Chapter 4Social and Cultural

Environments

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Introduction This can happen to anyone, anywhere, at anytime if

you don’t understand other people’s culture. Finn Hansen

Hansen, head of international operations at Arla Foods, referring to the boycott of Danish products by Muslims and the political debacle that followed the publication of images of the prophet Mohammed in a Danish newspaper.

http://www.timesonline.co.uk/tol/news/world/europe/article723266.ece

Culture and marketingSome ways of living are unique to culture (e.g. prom; going away to college)Some ways of living are common across cultures (e.g. celebrating births, marriages, etc.)Rapid inter-connectedness means shared ways of living increase

Global consumer cultures (credit-card culture, pub culture, coffee culture, fast-food culture, etc.)

Primarily embodied in the global teenagerRapid interconnectedness means that resistance to imported cultures also increases

Cargill seeds, KFC in India, McDonalds in France, American fast food

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Culture and marketing

Find which aspects of culture does your product / brand impactAre these aspects shared / uniqueShared aspects: standardized marketing programsUnique aspects: Adapted marketing programsWhich products are impacted by GCC?

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Breakfast habits in IndiaBreakfast habits

Indians like to eat hot, sit-down breakfastsMilk generally comes in fresh every morning. Needs to be heated before consumptionRice preparations in the south, wheat and corn preparations in the northAre used to and prefer spicier foods, not sweetDrink hot tea with milk and sugar with breakfastOats are for horsesOften eat with their fingers – may use a spoon

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Kellogg’s breakfast cereals in India - Product

What should Kellogg’s adapt and what should they standardize?

Product• Cornflakes (as in the US)• Wheat flakes and rice flakes cereals• Suitable for warm milk• Unsweetened • Cereal bars

Packaging• Weight in grams (metric)

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Kellogg’s breakfast cereals in India - Price

Premium pricingCornflakes Rs. 130 for 475 gms. i.e. $2.75 for 16 ounces of cornflakes.US price: 12 ounces - $3. Average cost of an Indian breakfast – Rs. 20, i.e. $0.40

Why premium pricing?‘premium’ image associated with Western foods

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Kellogg’s breakfast cereals in India - Place

Most retailers are small shopkeepers; large grocery stores are few and concentrated in urban areas

Cereals mainly available in large citiesWholesaler Retailer chain used

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Kellogg’s breakfast cereals in India - Promotion

Cereal bars – positioned as an anytime snack – placed in the candy aisle in a grocery storeCereals http://www.youtube.com/watch?v=uoDwJT_ZP-M&NR=1http://www.youtube.com/watch?v=uSXHOP-e1eE&p=7DB7C4654547C017&playnext=1&index=28

Kellogg’s US adshttp://www.youtube.com/watch?v=CtPTrG0DxXYhttp://www.youtube.com/watch?v=5Id3yJ8Qalo&feature=related

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Clothes washing in India• Daily, by hand (belief that clothes do not come

out clean unless properly scrubbed)• Maid• Hang them out to dry• Sturdy white (males) and colorful (females)

cottons• Power is expensive• Living space is at a premium• Water is scarce• Greater foaming = greater cleaning power• Clothes become dirty faster in dusty, hot climates

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P & G’s detergents in IndiaProduct

The Tide Bar

Price125 gm (7 ounces) bar is Rs. 7 ($0.15) - inexpensive

PlaceEverywhere (incl. small villages) – mass distribution

Promotionhttp://www.youtube.com/watch?v=RWALQ-EmRig

Promotions in villages: Weekly market, Bullock carts, animals, Bollywood stars & music

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http://www.pg-india.com/hp/tidebar.htm

For consumers who craved for Tide’s surprising whiteness in the form of a bar, try the New Tide Bar that provides superior whiteness through tough dirt removal. The New Tide Bar is unique as compared to the available detergent bars because of its three unique features:

1) It has green speckles called Whiteons, a P&G proprietary technology to deliver superior whiteness, which is further enhanced when clothes are being dried under the sun, as Whiteons release a unique whitening action on reacting with sunlight;

2) Its technology also ensures that it lasts longer, does not dissolve easily and delivers a good balance between bar-hardness and ease of application on clothes and;

3) It has a lemony & refreshing fragrance that lingers on clothes hours after wash.

It provides outstanding whiteness on white clothes and provides excellent everyday cleaning for colored clothes too, and is available at Rs. 5 for a 75gm. bar, Rs. 8.50 for a 125gm. bar, and Rs. 13 for a 200gm. bar.

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Quibla Cola Products

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Aesthetics and Color

Red—associated with blood, wine-making, activity, heat, and vibrancy in many countries but is poorly received in some African countriesWhite—identified with purity and cleanliness in the West, with death in parts of AsiaGray—means inexpensive in Japan and China, but high quality and expensive in the United StatesPurple – death in the Middle East, royalty in UK

The Meaning of Color

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Yellow indicates a merchant in India

Red signifies good luck and celebration in China

In England and the U.S., “Something Blue” on a bride’s garter symbolizes fidelity

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Dietary Preferences

Domino’s Pizza pulled out of Italy because its products were seen as “too American” with bold tomato sauce and heavy toppings.Subway had to educate Indians about the benefits of sandwiches because they do not normally eat bread.

Dietary PreferencesWould you eat…..

