How Do Cultural Differences Affect International Marketing Marketing Essay

How Do Cultural Differences Affect International Marketing Marketing Essay Markets are becoming increasingly internationalised and, for businesses to achieve sustainable growth in such markets, it is critical that they gain an understanding of the complex and diverse nature of international markets and of associated international marketing strategy (Doole and Lowe, 2008, pp. 5-6). International marketing strategy involves marketing mix decisions being made across both national and cultural borders. The coordination and management of effective and efficient marketing mix strategies globally for a multi-national organisation is fundamental to its business success (Wall et al., 2009, pp. 338-349). The term globalisation is first believed to have been used in a paper published by the late Theodore Levitt in the Harvard Business Review (1983). Since that time, the term globalisation has evolved to embrace more than just its original economic dimension. This has happened despite the fact that most academics and theorists are not able to agree on a common definition for globalisation (Healy, 2001). This dilemma was summed up by the sociologist, Anthony Giddens (1996), when he said thatà ¢Ã¢â€š ¬Ã‚ ¦ There are few terms that we use so frequently but which are in fact as poorly conceptualized as globalization. However, in spite of this lack of agreement on a definition, there is general agreement that the globalisation of world markets has been a major factor in the internationalisation of business (Wood and Robertson, 2000). The internationalisation of business has also been largely responsible for the so called homogenisation of consumer products and services worldwide, a phenome non sometimes know as the McDonaldization effect (Ritzer 2004, pp. 2-3). However, the counter argument to this position on globalisation is that there are very few brands that can truly be said to be global with most of the examples, such as McDonalds itself, Coca-Cola, and Nike, being based in the USA (de Mooij, 2010, pp. 31-32). Despite the relentless onward march of globalisation, the creation and implementation of a successful marketing communications strategy in a developing country, such as India, requires a significantly different approach to that required in a developed country, such as the United Kingdom. For example, language is a significant issue in the execution of marketing communications. The UK is more ethnically and culturally diverse than it was previously, but its first language remains as English. In India, however, there are a large number of ethnic groups and more than twenty official languages (Usunier and Lee, 2009, p. 7). Whilst originally a British colony, independent India has evolved its own political and legal systems which now have significant differences when compared to those in the UK. Any misreading of the political and legal environment in a particular country, by a multinational brand, can cause significant problems in marketing communications terms. In India, for example, t he UK based chocolate manufacturer, Cadbury, created intense anger amongst the population at large in 2002 when it completely underestimated sensitivity by politicians and the public at large to the enduring dispute between India and Pakistan over the territory of Kashmir. Cadbury promoted in together with the tagline Im good. Im tempting. Im too good to share. What am I? Cadburys Temptations or Kashmir? Cadbury compounded its insensitivity by launching the campaign on Indian Independence Day when nationalist feelings were running particularly high (Doole and Lowe, 2008, p. 17; Dodd, 2002). In addition, consumer attitudes and behaviour towards brands and products can be influenced by other factors such as the social environment. For example, marketers of innovative products, such as personal computers and other electronic gadgets, need to be aware that there are fewer so called early adopters in developing countries than there are in developed countries (de Mooij, 2005, p. 129). According to theory of the Diffusion of Innovations, early adopters are more likely to purchase a new and technically innovative product than are other consumer types (Rogers 1995, pp. 252-280). Consequently, in marketing communications terms, brand owners of such products will need to focus on the tried and tested nature of their technology rather than innovation when communicating their products to consumers in developing countries. Whilst issues such as legal and political systems and social environments are not necessarily directly related to culture, is perhaps culture itself that is the biggest single, differentiator in terms of global consumer behaviour (Blackwell et al, 2001, pp. 313-354). Culture should be regarded as a process rather than a distinctive dimension of consumer behaviour. At an individual level, culture comprises a number of different elements that all work together coherently including values, beliefs and knowledge. At a group level culture consists of the arts, morals, protocols, and legal systems present in any particular country or region. However, culture is principally characterised by language, institutions, and material and symbolic productions (Usunier and Lee, 2005, p. 4). The popular view is that that the worlds trade, financial systems technology, and media, are becoming increasingly globalised, a process frequently referred to as globalisation (Usunier and Lee, 2005, p. 66). Som e theorists such as Kenichi Ohmae go even further suggesting that the world will be a nationless state marked by the convergence of customer needs that transcends political and cultural boundaries (Pieterse, 2009, pp.10-11). Conversely, however, many academics believe that consumer behaviour will never become truly globalised as cultural influences refuse to follow the globalisation path remaining, as they do obstinately regionalised and, in some cases, localised (de Mooij, 2010, p. 2). According to Hall and Hall (1990, p. 6) there are two distinctive types of culture namely Low Context and High Context. The culture in the UK is regarded as Low Context/ Individualistic, and in India as High Context/ Collectivistic. Cultural attributes, such as communication and language, which are critical dimensions of marketing communications, demonstrate considerable variance between the two types of culture. In the Low Context/ Individualistic cultures, such as that in the UK, communication tends to be explicit and direct whereas in Low Context /Individualistic culture, such as that in India, it is usually implicit and indirect see Appendix I. It is important that these language and communication differences, brought about by differing cultures, are reflected in the language and communication styles that are deployed in the marketing communications activities targeted at particular markets. Power distance is defined as the extent to which the less powerful accept and expect that power is distributed unequally (Hofstede, 2001, p. xix). The Power Distance Index (PDI) is a tool used for the measurement of the degree of equality, or inequality that exits amongst the population in any particular