Impact of Cultural Factors on International Marketing - Essay Example

?Table of Contents Culture and Cultural Factors 2 Cultural Theories 2 Hofstede’s Dimensions 2 Cultural Factors on International Marketing 3 Age Groupor Gender 3 Population 3 Educational Background 4 Social Class 4 Geographical Concentration 4 Number of Household 4 Language Issues 5 Impact of Cultural Factors on International Marketing 5 Impact on Branding of Products 5 One Size doesn’t fit all 6 Characteristics of Global Brands 6 Works Cited 6 Impact of Cultural Factors on International Marketing Culture and Cultural Factors Culture is defined as a set of those holistic beliefs, knowledge, customer, moral, art and other habits or traits acquired by an individual as a member of society. Culture consists of several important traits. (Leadership and Change, 1999) Cultural Factors are those external influences which impact the behavior and choice of customers. In essence, those influences which are imposed on the customers by other people are called as cultural factors. Cultural Theories Hofstede’s Dimensions A Dutch researcher, Gert Hofstede, after conducting a wide research found that culture possess four important dimensions. They include: Collectivism vs. Individualism Masculinity vs. Femininity Power Distance Avoidance of Uncertainty Individual vs. Collectivism determines the belief of people in a sense that whether they consider reward and responsibility individual or at larger group level. In country like Japan, it is considered as neutral while U.K, U.S and Netherlands are more inclined towards individualism. West Africa and Indonesia are more concerned in collectivism and receiving responsibility and rewards at larger group level. Products and services which are considered as environmental friendly are considered as more feministic because female gender is more cautious and sensitive about these matters. Power distance refers to segregating individuals on the basis of status and ranks. It is most commonly observed in Arab and Latin American countries. Countries which are more uncertainty avoidance are tend to inclined towards risk averse and those which have lower uncertainty avoidance are considered as more risk tolerant countries. (Onkvisit, 2008) Cultural Factors on International Marketing Some important cultural factors that influence while marketing a brand internationally include: Age Group or Gender Taste preference, and interest of consumers differ with age group and gender. The perspective and attitude of people matters a lot which varies from country to country. Preferences and interest of people living in Latin America will be entirely different from Asian Countries. In this regard, it is essential to localize a product to certain extent so that it can gain popularity in respective country. Population Higher population means bigger market. Therefore, it is essential to consider the tactics of catering mass number of people. The problem that arises with population is that large number of people can have diverse needs. So, it is vital to select a product that fits to the needs of every individual. Educational Background Underdeveloped countries generally possess low rate of literacy as compared to developed countries. Therefore, many products which require higher educational proficiency cannot be successful in countries having lower rate of literacy. Social Class Large population refers to having multi-social classes. Social classes are also called as economic class which means dividing the target market on the basis of their income, education, background etc. Many products are developed for particular social classes for instance products of Apple Inc. cannot be purchased by every social class and are specially designed for elite class of people. Geographical Concentration Geographical concentration is referred to as developing products for specific market condition. Geographical concentration means that every country selects products on the basis of the concentration of demands present in that country for that product. The number of that product will be determined by the society in terms of success or failure of that product. (Perner, n.d.) Number of Household The type and number of household is essential for marketers to consider because this determines what type of product can be more successful in which country for instance underdeveloped countries will sacrifice quality and will demand cheaper products while people living in developed countries will give preference to quality and will not consider price too much. (Ramani, 2006) Language Issues There are numerous variants of every language in every country. Language also refers to those symbols which facilitate the communication process. Some symbols are considered as essential in one country for communication while in other country, the same symbol can be remarked as abusive. Most of the time, language becomes hurdle in marketing products internationally. For this regard, marketers take help from local linguistics experts to develop the reputation of their products. (Gogja, 2010) Along with these factors, other factors which come along while internationally branding a product include directness versus indirectness, sophistication, humor, comparison etc. Impact of Cultural Factors on International Marketing Some marketing professionals and experts draw strong distinction between heterogeneity of products and services on the basis of consumption pattern, perishability, intangibility etc. They believe that these factors are dependent upon locality. There are several factors, which have been mentioned above that determine the success or failure of products according to the locality. (Zekiri, 2011) Impact on Branding of Products Many authors argue that branding of a product must also encompass the cultural factors. Branding in different countries is perceived in a different manner. Americans are usually more comfortable with the brands that are category specific but that case cannot be applicable for Asian countries. (Bhasin, 2010) One Size doesn’t fit all There are a lot of limitations in branding globally. The cultural limitations in branding a product internationally have been mentioned earlier in a great detail. Companies can brand globally but only to some extent. Many companies utilize the hybrid approach which includes a portfolio of global as well as local brands. There are some companies which incorporate the cultural needs and develop standardize products which fit the demands of all the consumers. Characteristics of Global Brands Despite of these cultural issues, some companies address this issue so properly that it transforms their products into “Global Brands”. These brands are known worldwide and their respective companies are considered as successful multinationals. Some global brands include McDonalds ($25 billion), Microsoft ($65 billion), IBM ($53.8 billion), Toyota ($22.7 billion). Global brands must possess the following characteristics: Names which are easy to pronounce Globally balanced sales No particular dominant market Positioning is same in all countries for these brands Similarity in execution (advertising, pricing, packaging) across the cultures Address same customer needs Possess same target market in every country Works Cited Bhasin, H., 2010. Factors Affecting Consumer Buying Behavior. [Online] Available at: http://www.marketing91.com/factors-affecting-consumer-buying-behavior/ [Accessed 19 April 2012]. Business Anthropology, 2011. Cross Cultural Strategy in International Business Competitive Intelligence. [Online] Available at: http://businessanthropology.blogspot.com/2011/05/cross-cultural-strategy-in.html [Accessed 19 April 2012]. Gogja, P., 2010. Social and Cultural Factors Affecting International Marketing. [Online] Available at: http://www.businessihub.com/social-and-cultural-factors-affecting-international-marketing/ [Accessed 19 April 2012]. Leadership and Change, 1999. How Cultural Factors Affect Leadership. [Online] Available at: http://knowledge.wharton.upenn.edu/article.cfm?articleid=38 [Accessed 19 April 2012]. Onkvisit, S. a. S. J. J., 2008. International Marketing: Strategy and Theory. 5 ed. New York: Taylor & Francis. Perner, L., n.d.. The Global Market Place. [Online] Available at: http://www.consumerpsychologist.com/international_marketing.html [Accessed 19 April 2012]. Ramani, S., 2006. Cultural factors affecting international marketing. [Online] Available at: http://www.a1articles.com/cultural-factors-affecting-international-marketing-34450.html [Accessed 19 April 2012]. Zekiri, J. a. A. B., 2011. Factors that Influence Entry Mode Choice in Foreign Markets. European Journal of Social Sciences, 22(4), pp. 572-584. Read More