Socio Cultural Environment October 2, 2003

1. Socio Cultural Environment October 2, 2003

2. Introduction • Buyer behavior and consumer needs are largely driven by cultural norms. • Global business means dealing with consumers, strategic partners, distributors, and competitors with different cultural mindsets. • Within a given culture, consumption processes can include four stages: access, buying behavior, consumption characteristics, and disposal. • Each of these stages is heavily influenced by the culture in which the consumer thrives.

3. Why talk about culture? „differences between national cultures create important opportunities for growth and development, but also can cause serious problems if they are not understood“ (Mead 1998) Social cultural Environment includes social interactions between large groups of people seeped in their culture, sub-culture, social class

4. Why talk about culture? When General Motors introduced the Chevy Nova in South America, it was unaware that in Spanish „no va“ means it won‘t go. • When Pepsi started marketing its products in China a few years back, they translated their slogan, "Pepsi Brings You Back to Life" pretty literally. The slogan in Chinese really meant, "Pepsi Brings Your Ancestors Back from the Grave."

5. Why talk about culture? Clairol, introduced the "Mist Stick", a curling iron, into Germany only to find out that mist is slang for trash, waste or manure. The Scandinavian vacuum manufacturer Electrolux used the following in an American campaign: Nothing sucks like an Electrolux

6. Why talk about culture? Colgate introduced a a toothpaste in France called CUE, the name of a notorious porno magazine

7. Adapting to Cultures • Global marketers need to become sensitive to cultural biases that influence their thinking, behavior, and decision making. • Self-reference criterion (SRC): Refers to the people’s unconscious tendency to resort to their own cultural experience and value systems to interpret a given business situation. • Ethnocentrism refers to the feeling of one’s own cultural superiority.

8. Culture and the Marketing Mix Culture influences market place decisions. • Product Policy • Pricing: • Distribution: • Promotion:

9. Organizational Cultures • Organizational Culture: Most companies are characterized by their organizational (corporate) culture - Clan culture, Adhocracy culture, Hierarchy culture, Market culture

10. What is culture? • “Culture consists of patterns, explicit and implicit, of and for behaviour acquired and transmitted by symbols, constituting the distinctive achievements of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values; culture systems may, on the one hand, be considered as products of action, and on the other as conditioning elements of further action." (Kroeber 1952). • „Culture is a set of beliefs or standards, shared by a group of people, which help the individual decide what is, what can be, how to feel, what to do and how to go about doing it (Goodenough 1971). • Cultures may be defined as patterns of thought and manners which are widely shared. The boundaries of the social collectivity within which this sharing takes place are problematic so that it may make as much sense to refer to a class or regional culture as to a national culture (Child and Kieser 1977).

11. Defining Culture • There are numerous definitions of culture. • Culture (in a business setting) is defined as being a learned, shared, compelling, interrelated set of symbols whose meanings provide a set of orientations for members of society. • Cultures may be defined by national borders, especially when countries are isolated by natural barriers. • Cultures contain subcultures that have little in common with one another.

12. Elements of Culture Culture consists of many interrelated components. Knowledge of a culture requires a deep understanding of its different parts. Following are the elements of culture: Value System (values shape people’s norms and standards) Language(language has two parts: the spoken and the silent language) Social Interaction (social interactions among people; nuclear family, extendedfamily; reference groups

13. Elements of Culture (contd.) Aesthetics (ideas and perceptions that a culture upholds in terms of beauty and good taste) Religion (community’s set of beliefs that relate to a reality that cannot be verified empirically) Education (One of the major vehicles to transfer value from one generation to the next) Material life (technologies that are used to produce, distribute, and consume goods and services)

14. Sources of culture?? Language Nationality Education Profession Group (ethnicity) Religion Family Sex Social class

15. Cross-Cultural Comparisons Cultures differ from one another, but usually share certain aspects. High-context cultures: Interpretation of messages rests on contextual cues. Low-context cultures: Put the most emphasis on the written or spoken words. Monochronic culture: Do one thing at a time; well organized; tend to be punctual. Polychronic culture: Tend to do several things at once; less organized; less rigid and punctual.

16. Cross-Cultural Comparisons (contd.) Homophilous cultures: People share the same belief, speak the same language and practice the same religion. Heterophilous cultures: Cultures with amount of differentiation

17. Cultural Classification Scheme Geert Hofstede’s Cultural Classification Scheme : • Power distance: The degree of inequality among people that is viewed as being equitable. • Uncertainty avoidance: The extent to which people in a given culture prefer structured situations with clear rules over unstructured ones. • Individualism: The degree to which people prefer to act as individuals rather than group members. • Masculinity: The importance of “male” values (assertiveness, success, competitive drive, achievement) versus “female” values (solidarity, quality of life). • Long-term orientation versus short-term focus: Future versus past and present orientations.

