CHAPTER 4

SOCIAL AND CULTURAL ENVIRONMENTS

SUMMARY

A. Culture, a society’s “programming of the mind,” has both a pervasive and changing
influence on each national market environment. Global marketers must recognize the
influence of culture and be prepared to either respond to it or change it. Human behavior
is a function of a person’s own unique personality and that person’s interaction with the
collective forces of the particular society and culture in which he or she has lived. In
particular, attitudes, values, and beliefs can vary significantly from country to country.

B. Also, differences pertaining to religion, aesthetics, dietary customs, and language and
communication can affect local reaction to brands or products as well as the ability of
company personnel to function effectively in different cultures. A number of concepts
and theoretical frameworks provide insights into these and other cultural issues.

C. Cultures can be classified as high- or low-context; communication and negotiation styles

can in turn, differ from country to country. Hofstede’s social value typology helps
marketers understand cultures in terms of power distance, individualism vs.
collectivism, achievement vs. nurturing, uncertainty avoidance, and long- term versus
short-term orientation. By understanding the self-reference criterion, global
marketers can overcome the unconscious tendency for perceptual blockage and
distortion.

D. Rogers’ classic study on the diffusion of innovation helps explain how products are
adopted over time by different adopter categories. The adoption process that
consumers go through can be divided into multi-stage hierarchy of effects. Rogers’
findings concerning the characteristics of innovations can also help marketers
successfully launch new products in global markets. Recent research has suggested that
Asian adopter categories differ from those found in the Western model. An awareness of
environmental sensitivity can help marketers determine whether consumer and industry
products must be adapted to the needs of different markets.

LEARNING OBJECTIVES

4-1 Define culture and identify the various expressions and manifestations of culture that can
impact global marketing strategies.

4-2 Compare and contrast the key aspects of high- and low-context cultures.

4-3 Identify and briefly explain the major dimensions of Hofstede’s social values typology.

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4-4 Explain how the self-reference criterion can affect decision making at global companies and
provide a step-by-step example of a company adapting to conditions in a global market.

4-5 Analyze the components of diffusion theory and its applicability to global marketing.

4-6 Explain the marketing implications of different social and cultural environments around the
globe.

DISCUSSION QUESTIONS

4-1. Compare “material culture” and “nonmaterial culture.” Why is it important for global
marketers to understand the relationship between them?

Material culture includes physical artifacts created by humans that represent some degree
of significance or have some function, such as clothing or tools. Nonmaterial culture
refers to intangible elements such as the aggregate of religion, attitudes, norms, values,
and the like, which form the cultural structure that guides a particular group or the
functioning of a society.
There is a huge market for clothing, fashion, and gadgets, but different cultures ascribe
different connotations, meanings, and functions to clothing used in places of worship, at
sporting events, in weddings, and so on. Nevertheless, global marketers need to be aware
of cultural convergences resulting from the spread of the Internet. New global consumer
cultures create new consumption markets, and it is up to global marketers to seize these
opportunities.

4-2. What is the difference between a low-context culture and a high-context culture? Name a
country that is an example of each type and offer evidence for your answer.

In a low-context culture, most of the message weight in a communication is carried on by

the verbal component. A priority in such cultures is “getting it in writing,” and lawyers
play an important role in creating and backing up agreements. In a high-context culture,
the context of the communication carries more weight. The role of lawyers is reduced,
and personal obligation and trust are emphasized proportionately. Overall, Japan is a
high-context culture, while the U.S. a low-context culture.

4-3. How important is the self-reference criterion to global marketers in analyzing culture?

Global marketers need to be wary of the problem of self-reference criterion (SRC), as a

poor understanding of cultural differences, traits, habits, and norms may prove to be
costly and embarrassing. Successful companies in a particular culture may not necessarily
replicate their success in another culture. Global marketers need to suspend any personal
assumptions and previous experiences of reality, and constantly check their perceptual
biases and distortions. It is essential to identify and address cultural differences and
measure them objectively in order to have a successful business exchange in the global
market.

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4-4. Briefly explain the social research of Everett Rogers regarding diffusion of innovation,
characteristics of innovations, and adopter categories. How does the adoption process in Asia
differ from the traditional Western model?

Rogers’ work helps marketers understand the social processes at work when a new
product is introduced into a culture or country. The adoption process consists of five
steps, starting with awareness and ending with adoption. In the case of inexpensive
consumer products, adoption means repeat purchase. The rate at which buyers proceed
through the adoption process depends on the five characteristics of innovations: relative
advantage, compatibility, complexity, divisibility, and communicability.

For example, starting in 1991, Russell M. Frederickson successfully launched a chain of

coffee outlets in Hong Kong. Frederickson notes that he started by offering a cup of
coffee that was better than the rest (“relative advantage”) at a price that encouraged
consumers to try it and come back for more (“divisibility”). The shops generated
additional traffic by selling tea; regular tea-drinking patrons eventually “moved up” to
coffee (“compatibility”). Finally, Frederickson staffed the outlets with at least 50%
Chinese so that local consumers could learn about the products from one of their own.

