Impact of Culture on International Marketing Strategy - Assignment Example

Impact of Culture on International Marketing Strategy Introduction: One of the most significant differences that can be identified and investigated between domestic and international marketing can be termed as cultural differences. A number of researches show that to develop an appropriate understanding about local culture is the key of success in international market. The firms, which are looking for global expansions must have adequate and authentic information about the markets that are being seen as business destination. The term ‘culture’ has been defined differently in different context and its impact has been discussed by many of academicians and professionals. From the international business perspective culture refers to the distinct way of living for the people of a particular society. The term culture includes but is not limited to values, beliefs, assumption, moral, ethics, religion, etc of a society. These factors of culture are gradually learned from the members of the society and are passed from one generation to others. It defines and determines the ways in which the people of a particular society live. In addition to this, the culture of a society also determines what is acceptable and what is unacceptable for a society (Helsen 2009). Need of International marketing As the market of developed countries like UK are getting saturated, and because of high level of competition it become important for the organization to look for the new territories and markets (Doole and Lowe 2008). Markets of developing countries like India and China are in the state of evolution and their economy is booming, because of which there are good amount of opportunities are present for the foreign organizations. This statement can be supported by the fact that sales rates for Coca Cola get doubled every three years in the countries like India, China and Indonesia, whereas in developed countries its average growth rates is below 5% (Fletcher 2007). Thus it can be said that developing countries provides more growth opportunities in comparison to the developed countries. But to capitalize these opportunities it is important for the organization to adopt a strong marketing strategy for such international markets. Currently, companies like Coca Cola are targeting the elite population of developing countries. Most of the firms having imperialist mindset, which made them to sell the same products without any change as per the needs of the new market and consumers. Most of the organization believes that with the increase in the income level, people will start using their products. But this approach of the organization will help them to utilize only a part of the total market. At this stage, role of international marketing come into act as it helps the organization to understand the different market drivers, through which organization can capitalize the market well. Different market drivers are technology, culture, competition, etc. (Giligan and Hird 1986) Importance of culture in international marketing: It is needless to say that the marketing is a process through which the needs and wants of customers are profitably satisfied. In order to respond the needs and wants in different societies, it is imperative that the mangers understand them appropriately (Pride and Ferrell 2006). A firm as a part of global expansion when entered to foreign countries, it has to take a numbers of factors into consideration and these factors are identified and analyzed by environment analysis. It consists of internal and external analysis. In order to conduct external business environmental analysis PESTLE model is taken into consideration. It stands for political, economical, social, technological, legal, and environmental. In this regard the social factor has a profound impact upon the conduct of business in foreign country. The social factors are also concerned with cultural dimensions of the society and determine the acceptance of products and services in that particular society (Paul 2008). Most of the marketing experts believed that it is important for the organization to create customer value for the success in the new foreign markets. By creating a super customer value, organization can secure a niche in the competitive environment (Lai 1995). Organization can adopt different kind of strategies like differentiation, low-cost, but they all are insignificant if company fails to create customer value. Customer value is mainly depends on how customers perceived the new organization and its product, its benefits, its costs and its usability (Gale 2010). These are the factors which are needed to be considered by the organization to define its marketing strategy and to communicate in better and effective manner. Because of presence of such factors, organization started to work on different parameters so that can add value to their offerings. Now organization started making changes in the appearance, color, size, shape of the products on the basis of the consumer behavior. Even the organizations are not using same kind of advertisement and themes to communicate with the customers in the developing countries as they were using in the developed markets, as they know customers in both countries have different behavior because of the difference in the culture and other factors. Study of the consumer behavior is the major tool through which organization can understand the new customers and can transform its products accordingly. It is believed that with the help of detailed analyses of the consumer behavior organization can deliver superior customer value to its customers (East, Wright and Vanhuele 2008). Consumer behavior for same product or service is different, and difference in culture is one of main reason for it. Culture can impact the consumer behavior in three manners. Culture determines the cultural values, personal values and consumption values of the customers. All these three factors determine the value of the product in the market. Cultural values Cultural values are the individual beliefs which he/she got from his/her socio-cultural environment. These cultural values are the set of the values which are shared by the whole community and it defines what is desirable (Assael 2005). These socio-cultural beliefs are the society core values and are implanted into individuals through education and socialization. Each country has different society core values and they play very important role in defining the value of the product in the market. For example in American culture fun and enjoyment in life are the societies core-values, because of which organization in their marketing campaigns try to relate their product with the fun and enjoyment so that consumers can associate themselves with the product and understand its value. Whereas in the developing countries like India and China, family bonding and relationships are given more preference over the fun and enjoyment because of which organization uses this thing in their advertisements and other marketing campaign. Advertisement campaigns of Cadbury for Indian market is the good example of this, in which company tried show the importance of relation and happiness in life. This difference in the theme and message of the advertisements shows impact of cultural differences on the marketing in developed countries and developing nations. Personal Values Personal values of the person are his/her individual beliefs which decide what are desirable for themselves. They are closely related to the individual’s personality, position in the society, aims and objectives etc. All these factors determine the individual’s need and desires. Personal values are more self-centre, but still culture has indirect impact on it and person’s