18. What do you associate with Red? Active, hot, vibrant Weddings in some Asian cultures Poorly received in African countries Aesthetics and Color • With white? • Purity, cleanliness • Death in parts of Asia

19. Dietary Preferences • Would you eat….. • Reindeer (Finland) • Rabbit, Escargot (France) • Rice, soup, and grilled fish for breakfast (Japan) • Kimchi (Korea) • Blood sausage (Germany) or Rakti (Nepal) • Guinea Pig (Ecuador) • Ox tail soup, Tongue, Tripe (England)

20. Dietary Preferences • Procure 2 fresh ox-tails, cut each joint after dividing them into inch lengths with a small meat-saw, steep them in water for two hours and then place them in a stewpan with 3 carrots, 8 turnips 3 onions, 2 heads of celery, 4 cloves, and a blade of mace. Fill up the stewpan with broth from the boiling stockpot, boil this by the side of the stove fire till done, drain the pieces of ox-tail on a large sieve, allow them to cool,, trim them neatly, and place them in a soup pot. Clarify the broth the ox-tails were boiled in strain it through a napkin into a basin, and then pour it into the soup pot containing the trimmed pieces of oxtails, and also some small olive-shaped pieces of carrot and turnip that have been boiled in a little of the broth, and a small lump of sugar, add a pinch of pepper, and previously to sending the soup to table let it boil gently by the side of the stove fire for a few minutes. This soup may be served also in various other ways, by adding thereto a puree of any sort of vegetables, such for instance as a puree of peas, carrots, turnips, celery, lentils. Ox tail soup, Tongue, Tripe (England)

21. Dietary Preferences Creamy Garlic EscargotIngredients:    4 sheets phyllo dough4 teaspoons butter or margarine, melted32 helix snails, without shells4 egg yolks4 tablespoons butter or margarine2 tablespoons minced garlic1 quart heavy creamsalt and pepper to tasteDirections:1 Preheat oven to 350 degrees F (175 degrees C). Lightly spray a cupcake pan with non-stick cooking spray. 2 Place the phyllo dough on a flat surface and brush each sheet with the melted butter. Layer the sheets on top of one another and cut the pile into fours. Push each piece of dough into a cupcake pan, forming cups with the dough. 3 Bake the phyllo cups for 10 to 15 minutes, until golden. 4 Drain the snails and rinse them with running water until the liquid runs clear. In a small bowl, mix together the egg yolks and heavy cream. 5 Heat a saute pan, add 4 tablespoons of butter, the garlic and then the snails. Saute for a couple of minutes and then add half of the heavy cream mixture. Bring to a boil and season with the salt and pepper. The sauce will thicken while cooling. 6 Remove the phyllo cups from the muffin tins. Place a phyllo cup on a plate or bowl and put 8 escargot in the cup and flowing out of the cup. Pour the sauce in the cup over the escargot. • Makes 4 servings

22. High Context Information resides in context Emphasis on background, basic values Less emphasis on legal paperwork Focus on personal reputation Saudi Arabia, Japan High and Low Context Cultures • Low Context • Messages are explicit and specific • Words carry all information • Reliance on legal paperwork • Focus on non-personal documentation of credibility • Switzerland, US, Germany

23. Cross-Cultural Negotiations • Conducting successful cross-cultural negotiations is a key ingredient for many international business transactions.

25. Flows of Influence in Social Environment Culture Subculture Social Class Family Media Organizations Reference Groups Individual consumers

26. Two Approaches to Understanding Cultural Influences • Examine its “content” • includes characteristic behaviors, norms, goals, values, traditions, customs etc. • Examine its “structure” • how content is generated and distributed in the culture, i.e., the “structure” of culture.

27. Measuring Cultural Content • Content Analysis: • examine objects produced by the culture such as arts, advertisements, comic books, literature, movies, products etc. • Ethnographic Fieldwork: • observe consumers’ emotional, cognitive and behavioral responses in ordinary lives and interpret meanings. • Measure Values (Rokeach, VALS) and Core Values

28. Some Core American Values • Achievement and success • Activity • Efficiency • Progress • Material comfort • Individualism • Freedom • External conformity or Need to fit in. • Humanitarianism • Youthfulness • Fitness and Health

29. Culture as a Process • Examines how cultural meanings are moved from different aspects of the society. • Assumes that cultural meanings reside in: • the social and physical environment • products and services • individual consumers • Marketing strategies move meanings from environment to products and consumption rituals move meanings from products to consumers.

30. Cultural Process Cultural meaning in social and physical environment Marketing strategies Fashion systems Other institutions Cultural meaning in products and services Consumption Rituals Consumption meanings generated by consumers Social interactions Intentional actions

31. Role of Marketing Strategies • Advertising uses symbols (slice of life from small-town America) to transfer meanings from the society to products (Chevrolet, the Heartbeat of America). • symbols are words, objects, events, images that “stand for something” and widely accepted by the members of the culture. • Price may signify status • Product design (the PT Cruiser from Chrysler)

32. Products Acquire Cultural Meanings • Polo • Virginia Slims, Camel • Marlboro Man • Coca-Cola versus Un-cola • Dockers • Volkswagen – beetle/bug • J.C.Penney Vs. Wal-Mart Vs. Nordstrom or Saks

33. Moving Meanings from Product to Consumer: Rituals • Symbolic actions performed by consumers to create, affirm, evoke, or revise cultural meanings • Acquisition rituals • Possession rituals including product nurturing and personalizing rituals • Exchange rituals • Grooming rituals • Divestment rituals