IMPACT OF CULTURE ON GLOBAL MARKETING

2020-II

EICEA-INTERNATIONAL BUSINESS

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 COUNTRY OF
ORIGEN EFECT

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
 THE COUNTRY OF ORIGIN EFFECT
• COUNTRY OF ORIGIN (COO) REFERS TO THE NATION WHERE A
PRODUCT IS PRODUCED OR BRANDED.

• ORIGIN IS USUALLY INDICATED BY MEANS OF A PRODUCT

LABEL, SUCH AS “MADE IN CHINA”.

• WHEN CONSUMERS ARE AWARE OF A PRODUCT’S COO, THEY

MAY REACT POSITIVELY OR NEGATIVELY.

“COUNTRY OF ORIGIN EFFECT, HELPS IN LOCAL MARKET

TO INSTILL A SENSE OF PATRIOTIC FEELING IN THE MINDS
OF PEOPLE”.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 BUYER REACTIONS TO COO ARE
INFLUENCED BY VARIOUS FACTORS
(CZINKOTA,2013)

• FIRST, COO STEREOTYPES VARY DEPENDING ON THE ORIGIN OF THE JUDGE AND ON THE
CATEGORY OF THE PRODUCT BEING JUDGED.

• OPINION VARIES DEPENDING THE NATIONAL ORIGIN OF THE FIRM AND THE LOCATION WHERE
ITS PRODUCT IS ACTUALLY MADE

• AS THE CAPACITY OF COUNTRIES TO PERFORM WELL IN SPECIFIC INDUSTRIES IMPROVES, THE

COO PHENOMENON VARIES OVER TIME.

• THE TENDENCY OF CONSUMERS TO DISCRIMINATE AGAINST FOREIGN PRODUCTS VARIES BY

DEMOGRAPHIC FACTORS.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

COUNTRY-OF-ORIGIN EFFECT
Made in Made in
USA Mexico

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

COUNTRY-OF-ORIGIN EFFECT
Made in Made in
USA Mexico

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 Brand
Identity

Brand
Brand Brand
Image Purpose

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 Brand
Awareness

Brand
Brand
Loyalty
Image Perceived
Quality

(Equity)

Brand
Associations

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
 BRAND ORIGIN ASSOCIATION

• The country with which a firm is associated - usually its home

country
• Mecedes Benz - Germany
• Swatch – Switzerland
• Nokia – Finland
• Outback Steakhouse – Australia

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 COO IS OFTEN INDUSTRY-SPECIFIC

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 INDUSTRY CHAMPIONS

+ Iran - Persian rugs

+ France - Wines, perfumes
+ Russia – Vodka
+ Japan – cars, electronics
+ Switzerland – watches
+ Germany – engineering
+ Italy - design

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 WHY IS THERE A COO EFFECT?

• Economic Factors
1.Absolute Advantage (Smith)
2. Competitive Advantage (Porter)
• Industry Clusters
3. Economic development
• Consumers believe products from developed countries are better than
those from developing countries

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 WHY IS THERE A COO EFFECT?

• Consumer Psychology
1. Consumer Ethnocentrism
• Buyers are disinclined to purchase foreign products because they believe buying
imported products results in job losses and hardship at home
• “Buy American”

2. Consumer Animosity
• Buyers harbor political objections to purchasing products from a specific foreign
country
• “include Islamic nations boycotting American and other Western goods in light of ongoing
political disagreements.”

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

ATTITUDE TOWARD “HIGH-TECHNOLOGY” PRODUCTS
6
5.58
5.32

4,19 4,31 4.31

4,13
4

3.24
3

0
Mexico Netherlands China Taiwan South USA Japan
Korea

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 ATTITUDE TOWARD “AUTOMOBILES”
6
5,50
5,34

5
4,64
4,29 4,35

4
3,49

0
South Korea UK USA Sweden Japan Germany

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 PROMOTING COUNTRY

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
 The 10 Most Culturally Vibrant Brands
(Forbes)

1.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 2.

4.
3.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 5.

6. 7.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 9.

8.

