1. The World Market Environment

2. After Studying This Chapter
You Should Be Able To:
 Understand the nature of the marketing
environment and why it is important to
marketers.
 See how the political/legal environment affects
marketing.
 Describe the major components of the social
environment and how trends in the social
environment affect marketing.
 Understand how the economic environment
affects marketing.

3. After Studying This Chapter
You Should Be Able To:
 Appreciate the importance of the
technological environment to marketers.
 Understand differences in the competitive
environment.
 Know how changes in the institutional
environment affect marketers.

4. The Marketing Environment

5. Creation of Market Opportunities & Threats
• The Marketing
Environment Creates
Opportunities or Threats
in 2 Ways:
1. Changes affect specific
markets.
2. Changes affect specific
marketing activities.

6. Identifying Market Opportunities and Threats

7. The Social Environment
• The Social Environment:
– All factors and trends related to groups of
people including:
• Their number
• Characteristics
• Behavior
• Growth Projections

8. The Economic Environment
• The economic environment includes factors and trends related to
income levels and the production of goods and services.
• Economic trends in different parts of the world can affect
marketing activities in other parts of the world.
• Market opportunities are a function of both economic size and
growth. The Gross Domestic Product (GDP) represents the total
size of a country’s economy measured in the amount of goods
and services produced.

9. The Demographic Environment
• The Demographic
Environment:
– Refers to the size, distribution,
and growth rate of groups of
people with different
characteristics.

10. The Demographic Environment
Global Population Size and Growth:
– The world population is now more than six billion.
– Approximately 95 percent of that growth took place in
developing countries in Asia, Africa, and Latin
America.
– China currently has the largest population, followed
by India, with the United States a distant third.

11. The World’s Largest Cities
City 1995 2015 (estimated)
(in thousands) (in thousands)
1. Tokyo, Japan 26,959 28,887
2. Mexico City, Mexico 16,562 19,190
3. Sao Paulo, Brazil 16,533 20,320
4. New York, USA 16,332 17,602
5. Mumbai, India 15,138 26,218
6. Shanghai, China 13,584 17,969
7. Los Angeles, USA 12,410 14,217
8. Calcutta, India 11,923 17,305
9. Buenos Aires, Argentina 11,802 13,856
10. Seoul, South Korea 11,609 12,980

12. Median Ages In Selected Countries
Italy 36.2 42.4
Japan 37.2 42.2
Britain 35.7 40.0
U.S. 32.9 37.4
Korea (North & South) 25.7 34.4
China 25.4 33.9
Brazil 22.9 29.2
Mexico 20.0 6.5
Nigeria 16.3 18.1
Country 1990 2010

13. The Political/Legal Environment
• The political/legal
environment encompasses
factors and trends related to
governmental activities,
specific laws and regulations
that affect marketing
practice.
• The political/legal
environment is closely tied to
the social and economic
environments

14. Global Political Trends
• International political events greatly affect marketing
activities.
• The most significant global political trend is the “war on
terrorism.”
• A second important political trend is movement toward
free trade and away from protectionism.
Benefits to Free Trade:
– Countries with the freest trade had the highest GDP
growth from 1990 to 2000.
– Free trade in a global economy requires the free
movement of people, goods, and capital across borders.

15. International Politics
• International Politics: Political
relations and conflicts between
countries can have a profound impact
on firms trying to do business
internationally. If relations between
countries improve, business can
benefit
• International Law: No enforceable
body of international law exists. Firms
are subject to home and host-country
laws. Areas of cooperation among
nations exist through bilateral treaties
guaranteeing fair treatment. It also
includes patent and trademark
protection

16. • The laws and policies of the
government and society can affect
international marketing. Political
situations can be stable or unstable
and can create opportunities and
threats. Business needs to consider
the surrounding political and legal
environmental forces.
• The economic interests of the country
that an international marketer does
business in might not necessarily
coincide with their own. The political
and legal environments that impact
them are inherently related and
inseparable
The Political / Legal Environment

17. Political factors will impact on:-
• Government policies and how they affect
the costs and certainty of doing business
in the host/foreign country.
• Stability of the government and
continuity affecting business confidence.
For e.g. current episode between
Malaysian government and Anwar is
unsettling for investors.
• On bi/multilateral relations between
governments; this affects stability of
doing business. If relations are strong,
then more market opportunities will arise.
For e.g. more flights now being mounted
between China and Taiwan; cross-straits
relationships still tense but slowly
improving.

