Marketing Communication in a Multicultural Market Environment - Essay Example

A Critical Evaluation of Issues in Marketing Communication in a Multi-Cultural Market Environment Marketing communication is “the transmission of persuasive information about a good, service or an idea, targeted at key stakeholders and consumers within the target market segment” (Pelsmacker, 2006, p.509). Therefore, it can be seen that marketing communication in a multi-cultural market environment plays a similar role to that of the one in domestic markets (Hollensen, 2014). The promotional mix, as a communication tool, here includes advertising, public relations, personal selling, exhibitions, sales promotions, and direct marketing, which are methods frequently used to persuade customers to buy a product at present or in the future. Marketing communication is the main element, which is responsible for developing a customer’s demand for a product or service by providing brand information as well as facilitating purchase intention (Pelsmacker, 2006). Currently, there are a lot of issues concerned with global marketing communication, such as those related to how much effective the advertising is, testing various marketing and promotional methods, (Onkvisit and Shaw, 1999) the design of content and language used in the advertisement (Hollensen, 2014) etc. For example, although sales volume can be used as a yardstick to measure the effectiveness of advertising, other important factors such as economic conditions and pricing strategies can also affect sales volume. However, the decision regarding whether to standardise a particular advertising strategy or adopt another a new one is one of the most critical issues that business organisations face. This topic has been regarded as an endless debate from 1950 to 1990 (Solberg, 2002). Standardisation means that a company maintains the same advertising strategies in all the countries where it markets its products or services. It is in line with the idea of global marketing strategies, which was first established by Levitt (1983). The globalism concept suggests that the world is becoming a common place where people desire the best product and lifestyle no matter where they live. Particular to international advertising, the globalisation strategy concept was praised by marketing practitioners. By adopting global advertising, companies can create massive economies of scale to maintain a consistent brand image in the minds of the consumers. On the other hand, the conventional view is to localise marketing and advertising strategies because every market is unique (Zhou and Belk, 2004) and since consumers have different needs and lifestyle all around the world. Jobber (2010) also suggested that full standardisation of advertising is rare. Advertising is defined as “a paid form of non-personal communication about an organisation and its products that is transmitted to a target audience through a mass medium such as television, magazine, newspapers, public transport or the internet” (Jobber, 2010, p.913). Effective advertising can influence the reputation of the company in a highly significant and positive way. Furthermore, advertising is efficient, as it enables to reduce cost by generating awareness among a wider audience, rather than individual advertising. However, the total monetary outlay could be extremely high in certain cases. In addition, good advertising campaign can add extra value to the product. For example, BMW cars are advertised as being relatively more sophisticated, stylish and technically innovative than other Japanese brands, which makes the customers inclined towards wanting to own BMW cars. Therefore, it becomes clear that through advertising company’s image is further enhanced, thus the value of the brand increases. The paper at hand focuses on evaluating the extent to which factors such as culture, regulation and the organisation itself impact the decision of standardisation or adaptation of marketing strategies. National culture, in marketing literature, has generally been identified as one of the most important factors that influence the decision to adopt standardisation or adaptation advertising strategies. According to Feather (1995) and Rokeach (1973), culture influences how people interact with each other on one hand, whereas on the other, it shapes motivations, lifestyles and product choices in the same society by setting the norms of behaviour and acting in particular situations. Therefore, culture can be noise in the communication process, which influences how a receiver decodes the message. Since the sender intends to convey the right meaning of the message to the receivers (communication process diagramme), it is necessary for them to learn consumers’ attitudes to advertising across countries. Zandpour et al (1994) claims that advertising as a communication tool is more powerful and persuasive when it reflects local cultural values. For instance, according to Francis Hsu (1981), the American culture is centred on individualism and low-context dimensions, which are characterized by independent, freedom and equality of opportunity. On the other hand, Hsu (1981) described Chinese culture as that which promotes collectivism and high context. Collectivist societies emphasize interdependence and in-group obligations and high-context cultures emphasize harmony, beauty and unity with nature. Therefore, the standardisation of advertising appeals used in US when used in China is unlikely to be successful. This is due to the fact that Chinese commercials employ more group consensus appeals such as family-oriented and indirect verbal expressions than US commercials, which emphasize on individual determinism, competition and product superiority. Lin (2001) also suggests that a more contemporary interpretation may emerge since culture values can be changed over time. National culture can be influenced by foreign culture, which means it is possible to adopt standardisation in the future. This is supported by Lin’s (2001) research, which reveals that in Chinese commercials, the youth and modernity appeals that reflect westernisation have been frequently displayed as in the US commercials. By studying consumer responses to sex appeal advertising in Australia, China and the USA, Liu (2009) found that Chinese consumers hold similar attitudes towards sex appeal ads as US consumers and in certain cases, even more favourable attitudes than those shown by Australian consumers. However, it was assumed that culture may affect consumer reaction to sex appeal ads because Chinese people in a high-context culture are supposed to prefer implicit communication rather than explicit communication like ads which portray elements related to sex (Severn et al., 1990). On the other hand, Liu (2009) indicated