The Effect of Culture in International Marketing - Essay Example

The Effect of Culture in International Marketing Contents Introduction 3 Body 5 Mental Elements 14 Conclusion 15 References 18 Introduction The emergence of new innovations, transport framework, introduction of purchaser needs, laws and legislative issues, multinationals have decided to change their views of doing business in terms of standardization and product offerings. Presently, almost all of organization considers on product standardization and market comprises of diverse societies. Hofstedes (1980), a social psychologist, indicated that some European nations have been isolated themselves in terms of culture because the different of religion and culture among society between nations (Huntington 1997), and also consumption activities (Mead 1994). It is known that culture has a profound influence on peoples’ lifestyles, their preferences & tastes; this is important knowledge for marketing managers as tastes greatly affect purchasing behavior and trends. In addition, the nation’s attitude toward culture would impact on consumers’ behaviour, consumers’ lifestyle and beliefs. Therefore the power of culture causes consumption lifestyle among society. Hofstede and Trompenaars indicated that there is a level of cultural influence to purchasing around most of the countries, and an understanding of consumption practices can be made if the key attributes cultural influences are well known. As mentioned above, internationalization is closely associated with the standards of products, and this is in turn associated with proper coordination and execution of functions in the firm’s quality departments. The internationalization process of organizations is demonstrated by universal exchange theories. Considerations for internationalization are divided into two categories i.e. macroeconomic and microeconomic theories. (Dierkes 1999). Microeconomic scholars like Levitt, Ohmae, Howl, and Vernon have studied and written a lot on what inspires many organizations to strive so that they can achieve international recognition in terms of product ranges and market presence. The answer to internationalization practice by many firms is found in macroeconomic theories. The theories are concerned with and consider mostly on what factors and considerations inform many firms’ decisions to go international. The international product life cycle (IPLC) theories from Raymond Vernon (1966) explain the distribution methodology of companies’ expansion across national boundaries. The theory shows that many product lines are in the first place produced and processed in certain nations with the target of being sold on the international market. It very well and accurately describes the exchange process by enterprises and multinational organizations developing products and services for the international market as well as establishing subsidiary firms in foreign firms in other countries. The theory illustrates that the life cycle starts when a country, producing a product that can meet demands of consumers in other countries pushes its coverage and markets products to other nations. In the last two decades for instance there has been a lot of evolutions end products ready for international consumption and this has largely been associated with increased trust among many countries through bilateral cooperation. Many companies have marketed themselves and their products on the international arena and this is a clear demonstration of what globalization can bring in organizations. Therefore, it is important and timely to study and understand how culture affects international marketing. Body Trends in consumer behavior present a very important factor that affects advertising in many organizations in terms the method used and how the advertising strategy is executed especially considering the competitive international business. The consumer is central in informing strategy and therefore any marketing plan or idea undertaken by a company must understand and be cleared at fulfilling the needs of consumers. With this in mind marketing departments in organizations will be able to formulate and implement relevant marketing strategies that bring incomes to the organizations. Therefore to better remain competitive and relevant, firms must carefully study trends in customer behavior in through market researches aimed at understanding customer preference so as to produce and market products and services, which are timely; those that customers would want to purchase because they address their specific needs and satisfaction. Changes shown in behavior of buyers as well as the environment are important as they tell organizations what trends are in the market and just how to respond and meet demands presented by the change in trends (Kolb 2008) Globalisation has had effects on behaviour of consumers with significant changes in purchasing trends and this in turn has really impacted the business in terms of strategies employed in promoting products and services. Expansion on the market place, an emerging issue of the worlds significant economies, and the area of globalisation, tell us that the choice of advertising techniques employed, standardisation of products and adjustment will keep on being an important factor for academic research in the field of marketing (Viswanathan & Dickson 2007). Throughout decades, the impact of the globalisation on advertising strategies, product standards and adjustment of services to be more customer-centric has been