspects of a product must be adapted in order for any success to be realized. Avoid metaphors and possessive forms. customize objectives for each target market designated and do so with the culture in mind.  One should not assume that just because a commercial has appeal at home it will also appeal to foreigners with equal effectiveness. Marketers should understand and follow any special governmental regulations concerning packaging. 56 .  As advertising objectives vary from market to market. Cross – Cultural aspects of Products To increase the likelihood of success when a company is proposing to market products into a new culture back translating should be used to minimize the chance of a product or brand name being offensive to the host society. The interpretation of results should be done with local advice so that explanation of reason is not biased by one’s home culture. Any research instrument must use categories which are tested for relevance and this often implies searching out other people’s categories in their own language. Cross – Cultural Advertising  One must understand the local regulations and their effects upon advertising.  It is always good to create a global theme but one should localize to particular markets as necessary. In addition one must be aware of response bias.Cross Cultural Marketing pronouns.

When a company goes global.  Assist the import/export documentation. and international banking requirements. 57 . However. Companies must counter the following:  Variable distribution and marketing costs  Fluctuating exchange rates  Differing perceptions of the product  Local competition A global company needs to pay attention to the possibility of parallel imports because they can cause irreparable damage to a company’s image and profits.Cross Cultural Marketing Cross – Cultural Channels of distribution Channels chosen must take into account the country and culture so as to maintain acceptability and credibility within the target market. it is realistically not practical to set the same price in every country because of the differences in purchasing power parity. Cross – Cultural Pricing Effective pricing is a major element in the successful international business operation. custom clearances. Global companies must extract the following advantages from the intermediaries:  Cost savings from global intermediaries can be substantial. it has to price its products in different countries and develop a standardized pricing policy.

A. Aswathappa  Global Marketing Management – Allyn and Bacon Internet Sites Referred :  Google. The companies can make those minute changes or even major changes to make their products successful in the foreign country.co. Herbig  Essentials of Business Environment – K.Cross Cultural Marketing Competition won’t decrease but increase the need for survival. Com  Askjeeves. BIBLIOGRAPHY Books Referred :  Marketing Management – Philip Kotler  Cross – Cultural Marketing – Paul .com 58 .com  Internationalmarketing. As the technology has crossed all borders so has trade. transforming the world into one market.in  Coke.

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