GLOBAL

MARKETING
MANAGEMENT Chapter 4 PowerPoint
Sixth Edition Global Cultural Environment and
MASAAKI KOTABKE | KRISTIAAN HELSEN
Buying Behavior
 Chapter Overview

1. Definition of Culture
2. Elements of Culture
3. Cross-Cultural Comparisons
4. Adapting to Cultures
5. Cultures and the Marketing Mix
6. Organizational Cultures
7. Global Account Management (GAM)
8. Global Customer Relationship Management (CRM)

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 Introduction

 Buyer behavior and consumer needs are largely driven by

cultural norms.
 Global business means dealing with consumers, strategic
partners, distributors, and competitors with different
cultural mindsets.
 Within a given culture, consumption processes can
include four stages: access, buying behavior,
consumption characteristics, and disposal (Exhibit 4-1).
 Each of these stages is heavily influenced by the culture
in which the consumer thrives.

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 Exhibit 4-1: East West Differences in Emoticons

<Insert New Exhibit 4-1>

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 1. Definition of Culture

• There are numerous definitions of culture. In this text,

culture (in a business setting) is defined as being a
learned, shared, compelling, interrelated set of symbols
whose meanings provide a set of orientations for
members of society.
• Cultures may be defined by national borders, especially
when countries are isolated by natural barriers.
• Cultures contain subcultures that have little in common
with one another.

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 2. Elements of Culture

• Culture consists of many interrelated components.

Knowledge of a culture requires a deep understanding of
its different parts. Following are the elements of culture:
– Material life (technologies that are used to produce,
distribute, and consume goods and services)
– Language (language has two parts: the spoken and the
silent language)
• Blunders of translation are common either direction
(Exhibit 4-2)
• Back-translation can help avoid problems

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 Exhibit 4-2: How Not To Sell Abroad

<Insert New Exhibit 4-2>

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 2. Elements of Culture

– Social Interaction (social interactions among people;

nuclear family, extended family; reference groups) (Exhibit
4-3).
– Aesthetics (ideas and perceptions that a culture upholds in
terms of beauty and good taste) (Exhibit 4-4).
– Religion (community’s set of beliefs relating to a reality
that cannot be verified empirically) (Exhibit 4-5).
– Education (One of the major vehicles to channel from one
generation to the next) (Exhibit 4-6).
– Value System (values shape people’s norms and
standards) (Exhibit 4-7).

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 Exhibit 4-3: Rules to Start Cracking the Guanxi
Code in China

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 Exhibit 4-4: Car Color Preferences

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 Exhibit 4-5: Cross-Country Performance
Mathematics Skills among High School Students

<Insert New Exhibit 4-5>

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 Exhibit 4-6: Dentsu Lifestyle Survey

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 3. Cross-Cultural Comparisons

 Cultures differ from one another, but usually share

certain aspects. Recent social psychology research reveal
key cultural differences between East (high) and West
(low) context cultures in how people perceive reality and
reasoning (see below).
 High-context cultures: Interpretation of messages rests
on contextual cues; e.g., China, Korea, Japan.
 Low-context cultures: Put the most emphasis on written
or spoken words; e.g., USA, Scandinavia, Germany.

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 3. Cross-Cultural Comparisons

High context Japanese

IMPLICIT Arabian
Latin American
Spanish
Italian
English (UK)
French

English (US)

Scandinavian
German
Low context
Swiss EXPLICIT

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 3. Cross-Cultural Comparisons

• Geert Hofstede’s Cultural Classification Scheme:

– Power distance: The degree of inequality among people
that is viewed as being equitable
– Uncertainty avoidance: The extent to which people in a
given culture prefer structured situations with clear rules
over unstructured ones

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 3. Cross-Cultural Comparisons

– Individualism: The degree to which people prefer to act as

individuals rather than group members.
– Masculinity: The importance of “male” values
(assertiveness, success, competitive drive, achievement)
versus “female” values (solidarity, quality of life).
– Long-term orientation versus short-term focus: Future
versus past and present orientations.

