The Self Reference Criterion in the Context of International Marketing - Research Paper Example

SELF-REFERENCE CRITERION 1.0. INTRODUCTION Globalisation is a contemporary phenomenon that has been experienced only in the last sixty years (Soros, 2002). However, considering that it is still quite recent, its effects in the lives of contemporary people and social institutions have been tremendous (Suarez- -Orozco & Qin – Hilliard,2004). Due to globalization, trade and economic barriers have been removed by countries thus allowing the free movement of goods and services between and across nations (Soros, 2002; Fischer, 2003; Balakrishnan, 2003). Trade liberalisation has createdtrans-national corporations (TNCs) and multi-national corporations (MNCs) making it a part of contemporary reality (Supporting SMEs,2007). In addition, as globalisation has opened the venue for a freer and massive movement of people, it has contributed to the decreasing importance of physical boundaries and the increasing significance of the chance to meet, interact, get to know and assimilate different cultures and norms. The reality of cultural interactions among nations in the global community creates new challenges and paradigms in understanding the idea of cultural identity and national belongingness (Suarez- -Orozco & Qin – Hilliard,2004). Global marketing and international trade can be seen as firms’ expansion to other countries outside their home country (Boone & Kurtz, 2006) In this era of globalisation, firms are encouraged to go global because of the benefits that are gained in entering the global market. These benefits include: 1. Increase profits 2 Employment opportunities 3 It gives companies the chance to be less dependent to the economy of their countries 4. Reduces cost of production 5.provides an opportunity for sharing knowledge and potential markets around the globe (Boone & Kurtz, 2006). In the face of this reality – globalisation, TNCs, MNCs, and movement of people- one of the primary concerns that international businesses encounter is on how the different cultures that they meet as they cross borders, interact with and undertake business exchanges and transactions in the global market may create and become a positive opening. An opening wherein the differences in culture can be understood and turned into a constructive, affirmative and beneficial aspect for the firm in particular and for the entire business environment in general. This concern is significant since cultural differences in international market is a recognise source of conflict and misunderstanding in doing international business in the global market (Lee, 1966; Hofstede, 1993; Murray, 1981; Cateora & Graham, 2005; Camiah & Hollinshead, 2003; Fang, 2003). In fact, it is maintained that a continued disregard of the reality of cultural differences in international marketing spells failure for the company (Bakerma & Bell, 1996; Soley & Pandya, 2003;Tihanyi et al, 2005; Baraldi. 2006). Responding to the challenges pose by cultural differences in the context of global marketing and international trade, scholars and experts have come up with theories that clarifies, explains and even proffer solutions for this situation (eg. Hofstede,1993; Tihanyi, 2005; Shavitt et al,2006). 1.1. AIMS OF THE PAPER In this regard, this paper will try to understand and elucidate one of the major theories that is used in comprehending cultural differences in the context of international marketing – self –reference criterion. Self-reference criterion is defined “in the “cross-cultural management” literature as the tendency to judge other cultures using one’s own set of values as the reference point (Jeannet and Hennesy, 1995 as cited in Shankarmahesh, 2006: 148). The discussion of self-reference criterion will be undertaken in order to analyse the claim “The self –reference criterion is not a barrier in the context of international strategic marketing.” And provide arguments for the affirmation or negation of this claim. 1.2. STRUCTURE OF THE PAPER This paper will be having the following structure. The first part will be an introduction to the general context that which inspires this paper. The second part is the presentation of the aims of this paper. The third part will be the laying down of the definition of some terms that are deemed necessary in the discussion that will be undertaken in this paper. The fourth part will be the discussion of the self reference criterion wherein the positive and negative aspects of the theory will be presented. The fifth part will be presentation of the analysis and position of the paper regarding the claim “The self –reference criterion is not a barrier in the context of international strategic marketing. And the sixth part will the paper’s conclusion. 