important in marketing and remained a questioning point for many researchers and marketing professionals. The increasing importance of advertising strategies on organisations execution of marketing and the growing impacts of globalisation on customer behaviours as well as their reactions and responses towards it, place organizations on the run to constantly improve products and be more customer centered. Understanding diverse strategies: mixed and evolving trends in buyer tendencies influenced by factors such as their own particular society, esteem and class is important in worldwide business; as it informs companies on types of marketing and promotional strategies to implement as well as strategies to develop market leading products aimed at solving all customer demands in a globalised business environment. Globalization, according to Levitt (1983), has resulted into a new commercial reality. It has resulted in the disappearance of unique, on the grounds that purchasers were required to incline toward standard results of identifiable and regional or national buying tendencies. The global buyer demand is largely similar; low cost products that meet all the demands of buyers in a timely manner. An early approach to explain consumer segmentation in terms of identifiable aspects was taken by Engledow, Thorelli, and Becker (1975), who recognized homogeneous cross-cultural leaders of rich and records delicate buyers. Kale and Sudharshans model (1987) heavily relied on similarities across segments of customers in different nations to bring about a product-class particular framework for distinguishing deliberately comparative market sections. The most important objective for them was to gather information on overall purchasers that reacted to firms Promotional strategies. Kreutzers (1988) suggested a two-stage division process when studying product standardization and international marketing strategy. In the first stage, countries were classified based on certain factors which were considered as being important for standardization of products and services. These elements of consideration included mechanical, environmental, socio-cultural, budgetary, and political factors at play which affect consumer trends and eventually international marketing. As a result, national cultures have been acknowledged as being very important to international business and marketing strategies (De Mooij and Hofstede 2002). It has also been observed that globalization patterns have a close relationship to homogeneity, segmentation of markets and narrowness: the more globalized business becomes the more the changes in products and services are observed; globalization comes with advancement in technology & knowledge transfer and as such consumers become more empowered (Levitt 1988). This significantly affects consumer behaviors, trends and buying decisions as their preferences also change with availability of product knowledge which is an important tool for decisions such as choice of what to buy. The world has become one international market with products, services as well as buyers from any corner of the world; marketing strategies must therefore respond in a timely and effective manner to changes in consumption behavior. Waters (2000) identified three possible kinds of world frameworks i.e. First, World-realms, in which the society is held together through government structures. Second, World-economies, in which a large number of political states regularly, concentrate on a solitary society coordinated by the normal financial framework; the current world framework for instance is incorporated by a solitary industrialist economy which incorporates state-communist and cultural orders. Finally there is world-communism, in which both the country and private enterprise go active about a solitary economy, brought together in a political-budgetary exchange place; this is the general economic framework which coordinates many cultures. The theoretical organization of product standardization discussions particularly focus on consumer behaviors and their similarities in trends which are of interest to marketing (Ryans et al. 2003). Globalization is promoting homogenization and meeting in organizations strategies, structures and forms as well as in buyer decisions (Gachunga 2008). Zou and Cavusgil (2002) illustrated three important points of view: coordination, design and standardization of products. Jain (1989) suggested that standardization in product offerings might be more successful if overall customers and not assumptions based on notions, re key determinants of market segmentation. Those opposed to standardization, in any case, accepted that society exerts an influential impact on purchasing behavior, and that evident homogeneity of preferences may cover the contrasts in a some parts of customer behavior (Walters, 1986; Usunier, 1996; Belk, 1996; Manrai and Manrai 1996). Kotler (1986) illustrated that standardization could be achieved in a few situations, but however cautioned that many cases of product disappointments have resulted from poor or lack of product modifications and therefore marketers should put this in consideration. He recognized that consumers purchasing behavior is significantly affected by life, availability of wealth and the characteristics present in certain commodities. Companies investing in overseas markets must take their time to study the foreign market in terms the peoples cultures, social order and government policies which might impact doing business (Hassan and