Indonesian Art and Culture - Essay Example

Indonesian Art and Culture Contents Executive Summary 2 Introduction 3 IndonesiaArt and Culture 4 1.1 Origin and Influence of Cultural aspects 4 1.2 Cultural differences 4 2. Market penetration by Global MNCs 5 2.1 Cultural Approaches/Proxies 5 2.2 Advantages of cross-regional natural resources 6 2.3 Advantages of cultural values and diversity 6 2.4 Adaptation, standardization and cultural sensitivity 6 2.5 Advantages of Work Environment 7 Conclusions and Recommendations 7 References 9 Executive Summary Human behavior dimensions are broadly influenced by culture and as a result of this, defining culture is a difficult task. Culture is majorly an intangible factor, which is characterized by differences in market behavior and structure. So, it is important to understand the culture and its associated artifacts before penetrating into a foreign market. The current study evaluated cultural aspects of Indonesia and its inter-relationship with marketing strategies opted by global companies setting up therein. Through extensive literature survey on culture, art and social environment of Indonesia, it was found that the country has been suffering due to huge number of international brands overpowering the local artifacts and culturally unique products and services. Hence, it has become imperative to Indonesian government as well as foreign companies to set strict rules and policies and modify their strategies, respectively. This would help to upkeep cultural aspects of the nation as well as profitability of the companies. Introduction Indonesia has been termed as one of the major emerging nations across Asia. This can be attributed to the fast growing economy, infrastructure, manufacturing and IT sectors as well as increasing popularity of tourism sectors. The tourism industry of Indonesia is booming, where the major attractions are cultural artifacts such as tradition, art and places. In the last decade, international MNCs have been increasingly penetrating into these markets because of high demand for diverse services or products ranging from cell phones, automobiles to food and retail (Lenartowicz and Roth, 1999). This rising demand of international services and products in the Indonesian market coupled with different promotional and advertisement tactics used by global MNCs has encouraged the selection of this topic for fulfillment of current coursework. The major significance of the current topic is to understand the inter-relationship between Indonesian culture and its influence on marketing and promotional activities of international MNCs. However, another important factor that will be discussed is the extent of exploitation of these cultural and traditional artifacts by global companies with an objective of penetrating and developing an international market. Therefore, on the basis of above fundamental research grounds, objective of the study is to evaluate aesthetics, physical environment, values and religious aspects in the culture of Indonesia and ways in which international companies exploit these to establish in the local market. In order to achieve the above objectives, extensive review of literature will be useful for understanding both Indonesian market and international marketing strategies. These literature ranges from difference between Indonesian and western culture, changing nature of Indonesian market, acceptance of foreign brands to negative influence of international brands on Indonesian culture and art. It is observed that companies and brands had to alter their market and promotional activities to suit needs of the local market. The literature used for this study includes peer-reviewed academic journals, books and scholarly articles supported by examples from companies and case studies. News articles from authentic websites can also help in evaluating current cultural aspects of Indonesia. At the same time, various problems were encountered during the study. The major problem was lack of market research on this subject matter. Research studies have mainly focused on marketing and promotional strategies used in Asian countries such as, Indonesia. However, research on topics such as, consumer perception and acceptance of foreign brands and their influence on cultural and traditional aspects, were limited. The researcher aims to reduce this gap by extensive study of inter-relationship between promotional and branding activities of international marketers for penetration and growth as well as influence of these activities on Indonesian culture. 1. Indonesia Art and Culture 1.1 Origin and Influence of Cultural aspects The culture and art of Indonesia is intertwined with age-old traditions and religion. For decades, this culture has been influenced by western thoughts and tendencies such as, those of Dutch colonists and Portuguese traders. This culture and art of Indonesia is distributed across numerous ethnic groups, each showcasing distinctive culture differences shaped over centuries. The Indonesian culture has also been influenced by numerous trade ventures and exp-editions between Middle East and Far East, leading to establishment of a variety of cultural aspects (Australian Government, 2001). These cultural aspects were influenced by several religions such as, Buddhism, Islam, Confucianism and Hinduism. The modern day culture of Indonesia is a mixture of aesthetics, cultural and social aspects from Chinese, Arabic, European and Malay sources. Nonetheless, within this developing and mixed culture, there are villages and places where traditional Indonesian culture is still maintained. Thus, it can be summarized here that culture of Indonesia has been influenced since the early days of trade invasions. Indonesia is dominated by Islam and Muslim community. Other recognized religions are Hinduism, Buddhism, Confucianism, Catholics and Protestantism. Aesthetics of the country include its literature, music, films, art and crafts (Australian Government, 2001). 