18. Political Environment and International Business
• Political ideology is a body of
constructs, theories, and aims
that constitute a sociopolitical
program.
• Ultimate test of any political
system is its ability to hold a
society together despite pressures
from different ideologies, and its
ability to meet its objectives.
• Ideologies help bring countries
together/keep them apart.
• In Terms of Business, Companies
must understand the potential
sources of political tension and
instability.
Basic
Political
Ideologies

20. The Political Spectrum
 Democracy—involves wide participation by citizens in the decision-making process.
Democratic governments differ :-
• Presidential versus parliamentary
• Number of important political parties
• Amount of citizen participation in decision making
• Fragility and stability of new democracies
Democracy (not surprisingly) is believed in democracies to be the best form of
government.
 Totalitarianism (Absolutist) —a single party, individual, or group of individuals
monopolizes political power. Opposition is effectively not permitted
Totalitarianism takes several forms: -
 Theocratic—religious leaders are political leaders
 Secular—government often imposes order through military power
 Authoritarianism—desires to control the people
 Communism—political and economic systems are virtually inseparable

21. Impact of the Political System on
Management Decisions
• Political Risk- It is caused by political instability. It promotes
fear that operating position will deteriorate. It tends to be
higher in totalitarian regimes.
It can be termed as the risk of change in political environment
or government policy that would adversely affect a company’s
ability to operate effectively and profitably.
When perceived political risk is high, a country will have a
difficult time attracting foreign direct investment

22. Indicators of Political Risk / Instability
Some indicators of political risk include:
• War , Social unrest, Corruption, Nepotism,
Crime, Labor costs, Tax discrimination etc
• Negative Attitude of nationals towards
foreign business and foreigners including
exploitation ,colonialism, repatriation,
employment to foreigners etc.
• Politically-motivated violence ,
Transparency,
• Social Unrest (population density and wealth
distribution),Clashes between or among
community groups, ethnic groups and
regional groups.
• Host Govt. policies affecting International
Business directly and internally or
externally.

23. How to Minimize Political Risk?
Political risks cannot be eliminated.
However they can be minimized by:-
• Stimulating the economic development
of host country by investing in their
priority areas/ portfolios.
• By employing, developing and
promoting local people.
• By Sharing Ownership
• By being civic minded.
• By being politically neutral in host
countries
• By observation of political mood and
• By reduction of exposure

24. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Legal and Regulatory Environment

25. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
The Legal and Regulatory Environment
• One of the more difficult aspects of doing business globally is dealing with vast
differences in legal and regulatory environments.
• The United States, for example, has an established set of laws and regulations that
provide direction to businesses operating within its borders.
• But because there is no global legal system, key areas of business law—for example,
contract provisions and copyright protection—can be treated in different ways in
different countries.
• Companies doing international business often face many inconsistent laws and
regulations. To navigate this sea of confusion, American businesspeople must know and
follow both U.S. laws and regulations and those of nations in which they operate.
• The annals of business history are filled with stories about American companies that have
stumbled in trying to comply with foreign laws and regulations. Coca-Cola, for example,
ran afoul of Italian law when it printed its ingredients list on the bottle cap rather than on
the bottle itself. Italian courts ruled that the labeling was inadequate because most people
throw the cap away.
• In another case, 3M applied to the Japanese government to create a joint venture with the
Sumitomo Industrial Group to make and distribute magnetic tape products in Japan. 3M
spent four years trying to satisfy Japan’s complex regulations, but by the time it got
approval, domestic competitors, including Sony, had captured the market. By delaying
3M, Japanese regulators managed, in effect, to stifle foreign competition.

26. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Approaches to deal with …..
• One approach to dealing with local laws and
regulations is hiring lawyers from the host country
who can provide advice on legal issues.
• Another is working with local businesspeople who
have experience in complying with regulations and
overcoming bureaucratic obstacles.
Dear all, I have also covered this topic with the
help of some questions that I have included in the
question bank given to you… therefore we move
to impacts of legal environment in next slides

27. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
How Bribery and Other Types of Corruption Threaten the Global Marketplace?
• There’s no doubt that corruption, endemic in emerging economies around the
world, throws economic development into chaos. It affects decisions made by
bureaucrats, degrades the quality of those in power, and discourages foreign
investment.
• It’s also an increasingly hot business topic, with a growing number of
influential business and political leaders from around the globe regularly
pinpointing corruption as one of the greatest threats to global economic
development.
• Bribery, of course, is the most widespread form of corruption, and corporate
strategies for dealing with bribe requests vary.
• Some companies opt to pay, sometimes damaging their public images and
making it more difficult to refuse future requests. Others have the sheer bulk
and revenues to successfully and consistently say “no.”
• Oil giant Texaco, for example, has such a formidable reputation for refusing to
pay bribes that its jeeps are often waved through even remote African border
crossings without paying a penny.

28. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Question that arises…
On a practical level, what does the upswing in international corruption
mean to a company?
 The fact that a great number of government officials in a great number
of countries, including some potentially large markets, seem to demand
bribes is critical to any business that has a cross-border presence.
 Then there’s the reality that more than 20 nations, including the
wealthiest and most-active trading nations, have made bribe paying
illegal, and the fact that despite this there are still competitors who will
pay bribes.

29. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Is bribery a strategy to enter international markets? Is it ethical?
• It depends on the culture we grow up
in to classify a specific amount as
either bribery or easing business and
probably building relationships.
• Some time before I was asked about
how business is done in my home
country and I described it as
partnering with some officials
involuntary. Others might describe
this as a type of bribery.
• I agree that bribery is unethical,
however if a certain attractive market
requires a business to enter into such
untraditional actions, should the
company do them?

30. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Case Study of Wal –Mart (Bribery)
• Some years before, a news report came out about Wal-Mart paying bribes to
Mexican officials to obtain permits in virtually every corner of the country.
• Walmart said: “We do not believe that these matters will have a
material adverse effect on our business”. They probably believe that doing
such acts is necessary to do business in Mexico.
• They don’t believe that they violated the Foreign Corrupt Practices Act, a
federal law that makes it a crime for American corporations and their
subsidiaries to bribe foreign officials.
• The US law is clear regarding US companies paying bribes for foreign
officials. This clearly makes the Mexican market a lost opportunity.
• Walmart as an example going to Mexico should adapt to the way business is
done there and formulate strategies that coop with the country.
• Bribery should be a taboo of practicing business in any place. Walmart could
have lost the opportunity to enter the Mexican market, however it would have
not risked its reputation in the US market that compromise most of its revenue
(around 70% of sales based on the last quarter report).
• Walmart runs from a more regulated country compared to other countries.
Laws such as the Foreign Corrupt Practices Act and others, discourage
companies to engage in such acts. Other companies on the other hand that run
from different unregulated countries could have the short-term financial
advantage.
• A market system that relies a lot on bribes could easily suck
companies’ earnings by asking more with time.

31. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
PERMANENT ESTABLISHMENT (BRANCH) VS SUBSIDIARY
• A permanent establishment (Branch) is generally defined as a fixed
site through which the business of the company is wholly or partly
carried on within that territory. It can include an agent habitually
exercising authority to do business on behalf of the company.
• A Subsidiary is a separate legal entity so liabilities arising within the
company can not be claimed against another company in the group.
• The points of difference are clearly stated in the table in the next slide.

32. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Issue Branch Subsidiary
Legal entity Not a separate legal entity, so claims and
liabilities arising in the PE can be
extended to the main company of which it
is part.
A separate legal entity, so liabilities
arising within the company can not be
claimed against another company in the
group.
Inter office remittances/
repatriation of profits
Inter office remittances are not taxable. •Repatriation of profits can take various
forms and is therefore flexible.
•Timing of the repatriation of profits can
be arranged to suit the group tax
position.
•No withholding tax on dividends
Profits/losses Relief for start up costs and initial trading
losses can be set against parent
company profits for tax purposes.
Corporation Tax will be due on any profit
made by the branch.
The rate of corporation tax can be higher
as a result of increased numbers of
companies in the worldwide group.
Filing requirements. Public filing of parent company accounts
is usually required, depending on the law
in the country of origin
There is public disclosure of the
accounts. There is no cross border
consolidation so administration can be
more straightforward.
Generally A PE can be easier to establish and close
down if unsuccessful. However, later
incorporation may trigger tax liabilities
because of transfers to a separate
company although these can often be
overcome.
Home Country customers may prefer to
deal with a domestic company rather than
the branch of an overseas company

33. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Counterfeiting
• Counterfeiting is the practice of manufacturing goods, often of inferior quality, and
selling them under a brand name without the brand owner’s authorization.
• Generally, counterfeit goods are sold under a trademark that is identical to or
substantially indistinguishable from the brand owner's trademark for the same
goods, without the approval or oversight of the trademark owner.
• Many well-known brands, spanning various industries, are victims
of counterfeiting.
• Counterfeiting can be distinguished from traditional trademark infringement or
passing off, which involves the use of confusingly similar trademarks or service
marks on or in association with similar—as opposed to fake—products or
services.
• The manufacturing of counterfeits is most prevalent in developing countries with
a strong, inexpensive manufacturing capability, including many nations throughout
Asia (such as China and Taiwan), although counterfeit goods are sold around the
globe.
• Counterfeits are manufactured to a lesser degree in developed countries.
• Anything that can be made can be counterfeited. Counterfeit goods include not
only clothing, jewelry, purses, CDs, and DVDs, but also baby formula,
medications, cigarettes, electronic equipment and parts, airplane and automobile
parts, and toys etc.

34. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Does counterfeiting cause any damage?
• Yes. Although some believe counterfeiting is a victimless crime, it has many far-
reaching consequences.
• To begin with, depending upon the nature of the product being counterfeited, there
can be serious health and safety concerns for consumers, such as in the examples
of counterfeit baby formula, toys for children, medications, car parts, or electronic
goods. In nearly every instance, counterfeited goods are not made with the same
quality materials or to the same high standards as the original.
• In addition, counterfeiting damages brand owners’ reputations and lowers consumer
confidence in the affected brands. Counterfeiting also damages brand owners and
retailers selling legitimate products by causing missed sales opportunities and actual
job losses by manufacturers and retailers.
• Consumer confidence and the value of branding may suffer when purchasers
discover that the product they bought, believing that it was being sold under a
recognized brand, is in fact not authentic. Damages do not stop with brand owners
and consumers because counterfeiting also deprives national economies of customs
duties and tax revenues.
• Counterfeiting may also be linked to organized crime or criminal activity, which may
pose serious threats to the health and safety of consumers, economies and national
security.

35. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Gray market
• The gray market, while not illegal like the black market, involves the sale of goods
through means other than what was intended or approved by the original maker of a
product.
• A private person or business purchases the good at retail, wholesale, or a
discounted price, and attempts to resell it legally at a higher price.
• The list of things that can be sold this way is endless, but popular items include
electronics, photographic equipment, cigarettes, DVDs, and wine. The term can
also be used to refer to the securities market, where it defines the buying and
selling of securities that will be issued at some point in the future.
• It is extremely difficult to track the gray market because, once a good is sold to an
unauthorized dealer, the manufacturer has no way of tracking the sale of it. This
market exists just about everywhere.
• In the suburbs, one prime example is the snack stand at a high school football
game. In an effort to raise money, the student council may purchase soda, hot
dogs, and chips at a wholesale warehouse store, then sell them for a profit at the
game.
• Another good example is when someone buys goods at a garage sale or outlet
store and resells them on an online auction site at a higher price.

36. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Gray market continued…..
• Under some circumstances, different countries have different markets for different goods.
When a person takes advantage of the disparity in market prices of a particular good, it is
called arbitrage. An arbitrageur takes advantage of this disparity by buying a good in a
country where it is significantly cheaper, then reselling it legally in another country where
he can demand a higher price.
• One drawback of the gray market is that many manufacturers will not honor warranties on
electronics purchased through it. Because the good is not purchased through “authorized”
channels, manufacturers refuse to spend the money to honor the warranty. One of the ways
that manufacturers identify items resold this way is by putting different model numbers on
the same product in different countries. When someone calls for warranty issues, the
manufacturer can identify whether their product was sold in the correct country. The
warranty cannot usually be enforced, because it was sold through a third party in a different
country.
• Authorized agents and sellers are most often financially affected by the gray market,
because they lose business to unauthorized sellers. Local laws can help or hurt this market.
In some cases, food is difficult to resell because local laws dictate packaging, so what is
legal in one state or country may not be in another.
• In an effort to curb the resale of DVDs and DVD players, DVD region codes are written
onto the disc for the specific geographical area it is supposed to be sold in. Only the DVD
players intended for sale in that area can play these DVDs.

37. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Influences
on International Marketing

38. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Chapter Objectives
• Identify the elements of culture and examine how they affect
marketing practices around the world
• Describe national and regional character based on dimensions
such as time orientation, business practices, gift giving,
socializing, gender roles, and materialism
• Discuss cultural variability in terms of the Hofstede dimensions
with appropriate examples and address cultural change in a
marketing context
• Address the self-reference criterion and ethnocentrism and
describe how they impeded mutual understanding and
cooperation, with direct negative effects on marketing practices
• Describe the global consumer culture as it manifests itself
around the world

39. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
The Importance of Understanding
• Many companies find that their new foreign firm is
about to collapse because they have failed to learn
that country’s customs, cultures, and laws
• Two out of every three U.S. executives sent to Saudi
Arabia are promptly repatriated due to difficulties in
adapting to the local culture
• The costs associated with premature returns
(repatriation) negatively affects the bottom-line of
international companies

40. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Culture Defined
• A continuously changing
totality of learned and shared
meanings, rituals, norms, and
traditions among the members
of an organization or society.
 Ecology
 Social Structure
 Ideology

41. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Dynamics
• Culture: definition, origin, and scope
• Culture and consumption (e.g., flower, food, habitats):
modernization influence
• Culture is shaped and influenced by
 Geography, history and politics
 Technology
 Social Institutions: family, religion, school, media, and
government
• Elements of culture
 Cultural values- Hofstede’s five cultural values
 Beliefs, rituals, thought process
 Language: verbal, nonverbal, silent language of time, space and
friendship
 Aesthetics: arts, folklore, and music, drama, dance etc.
• Cultural change: planned and unplanned, resistance to
change

42. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Hofstede’s Cultural Value
• Individualism/collective index (IDV): Refers to preference of
behavior that promotes one’s self interest. Higher score (e.g.,
USA) means high on individualism.
• Power distance index (PDI): Measures the tolerance of social
inequality, that is, power inequality between superiors and
subordinates within a social system. Higher score (e.g., Arab
countries) means more hierarchical.
• Uncertainty avoidance index (UAI): Refers to the intolerance of
ambiguity and uncertainty among members of a society. Higher
score (e.g., Greece) means less tolerance for uncertainty.
• Masculinity/feminity (MAS): Refers to one’s desire for
achievement and entrepreneurial tendencies. Higher score (e.g.,
Latin culture) means more assertiveness and masculinity.
• Future orientation: Refers to the long-term orientation of the
society.

43. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Elements of Culture
• Spoken/Written Language
 Differences in meaning in
different countries which share
the same language
 Dealing with multiple dialects
 High costs of translation
 High costs of translation
blunders

44. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Elements of Culture
• Nonverbal communication
 Proxemics - the branch of knowledge that deals with the amount of space that
people feel it necessary to set between themselves and others.
 Postures - a particular approach or attitude/ viewpoint
 Orientations -
 Oculesics - is the study of eye movement, eye behavior, gaze, and eye-related
nonverbal communication.
 Chronemics - is the study of the use of time in nonverbal communication. The way
that an individual would perceive and value time, structure our time and react to
time is a powerful communication tool, and helps set the stage for the
communication process.
 Haptics - is any form of nonverbal communication involving touch.
 Kinesics - the study of the way in which certain body movements and gestures serve
as a form of non-verbal communication.
 Paralinguistics- the study of vocal (and sometimes non-vocal) signals beyond the
basic verbal message or speech.
 Appearances- the way that someone or something looks.
 Olfactions – The sense of smell/ past participle of olfacere.

45. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Culture and Business
• Role of adaptation
 cultural imperatives: must conform (e.g., trust, relationship)
 cultural electives: may or may not conform (e.g., kissing, hugging,
wine in business meetings)
 cultural exclusives: exclusively for the locals, do not have to
conform (e.g., local dress, local food, religious practices)
• Critical features of different Management Style
• Management Styles in the World
 Authority and decision making
 Management objectives and aspirations
 Role of individual in a company- social dimension
 Communication styles (High context vs. Low context)
 Formality
 P-time (poly chronic) vs. M-time (mono chronic)
 Negotiation style

46. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Culture and Business (contd.)
• Gender bias in international business
• Business Ethics and Corruption
• Transparency International’s CPI or Bribery Index
• Bribery: definition and variations
 Gifts vs. Bribery
 Extortion
 Lubrication
• Long term vs. short term orientation in decision making
• Relationship-oriented vs. Information-oriented culture

47. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
High vs. Low Context Cultures
• Low-Context cultures:
What is said is precisely what
is meant
• High-Context cultures:
The context of the message—
the message source, his or
her standing in society or in
the negotiating group, level
of expertise, tone of voice,
and body language—are
all meaningful

48. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
High Context vs. Low Context Cultures
High
Context
Implicit
Japanese
Arabian
Latin American
Spanish
Italian
English (UK)
French
North American (US)
Scandinavian
German
SwissLow
Context
Explicit

49. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Religion and Its Impact on Marketing
Practice
• Protestant Religion – stresses hard work and
frugality
• Judaism – stresses education and development
• Islam – focus on rules for social interaction
• Hinduism – encourages family orientation and
dictates strict dietary constraints
• Buddhism – stresses sufferance and avoidance
of worldly desires

50. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Religion
• Business days
• Gender roles
• Gift giving
• Marketing practices

51. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Values
• Enduring beliefs about a specific mode of conduct
or desirable end-state
• Guide the selection or evaluation of behavior
• Are ordered by importance in relation to one
another to form a system of value priorities

52. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Values
• Enculturation
Process by which individuals learn the beliefs and
behaviors endorsed by one’s own culture
• Acculturation
Learning a new culture
• Assimilation
Maintenance of the new culture, and resistance to
new cultures and to one’s old culture

53. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Norms
• Norms are derived from values and defined as
rules that dictate what is right or wrong, acceptable
or unacceptable
 Imperative
- What an outsider must or must not do
 Exclusive
- What locals may do but an outsider cannot
 Adiaphora
- What an outsider may or may not do

54. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
National/Regional Character
• Time Orientation
• Business Hours
• Gift Giving
• Socializing
• Gender Roles
• Status Concern and Materialism
• Other – for example, access
(transportation by bicycle,
personal automobile, public
transportation

55. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Variability
• Power Distance
• Uncertainty Avoidance
• Masculinity Versus
Femininity
• Individualism Versus
Collectivism

56. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Cultural Change & Marketing
In an advertisement, if the above
are perceived as faces, censors
might erase them; if they are
perceived as a vase, they would
not be altered.
Marketers need to identify
the symbolic elements that
are important to a market
segment and use them
effectively in creating the
marketing mix.

57. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Obstacles to Cultural Understanding
• Ethnocentrism
 A related belief that a particular culture is superior to
another and that strategies that are used in the home
country will work just as well abroad.
• The Self-Reference Criterion:
 The unconscious reference to one’s own value system

58. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
Dealing with the Self-Reference
Criterion
1) Define the marketing goal in terms of one’s home
country’s cultural traits, norms, and values
2) Define the marketing goal in terms of the host
country’s cultural traits, norms, and values
3) Isolate the self-reference criterion influence and
evaluate it to understand how it affects the
marketing issue
4) Solve the marketing problem based solely on the
unique conditions of the host country.

59. Copyright Atomic Dog Publishing, 2002Copyright Atomic Dog Publishing, 2002
THANK YOU…….