Chapter 11- Culture and international marketing management

Since the new approach to marketing is seen as the most appropriate and effective way of
dealing with consumers within the expanding and increasingly integrated market, there are
several problems which marketers must face with cross-border markets. The question of
adapting products and marketing strategies to suit the needs and wishes of the con- sumer
lies at the heart of the intercultural marketing approach.
Marketing is an integral part of a company’s activities. It tries to balance customer needs
with the aims and resources of the organisation. Wall and Rees (2004) separate out mar-
keting activities as follows:

1. Market analysis with at least three elements:

 environment analysis: this involves making an inventory of the risks and opportuni-
ties in the company’s environment;
  buyer behaviour: the company needs to establish the profile of its (potential)
custom- ers and to know how and why they buy;
 market research: this is the way information concerning the company’s customers
and environment is collected.

2. Marketing strategy. Once a market has been scanned using the above tools, the company
has to develop a strategy to give a meaning and direction to its marketing activities. The
following strategies are often used:
 market segmentation: taking a group of (potential) customers who share certain
characteristics (such as age or income range or occupational profile);
 marketing mix: comprising, apart from the product itself, price, promotional activi-
ties and place.

The various marketing activities are integrated into the organisation through planning and
management itself. Through planning, market opportunities can be evaluated in rela- tion to
the resources of the enterprise with a view to attaining its goals. Management is intent on
running the whole process effectively so that the customers’ needs and wishes are met.
However, this classification of marketing activities in terms of market, strategy, planning and
management, as well as the strategy of the marketing mix, has its critics. Some experts see
these approaches as being traditional ones that no longer meet pres- ent-day needs.

Traditional views and new ideas concepts

As Welford et al. (2008) note, experts are increasingly questioning the effectiveness of the
marketing mix approach. They argue that market-driven management should be more than
a succession of ‘ordered functions’. They see a modern concept of marketing with a stronger
customer focus, one that entails not only the notion of anticipating and responding to
customer needs, but also that of defining and delivering customer value through a market-
oriented business strategy. This means that the whole market- ing function of a company
should no longer be a separate unit; the function should be seen as a collective one
whereby departments link up to perform various tasks and processes. This prescription is,
according to Welford et al. (2008), closely linked to the develop- ment of relationship
marketing. Here, too, the focus is less on the marketing mix and more on the development
of relationships that firmly link the company to the market. These relationships comprise
not just personal and organisational ones, but also the creation of networks that the authors
define as ‘sets of relationships and interactions performed within specific relationships’.
Relationship marketing management is essentially about connecting with customers
through continual transactions and exchanges whereby the expectations of customers are
not only met but also, if possible, exceeded.

When looking for ways of establishing sustainable relations with and between consum- ers,
companies are turning more and more to social media for marketing purposes. In fact,
according to marketers worldwide, social network applications now receive priority over
digital advertising and e-mail marketing. Enterprises are now setting up marketing strate-
gies that bring not only change to corporate communication and marketing but also a real
cultural revolution to the whole company. The switch from the ‘mass media’ to ‘relational
media’ encourages companies to listen to consumers and to enter into dialogue with them.

International Marketing

According to Wall and Rees (2004: 306), ‘international marketing can be simply defined as
marketing activities that cross national borders’. They do add, however, that these activities
occur at three levels in line with the focus of a company’s operations:

 Companies whose sales for the most part are made in the domestic market and
consider exports to be less important.

 Multinational companies selling throughout the world that consider their country of
origin or host country in the same way as the other market environments in which
they are involved.

 Those companies – usually multinationals – that want to adopt a global marketing

strat- egy by identifying products or services with certain similarities in certain
markets, and pursuing a single, global marketing strategy for them (Coca-Cola being
an obvious example). Consumer products as well as industrial products are all
potential candidates for the global market, particularly when there is little or no need
to adapt them for local consumption (telecommunications and pharmaceuticals are
examples).

The application of international marketing depends not only on the target market but also on
the marketing orientation of the company. There are five common marketing orienta- tions:
production, customer, strategic marketing, sales and social marketing. The last two are
described below.

Companies with a sales orientation try to sell the same product domestically and in a large
number of countries where consumer characteristics are similar and, as Daniels et al. (2011:
640) point out, ‘where there is also a great deal of spillover’ between countries when it comes
to product information.