1.2 Cultural differences Cultural differences form major influencing factors in the marketing strategies such as, entry, promotion, branding and advertisement. The figure below shows an application of Hofstede’s cultural dimensions model, comparing two major developed nations, the UK and the US, with Indonesia. It is clear from the diagram that while most of the dimensions are similar for the UK and the US, there are huge difference between culture of those two and that of Indonesia. Hence, global companies often opt for regionalization and localization while entering into culturally dominant Indonesia (The Hofstede Centre, 2014; Sivakumar and Nakata, 2001). In the next section, important aspects of Indonesian art and culture and their inter-relationship with international marketing activities have been discussed. Figure 1 Hofstedes Cultural Dimensions (Source: The Hofstede Centre, 2014) 2. Market penetration by Global MNCs 2.1 Cultural Approaches/Proxies Sojka and Tansuhaj (1994) conducted a cross-cultural review on consumer research, according to which companies have been following three major approaches in order to exploit or utilize cultural environment for gaining access to particular nations. These approaches can also be described as cultural proxies, such as, language, value/belief systems and artifacts/material goods. In the first approach, companies use local language in their promotional and branding messages so as to offer interpretative scheme or code for presenting and organizing the target market. Even so, this aspect does not measure sub-cultural differences and can be ineffective in case of penetration into niche markets (Lenartowicz and Roth, 1999). The second is artifacts or possessions, which allow a more concrete opportunity for cultural penetration. This can be seen in localization of apparel designs, materials, toys and durable goods while entering markets such as, Indonesia. The last and most important aspect is belief and value systems such as, materialism, relationship and fatalism. Indonesia is a highly religious nation and this opportunity is utilized by companies by offering services and products with religious alikeness (Stimson, 2009). 2.2 Advantages of cross-regional natural resources South Asian countries such as, Indonesia, are found to be rich in natural resources in form of mineral, water and forest. Irrigation and agriculture are the major economic drivers. Indonesia is also one of the prime exporters of logs and recently the country also started exporting metal ores and coal in bulks. While the company’s flora and fauna is abundant, it lacks technology and manufacturing facilities for the purpose of transforming these resources into useful products (Australian Government, 2001). Capitalizing upon this fact, companies have penetrated into the Indonesian market with final products. Many of the companies such as, IKEA, Nike and Adidas, sell their products and also have manufacturing facilities and plants in Indonesia (Steenkamp, 2001). 2.3 Advantages of cultural values and diversity For most individuals across the globe, religion plays a major role in everyday life. Religion is considered more important than wealth, money or any worldly issues. Companies have been well-utilizing this opportunity for long in order to enter markets and offer their services and products. Similarly, people of Indonesia have strong ideologies and viewpoints regarding business, leadership and organizational culture (The Hofstede Centre, 2014). Companies understanding these factors have been able to successfully exploit the market and develop. For instance, companies such as, Toyota, hire local engineers and marketers who can better understand the regional market and provide strategies enhancing competitive edge and long-term development (Toyota, 2012). The culturally diverse environment of Indonesia has also helped companies to enter into this growing market. Companies such as, McDonalds, KFC and Pizza Hut, have been tapping the increasing percentage of youth in this market. Similarly, while companies such as, Nike and Adidas, need to change only their promotional strategies like, that of choosing local brand ambassadors and complimenting the culture of Indonesia, other companies such as, Toyota, have to introduce new variants suitable for physical conditions like, that of roads. 