1.3. DEFINITION OF SOME TERMS Before embarking on the discussion, there are some terms that need to be defined in order to guide the reader regarding the usage of these words in the paper. Moreover, it is recognised that there are some terms that will be used that are deemed to be ambiguous, consequently, it is necessary to set the parameters in order to avoid possible confusion. International trade is defined as the firms’ expansion to other countries outside their home country (Boone & Kurtz, 2006) thus creating the transnational corporations and multinational corporations. International marketing is defined as “the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. The only difference between the definitions of domestic marketing and international marketing is that in the latter case marketing activities take place in more than one country” (Cateora & Graham, 2005: 11). Culture, which, is one of the focal points of difference that exist among and across countries is defined in numerous ways. Hofstede (1993) defines culture as “the collective programming of the mind which distinguishes one group or category of people from another (p 89). He further stipulates that “culture is a construct” (Hofstede, 1993: 89). This claim implies that culture “ is not directly accessible to observation but inferable from verbal statements and other behaviours and useful in predicting still other observable and measurable verbal and non-verbal behaviour” (Hofstede, 1993: 89). On the other hand, culture can also be understood “in general, is the homogeneity of characteristics that separates one human group from another. Culture provides a society’s characteristic profile with respect to norms, values, and institutions that affords understanding of how societies manage exchanges” (Tihanyi et al, 2005: 271). Another popular definition of culture is the one given by Clifford Geertz which states that culture is the “means by which people communicate, perpetuate, and develop their knowledge about attitudes towards life. Culture is the fabric of meaning in terms of which human beings interpret their experience and guide their action” (Trompenaars and Hampden-Turner 1998, 24 as cited in Speedy, 2005). Another definition that is considered as popular is the definition given by Vern Terpstra and Kenneth David who assert that culture is “a learned, shared, compelling, interrelated set of symbols whose meanings provide a set of orientations for members of a society. These orientations, taken together, provide solutions to problems that all societies must solve if they are to remain viable” (Terpstra and David 1991, 6, as cited in Speedy, 2005). These definitions are only some of the definitions given in order to understand the notion of culture. In this condition, it can be impugned that the idea of culture, as it pegs the interests of scholars across various fields of knowledge, is generally understood as verbal and non-verbal behaviour of a group of people. Moreover, culture separates and distinguishes them from others while at the same time providing the group of people the tools and symbols necessary in creating meanings for their interactions with one another and with others. However, it should be noted that although there are many definitions that are given in this paper, what is important is the fact that there is recognition that culture is a construct and as a construct it can be changed and ‘discarded’ if other means for ascertaining the meanings of the society can be provided (Hofstede, 1993). International marketing strategy is defined as the “standardised marketing mix with minimal modifications that affirm uses in all of its foreign markets” (Boone & Kurtz, 2006). The last term to be defined is globalisation and it means the “free movement of capital and the increasing domination of national companies by global financial markets and multinational corporations” (Soros, 2002; 2). Again, the definitions of these terms are provided to guide the reader as to how these terms are used and understood in this paper. 1.4. SELF-REFERENCE CRITERION: IN FOCUS The impact of cultural differences in international marketing is undeniable. It can spell success or failure depending upon the approach and decisions that firms undertake as they enter the global market (Cateora &Graham, 2005; Baraldi, 2006; Tihanyi et al, 2005). In addressing this primary concern, one of the initial approaches that is taken is to study and understand the concept of culture. In fact, as provided already, there are numerous ways of looking at and defining culture. As such, it is not surprising to find that theories and approaches explaining cultural differences are also abundant. These theories and approaches include anthropological approach, Maslow approach, High-Low context cultures, diffusion theory, perception, nationalism, Hofstede’s theory and self-reference criterion (www.fao.org). As stated earlier, the focus of this paper is self- reference criterion. Just like the other theories, self-reference criterion is a response to the recognition of the fact that as a company cross borders, one is right away jolted to the reality that each country is unique, each country has a specific needs and demands and that each country has a set of values and specific culture that affects and influences the behaviour of its people, of its market, thereby, establishing new challenges and opportunities for companies in international market (Murray, 1981). This situation has long been recognised. As early as mid 1960’s James Lee already noted that cultural differences have a big impact in the performance eo fthe corporaton in the intenational market. According to James Lee (1966) “unconscious reference to one’s own cultural values” within business decisions. In a simplistic sense Lee discussed “foreignness” for he was concerned with the apprehension and value-ladened perceptions each of us has when we discover that there is something different about foreigners” (James