the limitation of this study, that is, the chosen sample only included young Chinese consumers who may accept sex appeal advertising more than their older generations. It actually further supports the argument that the interpretation of ads appeal can be changed over time because it implies that there would be different interpretation in sex appeal ads between the younger and older generations. Moreover, the suggestion of adaptation approach by Hsu (1981) and Severn et al (1990) is mainly based on cultural dimensions including individualism/collectivism, low/high power distance, low/high uncertainty avoidance, masculinity/femininity, short/long-term time orientation and low/high context (Hofestede, 1980; Hall, 1976). According to Brewer and Venaik’s (2012) finding, some academic researchers and practitioners misused Hofstede’s cultural framework by applying the national culture dimension scores in individual-level culture related decision making (Brewer and Venaik, 2012). Since people’s attitude to ads appeal is individual behaviour, it is inappropriate to project national culture dimension onto the individuals in the country. Therefore, the results found by Hsu (1981) and Severn et al (1990) may be viewed as invalid. Furthermore, the current findings exclude considering whether regional homogeneity exists in the host country (Onkvisit and Shaw, 1999). If the culture difference within the host country is significant, it is less effective to adapt to advertising strategies in a multiculturalism society. For example, in Britain, the ethnic minorities account for 5.5%of the UK population, and contribute to an annual spending power of £10billion, and this seen to be growing further at a rapid pace (Nwankwo and Lindridge, 1998). Both national and multinational companies should not treat the ethnic minorities as marginal because that population is soon becoming larger in size. In addition, their buying and consumption behaviour are different from the mainstream consumers, which makes it even harder to target both mainstream and other ethnic minority markets. Regulations in different countries can also be a determinant of making decision regarding adaptation or standardisation. Practitioners should adopt adaptation approach when regulations are different in foreign countries. Advertising regulation can be a reflection of its social environment, which can be influenced to a large extent by the element of culture. More precisely, advertising regulation is a result of the combination of different forces including culture, religion, legal tradition and economy etc (Boddewy, 1982; Harker, 1998; Rotzoll and Haefner, 1996, cited in Gao, 2005). The result was obtained by making comparisons among the government advertising regulation in China, Hong Kong and Taiwan. It was seen that although these three markets have strong cultural and economic commonalities, their advertising regulation systems vary considerably due to economic and political force Gao (2005). For example, the Chinese market is much larger and less democratic when compared with the other two countries. Therefore, in terms of overall strictness, China ranks first in being the most stringent, and Hong Kong ranks the third (Gao, 2005). Moreover, Gao (2005) concluded that in the future, hominization of regional advertising regulation in the three markets is attainable because the three regulatory systems have already followed similar guidelines and drawn upon the same set of advertising issues. However, Gao (2005) emphasises that the opinion on this issue depends on the characteristic of an individual. Optimistic people see the present world as an era of globalisation, however the pessimistic ones tend to argue against harmonisation of regional advertising regulations (Boddewyn, 1988). Due to this reason, one cannot fully accept the generalizability of Gao’s (2005) conclusion. Apart from the culture perspective, Martenson (1987) and Solberg (2000) suggested that the organisation itself is also a key determinant of international marketing strategy. By interviewing 150 Norwegian exporters, Solberg (2002) created the 2X2 matrix as shown in Figure 1 to demonstrate that both knowledge of local market conditions at the centre as well as the headquarters’ influence on local marketing decisions have impact on firms developing their international marketing strategy. Solberg (2002) also concluded that knowledge of local market conditions is more likely to lead to a more standardized approach by firms, whereas, on the other hand, centralized decision power will lead to more negative reactions at the intermediary level. For example, companies in the local barony position tend to adapt their advertising strategies in local markets. At the same time, local barony companies show better cooperative and favourable conditions than firms in other positions. This happens because of the headquarters’ lack of market knowledge as well as high autonomy of local representative. Meanwhile, because the cost of adaptation is extremely high and lack of control from HQ due to limited market knowledge (Kohli and Jaworski, 1990; Narver and Slater, 1990), local barony companies also show worse performance than others. However, this does not mean that standardisation can always lead to higher performance. According to Cavusgil and Zou (1994) there lack of sufficient evidence to show that communication adaptation gives positive correlations for the export company’s performance, especially so in case of its financial performance (Samiee and Roth, 1992). Furthermore, there is a main critique about Solberg’s (2002) finding, which reveals the lack of operative or execution part of the advertising effort despite possessing good knowledge of market as well as grasping the “think global” part of firms’ advertising strategy. Therefore, it becomes clear that the decision of whether to adopt standardisation or adaptation approach in advertising strategy is a highly critical issue in the current multi-cultural market environment. Although there are several researches which all point to the fact that culture, regulation and the organisation itself have a direct impact on this decision, there are also researches that present counter arguments regarding the methodology being used in research and the generalization of the result etc. Therefore, a valid conclusion still cannot be reached to show which factor has the most significant impact on deciding whether to adopt standardization or adaptation. Furthermore, it emphasises the need for further in depth research to be conducted in order to ascertain which approach is better. However, there is an increasing number of multinational companies as well as local companies which now use both advertising approaches. 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