Increasingly, however, exporting companies are having to adopt a social marketing

orientation. This entails not only knowing how a product is bought, but also how it is
disposed of, not only knowing why a product is bought, but also how it could be modified in
some way to make it more socially desirable. Furthermore, for their international mar- keting
to succeed, these companies have to take into account the effect of their products on all
stakeholders – such as consumer associations – so that they have regard for the concept of
social responsibility.

A change in orientation may be necessary because of legal, cultural or even economic

reasons. Such a change may compel the enterprise to modify its products to meet the needs of
local consumers. The real reason for a change in orientation is often a cultural one. A switch
from one product to another, a change in colour preferences or choice of materials is difficult
to predict. Marketers just cannot determine in advance what the consumer is going to buy –
not even when they are surveying their home country. Making such pre- dictions in foreign
markets is as difficult, if not more so, when it comes to selling new products, or at least
products that are unknown to the consumers there.

Intercultural Marketing

The question of adapting products and marketing strategies to suit the needs and wishes of
the consumer lies at the heart of the intercultural marketing approach. According to Usunier
and Lee (2005), intercultural marketing is as much to do with localising as with globalising.
The intercultural marketing approach takes account of criteria related to geo- graphy and
nationality while, at the same time, using criteria to do with consumer attitudes, preferences
and lifestyles related to age, class and ethnicity, as well as to occupation.

Intercultural marketing is made easier if the conditions for identification with the pro- ducts
are present in the target market. If consumers are to buy a certain product they need to
identify with it in some way. Usunier and Lee (2005: 232) also maintain that consumers:

buy the meaning that they find in products for the purpose of cultural identification, based on
the desire for assimilation in a certain civilization.

The elements involved in the process of cultural identification are, according to the authors,
twofold:

 the notion of identity (the need to reproduce the national culture such as it is, the
desire to feel at home);

 the notion of exoticism (the desire to escape from one’s culture and to experience
other values, other ways of living).

These notions are closely interlinked in a rather ambiguous way in the identification pro-
cess, so a straightforward description of the approach is difficult to make. That is why it is
preferable to make clusters of countries or consumers who share ‘meaningful cultural
characteristics’.

There are, in their analysis, ‘geographical cultural affinity zones’ which, to a large extent,
resemble national cultural groups; and ‘cultural affinity classes’, which are formed using
different kinds of segmentation. Usunier and Lee (2005: 232) give an example of such a class
composed of people between the ages of 15 and 20 from Japan, Europe and the US:
They have a tendency to share common values, behaviour and interests, and tend to present
common traits as a consumer segment; their lifestyles converge worldwide irrespective of
national borders. Such cultural affinity classes can be an ideal target for standardised products
because they have a sense of belonging to a common age, gender or income group across
different coun- tries. They may also share a common channel of communication, particularly
the web and satellite television.

Cross-cultural consumer behaviour

A certain understanding of cultural differences is indispensable for effective communica- tion

(see Figure 11.2) with consumers from different backgrounds. However, according to Kaynak
and Jallat (2004), the importance of geographic frontiers and politics will gradually diminish
because of changes in the economic environment and the evolution of consumer behaviour.
Europe offers an example of such changes, as do the young generations of consumers in more
and more countries. They increasingly behave in the same way. Even in China there is
evidence of the influence of the Confucian system of values retreating among the young to
make way for a more individualist attitude in their buying habits.

Although differences in the cultural and economic environment remain, there is increas- ing
uniformity in consumer taste and consumer behaviour. This already appears to be having an
effect on the marketing strategies of companies operating at an international level.

Nevertheless, Usunier and Lee (2005) maintain that there are limitations to the way
behavioural intentions are determined. Significant differences in consumer behaviour may be
determined and the need to adapt a product established, but this is not sufficient in itself
because the intentions of the consumers need to be established. Models of behavioural
intention, which were once assumed to be applicable universally, show different weight- ings
between attitudes and norms.

To what extent, therefore, is it possible to talk of transposing theories to do with con- sumer
behaviour? There are certainly similarities between cultures, but to really under- stand
consumer behaviour, account must be taken of the characteristics of the consumers’ culture
and their underlying models. There remain, however, problems for marketers and market
researchers. Europe being a prime example.