Lee, 1966 as cited in Murray, 1981). In this regard, self-reference criterion starts at the personal perspective and viewpoint of the marketer and makes it the cultural parameters, framework and paradigm with which to understand the culture of the other country. The self-reference criterion has been perceived by many as problematic in terms of decision making in marketing (Murray, 1981, Cateora & Graham, 2005) It is alsopointed out as the cause of many cross- cultural blunders committed (Murray, 1981, Cateora & Graham, 2005; Shankarmahesh, 2006). Self-reference criterion becomes a problem because of the resulting inflexibility and rigidity in the assertion of the rightfulness of one’s culture over the other culture. This manner of approaching other cultures create a chasm that is insurmountable. Insurmountable precisely because the marketer fails to see the market as it is perceived, understood and appreciated by the other culture, by the people to whom they are introducing their products/services. Moreover, in self-reference criterion, the person sees the other culture in the eyes and perspective of his/her own culture (Shankarmesh, 2006). In this regard, foreigners and/or foreignness is being accepted and interpreted in a very bias manner that results into unconstructive stereo-typing (Speedy, 2005). Furthermore, what this shows is that the self-reference criterion is presented as providing a very negative comprehension and understanding of cultural differences. So much so, that it can be claimed that in the context of self-reference criterion, the marketer fails to grasp the nature of cultural differences, fails to utilise the existing difference for the advantage of the company, disregards the authenticity of the other culture and implements marketing strategies that are not suited to the culture of the other country. Thus, creating cross-cultural blunders (Shankarmesh, 2006). Furthermore, what makes self-reference criterion more problematic is that it is “unconsciously” done and incorporated in decision making (Global, 1997). Thus, making it difficult to be detected. In lieu with this, it can be impugned that the self-reference criterion opens two distinctive approaches in the problem of cultural differences in international marketing (Global,1997). These two distinctive approaches are standardisation and adaptation. Standardisation as an international marketing strategy connotes the idea that the market, and or consumer wants, needs and preferences is homogenous regardless of cultural differences (Ryans et al, 2003;Viswanathan & Dickson, 2007). In this framework, what is presupposed is the notion that marketing strategies can be universalised as market and consumer preferences are homogenous (Viswanathan & Dickson, 2007). In fact, this approach is preferred because of lower cost in marketing (Ryans et al, 2003). On the other hand, adaptation in the midst of cultural differences in international market connotes the idea that the market is heterogeneous and that consumer preferences varies (Ryans et al, 2003). In this approach, the concept of culture plays an integral role since it recognises and respects the notion of cultural influences in the market and in the definition of consumer wants, needs and preferences. Being such, adaptation upholds the idea that culture is pivotal in the creation and understanding of the value system and meanings given by people to their experiences (Hostede, 1993). In this regard, the differing valuation and preferences of consumers across nations become understandable considering that culture plays a vital role in the “programming of the mind” (Hofsted, 1993). As such, in the reality of cultural differences in international marketing what is proposed is the adaptation of the firm to cultural differences (Ryans et al, 2003; Cateora & Graham, 2005, Speedy, 2005). Adaptation entails looking at the problem of marketing strategies not only from the perspective of the marketer or marketer’s home country but also from the viewpoint of the foreign market, and consumers (Murray, 1981). This move is considered as more responsive to the actual demands and wants of the consumer, thus, creating more profit for the international company (Ryans et al, 2003). However, it should be noted that adaptation although responsive and respectful of the inherent differences across culture and consumers, to be truly effective should go beyond the cognitive level and move towards emotional level in adaptation (Molinsky, 2007). This position maintains that in the context of cultural differences in international marketing, the cognitive awareness of the differences in culture and intellectual ability to understand that one is interacting in a foreign culture, coupled with the motivation in understanding the culture and the behavioural adaptation that is yielded out of this cognitive awareness has its toll to the emotional level of the individual (Molinsky, 2007). Thus, it is recommended that the emotional aspects of adaptation be given the necessary focus in order to equip the persons confronted with the problems and issues of cultural differences (Molinsky,2007). Moreover, it is important to note that the debate between standardisation and adaptation as response to the challenges posed by cultural differences and self-reference criterion is still ongoing and that scholars and practitioners of the field