2.4 Adaptation, standardization and cultural sensitivity An increasing issue faced by companies in the current economic and business environment is standardization versus adaptation. Companies have been focusing on adapting marketing and promotional strategies while entering new regions. At the same time, preferences and tastes of consumers across distant regions are becoming similar. Similarly, cultural variety in Indonesia has been hugely utilized by international companies for market penetration, development and gaining competitive edge. Markets generally use low price and high quality products strategy for gaining competitive edge. Indonesian customers are, in general, sensitive to high priced products, owing to the fact that majority of them ranges from middle to low income group (Australian Government, 2001). So, companies such as, Nestle, Unilever and P&G, penetrated into this market with low cost products and variants; whereas, high-end services and products were limited to developed nations. Thus, Indonesia has become a perfect market for selling low-cost and low-revenue generating products of international companies (Stimson, 2009). 2.5 Advantages of Work Environment Companies from Australia and Canada have made several pacts and trade agreements for entering into Indonesian markets. While the Indonesian market is getting filled with foreign and international brands, global MNCs are profiting from the low tariffs and low taxes (Stimson, 2009). In addition, overall labor costs are low compared to other developed nations. Hence, Indonesia has become an ideal region for establishing plants, manufacturing facilities and workshops. Conclusions and Recommendations The objective of the current study was to analyze culture, artifacts and natural environment of Indonesia and evaluate their influence over international penetration and marketing strategies. The diverse natural and cultural environment of Indonesia has attracted many global MNCs, who have been taking advantage of Indonesia’s flora and fauna, cultural sensitivities and availability of cheap labor. Culture varies greatly from one region to another and so does demand, purchase patterns and expectations of consumers. So, managers worldwide are realizing the increasing importance of developing requisite knowledge, attitude and skills for gaining competitive edge and facilitating development in international regions. Although companies have been successfully penetrating into the Indonesian market, this have also resulted in increasing depletion of natural resources, extinction of flora and fauna due to excessive deforestation as well as loss of traditional culture and art. As such, companies should aim to expand with those strategies, which are beneficial for both the company and host country, in this case, Indonesia. This can be achieved by combining company strategies with culture of the nation. 1. Regional Affiliation This approach is based on cultural definition according to characteristics resembling the culture such as, nationality or birthplace. For instance, this cultural proxy can be used in cultural engagement in retail. Prediction of consumer behavior can be easier by using a scoring system, identifying cultural variables such as, context, language, interpersonal relationships, class structure, family and its different roles, technology grasp and tradition orientation. By segregating the culture into further subsets, companies will be able to understand minute differences between various subcultures and henceforth will be able to provide appropriate solution to consumers without dissolving their basic demand (Steenkamp, 2001). 2. Providing training and employment opportunities The overall technological development in Indonesia is low. By providing proper training and employment opportunities, companies will not only enhance overall competency and knowledge of local employees, but will also increase productivity and in turn revenue of the foreign entity. For instance, companies can tie up with educational institutions and help in building infrastructure and facilities. 3. Localization Companies such as, Toyota, have perfected the localization strategy. Instead of managing distant R&D facilities and markets, the company has minimized cost and maximized efficiency by establishing research facilities in the target market itself. This facilitates quick access of information from the market to research facilities and reduces demand-supply gap (Toyota, 2012). References Australian Government. (2001). Indonesia country brief. Retrieved from http://www.dfat.gov.au/geo/indonesia/indonesia_brief.html Lenartowicz, T. and Roth, K. (1999). A framework for culture assessment. Journal of International Business Studies, 30(4), 781–98. Sivakumar, K. and Nakata, C. (2001). The stampede toward Hofstedes framework: Avoiding the sample design pit in cross-cultural research. Journal of International Business Studies, 32(3), 555–574. Sojka, J. and Tansuhaj, P.S. (1994). Cross-cultural consumer research: A twenty-year review. Advances in consumer research, 22, 461–474. Steenkamp, J. (2001). The role of national culture in international marketing research. International Market Review, 18(1), 30–44. Stimson. (2009). Exploiting Natural Resources. Retrieved from http://www.stimson.org/images/uploads/research-pdfs/Exploiting_Natural_Resources-Chapter_5_Cronin.pdf The Hofstede Centre. (2014). Country Comparison. Retrieved from http://www.dfat.gov.au/geo/indonesia/indonesia_brief.html Toyota. (2012). Special Feature: Toyotas Efforts in Emerging Markets. Retrieved from http://www.toyota-global.com/investors/ir_library/annual/pdf/2012/feature/ Read More