The shops feature posters explaining the various coffee drinks and indicating how they
are pronounced (“communicability”). In view of Frederickson’s clear understanding of
the diffusion process, it is not surprising that he has received many inquiries from Korea,
Taiwan, and Singapore from persons wanting to start franchises. This demonstrates that
both the product itself and the retailing concept exhibit the characteristics of the
innovations described by Rogers. (Source: Russell M. Frederickson, “How to Sell Coffee
in the Land of Tea,” Wall Street Journal (Jan. 23, 1995), p. A16.

The third aspect of Rogers’ work is adopter categories, a way of classifying individuals in
term of their innovativeness. Marketers should focus special efforts on early adopters,
who make up 13.5 percent of the potential market. They exert a great deal of influence on
the mass market for a product, which Rogers calls the early and late majority.

OVERVIEW

The conflicting priorities of commerce and conservation in Ethiopia, the broader acceptance of
coffee worldwide, and the rapid growth of coffee-centric brands such as Starbucks illustrate the
ways that differences in the social and cultural environments impact marketing opportunities and
dynamics around the globe. This chapter focuses on the forces that shape and affect individual,
group, and corporate behavior in the marketplace.

We start with a general discussion of the basic aspects of culture and society and the emergence
of a twenty-first-century global consumer culture. Next, several useful conceptual frameworks
for understanding culture are presented, including Hall’s concept of high- and low-context

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cultures, Maslow’s hierarchy of needs, Hofstede’s cultural typology, the self-reference criterion,
and diffusion theory.

The chapter also cites specific examples of the impact of culture and society on the marketing of
both consumer and industrial products.

ANNOTATED LECTURE/OUTLINE

SOCIETY, CULTURE, AND GLOBAL CONSUMER CULTURE

Both differences and similarities characterize the world’s cultures, meaning that the task of the
global marketer are twofold. First, marketers must study and understand the country cultures in
which they will be doing business. Second, they must incorporate this understanding into the
marketing planning process. In some instances, strategies and marketing programs will have to
be adapted to the local culture; however, marketers should also take advantage of shared cultural
characteristics and avoid unneeded and costly adaptations of the marketing mix.

While marketers should be secure in their own convictions and traditions, an open mind is
required to appreciate the integrity and value of other ways of life and points of view. Although
“culture shock” is a normal human reaction to the new and unknown, successful global
marketers strive to comprehend human experiences from the local point of view.

Culture can be understood as “ways of living, built up by a group of human beings that are
transmitted from one generation to another.”
 (Learning Objective #1)

A culture acts out its ways of living in the context of social institutions, including family,
educational, religious, governmental, and business institutions.

Culture includes conscious and unconscious values, ideas, attitudes, and symbols that shape
human behavior and that are transmitted from one generation to the next.

Culture can be divided into two broad categories:

a) Material culture: the physical component or physical culture: it includes physical objects
and artifacts created by humans such as clothing and tools.
b) Nonmaterial culture: also known as subjective or abstract culture includes intangibles
such as religion, perceptions, attitudes, beliefs, and values.

“Cultural universals” are those elements of culture evident in all societies. These “universals”
include:
 athletic sports
 body adornment
 cooking
 courtship
 dancing
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  decorative art
 education
 ethics
 etiquette
 family feasting
 food taboos
 language
 marriage
 mealtime
 medicine
 mourning
 music
 property rights
 religious rituals
 residence rules
 status differentiation
 trade

Consumption has become the hallmark of postmodern society. As cultural information and
imagery flow freely across borders via satellite TV, the Internet and other communication
channels, new global consumer cultures are emerging. Persons who identify with these cultures
share meaningful sets of consumption-related symbols.

Some of these cultures are associated with specific product categories; marketers speak of
“coffee culture”, “credit card culture,” “pub culture,” etc. This cosmopolitan culture owes its
existence in large part to a wired world in which there is an increasing interconnectedness of
local cultures; it can be exploited by global consumer culture positioning (GCCP).

Attitudes, Beliefs, and Values

If we accept Hofstede’s definition of culture as “the collective programming of the mind,” then it
makes sense to learn about culture by studying attitudes, beliefs, and values.

An attitude is a learned tendency to respond in a consistent way to a given object or entity.

Attitudes are clusters of interrelated beliefs.

A belief is an organized pattern of knowledge that an individual holds to be true about the world.
Attitudes and beliefs are closely related to values.

A value is an enduring belief or feeling that a specific mode of conduct is personally or socially
preferable to another mode of conduct; values represent the deepest level of culture.

Within any large dominant cultural group, there are likely to be subcultures, smaller groups of
people with their own shared subset of attitudes, beliefs, and values; subcultures represent
attractive niche marketing opportunities.

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Religion

Religion is an important source of a society’s beliefs, attitudes, and values.

The world’s major religions include Buddhism, Hinduism, Islam, Judaism, and Christianity.

Religious tenets, practices, holidays, and history directly impact the way people of different
faiths react to global marketing activities.

Example:

a) Hindus do not eat beef, which means that McDonald’s does not serve hamburgers in
India.
b) In the aftermath of the September 2001 terror attacks in New York and Washington, D.C.
and the subsequent American military actions in the Middle East, some Muslims have
tapped into anti-American sentiment by urging a boycott of American brands.

Aesthetics

Within every culture, there is an overall sense of what is beautiful and what is not beautiful, what
represents good taste as opposed to tastelessness or even obscenity, and so on. Such
considerations are matters of aesthetics.

Global marketers need to understand the importance of visual aesthetics embodied in the color or
shape of a product, label, or package.