are still elucidating and clarifying the issue (Ryans et al, 2003). This discussion highlights the fact that self-reference criterion is a reality that has to be reckoned with in the midst of the reality of cultural differences in the international market. In this regard, guidelines have been proffered in order to minimise if not totally eliminate self-reference criterion. These guidelines re: (1) define a business problem in terms of his/her own cultural norms, habits and standards; (2) define the same business problem in terms of a foreign culture’ s norms, habits, and/or standards; (3) Examine the results of #1 and #2 above; this is the SIC influence. The manager’s solution in his/ her home culture (#1) as compared to his/her solution in the foreign setting (*2) must be compared to expose the manager’ s unconscious biases regarding the foreign environment and (4) Redefine the problem without the SIC. Develop a solution to the foreign environment which is not based upon the manager’s SIC. SOURCE: LEE, 1966 as cited in MURRAY,1981:163 These guidelines help managers in international companies remove the influence of self reference criterion in their approach and management decision. Again, there is a perceived importance in minimising if not totally eliminating self-reference criterion in management decisions. Since, it fails to appreciate the inherent differences existing among and between cultures of nations as they meet and interact in the international global market. Having an idea as to what self-reference criterion means, gives us the tool in analysing the claim “The self-reference criterion is not a barrier in international marketing strategy.” 1.5. THE SELF-REFERENCE CRITERION IS NOT A BARRIER IN INTERNATIONAL MARKETING: A DISCUSSION In the above discussion it has been shown that adapting to the challenges brought forth by the inherent reality of cultural differences as various nations meet and interact in the global market is necessary. In this regard, the self-reference criterion as an explanation of culture is often encouraged to be minimised if not totally eliminated (Murray, 1981; Cateora & Graham, 2005; Camiah & Hollinhead, 2003;Rajagopal, 2005a, 1005b). However, the proposition “The self-reference criterion is not a barrier in international marketing strategy.” provides an alternative approach and understanding of self –reference criterion. Looking at the statement, it connotes the notion that self-reference criterion is not as bad as it is now understood. That, perhaps, there is a possibility that it does not act as a hindrance in implementing international marketing strategy, thus attain success and sizeable market share in international market. In this view, this paper affirms the proposition that The self-reference criterion is not a barrier in international marketing strategy. This is claimed base on the following reasons. First, although human beings are deemed as tabula rasa at birth, it is accepted that as they grow older their manner of looking at things and understanding of their experience of life plus the meanings that they attach and attribute to life itself is shaped by their continuous interaction with other people in the community (Locke, 1952). In fact, it is continuously maintained that the growth of the human person is only attainable in the context and presence of other human beings (Arendt, 1959). In this regard, putting this idea in the situation of cultural differences in international marketing, it can be claimed as a reality that managers do not enter the global market as if they do not have any cultural influences from their home country. This is a reality that is something considered significant even by Lee who is the one who conjure the concept of self-reference criterion. He himself includes it in the guidelines that he provided. The first guideline refers to managers looking into their own culture (Lee 1966 as cited in Murray in 1981). This acts as a proof that the influence of culture in the individual is something that has to be accepted. It is not something that has to be denied. Culture is the mind’s programming (Hofstede, 1993). It is the learned, shared, values and means by which people communicate, perpetuate, and develop their knowledge about attitudes towards life. Culture is the fabric of meaning in terms of which human beings interpret their experience and guide their actions and orientations (Tihanyi et al, 2005; Speedy, 2005). As such, to remove it from the frame work of the marketer is a failure to recognise and respect the validity and authenticity of the own cultural backgrounds of the managers and people working in international market. It should be kept in mind that the managers themselves are human beings and are not just automatons responding unthinkingly to the challenges of globalisation. The ‘divide’ between my culture (managers’ home country) and their culture (the culture of the foreign market) should not be seen as wall that separates people from one another. Rather, it should be seen as the inherent connection that affirms the humanity of each and every human being. My culture Their culture This figure shows that the existing differences in culture point to a similarity that is not exact but an existing one –the intricate presence of culture in the experience of life of people. Looking into the inherent cultural differences in this manner