34. Culture and Customer Behavior KKG, Inc., is an appliance and small electronics manufacturer in the United States that markets a wide variety of product lines. One of KKG’s most successful new products in the past few years hhas been the Cook ‘N Cool, a small, mobile appliance that is capable of both heating and cooling foods and liquids. Since the Cook ‘N Cool has enjoyed a good deal of success domestically, senior management at KKG is now exploring the possibility of going international with the product. A traditional, comprehensive assessment of potential export countries has been undertaken, and the field of potential sites has been narrowed to three countries. Members of senior management have decided that they would like to begin slowly with the export of this product, and initially invest only enough funds to export to one country. Sharon Bradley works in the market research area at KKG. Her boss, Jim Hayes, is one of the members of senior management. Jim has asked Sharon to take the three prospective export countries and rank them according to market potential for the Cook ‘N Cool, and include in the report a clear and concise justification for this ranking. He stated that since the three potential export sites were nearly identical in terms of the traditional aspects of export analysis, he was counting on her to bring fresh insight to the problem. In other words, he was asking her to come up with a new way of analyzing the three potential countries that would “break the tic” between them. He asked her to work with Charlie Lowry, a new hire in the marketing area. ‘The Meetings ‘Sharon: “Ihave gone over and over the export analyses for these three countries, and it’s almost eerie how similar they are in all aspects of traditional export analysis. On the other hand, | know that they are very different with regard to their cultures. But culture is a very abstract concept—it just can’t be measured as easily as something like average disposable income, for example. And yet even though it can be difficult to measure, | believe that our answers lie with these three countries’ very distinct cultures.” Charlie: “Were you on the team that did the initial analysis of the market potential for the product domestically? What did you find in that analysis?” ‘Sharon: “Well, I'm going back a few years, but I do remember that innovativeness was very closely tied to acceptance of the Cook ‘N Cool. In other words, consumers who scored high on the innovativeness scale tended to be very excited about the Cook ‘N Cool, and those who scored low had absolutely no use for it. A good deal of our domestic success with this product ean be tied to our strategy to target highly innovative consumers.” Charlie: “I wonder if we could extrapolate those findings to the export arena, and argue that those cultures that tend to be high in innovativeness represent superior potential for this Product than those cultures that tend to be low in innovativeness.” 160 "hs Matera ony tobe used i conjunction with MBA Ir Lectures‘Sharon: “1 think you're definitely headed in the right direction there. However, the three countries we're analyzing are not exactly mainstream export avenues. I’m doubtfal that we'll be able to find any definitive information on the innovativeness of each of these cultures.” Charlie: “I'd be willing to devote the rest of the day to seeing what I could find with regard to that. I’m so new here that I don’t have a lot of other projects going on, We could meet again tomorrow, and I'll let you know what T was able to find.” ‘Sharon: “Alright—thanks. 1’ll see you tomorrow.” (They meet again the next day.) Sharon: “Any luck?” Charlie: “No—yout doubts were right on target. There was nothing I could find that addressed anything about innovativeness within these three cvltures. But while I was doing the feareh, T kept thinking about some cultural dimensions I studied in college. When got home last night, I pulled out my old global business text to refresh my memory, and there they were: Hofstede’s Cultural Dimensions." Are you familiar with Hoftede's dimensions?” Sharon: “Actually, no. Iwas an English major in college. Believe me, you don’t even want to know the circuitous path that led me to this job. So tell me about these cultural dimensions.” Charlie: “Well, one ofthe reasons that I remember them so well is because ofthe way that my slobal business course was taught. I had two professors team-teaching the courseon anthropology professor and a business professor—and they disagreed vehemently over the usefulness of these dimensions. The anthropology professor felt strongly tha these dimensions were almost useless because they were so general. She argued that they study. On the other hand, my business professor argued that the dimensions are useful procitely because they serve as generalizstions. She argued that in the business world, We often don’t have the time or resources to conduct comprehensive cultural studies We must therefore rely on broad generalizations, however imperfect they may be. In ffect, she was arguing that generalizations are better than no information at cl, Anyway, Sharon, I've typed up a short summary of four of the most widely used of these cultural dimensions for you—I'm interested in seeing whether you believe they're useful in this particular situation. Take a look...” ae es "Hofstede, G. (1980). Cultre's Consequences. Bevely Hill, CA: Sage 161Individualism vs. Collectivism—the value that members of a culture attach to their own personal advancement versus the advancement of the groups and institutions to which they belong. Large vs. Small Power Distance—the degree to which a culture’s. members accept unequal power distribution and tend to be submissive to authority. High vs. Low Uncertainty Avoidance—the degree to which members of a culture feel threatened by ambiguity and uncertainty. Masculinity/Femininity—the degree to which gender roles are clearly defined, and one or the other set of traditional norms/values is seen as superior. “I think we could argue that two of these dimensions are likely to be strongly correlated with consumer innovativeness: High vs. Low Uncertainty Avoidance, and vy Individualism vs. Collectivism.” Sharon: “lagree. And were you able to find information with regard to how our three potential export countries are rated with regard to these dimensions?” Charlie: “Yes—thankfully, the use of these cultural dimensions is fairly widespread. I've created a table that summarizes how each of the three countries was rated on each of the four dimensions.” Country A [ Country B | Country C Individualism vs. Collectivism Indiv. Collect. Indiv. Large vs. Small Power Distance Large ‘Small Large High vs. Low Uncertainty Avoidance High High Low Masculinity/ & Femininity Mase. Fem. ‘Mase. Sharon: “You've really got something here, Charlie. This gives us a fresh new perspective. 1 have to say, I'm impressed with the creativity and resourcefulness you've shown in approaching this problem. How long do you think it will take to write this up? Remember that Jim asked for something clear and concise; it shouldn’t run more than halfa page.” Charlie: “Ul have it ready for you to review this afternoon.” 162Please do the following in a separate document: Rank the counties in terms of market potential, and write a strong, reasoned argument supporting that ranking, Do not assume thatthe readers of this document have any knowledge of the content of Sharon and Charlie's discussions. This document must stand alone: in othe. words, you will not be Thay aes tha the blanks”—your reasoning must be clear to all who read the document. You udinentan joa Jim Hayes and other members of KKG's senior management have some rudimentary knowledge of Hofstede’s dimensions, Your argument should be clear and concise, and should not exceed half a page in length. 163