Destep Analyse Deel 2

PART IV
External Analysis Demographic factors

Economic factors
DESTEP
Socio-cultural factors
Technological factors
Ecological factors
Political / legal factors
© Artevelde Hogeschool
PART IV

Economic factors
DESTEP: Socio-cultural environment
Ecological factors
Sociocultural Technological
Macro-
environment
INDUSTRY
(Meso-environment)
Market
(Micro-environment)
Economic Environmental
Market Potential Market Growth
Market size Profit potential
Competition Market access (e.g.
tariffs)
Decision-making unit
 Individual consumer
 Family
 Business
 Government
Demographic Political / legal
Development
International Marketing mix
(4 P’s)
PART IV
4.3 What is culture?

- Characteristics
Socio-cultural factors - Levels
- Layers
Classification of culture
- High- and low-context cultures (Hall)
- Cultural dimensions (Hofstede)
Elements of culture to be researched
Elements to be researched
 Language
 Manners & customs
Visual
elements  Food preferences
of culture  Lifestyle & aesthetics
Language  Symbolism
 Social institutions
Values & social morals  Values and attitudes
Social institutions
 Ethics
National identity
Basic cultural assumptions Ethnic culture
National identity
Religion
5
 Language
Visual
6
Language
 Verbal:
▶ Vocal sounds and paterns that have a meaning
 Non-verbal
▶ Body language, silences, social distance
▶ Up to 90% of a message is non-verbal
7
Verbal language
 English is not the largest language if you look at how many people fluently speak it
▶ However, in business, it is
▶ Dominant language
 Official languages are not always spoken by whole populations of a country (e.g. French in Canada, Flemish in Belgium)
 English is the the common language between business people of different nationalities
Top 10 Languages By Number Of Native Top 10 Languages By Total Number Of

Speakers Speakers
1. Mandarin Chinese 1.3 Billion 1. English 1.452 billion
2. Spanish 475 Million 2. Mandarin Chinese 1.3 billion
3. English 373 Million 3. Hindi 602 million
4. Arabic 362 Million 4. Spanish 548 million
5. Hindi 344 Million 5. Arabic 362 million
6. Bengali 234 Million 6. French 274 million
7. Portuguese 232 Million 7. Bengali 273 million
8. Russian 154 Million 8. Russian 258 million
9. Japanese 125 Million 9. Portuguese 258 million
10. Lahnda 101 Million 10. Urdu 231 million
8
Translation bloopers
9
Source: https://www.cbsnews.com/news/worlds-dumbest-branding-move/
Body language
10
Manners & customs
 e.g. Beer in England and Poland  E.g. use of left and right hand
▶ no foam and room temperature
▶ Size
 Right-hand societies: the left hand is the ‘toilet hand’ 
▶ Syrup added with straw
using it to eat or give = impolite
 e.g. Asia & muslim countries
 Understanding manners & customs is especially
important in negotiations because interpretations based
on one’s own frame of reference may lead to a totally
incorrect conclusion.
11
Food preferences
12
Lifestyle & aesthetics
 Aesthetics = attitude towards beauty and good (cultural) taste

▶ “What is and what is not acceptable” may vary dramatically, even in otherwise highly similar markets.
 Aesthetic factors: product design, colour, packaging
 Levels of acceptibility can vary dramatically

▶ The use of “sex” in advertising is an example
▶ American Apparel: US lingery brand, known for its controversial ads
 https://www.youtube.com/watch?v=xjJuvN-OM8U
13
Beauty standards
 Asia: the rise of whitening beauty products

 In Asia: pale skin = sign of social status (upper class)
14
Symbolism
 The use of colours:

▶ Red and yellow for food products
▶ White and pastel for household products
15
Symbolism
Colour of death:
16
Numbers
 Golf ball company: packaged golf balls in packs of 4 in Japan

 China: most items are packed in odd numbers
 Other examples:
▶ Many numbered product lines skip the ‘4’ (e.g. Nokia: no series beginning with 4)
▶ S-E Asia: some buildings don’t have a fourth floor (cfr. 13th floor in the West)
▶ Hong-Kong: no floor numbers with ‘4’ (4, 14, 24,34,…, 40-49,…) + no 13th floor
▶ Citroën C4  Citroën C-quatre
Lucky number in China: 8

e.g. Olympic games of 2008 started on 8-8-08
17
Animals
18
 Language
Visual
Social institutions
 Ethics
19
Social institutions
E.g. business, political, family or social class influence behaviour and interaction, e.g.
favourable treatment for members of family :
▶ Latin America and Saudi Arabia: = your duty
▶ USA: favouritism = nepotism
20
Example: IKEA catalogue Denmark versus Shanghai
Denmark Shanghai
21
Gay marketing
 OK in the US,
 What about Europe? Russia?
22
Example: URBO pushchairs
23
Values and attitudes
 What is right/appropriate, important, desirable

 Deeply rooted values: e.g. religion
 The more deeply rooted values are, the more careful an international manager should be
 Attitude towards change:
▶ Some cultures don’t trust change, especially not when coming from abroad
▶ more positive in industrialized countries (<-> tradition-bound societies)
▶ Take away biases by offering warranties
24
Example: Scottish whiskey
 Status = core value