gives room for a paradigm shift in the manner of looking at the intrinsic differences in culture that exists among and between people and nations – culture is a commonality that exist in the human condition. “The human value system is a synergy of societal values, familial values and individual values generated through the influence of culture “ (Rajagopal, 2005a: 4) Second, self- reference criterion being the unconscious reference in one’s own values may act as one of the many points that meet in the pluralist society which in turn drives globalisation (Saurez -Orozco & Qin – Hilliard,2004). The idea of a “one size fits all” or a universal marketing strategy seems to be removed from the very ethos that drives globalisation - pluralism. For instance, in the tourism industry, a new marketing strategy is being employed - the nation branding. This concept is recent (Fan, 2005; Gilmore et al, 2007; Marat, 2009) and it involves the creation of a slogan or symbol or a combination of both that represents the country. This is used by the tourism industry in order to attract foreign tourist to visit their country. In this regard, the inherent cultural differences are used to the advantage of the country. Transcribing this in a more general picture of cultural differences in international marketing, cultural differences should be used to the advantage of the firm. Indeed, the manger has his/her own culture and the new market has its own culture. What should be done is to enhance the positive aspects of both cultures and find means wherein the two can be reconciled. Again drawing from the work of Lee (1966), the third part of the guidelines (3 Examine the results of #1 and #2 above; this is the SIC influence. The manager’s solution in his/ her home culture (#1) as compared to his/her solution in the foreign setting (*2) must be compared to expose the manager’ s unconscious biases regarding the foreign environment ) already affirms the possibility of a meeting point between cultures. Thus, leaving no culture relegated in the periphery. However, what has only been highlighted in self-reference criterion is the negative facets of cultural differences like bigotry, stereo-typing and bias. Although there is truth to this and it cannot be denied, but there is also the positive side of cultural differences that can be utilised for growth. And this is shown to us by the tourism industry. Self- reference criterion provides a window wherein the culture of other countries can be mirrored and appreciated vis- a- vis other cultures thus hopefully striking a more holistic, synergistic and integrative approach in international marketing. Third, self reference criterion can serve as one of the initial instruments that may be used in addressing the basic questions of international marketing. The basic questions of international marketing include the following key issues: what is the business environment? Which market to enter? How to enter? What are the objectives? Segmentation, positioning, international and global market mix, management of global operations with the core strategy of attaining sustainable advantage in the global market (Cateora & Graham, 2005). In this regard, it is not impossible that of the numerous concerns confronting a firm the danger of information overload is imminent. In this situation, managers and decision makers have to have an anchor or frame of reference with which they will understand all the information. And one of the basic references that can be utilised in the initial assimilation of all information are the managers’ perception of self, their conditioning and background and their own culture. This is facet of self-reference criterion that can be considered as a positive one as it affords managers and decision makers a preliminary means with which to approach cultural differences. Fourth, another positive aspect of self-reference criterion is that it encourages managers to undertake and conduct marketing research (Gillpatrick, 2008). This is significant since with the concept of SRC at the fore of the minds of the managers they become more aware of the dangers of the negative aspect of SRC which are negative stereo-typing and disrespect to the inherent value of the different cultures. And as such, they become more willing in spending for research and conducting research in order to understand and gain knowledge of the intricacies of the foreign market. Fifth, since self-reference criterion is a judgement passed on other culture, managers and decision makers in marketing are becoming more conscious of their own cultural biases via being made aware of it. And in this condition, managers are taking the necessary steps in coming up with research designs that minimises or even eliminates their own home country bias (Gillpatrick, 2008). This is considered integral in their dealings with the foreign/international market (Tsui et al, 2007; Meriläinen et al, 2004; Cateora & Graham, 2005; Camiah & Hollinshead, 2003). This conscious effort in minimising their own home country bias shows that managers and marketers take seriously the threat of disregarding cultural differences. Sixth, another advantage of self-reference criterion is the fact that it makes managers and marketers more receptive to the results of the findings (Gillpatrick, 2008). This is very important as it is a clear manifestation that managers