Cultural Dynamics in Assessing Global Markets

1. Chapter 4 Cultural Dynamics in Assessing Global Markets McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

2. Culture has been conceptualized as: “Software of the mind” - culture is a guide for humans on how to think and behave; it is a problem-solving tool (Hofstede). An invisible barrier… a completely different way of organizing life, of thinking, and of conceiving the underlying assumptions about the family and the state, the economic system, and even Man himself” (Hall). Definitions and Origins of Culture Culture refers to “the human-made part of human environment—the sum total of knowledge, beliefs, art, morals, laws, customs, and any other capabilities and habits acquired by humans as members of society.” It is the sum of the “values, rituals, symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation.”

3. Origins, Elements & Consequences of Culture

4. Origins of Culture Geography, which includes climate, topography, flora, fauna, and microbiology, influences our way of life. The impact of specific events in history can be seen reflected in technology, social institutions, cultural values, and even consumer behavior. The political system affects social institutions,cultural values and ways of thinking. Technological innovations, such as jet aircraft, air conditioning, televisions, computers, the internet and the pill have all influenced culture. Social institutions including family, religion, school, the media, government, and corporations all affect culture.

5. Some Cultural Factors • Never touch the head of a Thai or pass an object over it. The head is considered sacred in Thailand. • Avoid using triangular shapes in Hong Kong, Korea and Taiwan. It is considered a negative shape. •  The number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has a magical connotation in Benin. •  The number 10 is bad luck in Korea. •  The number 4 means death in Japan. •  Red represents witchcraft and death in many African countries. •  Red is a positive color in Denmark. SOURCE: Business America, July 12, 1993

6. It’s Not the Gift that Counts, But How You Present It Japan Do not open a gift in front of a Japanese counterpart unless asked, and do not expect the Japanese to open your gift. Avoid ribbons and bows as part of the gift wrapping. Bows as we know them are considered unattractive, and ribbon colors can have different meanings. Do not offer a gift depicting a fox or badger. The fox is the symbol of fertility; the badger, cunning. Europe Avoid red roses and white flowers, even numbers, and the number 13. Do not wrap flowers in paper. Do not risk the impression of bribery by spending too much on a gift.

7. It’s Not the Gift that Counts, But How You Present It Arab World Do not give a gift when you first meet someone. It may be interpreted as a bribe. Do not let it appear that you contrived to present the gift when the recipient is alone. It looks bad unless you know the person well. Give the gift in front of others in less –personal relationships. Latin America Do not give a gift until after a somewhat personal relationship has developed unless it is given to express appreciation for hospitality. Gift should be given during social encounters, not in the course of business. China Never make an issue of a gift presentation—publicly or private. Gifts should be presented privately, with the exception of collective ceremonial gifts at banquets.

8. Cultural Differences between Japanese and Americans’ Individual Lifestyles AmericansA Culture of Self-expression JapaneseA Culture of Self-restraint CulturalBackground Clear expression of joy and sorrow Unequivocal expression of “Yes/No” Strong self-assertion Strong personality Excellent negotiating skills Priority of self-interest Ambiguous expression of Joy/Sorrow Equivocal expression of “Yes/No” Weak self-assertion Weak personality Poor negotiating skills Priority of harmony with others Reticence Modesty Reserve Punctiliousness Politeness Obligation SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone Tomorrow,” Tokyo Business, February 1995, p.50.

9. Cultural Differences between Japanese and Americans Social Life American SocietyDignity of Individuals Japanese Society“In the Same Boat” Concept Dignity of individuals Individual work ethic Great individual freedom Low regard for rules An open and transparent society Multi-cultural society A society excelling in creativity and versatility Individual decisions over consensus A society which pursues the ideal Human relations oriented Dependence on the group Lack of individual freedom Respect for rules A closed society, lacking in transparency Mono-cultural society An orderly and uniform society Dependence on consensus A society which pursues harmony with reality SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone Tomorrow,” Tokyo Business, February 1995, p.50.

