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Monday, November 16, 2009

International Social & Cultural Enviornment

Q.1 Illustrate the impact of social and cultural environment on the marketing of industrial products.

Ans. The social and cultural environment encompassing the religious aspects; language; customs; traditions and beliefs; tastes and preferences; social stratification; social institutions; buying and consumption habits etc are all very important factors for business. What is liked by people of one culture may not be liked by those of some other culture. One of the most important reasons for the failure of a number of companies in foreign markets is their failure to understand the cultural environment of these markets and to suitably formulate their business strategies.

Many companies modify their products and/or promotion strategies to suit the tastes and preferences or other characteristics of the population of the different countries. Significant differences in the tastes and preferences may exist even within the same country, particularly when the country is very vast, populous and multi-cultural like India.

For a business to be successful, its strategy should be the one that is appropriate in the socio-cultural environment. The marketing mix will have to be so designed as best to suit the environmental characteristics of the market. In Thailand, Helene Curtis switched to black shampoo because Thai women felt that it made their hair look glossier.

Even when people of different cultures use the same basic product, the mode of consumption, conditions of use, purpose of use or the perceptions of the product attributes may vary so much so that the product attributes, method of presentation, positioning, or method of promoting the product may have to be varied to suit the characteristics of different markets.

The differences in language sometime pose a serious problem, even necessitating a change in the brand name. For instance, Chevrolet’s brand name Nova in Spanish means “it doesn’t go”. In some languages, Pepsi-Cola’s slogan “come alive” translates as “come out of the grave”.

The values and beliefs associated with colour vary significantly between different cultures. White indicates death and mourning in China and Korea; but in some countries, it expresses happiness and is the colour of the bridal dress. Boeing an United States based aero-space manufacturer has felt the impact of an unwritten “buy national policy” in Europe. As a result, the market share of Airbus for commercial planes which is a consortium of European countries grew to 50 percent. The market share of Boeing in Europe declined resulting in a loss. Boeing attempted joint venture with Russian, Ukrainian and Norwegian partners and hired a designer to decorate a facility to watch the launch of the Sea Launch rocket. The designer decorated the facility in black which is considered as bad luck colour in Russia. The Russians were furious to see black colour. Boeing repainted the facility with a shade of blue to avoid a cultural blunder.

While dealing with the social environment, we must also consider the social environment of the business which encompasses its social responsibility and the alertness or vigilance of the consumers and of society at large. Marketing people are at interface between company and society. In this position, they have the responsibility not merely for designing a competitive marketing strategy, but for sensitizing business to the social as well as the product, demand of the society.

Q.2 Write short notes on:

a) Self-reference criterion: - A person’s understanding or perception of market needs is determined by his or her own cultural experience. James Lee – developed a systematic framework to reduce perceptual blockage and distortion. This framework is known as the self-reference criterion (SRC) – which addresses the problem of unconscious reference to one’s own cultural values. In order to reduce cultural myopia or short sightedness, James Lee proposed a four-step framework which is as below:
(1) Define the problem or goal in terms of home-country cultural traits, habit and norms.
(2) Define the problem or goal in terms of host culture, traits, habits and norms. Make no value judgments.
(3) Isolate the self-references criterion influence and examine it carefully to see how it complicates the problems and
(4) Redefine the problem without the self-references criterion influence and solve for the host-country market situation.
An important skill that an international marketer needs to possess is that of unbiased perception. The framework of self-references criterion brings out this important skill to be learnt by international marketers. The use of SRC and the tendency towards ethnocentrism is widespread and it can become a strong negative form in international business. The international marketer must check this tendency to avoid misunderstanding and failure. In order to avoid SRC, a person needs to forget assumptions based on earlier experience and success and be prepared to acquire new understanding and knowledge about human behaviour and motivation.

b) Communication and Negotiation: - Language is the medium through which any given culture is expressed and the subtleties of a culture can best be expressed only through a language that is home to a given culture. Cultural transliterations are only approximations and hence a compromise on the meaning and essence of a certain context. The international marketer with a hold over multiple languages has an edge over those who do not. Whenever, languages and cultures change, communication challenges comes to the fore. For instance, ‘yes’ and ‘no’ are used differently in Japanese than in western languages. In English, the answer ‘yes’ or ‘no’ to a question is based on whether the answer is affirmative or negative. In Japanese, the answer ‘yes’ or ‘no’ may indicate whether or not the answer affirms or negates the question. For instance, in Japanese the question, “Don’t you like meat!” would be answered “yes”. If the answer is negative, as in, “Yes, I don’t like meat.” The word “Wakarimashita” means both “I understand” and “I agree”. In order to avoid misunderstandings, foreigners must learn to distinguish which interpretation is correct in terms of the entire context of conversation. The challenges of non-verbal communication are more formidable.

c) Environmental Sensitivity: - Environmental sensitivity is the extent to which products must be adapted to the culture-specific needs of different needs of different national markets. Environmental sensitivity can be measured by viewing product on an environmental sensitivity continuum. At one end of the continuum are environmentally insensitive products that do not require significant adaptation to the environments of local markets in the world. At the other end of the continuum are products that are highly sensitive to different environmental factors. A firm with environmental insensitive products will spend less time determining the specific conditions of local markets as the product in question is universal in nature. In case of environmentally sensitive products, managers need to address country-specific economic, regulations, technological, social and cultural environmental conditions.

The sensitivity of products can be represented on a two dimensional scare wherein the horizontal axis shows environmental sensitivity and the vertical axis shows the extent of need for product adaptation. Products showing low levels of environmental sensitivity such as technical products belong to the lower left of the figure. As we move to the right or the horizontal axis, the environmental sensitivity increases along with the need for adaptation. Computers have low levels of environmental sensitivity but variations in country voltage requirements require some adaptation. At the top right of the figures we have products with high environmental sensitivity. For example, food is highly sensitive to climate and culture.


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