and marketers in international marketing are cognitively aware of the fact that they are dealing with a foreign culture (Molinsky, 2007). This metacognition enables them to be motivated in understanding the culture and finding strategies that suits the foreign market. While at the same time, it enables them to behaviourally adapt to the foreign culture (Molinsky, 2007). Seventh, self-reference criterion challenges managers and marketers in international marketing to take a re-look at their own cultural values, which in the process enhances not only their cognitive awareness of other cultures but of their own cultures as well (Cateora & Graham, 2005). This awareness provides managers and marketers the chance to curve the strong tendency to interpret and value the cultural differences from one’s perspective, thus becoming more cautious and sensitive to cultural nuances. It should be remembered that self reference criterion has a negative facet that is constantly posing a danger. Always at offing, trying to make a negative turn. Being such, mangers have to be constantly on guard in not passing their own cultural value judgement via utilising all the means and tools that will increase their cognitive awareness of other cultures. Take for instance what had happened to Vicks Company“Asking the appropriate question helped the Vicks Company avoid making a mistake in Germany. It discovered that in German “Vicks” sounds like the crudest slang equivalent of “intercourse,” so they changed the name to “Wicks” before introducing the product.” (Cateora & Graham,2005: 17). Eight, culture together with “political/legal forces; economic forces; competitive forces, level of technology, structure of distribution, geography and infrastructure” (Cateora & Graham,2005: 13) are considered as the factors falling in uncontrollable international environment. And these are part of the “principal elements of uncertainty an international marketer must cope with in designing a marketing program” (Cateora & Graham,2005: 13). As culture is part of the uncontrollable environment, it can be impugned that as SRC acts as an initial measure that will equip one in understanding other culture through one’s own personal perspective and own home country values/culture, the chance of developing global cultural awareness is created. In the end, due to these eight arguments, the paper affirms the statement that self-reference criterion is not a barrier to international marketing strategy. These arguments do not intend to portray that there is no problem with SRC. Rather, it offers a positive outlook towards SRC and these can be utilised in turning self-reference criterion to the advantage of the company in international market. 1.6. CONCLUSION As the benefits of entering the world market accrue, companies cannot be deterred in entering the international/global market. However, as firms cross borders, difficulties are encountered. Part of the inherent challenge of international market is the intrinsic cultural differences that exist among nations. In fact, in the literature culture is considered as one of the uncontrollable environment with which firms have to contend with. In this condition, several theories have been proffered in order to help managers, decision makers, and marketers in understanding the dynamics of cultural differences. This is necessary since, it is a known fact that a disregard of the culture of the foreign market spells failure for the firm. As such, of the several theories given, the self-reference criterion has been considered as an ineffective means of understanding other cultures primarily because the foreign culture is understood, seen, valuated and judge using the lens or perspective of the home country values of the managers. This in turn result into a negative and limited perception of the foreign culture which has resulted to cross cultural blunders. In this regard, there has been an effort in curbing the influence of self reference criterion. However, in this paper it has been shown that SRC is not a barrier in international marketing strategy because: SRC recognises the reality that human beings are influenced by their own culture and are not empty vessels when encountering other cultures. This reality can become the paradigm shift wherein cultural differences can become the point where commonality among various cultures as they intersect. SRC provides the window wherein the culture of other countries can be mirrored and appreciated vis- a- vis other cultures thus hopefully striking a more holistic, synergistic and integrative approach in international marketing. SRC can serve as one of the initial instrument that may be used in addressing the basic questions of international marketing. It encourages managers to undertake and conduct marketing research. It makes managers and marketers more receptive to the results of the findings. It makes managers and marketers take the necessary steps in coming up with research designs that minimises or even eliminates their own home country bias. It challenges managers and marketers in international marketing to take a re-look at their own cultural values, which in the process enhances not only their cognitive awareness of other cultures but of their own cultures as well. It creates the chance of developing global cultural awareness. 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