Problems with cross-border market research

Welford et al. (2001: 394–395) define these problems as follows:

 Language barriers. Language poses a real problem when it comes to identifying

behaviours common to different nationalities. Translating from one language to
another is one problem, but also assessing the differences between countries when it
comes to the meaning of the translated words.

 Sensitivity of questioning. Europeans show differences in the information they choose

to communicate. The Greeks, for example, may not be worried about revealing
informa- tion on their income, whereas the British are.

 Research techniques. Most of marketing research techniques emanate from the US.
They focus on the ability of individuals to express their sentiments and feelings. Some
 customers, whether in Europe or Asia, are reluctant to talk openly about such matters
and prefer instead to be asked questions on more practical issues

 Cultural differences. When surveys are being carried out across cultures about the
way people live, behave and think, it is important to take into account the cultural
context when responses to questionnaires are being analysed. If this is not done, the
research findings may be misinterpreted and the real meanings undiscovered.

 Suspicion. People in certain countries are becoming increasingly suspicious about

what happens to information gathered through marketing surveys. They are increas-
ingly reluctant, therefore, to participate in such surveys.

 Statistical comparisons. Cross-country comparisons of statistics are difficult to

perform since the data is established locally and is based on practices that differ
between coun- tries. Demographic information, educational qualifications and social
groupings may be different, as well as the relative amounts spent on promotion and
advertising.

 Fragmentation. Many multinational concerns have decentralised structures whereby

operating companies enjoy considerable autonomy. Research done by a local
company across different countries and markets may lack a consistent method, be
fragmented and inconclusive.

Marketing is also a process in which communication plays an important role. Consumers

buy not only the product but the meaning that goes with it. This idea will be developed
in Concept 11.2.

Chapter 12- Cultural diversity in organisations

The word ‘diversity’ is ambiguous, especially when associated with the term ‘organisation’.
An organisation can be a domestic one, with many of its employees who have their roots
abroad – reflecting the social diversity of the country in question. It can also be an inter-
national organisation whose cultural diversity is reflected in its foreign subsidiaries. At the
same time, diversity can refer to the collection of groups who form the organisation: groups
differentiated in terms of gender, mother tongue, education, as well as their posi- tion or
salary.

Moore (1999: 212) analysed the attitudes of organisations towards diversity generally and
identified four different perspectives:

1. Diversity blindness: no provision is made within the organisation for addressing the
problems and/or opportunities relating to diversity.

2. Diversity hostility: the organisation attempts to ‘homogenize’ its employees and

actively suppresses expressions of diversity.

3. Diversity naïveté: the organisation views diversity positively and encourages diversity
awareness, but is probably unable to cope with any problems which diversity may
cause.
 4. Diversity integration: the organisation addresses diversity in a pragmatic way. It helps
its employees to develop skills in diversity management and creates the preconditions
needed for effective communication between the different groups in the workforce.

The concepts in this chapter will focus specifically on the management of cultural diversity in
multinational operations. Concept 12.1 first examines how managers can deal with cultural
diversity and how they can turn this diversity to their advantage. It then considers the
question of how to take account of ethical values in a culturally diverse workforce.

Concept 12.1- Managing Diversity in a global environment

Globalisation is one of the most discussed topics in business. International business research
is directly affected by a globalisation process that does not seem to end. Furthermore,
researchers of other disciplines are also being urged to reflect on this process, which concerns
all institutions of human society.

Compared with political, social and educational institutions, however, businesses appear to be
the most suitable candidates for globalisation, particularly those in the industrial, financial
and service sectors. According to de Woot (2000), companies in these sectors have cleared
most obstacles in the globalisation process: that of size (with multinationals), that of time
(with long-term strategies), that of complexity, and finally that of information and
communication. The globalisation of companies seems to be linked to the cultural diversity of
organisations, which in turn is connected to the interna- tionalisation of organisations.

Management culture and multinationals

As many writers on the subject indicate, one fundamental problem which the globalisation of
the economy causes organisations is the management of cultural differences. Steinmann and
Scherer (2000) raise some fundamental issues with regard to the effects of the global- isation
process on managerial functions. These include the way the executives of a company
conceive the interaction between the different cultures present. If, for example, a multi-
national embraces operating companies in Asia, should it advocate Western values (what
Steinmann and Scherer call a ‘strategy of proclamation’), or should it embark on the new
process of intercultural learning, based on the application of reasoning (a ‘strategy of
learning’)? This last option seems to them the best way of settling the intercultural conflicts
in multinational companies.