Samli 1994). The recognition worldwide reactions and trends in the behavior of consumer are important in international marketing as well as the aspect of globalization (Ter-Hofstede, Steenkamp and Wedel, 1999; Hassan, Create and Kortam, 2003). Going by these views therefore it is very important for companies to understand international markets and their demands in order to roll out standard products and quality service which compete in the international environment. Further quality should of products and service offerings should be the key driving force for companies’ internationalization. (Hassan, Create and Kortam 2003). Douglas and Wind (1987 affirmed that standardization of products and service as well as brand development are important factors international business. Production of quality alternatives and differentiation of the brand should be taken with a lot of weigh by marketing teams and managers of companies going international. The presence of internationally known purchasing should not be enough in informing product development and internationalization. Companies should also understand trends prevalent in certain regions and localities driven by certain cultures in order to gain acceptance. This wil lead to development of products for diverse clientele and also formulation of marketing strategies with messages just the right market segemnts at the right time through relevant media. The level of product standardization should be higher in businesses with relation to consumer behavior and lifestyle with specific attention to the cultures that inform trends in purchasing tendencies (Jain 1989). According to Shoham (1995) standardization of product lines and adaptation marketing strategies should be influenced mainly by careful choices made by marketing managers following thorough market research. Recent cross-national customer specific studies appear to have gone beyond the product standardization talk and directed their main concentration on the need to understand the effects of cultural differences on consumer behaviors and tendencies. The fact that there exist a lot of similarities in consumer shifts around the world and the appropriateness of standardized marketing might additionally rely on proof of culturally independent significant consumer behaviors being important to business (Leblanc and Herndon 2001). The model created by Hofstede illustrates the variance in consumption and customer behavior across nations and empowers marketing professionals to quantify the impacts of society on internationalization (De Mooij 2003). Culture can therefore not be ignored and companies must do everything to understand respect and promote the different cultures as a market response. Thid will encourage customer intimacy and promote differentiation of the brand which will in turn favor business. Differences in cultural preferences, individual tastes and behaviors, and business establishments are concepts of the past. Certain characteristics in humans disappear with changes and in times while new trends which are significant in terms of influencing purchasing are acquired. A perfect example is a market in a particular society, it has unique buying patterns but will always new influences from the environment. Many companies have done international in operations and market their products as well as new ones specifically targeting the international market. This is in the wake of new reality as a result of globalization which pushes every company to go beyond national boundaries and as such market through strategies which aim at portraying an international and diverse coverage. The result is that most marketing managers and chief executives want to reach new markets thus will do anything to understand and respond appropriately to international trends in purchasing. Companies therefore are forced to invest heavily in marketing research programs, product development and promotional strategies which depict international standards of quality and service. Customer buying behavior is firmly reliant on cultural, individual, and mental factors with Cultural components bearing the heaviest and deepest impact on customer purchasing trends. The company has to focus on these effects and must realize the role played by the purchasers society, subculture, and social class since is critical society is the most fundamental reason for an individuals needs and behavior. Also, experiencing childhood in a cultural order takes in essential qualities, recognitions, needs, and practices from the family and other important associations. Impacts from end up forming ones purchasing behavior hence culture has a profound impact on international market. Subculture - Each culture is composed of subcultures or assemblies of people with certain tendencies which are dependent on the background and circumstances they are in. National cultures for example such the Irish, Shine, Italians, and Hispanics are within the national boundaries and contain different ethnic tastes which are diverse. Racial identities, on another hand such as the blacks and Asians have dissimilar cultural styles and state of mind and this translates into dissimilar purchasing behaviors which must be understood in marketing. These subcultures make up essential business segments, and marketers frequently design items and promoting projects custom-made to the needs of these customer groups by studying their behavior and buying trends. Social class – In every societies, they exists social classes with unique class associated