10. Cultural values Rituals Symbols Beliefs, and Thought processes Elements of Culture International marketers must design products, distribution systems, and promotional programs with due consideration to culture, which was defined as including five elements:

11. Individualism/Collective Index (IDV), which focuses on self-orientation; Power Distance Index (PDI), which focuses on authority orientation; Uncertainty Avoidance Index (UAI), which focuses on risk orientation; and Masculinity/Femininity Index (MAS), which focuses on assertiveness and achievement. Elements of Culture: Cultural Values • Differences in cultural values, which are found to exist among countries, affect consumer behavior. • Hofstede, who studied over 90,000 people in 66 countries, found that the cultures differed along four primary dimensions:

12. The Individualism/Collective Index refers to the preference for behavior that promotes one’s self-interest. High IDV cultures reflect an “I” mentality and tend to reward and accept individual initiative. Low IDV cultures reflect a “we” mentality and generally subjugate the individual to the group. Collectivism pertains to societies in which people from birth onward are integrated into strong, cohesive groups, which protect them in exchange for unquestioning loyalty. • Individualism/Collectivism Index: Individualism/Collectivism Index

13. The Power Distance Index measures power inequality between superiors and subordinates within a social system. Cultures with high PDI scores tend to be hierarchical and value power and social status. High PDI cultures believe that those who hold power are entitled to privileges. Cultures with low PDI scores value equality and are less accepting of differences in power and wealth. • Power Distance Index: Power Distance Index

14. The Uncertainty Avoidance Index measures the tolerance for uncertainty and ambiguity among members of a society. High UAI cultures are highly intolerant of ambiguity, experience anxiety and stress, and accord a high level of authority to rules as a means of avoiding risk. Low UAI cultures are associated with a low level of anxiety and stress, a tolerance for deviance and dissent, and a willingness to take risks. • Uncertainty Avoidance Index: Uncertainty Avoidance Index

15. The masculinity/femininity index measures the extent to which a culture takes on more masculine or feminine values. In masculine cultures, the division of sex roles in society is maximized, with men taking the more assertive and dominant roles, and women taking the more service-oriented and caring roles. Masculine societies reflect traditionally masculine values: the importance of showing off, of performing, of making money, of “big is beautiful”. 3. In feminine cultures, the dominant values for both men and women are those traditionally associated with the female role: not showing off, caring for others, valuing personal relationships, “small is beautiful”. • Masculinity/Femininity Index: Masculinity/Femininity Index

16. Hofstede’s Indices

17. Elements of Culture: Rituals, and Symbols • Rituals are patterns of behavior and interaction that are learned and repeated. They vary from country to country, e.g., extended lunch hours in Spain and Greece. • Language as Symbols: the “languages” of time, space, things, friendships, and agreements. • Differences in language vocabulary varies widely.

18. Fractured Translations • English Translations made by a Japanese firm that were added to labels to increase prestige for their products being sold in China. Product Equivalent to Japanese Spam Toilet Paper Ready to Eat Pancakes Antifreeze Spray Pediatrician’s Slogan English Translation Liver Putty My Fanny Brand Strawberry Crap Dessert Hot Piss Brand Specialist in Deceased Children SOURCE: “Some Strawberry Crap Dessert, dear?” South China Morning Post, Dec 9,1996 p. 12.

19. Whose English? • United States • Trunk • Hood • Convertible Top • Elevator • Toilet • Bathroom • Vacuum • United Kingdom • Boot • 2. Bonnet • Hood • 4. Lift • 5. W.C. • 6. Tub or Shower • 7. Hoover

20. The western aversion to the number 13 or refusing to walk under a ladder. Japanese concern about the number “4”. The Chinese practice of Feng Shui in designing buildings. Elements of Culture: Beliefs and Thought Processes Beliefs, which stem from religious training, vary from culture to culture. Examples: Thought processes also vary across cultures. “Asian and Western” thinking Examples: In summary, marketers must consider larger cultural consequences of marketing actions.

21. Factual versus Interpretive Cultural Knowledge There are two kinds of knowledge about cultures both of which are necessary. Interpretive knowledge is the ability to understand and appreciate the nuances of different cultural traits and patterns, e.g., the meaning of time, and attitudes toward people. Factual knowledge is usually obvious and must be learned, e.g., different meanings of colors, and different tastes; it deals with a facts about a culture. Interpretive knowledge requires a degree of insight. It is dependent on past experience for Interpretation. It is prone to misinterpretation if one’s SRC is used.