Likewise, different parts of the world perceive aesthetic styles—various degrees of complexity,
for example—differently. In some cases, a standardized color can be used such as the distinctive
yellow on Caterpillar’s equipment.

Because color perceptions can vary among cultures, such perceptions should be considered in
product packaging and other brand-related communications especially in highly competitive
markets.

There is nothing inherently “good” or “bad” about a color; red is popular in most countries
despite being the color of blood. It represents winemaking and conveys the meaning
“emotional.”

In Korea, it is taboo to write a person’s name in red ink because traditionally red was used to
record the names of the deceased. White is associated with death, mourning, and funerals in
China and other parts of Asia.

Music is an aesthetic component of all cultures, accepted as a form of artistic expression and a
source of entertainment. In one sense music represents a “transculture” not identified with any
particular nation. Rhythm, or movement through time, is a universal aspect of music.

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Music is also characterized by stylistic variation with regional or country-specific associations
(e.g., reggae with Jamaica); music exemplifies the “think global, act local” theme.

Because music plays an important role in advertising, marketers must understand which style is
appropriate to use in their campaigns in a given national market. Although background music
can be used effectively in broadcast commercials, the type of music appropriate for a commercial
in one part of the world may not be acceptable or effective in another part.

Dietary Preferences

Cultural influences are also quite apparent in food preparation and consumption patterns and
habits.

Examples:

a) Domino’s Pizza pulled out of Italy because Italians perceived its product to be “too
American.” In particular, the tomato sauce was too bold and the toppings were too heavy.
b) When Dunkin Donuts first opened in India in 2012, morning business was slow. Why?
Most Indians eat breakfast at home.

These examples underscore the fact that a solid understanding of food-related cultural
preferences is important for any company that markets food or beverages products globally.

Companies that lack cultural sensitivity are bound to make marketing mistakes.

While some food preferences remain deeply embedded in culture, there is plenty of evidence that
global dietary preferences are converging. For example, the “fast food” culture has gained
increased acceptance around the world.

There are several explanations for this:

a) Heads of families in many countries are pressed for time and are disinclined to prepare
home-cooked meals.
b) Young people are experimenting with different foods.
c) The global tourism boom has exposed travelers to pizza, pasta, and other ethnic foods.
d) Shorter lunch hours and tighter budgets are forcing workers to find a place to grab a
quick, cheap bite before returning to work.

As food-related cultural differences become less relevant, such convenience products are likely
to be purchased in any country wherever consumers’ disposable incomes are high enough to
afford them.

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However, such processes can also provoke a nationalist backlash.

 To counteract the exposure of its young citizens to le Big Mac and other American-style
fast foods, the French National Council of Culinary Arts designed a course of French
cuisine and “good taste” for elementary school students.

Language and Communication

The diversity of cultures around the world is reflected in language.

Linguists divide the study of spoken or verbal language into four areas:
 syntax (rules of sentence formation)
 semantics (system of meaning)
 phonology (system of sound patterns)
 morphology (word formation).

Unspoken or nonverbal communication includes gestures, touching, and other forms of body
language that supplement spoken communication.

The spoken and unspoken aspects of language are included in the broader linguistic field of
semiotics, which is the study of signs and their meanings.

In global marketing, language is a crucial tool for communicating with customers, suppliers,
channel intermediaries, and others. Blunders in product names and advertising are costly.

THE CULTURAL CONTEXT

THE CULTURAL CONTEXT
Globe to Globe: Shakespeare Around the World

Why would a small troupe of actors and a handful of stage managers take it upon themselves to
produce an English-language version of Hamlet in every country on the planet over the course of
two years?

How can a centuries-old play be relevant to today’s audiences? The dialogue draws people in. In
addition, the architecture of the play translates well to many cultures.

Hamelt’s meaning also took on a local resonance that varied from one country to another. When
the play was staged in Phnom Penh, Cambodia, a connection between Claudius and Khmer
Rouge revolutionary Pol Pot was seen.

Technology is providing interesting new opportunities for exploiting linguistics in the name of
marketing. Young people throughout the world are using mobile phones to send text messages; it
turns out that certain number combinations have meaning in particular languages.

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An impact of globalization on culture is the diffusion of the English language around the globe.
More people speak English as a second language than as a native language.

The challenges of nonverbal communication are formidable (e.g., In the Middle East, Westerners
must not reveal the soles of their shoes or pass documents with the left hand).

Westerners must pay attention not only to what they hear but also to what they see when
conducting business in such cultures.

Two important communication issues may emerge:

 Sequencing concerns whether the discussion goes directly from point A to point B or
seems to go off on tangents.
 Phasing pertains to whether certain important agenda items are discussed immediately or
after the parties have taken some time to establish rapport

Marketing’s Impact on Culture

Universal aspects of the cultural environment represent opportunities for global marketers to
standardize some or all elements of a marketing program. The astute global marketer often
discovers that much of the apparent cultural diversity in the world turns out to be different ways
of accomplishing the same thing.

In recent times, increasing travel and improving communications have contributed to a

convergence of tastes and preferences in a number of product categories.

The impact of marketing and of global capitalism on culture can be controversial; sociologist
Ritzer laments the “McDonaldization of culture.”