country. A country with high PDI score would indicate that it high levels if of inequalities in its society whereas of power and wealth whereas a low PDI score would be an indicator of more social equality (Hofstede, 2001, p. 50). The PDI for India is 77 whilst that of the UK is 35 (Hofstede, 2003, p. 87). This would indicate that there is more inequality in India than there is in the UK. This finding is substantiated by the fact that India has a very hierarchical society based on social status by birth whereas the UK has a non hierarchical culture with status based on wealth and income, (Hollensen, 2011, pp. 237-244). In addition, gender plays an important role in consumer behaviour in developed and developing countries. In India paternal authority means that marketing communications for many product areas has to be targeted at males who are also the head of their household whereas in societies where there is equality of the sexes, such as in the UK, marketing can effectively be targeted at either sex depending on the nature of the product and its positioning (Usunier and Lee, 2009, p. 71). Furthermore, the central role of the family in Indian culture means has had implications for global brands such as McDonalds which, although using standardised store formats worldwide has positioned and promoted its outlets as family restaurants whereas in the UK, and other developed countries, it has positioned itself as fast food restaurant and a venue for childrens parties (de Mooij, 2010. p. 15). The need to consider whether or not a marketing communications strategy for a brand that is effective in a developed country, such as the UK, should be adapted for a developing country, such as India, is fundamental to that brands international success (Kotler and Armstrong, 2010, p. 259). There are two high-level, strategic options that such multi-national brands can adopt. Firstly, such a brand can think and act globally by deciding to use the same marketing communications strategies across all of its international markets or, secondly, it can think globally but act locally by developing and customising strategies to meet the needs of consumers in particular local markets across the world (de Mooij, 2010, p.2). Organisations with a standardised approach to marketing communications are striving for their customers to perceive a consistent brand image in all of their operational markets (Hafez and Ling, 2005). However, despite this approach many brands may still find that their consu mer perception varies in different cultures (de Mooij, 2010, p. 37). For example, global consumers of Coca-Cola in different cultural markets worldwide will undoubtedly be aware of the Americaness of the brand however, they will still evaluate the global brand values of the drink based on their own particular cultural knowledge, values, and beliefs (de Mooij, 2010, pp. 31-32). A major benefit of a standardised marketing communications strategy is that the associated costs will usually be lower the activities will be easier to manage and control than would be the case with adapted strategies. In addition, if marketing communications strategies have to be adapted for particular markets then there is potential for the strength of the brand to be diluted (Hafez and Ling, 2005). Truly global brands, such as Coca-Cola, are largely able to standardise their marketing communications activities globally because of the worldwide recognition that the brand enjoys. The Coca-Cola brand communicates certain values, such as fun and happiness, that are able to appeal to global consumers regardless of their country of origin or local culture. This can be clearly demonstrated in the brands global advertising campaign the Happiness Factory, which was launched in 2009 see Appendix II. However, even Coca-Cola can not always justify the total standardisation of its marketing c ommunications and has, historically, had to produce adapted television commercials for some countries, including the UK, such as in the UK. However, Coca-Cola has since reiterated its desire to produce only globalised marketing communications campaigns (Eleftheriou-Smith, 2011). However, there are very few truly global brands that have the power of Coca-Cola and, consequently, most brands will have to adapt their marketing communications strategy to take account of local markets. According to Vignola (2001), brand names and the attributes and characteristics of products are the easiest elements of the marketing mix to standardise in global markets. By definition, therefore, marketing communication is more difficult to standardise. This view is supported by Hafez and Ling (2005) who suggest that a premise of basic marketing practice is that organisations operating globally have to determine how best to adapt their marketing communications strategies to the local markets in which they sell their products or services. Unlike with a standardised approach, brands that use an adapted approach to marketing communications consciously permit their consumers to perceive differing brand images according to their culture. This enables the brand to establish higher levels of brand equity in individual market s than would be possible with a standardised approach (Hafez and Ling, 2005). The culture of consumers in developing countries tends to include higher levels of risk aversion that does the culture of consumers in developed countries (Hollensen, 2011, p. 237-244). In terms of adapting marketing communications activity for a global brand, then research has shown the strategies that are especially effective are those that reassure consumers in developing markets, such as India, that the brand they are choosing is free of risk (Erdem et al, 2006). It can be seen that there are a number of differences that exist between developed and developing countries in relation to the creation and implementation of marketing strategies. These differences are particularly significant in marketing communications terms and are largely, although not exclusively, related to culture. These differences are at odds with the basic and inherent desire on the part of many multi-national brands to standardise their marketing communications for both cost and ease of control reasons. However, it has been shown that this approach is not necessarily always appropriate as local cultures can be stubborn in their resistance to receiving standardised messages about brands and products. Consequently, a strong case can usually be made in favour of locally adapted marketing communications strategies, rather than those that are standardised globally, for most brands and products. It is really only those true global brands, such as Coca-Cola for example, that enjo y a consistent and powerful image, together with high levels of brand equity, across cultures that can be fully justified in adopting a globally standardised approach to marketing communications. In conclusion, therefore, the global and local dimensions of marketing communications should always be reflective of a brands recognition, power, and acquired equity in each individual, operational marketplace and its likelihood of generating different cultural responses at a regional or local level.