need and desires, which force the organization’s to modify their marketing strategy as per the culture of the country or market (Paliwoda 1991). For example, in developing countries people are more prices concerned because of which most of the organizations use the message in which they can show value of the product in accordance to its price. McDonald’s physical separation of vegetarian and non-vegetarian products in India is another example of the impact of cultural and personal value on the marketing strategy of the organization (Wharton 2012). Consumption Values Consumption values define the belief of individual about the desirable way to attain the personal values. People achieve their personal values through actions and activities, like social interaction, possession or consumption. In different studies it has been shown that knowledge of the products helps the consumer to determine which course action will help them to achieve personal values or goals (Assael 2005). Due to the difference in the cultural background, people preferences of action for attaining the personal values also differ. For example, people in the developed countries consumers looks for the aesthetic benefits of products. For example, they like to have expensive gadgets with latest technology as it gives them sense of self-satisfaction and pride. Whereas in the developing countries, consumers select the products on the basis of its usability, ease of use, etc. Because they want to have products which help them perform better. These differences on the course of action of the consumers make the organization to change the marketing strategy when they move from developed countries to developing countries. Another important factor which affects the success of the organization in the foreign market is its relationship with the local business partners and customers. Organizations are required to develop a strong network to establish its business in new market, for which they need to communicate in right manner. Different studied showed that organization with strong relationships and network performed better than the others. Key factors which results into the strong and long-term relationship are- communication, shared norms, co-operation and reputation. It has been observed that businessman of South Korea preferred to do business with their neighboring country rather than working with western culture because of cultural variances (Fletcher 2007). Thus it can be said that culture plays a crucial role in each of the relationship and network. Business relationships are the result of the continuous interaction and communication between the parties involved (Muhlbacher et al 2006). Each of the part has different style and ways of doing because of the differences in the cultural-social environment. It is easy for the people to interact and communicate with the people who share same view and culture. People from same culture understand each other’s behavior more easily, because of which they trust each other which is very important for the development of the long term relationship and network. Different cultures values the relationship differently, because of which the establishment, development and maintenance of relationships varies across cultures. For example, the European culture focuses on the co-operative aspects of the relationship, the North American culture believes in power and conflict, whereas the Asian believes in building network through relationship. Thus it becomes important for the organization to change their strategy according to the culture. Today’s organizations working in different markets across the borders understand the importance of relationship and network for the growth of the business. They also know the role of the culture in relationship and networking, because of which they are trying to become more cultural sensitive. Cultural sensitivity can be defined as the firm’s learning and adaptation to its new nation’s business partners (Cateora and Hess 1971). Organization can learn about the new culture by obtaining knowledge related to it. There are basically two kinds of cultural knowledge that must be developed by the mangers in order to succeed in international market- the factual knowledge and the cognitive knowledge. The factual knowledge in the context of international marketing refers to the knowledge that can be acquired and developed by the mangers. There are a number of ways that can be taken into account by the mangers for this purpose like, reading a book or taking to the people from different culture or experiencing the differences while residing in different culture. There are several components of factual knowledge and include education, religion, language, politics, values technology, social relationship, values, etc (Brady 2010). The tern cognitive knowledge refers to the ability of an individual to feel comfortable with different culture and application of factual knowledge for the desired outcomes. It is not only important to know that what is acceptable in a specific culture but it is more important to understand that why an action is appropriate in a particular culture (Brady 2010). Both kind of knowledge will help the organizations to have awareness about the particular culture and its norms. This information will create base for the strong international marketing strategy and network building. The cultural sensitivity has its direct implications on the level of trust and understanding among the different parties involved in the business, thus result into better and strong relationship and network building. Cultural sensitivity becomes more important for the organization which started their business in the Asian markets because of the huge gap between the cultures and business environment (DuBrin 2012). For example, in western culture networks are build on the basis of competition, but in the Asian market co-operation and collectivism are major component of any network. Due to higher power distance, relationships can easily influenced by hierarchy in Asian markets in comparison to the Western. These cultural differences make the organizations to adopt different marketing strategies when they move from developed countries to markets of developing countries. Conclusion On the basis of the above discussion and observation it can be said that difference in the culture is one of the major reason behind the adoption of the difference approach of marketing by the organization in developing countries. Increase in the competition and saturation of the markets in developed countries, forcing the organizations to look for the new territories and markets for their markets. And it is important for them establish their business in the developing countries where good business opportunities are available. Basic need of both the markets is similar but due to difference in the culture and social environment, the customer present in the developing countries has different values, beliefs and view to the customers of developed nations and value of product will differ to them. Thus it becomes necessary for the organization to change their market strategy so that can communicate with their new customers more effectively. Relationship and network building is another important aspect of the marketing and is must for the success of the business. Every region has its own business environment which carries certain beliefs and norms, thus it understanding of local culture become more important for the new organization to develop s strong relationship and network. References: Assael, H. 2005. Consumer Behavior A Strategic Approach. Dreamtech Press. Brady, D.L.2010. Essentials of International Marketing. M.E. Sharpe. Cateora, P.R. and Hess, J.H. 1971. International Marketing. 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