The international Slow Food movement boasts tens of thousands members worldwide; it is
founded on the idea that things should not taste the same everywhere (Exhibit 4-7).

HIGH- AND LOW-CONTEXT CULTURES

 (Learning Objective #2)

Edward T. Hall has suggested the concept of high- and low-context as a way to understand
different cultural orientations.

In a low-context culture, messages are explicit and specific; words carry most of the
communication power.

In a high-context culture, less information is contained in the verbal part of a message. More
information resides in the context of communication, including the background, associations, and
basic values of the communicators.

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High-context cultures function with much less legal paperwork than low-context cultures (e.g.,
Japan, Saudi Arabia, and other high-context cultures place emphasis on a person’s values and
position or place in society).

In a low-context culture such as the U.S., Switzerland, or Germany, deals are made with less
information about character, background, and values of the participants. Much more reliance is
placed upon words and numbers.

In a high-context culture, a person’s word is his bond. This culture emphasizes obligations and
trust as important values. There is less need to anticipate contingencies and provide for external
legal sanctions. Feelings of obligation and honor take the place of impersonal legal sanctions.

Exceptions to the general tendency are found in subcultures. The U.S. is a low-context culture
with high-context subcultures (e.g., the world of the central banker, for example, is a
“gentleman’s” world. The word of the banker is many times sufficient for the borrowing of
millions of dollars).

(Table 4-1 summarizes some of the ways in which high- and low- context cultures differ).

HOFSTEDE’S CULTURAL TYPOLOGY

 (Learning Objective #3)

Hofstede is well known for research studies of social values suggesting that the cultures of
different nations can be compared in terms of five dimensions (see Table 4-2). Three of the
dimensions refer to expected social behavior, the fourth dimension is concerned with “man’s
search Truth” and the fifth reflects the importance of time.

The dimensions are:

1. The first dimension is a reflection of the degree to which individuals in a society are
integrated into groups. In individualist cultures: each member of society is primarily
concerned with his or her own interests and those of his or her immediate family. In
Collectivist cultures, all of society's members are integrated into cohesive in-groups.
High Individualism – U.S. and Europe
Low Individualism – Japan and other Asian countries

2. The second dimension: Power distance: is the extent to which the less powerful members of
a society accept – even expect – power to be distributed unequally. Hong Kong and France
are both high power distance countries. Germany and Austria are low power distance
countries as well as the Netherlands and Scandinavia.

3. The third dimension: Uncertainty avoidance: This is the extent to which the members of a
society are uncomfortable with unclear, ambiguous, or unstructured situations. Members of
uncertainty-avoiding cultures may resort to aggressive, emotional, intolerant behavior; they

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 are characterized by a belief in absolute truth and are more tolerant of persons whose
opinions differ from their own. Examples: Denmark, Sweden, Ireland, and the United States.

4. The fourth dimension: Achievement: This dimension describes a society in which men are
expected to be assertive, competitive, and concerned with material success, and women
fulfill the role of nurturer and are concerned with issues such as the welfare of the children.
Examples are Japan and Austria. Nurturing, by contrast, describes a society in which the
social roles of men and women overlap, with neither gender exhibiting overly competitive
behavior. Examples are Spain, Taiwan, the Netherlands, and the Scandinavian countries.

5. The fifth dimension: Long-term orientation vs short-term orientation

For cultural dimensions in Asia, researchers developed a Chinese Value Survey (CVS). This
dimension concerns “a society’s search for virtue,” rather than the truth.

a) A long-term orientation (LTO) versus short-term orientation to assess the sense of

immediacy within a culture, whether gratification should be immediate or deferred.
b) Long-term values include persistence (perseverance), a general tenacity in the pursuit of
a goal.
c) Ordering relationships by status reflects the presence of societal hierarchies, and
observing this order indicates the acceptance of complementary relations.
d) Thrift manifests itself in high savings rates.
e) A sense of shame leads to sensitivity in social contacts.

Hofstede’s work provides marketers insights that can guide them in a range of activities,
including product development, interacting with business partners, and conducting sales
meetings.

For example, understanding the time orientation of one’s native culture compared to that of
others is crucial.

In Japan, Brazil, and India, building a relationship with a potential business partner takes
precedence over transacting the deal. People from cultures that emphasize the short term must
adapt to the slower pace of business in some countries.

The Japanese concept of gaman (persistence) provides insight into the willingness of Japanese
corporations to pursue research and development projects for which the odds of short-term
success appear low.

Using Hofstede’s framework can provide useful insights into the creation of culturally
appropriate consumer brand images.

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THE SELF-REFERENCE CRITERION
√ (Learning Objective #4)

A person’s perception of market needs is framed by his or her own cultural experience. A
framework for systematically reducing perceptual blockage and distortion was developed by
James Lee.

The unconscious reference to one’s own cultural values is the self-reference criterion (SRC).
To eliminate or reduce cultural myopia, Lee proposed a four-step framework.

 Define the problem or goal in terms of home country cultural traits, habits, and norms.
 Define the problem or goal in terms of host-country cultural traits, habits, and norms.
Make no value judgments.
 Isolate the SRC influence and examine it carefully to see if it complicates the problem.
 Redefine the problem without the SRC influence and solve for the host-country market
situation.

SRC teaches that a vital, critical skill of the global marketer is unbiased perception, the
ability to see what is so in a culture.