behavior such as dressing, eating or tastes in terms of entertainment and marketers need to have this information. Social classes are moderately changeless and social order can be understood in terms of comparative values, hobbies, and practices. Social class is controlled by a number of elements, for example, wage is measured on the basis of occupation, salary, instruction, riches, and different variables. Marketers and advertisers are interested in social classes on the grounds that individuals inside a given social class have a tendency to show similar behavior, including purchasing behavior. The various social classes show differences in terms of product and brand preference when it comes to the purchase clothes, accessories, home furniture, leisure time, and vehicles. Social Variables- Consumers’ behavior is affected significantly by social elements, for example, the consumers associations, family, as well as class and social status. These social arrangements have a strong influence on consumers’ activities and purchasing trends. Companies must therefore incorporate considerations of the social elements in their marketing and advertising strategies in order to send the right message to the right clientele. Groups- An individuals conduct is affected by groups of people he/she identifies or associates and as such these groups also affect buying trends. Groups which have an immediate influence and to which an individual has a place are called acceptance groups. Reference gatherings on the other hand are assemblies that have indirect influence on ones behavior and therefore indirectly affect their purchasing trends. Marketers must therefore study and understand the kind of groupings in their targeted market segment in order to gain accurate knowledge of buyer preferences. The level of influence exerted by the group may differ significantly in market segments but is particularly important in influencing behavior in terms of impulse purchasing (Maslow, 1943). Family – The Family can also significantly influence purchasing behaviors of people. Family influences purchasing patterns can be divided into two kinds, which are purchaser’s guardians and purchaser’s companion. The purchasers guardians represent the group of introduction; through relatives, an individual is introduced to religion, legislative issues, money making concerns and a feeling of particular desire, self-esteem, and respect. The groups of reproduction or the purchasers companion include ones kids and their influence on buying behavior of someone is more regulated. The family is the most fundamental consumer buying association in the public field, and it has been studied about widely. Marketers are interested in collecting data on parents, relative partners, wife, and children for study of how they impact ones decisions in purchasing of a substantial assortment of products and services (Leblanc and Neil, 2001). Parts and Status: An individual fits in with numerous assemblies similarly to family, clubs, and associations. The individuals attitude in each one assembly might be characterized by both part and status. A part comprises of the individual activities, which are required to perform as stated by surrounded people. Every part conveys a status that status reflects the general view, which is provided by social order. Personal components: People are consisted of various kinds of features that each people might has different kind of features, which would affect on their purchasing choice for instance the purchasers age and life-cycle stage, occupation, economic situation, life style, identity and thought toward themselves. Age and Life-Cycle State – People might change their products and services, which are purchased over their lifetimes. Purchasing is equally categorized by the period of life cycle stage that purchasing might be developed over time. Therefore, marketers have to identify their advertisement properly for each life-cycle stage in order to attract people on each stage to buy their products and services. In addition, companies have to spend their significant time in order to create products and services appropriately for their customer needs on each life-cycle stage. Economic Circumstance – The personal budget will incredibly influence on making a decision for purchasing. In terms of income-sensitive, marketers have to focus on the trend of individual wage, investment funds, and tax rates that these factors would indicate the subsidence of economy. Therefore, marketers are able to use these factors to update, reposition, and reprise their products and services. Life Style – People might has diverse lifestyle even through they are from the same subculture, social class, and even occupation. Life style is an individuals activity of living, which is conveyed from his or her manners, diversions, and presumptions. Life style has something more than the individuals social class or identity. The idea of lifestyle can be used by marketers in order to understand purchaser behavior and also to know how it influences on purchasing among consumers. Identity An understanding of individual might impact his or her purchasing behavior. Identity indicates to the kind of mental aspects that dictates what is common and can be easily predicted with an individual. Thus, marketers are able to utilize an idea of identity to enhance their products and services for more attractive. Mental Elements Making a decision for purchasing products and services might be additionally affected by four mental variables, which