 Image needs to be reflected in commercials
▶ UK: status is less important
- Commercials are never extravagant
▶ Italy: whiskey has a very masculine image
- Commercials: status, rich guys and women
▶ Japan:
- Status if many people drink it ( individualism)
 Hofstede
▶ masculine vs. feminine cultural dimension
▶ individualism vs. collectivism
 Alcohol for minors in W-Europe is frowned upon
25
Attitude towards women
26
Attitude towards women
 2015: visit of the Obama’s to Saudi Arabia (death of king Abdullah)

 Michelle Obama: not wearing a veil (forgot or as a sign of protest?)
 Family members refused to shake hands
27
Ethics
Greatly influenced by culture. Ethical issues include:
 Bribery:
▶ In some countries, bribery is common practice
▶ Go with the flow?
▶ Or wait for the official approval to import/trade goods?
▶ Officially unethical, but sometimes there is little choice…“Oiling of the wheel”
▶ e.g. China: bribery can mean the difference between 3 months or 1 year
 Secotrs: e.g. weapons, cigarettes, gambling
 Wages:
▶ e.g. socialist countries (China): different view on wages
 Working hours & conditions:
▶ e.g. clothing industry in Banghladesh, Spain (siësta, working late)
28
 Language
Visual
Social institutions
 Ethics
National identity
Basic cultural assumptions Ethnic culture
National identity
Religion
29
National identity
e.g. Turkey:
 Organ Pamuk wrote a book, in which he criticised the Turkish state

 Sentenced to jail
30
Ethnic culture
 A group of people who share a similar culture (beliefs, values, and behaviors), language, religion, ancestry, or
other characteristic that is often handed down from one generation to the next. They may come from the same
country or live together in the same area.
31
Religion
 Can provide the basis for transcultural similarities = similarities between countries, even though cultures may
differ
 Separation of power: church – state differs
▶ E.g. Lebanon and Iran: religion influences all decisions
 Religion influences international marketing strategy

▶ Religious holidays
▶ Dogmas & taboos
▶ Ethno-marketing
 Religious holidays vary greatly among countries:
▶ not only from Christian to Muslim
▶ but even from one Christian country to another
▶ In general, Sundays are religious holiday in all nations where christianity is an important religion
▶ In the Muslim world, the entire month of Ramadan is a religious holiday
32
Dogma’s & taboos
33
Ethno-marketing
34
Conclusion
 Research and analyze socio-cultural similarities & differences

 Decide to what extent you will change your 4 P’s
35
PART IV

Economic factors
DESTEP: Socio-cultural environment
Ecological factors
PART IV
4.4 Technological factors Infrastructure & transport

Financial services
Telecom & internet
…
Macro-
environment
INDUSTRY
(Meso-environment)
Market
(Micro-environment)
Economic Ecological
tariffs)
 Family
 Business
 Government
Development
(4 P’s)
Global internet usage
39
Search engines used worldwide
40
PART IV
4.5 Ecological factors Geography

Climate
Geographic location
Important cities
…
Macro-
environment
INDUSTRY
(Meso-environment)
Market
(Micro-environment)
Economic Ecological
tariffs)
 Family
 Business
 Government
Development
(4 P’s)
Geography
43
Climate
44
PART IV
4.6 Political/legal factors Type / form of government

Pressure groups
Boycotts
Legislation
…
Macro-
environment
INDUSTRY
(Meso-environment)
Market
(Micro-environment)
Economic Ecological
Competition Market access (e.g. tariffs)
 Family
 Business
 Government
Development
(4 P’s)
Type of government
 Monarchy, republic, dictatorship,…

 Political stability
 Change of government: change of plans?
▶ A new party/leader could ignore previously made agreements
Iran (2013): USA:

 Ahmadinejad conservative islamic party
 Obama: democrat, obamacare, Paris agreement on Environment
 Rouhani: more open to Western relationships, human rights,…?
 Trump: America first
 Biden: climate change
47
Political changes
48
Pressure groups
 Labour unions
 Consumer organisations
 Lobby groups
49
Pressure groups: UK parent organisations
50
Pressure groups: Friends of al-Aqsa
51
Boycotts
52
Legislation
53
Sugar tax
54
Legislation
55

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PART IV

External Analysis Demographic factors

External Analysis Demographic factors

4.3 What is culture?

Top 10 Languages By Number Of Native Top 10 Languages By Total Number Of

 Aesthetics = attitude towards beauty and good (cultural) taste

 Levels of acceptibility can vary dramatically

 Asia: the rise of whitening beauty products

 The use of colours:

 Golf ball company: packaged golf balls in packs of 4 in Japan

Lucky number in China: 8

▶ USA: favouritism = nepotism

 What is right/appropriate, important, desirable

 Status = core value

 Alcohol for minors in W-Europe is frowned upon

 2015: visit of the Obama’s to Saudi Arabia (death of king Abdullah)

Greatly influenced by culture. Ethical issues include:

 Organ Pamuk wrote a book, in which he criticised the Turkish state

 Religion influences international marketing strategy

 Research and analyze socio-cultural similarities & differences

External Analysis Demographic factors

4.4 Technological factors Infrastructure & transport

4.5 Ecological factors Geography

4.6 Political/legal factors Type / form of government

 Monarchy, republic, dictatorship,…

Iran (2013): USA:

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