SRC can be a negative force in global business leading to misunderstanding and failure. A
person must suspend assumptions based on prior experience and success and to be preapred
to acquire new knowledge about human behavior and motivation.

Diffusion Theory
√ (Learning Objective # 5)

Sociologist Everett Rogers distilled his research into three concepts that are extremely useful to
global marketers: the adoption process, characteristics of innovations, and adopter categories.
An innovation is something new. However, a product already introduced in one market may be
an innovation elsewhere because it is new and different for the targeted market.

Managers find themselves marketing products that may be, simultaneously, innovations in some
markets and mature or declining products in other markets.

The Adoption Process

The adoption process - the mental stages from the first knowledge of an innovation to product
adoption or purchase:
 Awareness. The customer becomes aware for the first time of the product or
innovation. Global marketers create awareness through general exposure to advertising
messages.
 Interest. The customer is interested enough to learn more. The customer will engage in
research and seek information.

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  Evaluation. The individual mentally assesses the product's benefits and decides whether
or not to try it.
 Trial. Most customers will not purchase expensive products without a "trial." For
inexpensive products, an initial single purchase is defined as trial.
 Adoption. The individual either makes an initial purchase or continues to purchase a
product. Sales reps and word of mouth are forces in the decision to buy.

Characteristics of Innovations

Five factors affect the rate of adoption:

 Relative advantage: How a new product compares with existing products or methods.
 Compatibility: How consistent a product is with existing values and past experiences.
 Complexity: How difficult the new product is to understand and use.
 Divisibility: How easy it is to try a product on a limited basis without great expense.
 Communicability. How well the benefits or value of a product are communicated.

Adopter Categories

Adopter categories are classifications of individuals in a market on the basis of innovativeness.

(See Figure 4-3)

Five categories have been assigned to the segments of a normal distribution:

 The first 2.5 percent to purchase a product are innovators.
 The next 13.5 percent are early adopters
 The next 34 percent are the early majority
 The next 34 percent are the late majority
 The final 16 percent are laggards.

Innovators are more venturesome, more cosmopolitan, and wealthier than those who adopt later.

Earlier adopters are the most influential people in their communities and have great influence on
the early and late majority, the bulk of the adopters of any product.

Early adopters tend to be younger, with higher social status, and a more favorable financial
position than later adopters.

Persuading innovators and early adopters to purchase a product is critical; these groups must
make the first move in order for eventual penetration of a product into the broader market.

Diffusion of Innovations in Pacific Rim Countries

Since Japan, South Korea, and Taiwan are high-context, homogeneous cultures while the U.S. is
a low-context, heterogeneous culture, research showed that Asia had faster diffusion rates.

Adoption would proceed more quickly in markets where innovations were introduced late,
allowing time to assess the relative advantages, compatibility, and other product attributes.
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MARKETING IMPLICATIONS OF SOCIAL AND CULTURAL ENVIRONMENTS
 (Learning Objective #5)

The various cultural factors described earlier can exert important influences on consumer and
industrial products marketed around the globe.

Environmental sensitivity reflects the extent to which products must be adapted to the culture-
specific needs of different national markets.

At one end of the continuum are environmentally insensitive products that do not require
significant adaptation; at the other are products that are sensitive to environmental factors.

The greater the environmental sensitivity, the more managers must address country-specific
economic, regulatory, technological, social, and cultural environmental conditions.

Intel’s microprocessors can be sold anywhere because a chip is a chip, but food products have
high environmental sensitivity because of sensitivity to climate and culture.

The sensitivity of products can be represented on a two-dimensional scale (Figure 4-5). The
horizontal axis shows environmental sensitivity, the vertical axis the degree for product
adaptation needed.

At the upper right of Figure 4-5 are products with high environmental sensitivity. Food
sometimes falls into this category because it is sensitive to climate and culture.

Research studies show that, independent of social class and income, culture is a significant
influence on consumption behavior and durable goods ownership.

Consumer products are probably more sensitive to cultural difference than are industrial
products.

Hunger is a basic physiological need in Maslow’s hierarchy; everyone needs to eat, but what we
want to eat can be strongly influenced by culture.

Evidence from the front lines of the marketing wars suggests that food is probably the most
sensitive category of consumer products.

Hydration is a universal physiological need (see Exhibit 4-10). As is the case with food and
cooking, however, the particular liquids people want to drink can be strongly influenced by
culture. Coffee is a beverage category that illustrates the point.

On the European continent, coffee has been consumed for centuries. By contrast, Britain has
historically been a nation of tea drinkers, and the notion of afternoon tea is firmly entrenched in
British culture.

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CASES

Case 4-1: Cotton, Clothing Consumption, Culture: From Small Beginnings to a Global
Cultural System

Overview: Cotton has been a very popularly traded commodity throughout history, and its
popularity continues to rise all over the world. Indeed, demand is expected to outstrip supply
soon. Cotton is used not only to make almost every type of clothing but also in industrial
products, but through its status as clothing, cotton has significant socio-cultural impacts as well.

India, China, and the United States are the largest producers of cotton, responsible for over half
of the total production volume in the world. Whereas China uses most of the cotton it grows
internally, the United Sates exports between 40 and 60 percent of the cotton it produces. Ethics,
sustainability, and environmental impacts have become major factors that determine how cotton
is grown and used. Cotton is an especially resource-intensive crop, and attention has focused on
genetically modified cotton and organic cotton as possible solutions. A major social issue is the
labor practices in some cotton-producing countries that have led to greater demands, driven by
organizations, consumers, and the press, for fairer conditions and initiatives like free trade.