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 3. Cross-Cultural Comparisons

• Project GLOBE (Global Leadership and Organizational

Behavior Effectiveness)
– Project GLOBE is a large-scale ongoing research project
that explores cultural values and their impact on
organizational leadership in 62 countries (Exhibit 4-9).
– The first three dimensions (uncertainty avoidance, power
distance, and collectivism) are the same as Hofstede’s
constructs.

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 3. Cross-Cultural Comparisons

 The remaining six dimensions include: collectivism II,

gender egalitarianism, assertiveness, future orientation,
performance orientation, and humane orientation.
 World Value Survey:
Survey
 The WVS is organized by the University of Michigan.
 The WVS has been conducted multiple times and the
population covered is much broader than in other similar
studies.
 The WVS encompasses two broad categories: traditional
versus secular values, and the quality of life (Exhibit 4-9).

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 Exhibit 4-9: World Value Survey

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 4. Adaptation to Cultures

• Global marketers need to become sensitive to cultural

biases that influence their thinking, behavior, and
decision making.
• Self-reference criterion (SRC): Refers to the people’s
unconscious tendency to resort to their own cultural
experience and value systems to interpret a given
business situation.
• Ethnocentrism refers to the feeling of one’s own cultural
superiority.

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 5. Culture and the Marketing Mix

• Culture is a key pillar of the marketplace.

• Product Policy: Certain products are more culture-bound
than other products. Food, beverages, and clothing
products tend to be very culture-bound.
• Pricing: Pricing policies are driven by four Cs:
– Customers
– Company (costs, objectives, strategy)
– Competition
– Collaborators (e.g., distributors)

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 5. Culture and the Marketing Mix

• Distribution: Cultural variables may also dictate

distribution strategies.
• Promotion: Promotion is the most visible element
of the marketing mix. Culture will typically have a
major influence on a firm’s communication
strategy. Local cultural taboos and norms also
influence advertising styles.
(See Exhibit 4-10.)

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 Exhibit 4-10: Starbucks Logo in Saudi Arabia

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 6. Organizational Cultures

• Organizational Culture: Most companies are

characterized by their organizational (corporate) culture.
• A model of organizational culture types includes the
following four cultures (Exhibit 4-11):
– Clan culture
– Adhocracy culture
– Hierarchy culture
– Market culture
• Additional business cultures exist in countries as well
(Exhibit 4-12).

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 7. Global Account Management (GAM)

• The coordination of the management of customer

accounts across national boundaries are referred to as
global account management (GAM).
• Global Accounts’ Requirements:
• May require a single point of contact
• May demand coordination of resources for serving customers
• May push for uniform prices and terms of trade
• May have standardized products and service
• May require a high degree of consistency in service quality and
performance
• May require support in countries where the company has no
presence

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 7. Global Account Management (GAM)

– Managing Global Account Relationships:

• Clarify the role of the global account management team.
• Make incentive structure realistic.
• Pick the right global account managers.
• Create a strong support network.
• Make sure that the customer relationship operates at more
than one level.
• GAM should be flexible and dynamic.

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 8. Global Customer Relationship
Management (CRM)
• The process of managing interaction between the
company and its customers is called customer
relationship management (CRM):
– Helps in customer retention
– Helps in richer communication and interactive marketing
– Helps in tailored services
– Helps to maintain a closer contact with the customers

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 8. Global Customer Relationship
Management (CRM)
• Benefits of CRM:
– A better understanding of customers’ expectations and
behavior
– Ability to measure the customers’ value to the company
– Lower customer acquisition and retention costs
– Ability to interact and communicate with customers in
countries where access to traditional channels is limited

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 8. Global Customer Relationship
Management (CRM)
• Guidelines for Successful CRM Implementation:
– Make the program business-driven rather than IT-driven
– Monitor and keep track of data protection and privacy laws
in those countries where CRM systems are being used or
are in the planning stage
– A good database is the main pre-requisite.
– Rewards being sent out to customers are relevant,
targeted, and personal.

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