are inspiration, observation, convictions and state of mind. Inspiration In society, there are many people that have different kinds of need. Need is categorized into two types, which are lower-order need and higher-order need. Lower-order need is considers as physiological needs that emerge from states of pressure, for example, appetite, thirst, or distress. High-order needs are mental, emerging from the need for recognition, regard, or having a place (Maslow 1943). Sometimes, needs would not strongly enough to persuade consumers to make a decision to purchase products and services. At initial stage, need turns to a considered process. If consumers’ need level are sufficient in order to force, consumers will seek to fulfill their needs. Researchers gather significant information of inspiration from sample of consumers in order to study how their consumers’ needs influence on making a decision for purchasing. Perception Perception is the process that interprets sensory information in order to respond. In addition, the personal reaction is influences by his or her perception of the circumstances. People, who has same inspiration and residing in the same circumstance, might respond differently due to the difference of perception that they might perceive different fact or motivation, which are observed individually. Perception is the process that each person selects information then composes and interprets information or motivation to structure of meaningful. Marketers are able to use perceptual method in order to create their advertisement, which would convey a message of products or services to consumers. Therefore, consumers will perceive features, quality and etc. of products and services. Conclusion The connection between neighborhood cultures has been continually growing and the expanding of cultural limits can change societal circumstance. Cultures have been connecting throughout the world dramatically that cultures can enhance the development of innovation. According to Appadurai (1990), a contemporary social-cultural anthropologist, has recognized disjuncture and difference in the global cultural economy that the world are always altering culture all the time and tension between the difference of cultural homogenisation and cultural heterogenisation might cause to the problem of global interaction. Appadurai mentioned that there are five dimensions of global cultural flow, which are Mediascapes, Ethnoscapes, Ideoscapes, Technoscapes and Finanscapes. Mediascapes, the electronic and print media in global cultural flows, can widely impact on consumers’ perception in order to make them perceive reality by using persuasive techniques. Ethnoscapes, is the landscape of persons who set up the shifting world, which are tourists, immigrants, refugees, exiles and guest workers. This group of people would affect on politic. Ideoscapes are often connecting the images of political, ideologies and also the movement of counter-ideologies in order to take part of control. Ideoscapes are consisting of connective ideas for instance, liberty, prosperity, justice, monarch, image and the major democracy. Political systems play important role for taking an opportunity from the public areas, which Ethnoscapes and Mediascapes are viewing as a media for communication and disseminate information for the public interests. Technoscapes are viewing as streams of innovation that including both low and high technology, ability to link across the local businesses and overall organisations. Technologies distributions are driven economic of scale and market relation and also increasingly relationship between capital flows, political actions and low and high labor skill. And Finanscapes, a financial transfer of global capital, are limited because of mysterious, rapid and difficult landscape in order to pursue ever than before for instance currency markets and national stock exchanges. The significance of the global relation between ethnoscapes, technoscapes and finanscapes is completely disjunction and uncertainty because of the landscapes is controlled by the limitation and stimulus such as politics, information and techno-environment. While the limitation and stimulus are moving to the other territories, the global political economy has to consider the fundamental models, which help multi organization connect their relationships between aspects on human drive, industrial movement and financial transfers from one society to one another. The five dimension of global cultural flow play an important role for globalization that these factors would affect on traditional and existing culture. In addition, there are some restrictions among society because of regional limits that traditional cultures are seen as limitation because some nation has different cultures, which make communication between nations more difficult. Disjuncture and difference in the global cultural economy make difference throughout the world that every culture is unable to assemble as the one nation. Therefore, culture might affect international organization in terms of communication, product standardization and advertisement. References Belk, R., 1996. “Hyperreality and Globalization: Culture in the age of Ronald McDonald”. Journal of International Consumer Marketing. Creswell, J. W., 2010. Designing and Conducting Mixed Methods Research, Sage Publication. Douglas, S. P. & Yoran, W., 1987. “The myth of globalization”. The Columbia Journal of World Business. 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