Discussion Questions

4-5. To what extent does the consumption of cotton differentiate particular cultural contexts
from others?

Given that culture is prescriptive and determines consumption patterns in several

contexts, it is inevitable that cotton-related products vary from one cultural setting to
another. Moreover, since there is a wide variety of cotton-made clothing for different
weather conditions, some products will be more amenable to specific cultural contexts
than others.

4-6. The marketing records of the fashion retailers highlighted in the case suggest that cotton
clothing is a major success. What do you think should be done by these and organizations in
related businesses to ensure that this success is maintained and built upon in the future?

Essentially, contemporary marketing is anchored on value creation and delivery. For any
type of business to succeed, it must meet its consumers’ needs and ensure that they get
value in their transactions. For cotton clothing businesses to remain successful, they
should look at improving their value propositions to the consumers along the key areas
that underpin marketing. A good way to discuss this in detail will be to look at how these
businesses create and deliver value around marketing mix elements—product, price,
place (distribution), and promotion (marketing communications).

4-7. The case indicates that some cotton-producing countries need to improve their ethical
standards. What measures do you think could be put in place to ensure significant improvement
on this front and in global sustainable cotton production?

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 Opinions will vary among students and they may propose a number of measures. Some
likely suggestions include:
• More robust action from the international community in the areas of politics,
penalties, and diplomacy toward the affected countries.
• Further action from international agencies such as the International Labour
Organization (ILO) to pressure these countries into taking more ethical stances on
cotton production.
• Intensified efforts by non-governmental organizations (NGOs) and pressure
groups through contemporary means—such as social media—to call for better
approaches to cotton production in these countries.

4-8. Assume you have been invited to speak on the topic “Global Cotton Consumption: The
Good, the Bad, and the Ugly.” What key points would you cover?

Since this question is meant to have students summarize the key issues in this case study,
useful subheadings could be:
— Cotton and clothing across cultures
— Cotton production across the continent
— Drivers for cotton consumption
— Ethical consumption of cotton
— Organic cotton
— Fashion retailers cashing in on the increasing trend of cotton consumption

4-9. Do you think the adoption process in Roger’s product diffusion theory is applicable to
cotton-related products? Justify your standpoint with examples.
To address this question, students are expected to examine the key stages in Roger’s
adoption process—a series of mental stages that an individual goes through from the first
time they hear about an innovation through to the time of purchase. These stages are:
— Awareness
— Interest
— Evaluation
— Trial
— Adoption

These stages are also applicable to most cotton-related products. When consumers
become aware of such products—for instance, specific types of clothing—they may
develop an interest in them and seek to evaluate their suitability and ability to provide the
desired value. Current marketing trends suggest that consumers appreciate opportunities
to try on clothing before committing to adopting them at the final stage. This also applies

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 to other cotton-related products that business purchasers use, such as fishnets and
archival papers.

Case 4-2: Dubai’s Evolution from a Fishing Village to the Host of Expo 2020

Overview: The case highlights Dubai’s growth from its humble beginnings to one of the world’s
top tourist destination. It discusses how Dubai used tourism and other drivers to diversify its
economy to reduce its dependency on oil. Further, it highlights the importance of the upcoming
Expo 2020, which Dubai will be hosting, and its implications for the city’s tourism sector. The
city has an inclusive and multicultural environment, with a wide range of activities for everyone.
It is a true cosmopolitan city, with 83 percent of its residents born outside the country.

Discussion Questions

4-10. What role do cultural and social factors play in building Dubai’s tourism appeal? How
well do you think Dubai has managed to bring the East and the West together?

Dubai’s global appeal lies in the fact that it is welcoming to all people from all cultures
from around the world. It has positioned itself as a warm and inviting country that
embraces its heritage but is still modern and progressive. On the one hand, it proudly
boasts about its souqs and spices trading; on the other, it has shown its ability to build
trendy malls, recreational spaces, and other infrastructure.

4.11. Indian tourists account for the biggest segment of total tourism in Dubai. Discuss the role
of Bollywood and other factors that attract Indian tourists to Dubai.

Bollywood is an effective way to connect with the Indian target market and is widely
used to attract tourists and in marketing communication. Actors and performers are often
invited to events in the city, attracting fans and tourists. Souqs are also famous in the
region for their jewelry, and gold also has a special deep-rooted cultural significance for
Indians.

4.12. Comment on the growth of Dubai as a tourist destination and how other economic drivers
have contributed to it.

Dubai’s economy has become increasingly diversified due to drivers such as tourism,
aviation, business, retail, hospitality, and real estate. All these factors are inter-linked and
impact each other. Growth in one of these drivers will result in growth for tourism in
Dubai and vice-versa.

4.13. Dubai aims to increase the number of tourists from beyond its tradition markets. What
changes, if any, will be needed in its targeting and communication strategy to encourage
tourists from non-traditional markets?