10.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 WHAT ABOUT BRANDS FROM FROM 2016,
NOT IN THE ABOVE LIST, THAT ARE HAVING
A CULTURAL IMPACT AROUND THE GLOBE.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

MANAGING COO IN YOUR PROMOTION
STRATEGY
• Made in examples??
• Along with your group come up with idea for promoting a product
depending on the country and culture 5 min

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 FIGHTING NEGATIVE COO IMAGE
1. Use brand name to create positive COO associations
• Lenovo Thinkpad (purchased IBM name for $6 Billion) – USA (China)
• Audi – German Engineering (Germany)

2. Separate firm origin, design, and manufacturing

• Volkswagen – made in Mexico, GERMAN ENGINEERING
• Toyota – MADE IN USA, JAPANESE DESIGN, profits to Japan
3. Dilute COO by sourcing parts/engineering from several countries
4. Develop a global image to separate your firm from country affiliation
• Global Positioning Strategy – Budweiser
5. Use a distribution system that distributes already accepted complimentary products
• Made in China at Wal-Mart
6. Superior warranty package that gives customer a “free trial”
• Hyundai
7. Move production to a country with a positive COO effect.
• Mattel

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 TOYOTA – 2010
“52 Deaths
Reportedly Tied to Brand value reduced by
Toyota” $5B (Interbrand)

“New Reports of Consumer satisfaction

Runaway Toyotas; dropped by 46
Massive Recall Issued” percentage points

“fucken japs can't even make a

car right?”
ghoststrider45
J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing
 Country
Awareness

Micro
Country
Country
Associations
Brand Country
Loyalty
Equity

Macro
Country
Associations

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 WHAT CAN A GOVERNMENT DO TO REDUCE A POOR COUNTRY
IMAGE?
1. Promote joint efforts by several companies from one country to change consumer
perceptions
• South African and Chilean Wines
2. Attract global events to raise profile of country and consumer perceptions
• South Korea – Olympics 1988
• China – Olympics 2008
• South Africa – World Cup 2010
• Brazil – World Cup 2014
• Brazil – Olympics Rio 2016
• Rusia 2020
3. Educate, condemn, and take responsibility for country’s past (reduce animosity)
• Germany – Holocaust
• USA – Attempts by the Obama administration
• Restart of US – Islam relations (Cairo speech, Libya intervention)
• Nobel Peace Prize

4. Develop National Champions

• Japan – Toyota, Honda, Sony
• South Korea – Samsung, Hyundai
• China – Lenovo, Haier, Baidu

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 WHAT CAN A GOVERNMENT DO TO REDUCE A POOR COUNTRY
IMAGE?

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 SIMON ANHOLT “PLACE BRANDING”
1. through courageous and enlightened social, economic, environmental and foreign policies;
2. through the dynamic development of tourism, foreign investment and exports;
3. through carefully chosen international cultural, sporting and political events;
4. through improved cultural and academic relations with other countries;
5. through a strategic commitment to international development and poverty reduction;
6. through productive engagement with multilateral institutions, regional organizations and with
NGOs at home and abroad;
7. through effective coordination between government, industry and civil society;
8. through enhanced public and private diplomacy overseas;
9. through a visionary long-term approach to innovation, investment and education.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 CLASS ACTIVITY
How is the research project coming up?
In order to help and motivate the groups to work on their RP, we will conduct 3
class activities before the group presentations that will structure your project. It will
be divided in 3 (60 minute) parts :
1. Country Selection and Hofstede analysis
2. FDI SELECTION and culture road
3. Brand analysis and 4 p´s proposal

Only the first 2 teams that deliver the activity with the complete objectives will
receive 0,3 and 0,2 in the grade for the final research project

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing

 CLASS ACTIVITY
• STATE WHAT KIND OF BRAND CULTURE DOES YOUR COMPANY MANAGES
AND HOW IT WILL AFFECT YOUR FDI EXPANSION.
• CONSIDERING YOUR PRODUCT OR SERVICEE TYPE, PRESENT 2 STRATEGIES TO
INCREASE BRAND AWARENESS IN THE TWO MOST OPTIONAL COUNTRIES
YOU HAVE ANALIZED REGARDING THEIR CULTURE.
• REVIEW THE LECTURE “4 P´S” IN THE LECTURE TAB AT VIRTUAL SABANA. WITH
THE PRODUCT OR SERVICE YOU HAVE PREVIOUSLY ESTABLISHED, PRESENT A
NEW 4P STRATEGY TO ONE OF THE COUNTRIES YOU HAVE AS A FINALIST OF
THE QUALITATIVE AND QUANTITATIVE ANALYSIS.

J. Sebastian Betancourt 2020. Impact of Culture on Global Marketing