What sort of management culture is to be found in multinationals? Théry (2002) distin-

guishes three types:

●  a dominant management culture that is a copy of the multinational’s home country

(e.g. American management in a US multinational);

●  a dominant transnational management culture created by the mother company’s

founders using clearly defined specific values, a culture present in all the
multinational’s operating companies;
 ●  a minimum management culture, leaving considerable room for national cultures in
all their diversity.

In all three cases, the multinational must perform two roles at once: an integrating role and an
adapting role. It not only has to ensure that the companies forming the group remain
integrated and thus able to continue as a multinational; it also has to ensure that it respects the
different national groups of clients and employees by making the necessary adaptations.

Transnational organisation

That globalisation has become a reality and that it is still progressing at high speed is not in
doubt. The same holds true for the increase in cultural diversity in domestic and inter-
national companies where people from different cultural backgrounds are working together
more and more. In view of these changes, Bartlett and Ghoshal (1989) propose a model for
the organisation of the future: the transnational company (see Concept 7.1). The
‘transnational’ is a management mentality combining the abilities of the multinational,
global or international firm: flexibility, efficiency and the transfer of expertise. The manag-
ers at the headquarters and in the subsidiaries abroad are responsible for co-ordinating
these capacities throughout the different units of the organisation. For Trompenaars and
Hampden-Turner (1997: 188), ‘the transnational corporation is polycentric rather than co-
ordinated from the centre’.

Bartlett et al. (2003) go further. They believe that top management must bring added value
to the transnational company in the same way as the executives operating at all levels of the
organisation. This means that the top managers are not just content to create an opera-
tional framework in which the responsibilities of the functional and geographic groups are
clearly defined. They also have a federating role by integrating the different influences of
these groups in the management process. While recognising that diversity and internal
tensions can be the source of new ideas, it seems that the role of top management is rather
to create a common vision for the future, a shared set of values to reflect managers’ goals.

Ethical values and multicultural diversity

When working with a culturally diverse workforce, managers must take into account the
values and associated norms inherent in the cultures involved, particularly when it comes to
ethical issues. Ethical values, as depicted in the work of many cross-cultural researchers, can
be compared and may assist the international managers when deciding on the imple-
mentation of a particular business practice. Their making such comparisons, however,
almost inevitably involves making implicit judgements about the ethicality of values which
differ from their own.

Jackson (2011) argues that what managers need to do is not just focus on what differ- ences
there are, but also attempt to discover why the ethicality of culture may differ from their
own. He suggests examining not just norms (the notions of right/wrong – what Jackson
refers to as ‘rules’) and values (the notions of good/bad), but also the various elements of
society which reflect these norms and values in more concrete form.

What is corrupt behaviour?

Issues to do with ethicality are centred on the question of what is considered to be corrupt
behaviour. Corruption can be defined in many ways, but the simplest is probably that given
by Transparency International, a non-governmental organisation whose aim is ‘to stop
corrup- tion and promote transparency, accountability and integrity at all levels and across all
sectors of society’

All manner of behaviours can be accounted for, both at personal and organisational level
whereby the company and/or individual can increase profit, wealth and power. As seen in
Chapter 3 when the nature of Russian ‘blad’ was described, bribery – the act of taking or
providing something whereby the provider influences the behaviour of the receiver in some
way favourable to the provider – is a frequent topic of discussion when it comes to ethical
behaviour in an international context. As Eicher (2009: 6) says:

In many cultures, people may require that a relationship be developed before business
transac- tions occur. One way that this occurs is often through socializing and gift-giving that
denote respect and appreciation or gratitude [. . .] Cultural differences regarding such norms
as gift giving make articulating international anti-corruption strategies difficult.

When offering a (possible) client a free lunch to establish or strengthen a business relation-
ship, is a business person involved offering a bribe? Moreover, if the (possible) client accepts
the offer is that client accepting a bribe? Is this in any way different from offering and
accepting a much larger gift of some sort? Some societies perceive no difference, others do.