Offering easy visas will help to attract more tourists. Additionally, Dubai’s tourism may
benefit from market-specific campaigns that are socially and culturally relevant. For
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 example, bringing Bollywood celebrity Shah Rukh Khan on board has been hugely
successful in attracting Indian tourists. Similarly, collaborating with popular celebrities
from non-traditional markets and developing targeted social media campaigns would also
benefit tourism.

4.14. Discuss the role of Expo 2020 in further boosting Dubai’s tourism. Will Dubai be able to
sustain its gains in tourism after the expo?

The expo is expected to bring a large number of tourists to Dubai. The events and
preparation leading up to the expo are contributing to the overall economy. With
infrastructure, polices, and systems in place, Dubai will continue to draw tourists beyond
2020.

TEACHING TOOLS AND EXERCISES

Additional Cases:

"Tailoring Your Strategy to Fit the Culture" by Marieke de Mooij, Insight Magazine, June 2010;
IIR026-PDF-ENG.

"EMC2: Delivering Customer Centricity" by Thomas Steenburgh and Jill Avery, April 2011.
Harvard Business School 511124-PDF-ENG.

"Dacia Duster SUV" by Marina Apaydin, Hantulie Oana, and Nicoleta, January 2011, Richard
Ivey School, Product Number 910A31-PDF-ENG.

“Marketing: Who’s Really Minding the Store Globally”? Linda C. Ueltschy,; Irene Herremans;
John K. Ryans Jr. HBS BH190.

“Colgate Max Fresh: Global Brand Roll-Out”, John A. Quelch, Jacquie Labatt-Randle, HBS
508009.

Activity: Students should be preparing or presenting their Cultural-Economic Analysis and

Marketing Plan for their country and product as outlined in Chapter 1.

Out-Of-Class Reading: As an outside reading assignment, students will read how expanding
into adjacent markets is tougher than it looks; three-quarters of the time, the effort fails. Here is
how to change those odds dramatically.

Zook, Chris, and Allen, James. “Growth Outside the Core.” Harvard Business Review 81, no. 12
(December, 2003), pp. 67-73.

Cross-Cultural Differences: To assess cross-cultural differences, students will talk to people

from a different country. They can check with the office responsible for coordinating
international students to obtain names. Interview at least three people and get responses to the
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following questions: (a) What country do you come from? (b) What is your first language? (c)
Describe you country’s culture in terms of the role of women in the workforce, the benefits
provided to employees, how managers treat their employees, and general management practices.
(d) What were the greatest difficulties you had in adapting to your new culture? (e) What advice
would you give me if I were in a marketing management position in your country?

Internet Exercise: Have students go to the homepage of The Internationalist

(www.internationalist.com). Here they can start to explore the world. Have them browse around
the sites and then click on International Business. They should select 2-3 countries in which they
have an interest. Students are to write a 1-page impression of findings regarding the culture of
these countries and should be prepared to discuss those findings with the class.

Videos:

U.K. Bellwether Report: Marketers Are Pessimistic About 2012 – European Companies are
scaling back marketing plans for 2012.
http://adage.com/article/global-news/u-k-bellwether-report-marketers-pessimistic-2012/232201/

Four Seasons Embraces Digital Marketing, Virtual Experiences – How they are coping with
advertising changes worldwide, and the new moves they are making.
http://adage.com/article/cmo-interviews/seasons-embraces-digital-marketing-virtual-
experiences/232055/

Film: Assign the film “Rising Sun.” The movie is a murder mystery based on the culture clash
between Los Angeles police and Japanese multinational business interests. It is entertaining and
educational at the same time.

SUGGESTED READING

Books

Abegglen, James C., and George Stalk Jr. Kaisha, The Japanese Corporation. New York: Basic
Books, 1985.

Alfino, Mark, John S. Caputo, and Robin Wynyard. McDonaldization Revisited: Critical Essays
on Consumer Culture. Westport, CT: Praeger, 1998.

Benedict, Ruth. Patterns of Culture. Boston: Houghton Mifflin, 1959.

Brislin, R. W., W. J. Lonner, and R. M. Thorndike. Cross-Cultural Research Methods. New

York: John Wiley & Sons, 1973.

Dale, Peter N. The Myth of Japanese Uniqueness. New York: St. Martin's Press, 1986.

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Featherstone, Mike, ed. Global Culture: Nationalism, Globalization and Modernity. London:
Sage Publications, 1990.

Hall, Edward T. Beyond Culture. Garden City, N.Y.: Anchor, 1976.

_____ and Mildred Reed Hall. Hidden Differences: Doing Business with the Japanese. New
York: Doubleday, 1990.
_____ and Mildred Reed Hall. Understanding Cultural Differences. Yarmouth, ME: Intercultural
Press, 1990.

Harris, Philip R., and Robert T. Moran. Managing Cultural Differences: High Performance
Strategies for a New World of Business, 3d ed. Houston: Gulf Publishing Company,
1991.

Hofstede, Geert. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill,
1991.

Lewis, Richard D. When Cultures Collide. London: Nicholas Brealey Publishing, 2000.

Moran, R. and W. Stripp. Dynamics of Successful International Business Negotiations.

Houston: Gulf Publishing Company, 1991.

Articles

Alden, Dana L., Jan-Benedict Steenkamp, and Rajeev Batra. “Brand Positioning through
Advertising in Asia, North America, and Europe: The Role of Global Consumer
Culture.” Journal of Marketing 63, no. 1 (January 1999), pp. 75-87.