Sturgeon roe (Russia)Reindeer (Finland)Rabbit, Snails and Frog legs (France)Blood sausage (Germany)Haggis – ScotlandSorpotel – GoaSnakes & rhesus monkey brains (Hong Kong)Roos (Australia)Raw puffer fish (Japan)

Converging dietary preferences (fast food)

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Some communication gaffesThe Big Mac: Originally sold in France under the name Gros Mec. The expression means "big pimp" in French.The Rolls-Royce Silver Myst: In German, mist means "human waste." (Clairol's Mist Stick curling iron had the same problem.)GM cars: Originally sold in Belgium using the slogan, "Body by Fisher," which translated as "Corpse by Fisher."Cue toothpaste: Marketed in France by Colgate-Palmolive until they learned that Cue is also the name of a popular pornographic magazine.

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Some communication gaffesPuffs tissues: In Germany, puff is slang for "whorehouse."The Jotter: A pen made by Parker. In some Latin countries, jotter is slang for "jockstrap."Schweppes Tonic Water: The company changed the name from Schweppes Tonic Water to Schweppes Tonica when they learned that in Italian, "il water" means "the bathroom.“Colgate is a Spanish command that means ‘go hang yourself’

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Language and CommunicationSpeaking English around the globe

There are more people who speak English as a foreign language than native speakers.85% of European teens study EnglishSony, Nokia, Matsushita require managers to speak English.

Nonverbal communication

Westerners tend to be verbal, Asians value nonverbal communication.In Japan, bowing has many nuances.In the Mideast, Westerners should not show the soles of shoes or pass documents with the left hand.

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High- and Low- Context Cultures

High ContextInformation resides in contextEmphasis on background, basic values, societal statusLess emphasis on legal paperworkFocus on personal reputation

Saudi Arabia, Japan

Low ContextMessages are explicit and specificWords carry all informationReliance on legal paperworkFocus on non-personal documentation of credibility

Switzerland, United States, Germany

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High- and Low- Context CulturesFactor/

DimensionHigh Context Low Context

Lawyers Less important Very important

A person’s word Is his/her bond Is not reliable—get it in writing

Responsibility fororganizational error

Taken by highest level Pushed to the lowest level

Space People breathe on one another

Private space maintained

Time Polychronic Monochronic

Competitive bidding

Infrequent Common

Marketing implications of context

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High Context Low ContextNegotiations Lengthy Direct &

purposeful

Prices Bargainable Firm

Promotional platform

Extended family / collective

Immediate family / individualistic

Respect Given without question

Earned

Hofstede’s Cultural TypologyPower Distance – expectation and acceptance of unequal distribution of power (High PD – Hongkong, France; Low PD – Austria)Individualism / Collectivism – ‘one above all or all above one’ (High I/C – USA, UK; Low I/C – Taiwan)Masculinity – sharply defined roles for men and women (High M/F – Japan; Low M/F – Sweden)Uncertainty Avoidance – comfort with ambiguity (High UA – Greece, Portugal; Low UA – Denmark)Long-Term Orientation – Is gratification immediate or deferred (High LTO – Hongkong; Low LTO – Spain)

http://www.geert-hofstede.com/ 4-26

Hofstede’s Cultural Typology – Some Implications

Power distance – higher PD means lower trust levels

Greater control preferred in countries with high PD

Greater individualism – generally greater demand for luxury goods

Immediate gratification, less team workGreater collectivism – word-of-mouth very powerful e.g. Tamogotchi (virtual pets)Groups in ads vs. individuals in ads

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The Chinese Negotiation (2003)Graham & Lam, HBRAmerican

IndividualistEgalitarianInformation-orientedReductionistSequentialSeeks the truththe argument culture

Chinese

CollectivistHierarchicalRelationship orientedHolisticCircularSeeks the wayThe haggling culture

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The Chinese Negotiation (2003)Graham & Lam, HBR: How they approach the negotiation process

American

Quick meetingsInformalMake cold callsFull authorityDirectProposals firstAggressiveForging a ‘good deal’

Impatient

Chinese

Long courting processFormalDraw on intermediariesLimited authorityIndirectExplanations firstQuestioningForging a long term relationshipenduring

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The Chinese Negotiation (2003)Graham & Lam, HBR: Eight elements of their negotiation style

Guanxi (Personal Connections) – premium on social capital within group of friends, relatives and associates. The person with the best guanxi wins. Reciprocity in guanxi is importantZhongjian Ren (the Intermediary) – a go-between needs to be used to make connectionsShehui Dengji (Social Status) – obedience and deference to one’s superiors is strong – low level company executives cannot break bread with high level chinese executivesRenji Hexie (Interpersonal harmony) – positive feelings holds interpersonal relationships together – nontask activities may involve long dinners, home visits, invitations to sports and other events, etc. Trust and harmony are important

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The Chinese Negotiation (2003)Graham & Lam, HBR: Eight elements of their negotiation style

Zhengti Guannian (Holistic thinking) – discussing all aspects of the deal at once – divergent from sequential thinking in the USJiejian (Thrift) – the tendency to save has engendered bargaining over price usually through hagglingMianzi (Face or Social Capital) – a person’s business reputation and social standing rests on saving face. If Westerners cause the chinese embarrassment or loss of composure even unintentionally, it can be disastrous for negotiations. Face can be earned, lost, given or taken awayChiku Nailao (Endurance, Relentlessness) – talent is not as important as diligence and work ethic. Negotiations can be lengthy, chinese work hard at preparing for a meeting.

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