Bonvillian, Gary, and Willliam A. Nowlin. “Cultural Awareness: An Essential Element of Doing
Business Abroad.” Business Horizons 37, no. 6 (November 1994), p. 44.

Dulek, Ronald E., John S. Fielden, and John S. Hill. “International Communications: An
Executive Primer.” Business Horizons 34, no. 1 (January/February 1991), pp. 20-25.

Fedor, Kenneth J. and William B. Werther, Jr. “Making Sense of Cultural Factors in
International Alliances.” Organizational Dynamics, 24, no. 4 (Spring 1995), pp. 33-48.

Fitzgerald, Nora. “Oceans Apart, but Closer than You Think.” World Trade, (February 1996), p.
58.

Ford, John B., Michael S. LaTour, and Tony L. Henthorne. “Perceptions of Marital Roles in
Purchase Decision Processes: A Cross Cultural Study,” Journal of the Academy of
Marketing Science, 23, no. 2 (Spring, 1995), pp. 120-131.

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Ford, John B., and Earl D. Honeycutt, Jr. “Japanese National Culture as a Basis for
Understanding Japanese Business Practices.” Business Horizons 35, no. 6
(November/December 1992), pp. 27-34.

Froz, Nadeen and Taghi Ramin. “Understnding Cultural Variables is Critical to Success in
International Business.” International Journal of Mangement 21, no. 3 (2004), pp. 307-
324.

Herbig, Paul A., and Hugh E Kramer. “Do’s and Don’ts of Cross-Cultural Negotiations.”
Industrial Marketing Management 21, no. 4 (November 1992), pp. 287-298.

Hofstede, Geert, and Michael Harris Bond. “The Confucius Connection: From Cultural Roots to
Economic Growth.” Organizational Dynamics, (Spring 1988), pp. 5-21.

Jacobs, Laurence E., Charles Keown, Reginald Worthley, and Kyung-I Ghymn. “Cross-Cultural
Colour Comparisons: Global Marketers Beware!” International Marketing Review 8, no.
3 (1991), pp. 21-30.

Kim, Donghoon, Yigang Pan, and Heung Soo Park. “High- Versus Low-Context Culture: A
Comparison of Chinese, Korean, and American Cultures.” Psychology & Marketing 15,
no. 6 (September 1998), pp. 507-521.

Lewis, Maureen. “Why Cross-Cultural Training Simulations Work.” Journal of European

Industrial Training, 29, no. 7 (2005), pp. 595-598.

Lin, Carloyn A. “Cultural Values Reflected in Chinese and American Television Advertising.”
Journal of Advertising 30, no. 4 (Winter 2001) pp. 83-94.

Manrai, Lalita A., and Ajay K. Manrai. “Current Issues in the Cross-Cultural and Cross-National
Consumer Research.” Journal of International Consumer Marketing 8, no. 3-4 (1996),
pp. 9-22.

Menger, Richard. “Japanese and American Negotiators: Overcoming Cultural Barriers to

Understanding.” Academy of Management Executive 13, no. 4 (November 1999), pp.
100-101.

Mintu, Alma T., and Roger J. Calantone. “A Comparative Approach to International Marketing
Negotiation.” Journal of Applied Business Research 7, no. 4 (Fall 1991), pp. 90-97.

Money, R. Bruce, Mary C. Gilly, and John L. Graham. “Explorations of National Culture and
Word-of-Mouth Referral Behavior in the Purchase of Industrial Services in the United
States and Japan.” Journal of Marketing 62, no. 4 (October 1998), pp. 76-87.

Reardon, Kathleen Kelley, and Robert E. Spekman. “Starting Out Right: Negotiating Lessons for
Domestic and Cross-Cultural Business Alliances.” Business Horizons 37, no. 1 (January-
February 1994), pp. 71-79.

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Ross, Martin S. “The Effects of Culture and Socioeconomics on the Performance of Global
Brand Image Strategies.” Journal of Marketing Research 32 (May 1995), pp. 163-175.

Shane, Scott A. “The Effect of Cultural Differences in Perceptions of Transactions Costs on

National Differences in the Preference for International Joint Ventures.” Asia Pacific
Journal of Management 10, no. 1 (1993), pp. 57-69.

Sivakumar, K., and Cheryl Nakata. “The Stampede toward Hofstede's Framework: Avoiding the
Sample Design Pit in Cross-Cultural Research.” Journal of International Business
Studies 32, no. 3 (2001), pp. 555-574.

Schneider, Susan C., and Arnoud De Meyer. “Interpreting and Responding to Strategic Issues:
The Impact of National Culture.” Strategic Management Journal 12, no. 4 (May 1991),
pp. 307-320.

Tung, Rosalie L. “Handshakes Across the Sea: Cross-Cultural Negotiating for Business
Success.” Organizational Dynamics 19, no. 3 (Winter 1991), pp. 30-40.

Usunier, Jean-Claude G. “Business Time Perception and National Cultures: A Comparative

Survey.” Management International Review 31, no. 3 (Third Quarter 1991), pp. 197-217.

Yeh, Ryh-song, and John J. Lawrence. “Individualism and Confucian Dynamism: A Note on
Hofstede's Cultural Root to Economic Growth.” Journal of International Business
Studies 26, no. 3 (1995), pp. 655-669.

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