Culture and its Impact on Global Marketing | My Assignment Tutor

1Session 4/5: Culture and its Impact on GlobalMarketingICTCM Module Delivery Team By the end of the session, the student will be able to: Identify the areas of culture which have caused significantproblems to the global marketers in the past Analyse the impact of cultural change on the organisationICTCM Module Delivery Team1 22 ICON College of Technology and ManagementGlobal Economies and International Markets Weeks 5 Activities PlannerWk 5StepsDescriptionExample Activity TypesTool that will suport this activity1Introduction(Informinglearners of theobjective)Define culture and identify the role of culture in global marketingIdentify and evaluate the major cultural changes and identify the causes of these changesConduct a cultural analysis of global marketsIdentify the areas of culture which have caused significant problems to the global marketers inthe pastAnalyse the impact of cultural change on the organization change; areas of culture whichcause significant problems to global marketersRead Levitt’s article on Globalisation andon the ICON VLE and summarise hisarguments in the Forum created for yourgroupICON VLE: Theodore Levitt (1983), The Globalisation ofMarkets. Published by Harvard Business Review. Also availableat: anddeliverymethodSession 4: Culture and its impact on Global Marketing: The importance of global marketsegmentation; the role of culture in global marketing; the major cultural changes and identifythe causes of these change and areas of culture which cause significant problems to globalmarketers: Instructor-led with Q&A for students engagementPresentation, video on “challenges ofglobal marketing”Kaltura – My Media url to video.Lecture material on ICON VLE3ActivityStudents will discuss the circumstances under which adaptation of marketing mix is moreappropriate than standardisationstandardisation and adaptationBreakout Rooms in Kaltura4Reflection andFeedbackIndividuals summarise the the importance of the socio-cultural factors and their impact on theglobal marketing activities of a global company, which is part of their individual portfolioFeedback; Reflective journal – studentskeep a record of the results of theanalyses for the portfolio developmentICON VLE and Kaltura5ConsolidationandIntegrationStudents share their summaries of the importance of culture and its impact on internationalbusiness. These summaries are uploaded onto the ICON VLEStudents are divided into groups inbreakout room to share their summariesof the importance of environmentalfactors on an organisation of their choiceKaltura and ICON VLE ICTCM Module Delivery Team Business operating at the international level has to face avariety of social and cultural environments where social characteristics,significantlystructures,andinstitutionsmaydiffer  Societies across the world can differ enormously in terms ofdemography, health, class structures, composition by ethnicgroup, incidence of corruption, the importance of pressuregroups and in norms and valuesICTCM Module Delivery Team3 43 The be successful, business has to be aware of the differencesthat could be important to it regarding levels and patterns ofdemand, the quality and quantity of labour, and the policies andstrategies to be adopted Culture: that can be seen as a system of shared beliefs, values,customs, and behaviours prevalent in a society and that aretransmitted from generation to generation (Bates and Plog1990; also cited in Hamilton and Webster, 2012)ICTCM Module Delivery Team• INSERT CONTENTEntering in foreign marketsICTCM Module Delivery Team5 64Why competing Across National BordersMakes Strategy Making More Complex• INSERT CONTENTICTCM Module Delivery TeamThe Impact of Government Policies andEconomic Conditions in Host CountriesPositives• Tax incentives• Low tax rates• Low-cost loans• Site location anddevelopment• Worker trainingNegatives• Environmental regulations• Subsidies and loans todomestic competitors• Import restrictions• Tariffs and quotas• Local-content requirements• Regulatory approvals• Profit repatriation limits• Minority ownership limitsICTCM Module Delivery Team7 85Political and Economic RisksPolitical Risks• Stem from instability or weaknesses in nationalgovernments and hostility to foreign businessEconomic Risks• Stem from the stability of a country’s monetarysystem, economic and regulatory policies, lackof property rights protections, and risks due toexchange rate fluctuationICTCM Module Delivery TeamThe Risks of Adverse Exchange RateShiftsEffects of Exchange Rate Shifts:• Exporters experience a rising demand for theirgoods whenever their currency grows weakerrelative to the importing country’s currency• Exporters experience a falling demand fortheir goods whenever their currency growsstronger relative to the importing country’scurrencyICTCM Module Delivery Team9106Cross-Country Differences inDemographic, Cultural, and MarketConditionsTo customize offerings ineach country market tomatch the tastes andpreferences of localbuyersTo pursue a strategy ofoffering a mostlystandardized productworldwideKey StrategicConsiderationsICTCM Module Delivery TeamThe Concepts of Multi-DomesticCompetition and Global CompetitionMultidomestic Competition• Exists when competition in eachcountry market is localized and notclosely connected to competition inother country marketsGlobal Competition• Exists when competitive conditions andprices are strongly linked across manydifferent national marketsICTCM Module Delivery Team11127Features of Multi-DomesticCompetition• Buyers in different countries are attractedto different product attributes.• Sellers vary from country to country.• Industry conditions and competitive forcesin each national market differ in importantrespects.ICTCM Module Delivery TeamFeatures of Global Competition• The same group of firms competes in countrieswhere sales volumes are large and having apresence is important to a strong global position.• Competitive advantage is gained from the transferof expertise, economies of scale, and worldwidebrand-name recognition.• Global competition is increasing in multi-domesticmarkets where custom mass production iscoinciding with converging consumer tastes.ICTCM Module Delivery Team13148 Video on Global Marketing ChallengesICTCM Module Delivery Team Service or Product offering: International marketingstrategies focus on custom-tailoring or creating new productsand services to target the market in a specific country. Thegoal is to break away from universalizing product and serviceofferings in order to accommodate the particular preferencesof an overseas market In global marketing, a company provides the exact product orservice offerings to the customers in all countries that itoperatesICTCM Module Delivery Team15169 Marketing Personnel: When taking an international marketingapproach, companies will either move headquarters’ marketingemployees to foreign countries or hire expert marketingpersonnel in the foreign country An international marketing approach requires intimateknowledge of the country that is being marketed toICTCM Module Delivery Team Marketing Budget: In international marketing, the budgetgets segregated into each of the subsidiary offices which canalso formulate its own budget as well. For example,McDonald’s runs ads in local languages and according to localtraditions that can be found in those regions only On the other hand, the marketing budget of a companyadopting the global marketing policy is finalized and approvedfrom the corporate headquarters. For example, Nike finalizesa said amount of budget at its headquarters which then dropsdown to local branch offices subsequentlyICTCM Module Delivery Team171810  Promotion tactics:Ininternationalmarketing, all themarketingeffortsincludingtelevisioncommercialsare tailored for the local market In global marketing, the company tries to make and air (onTV and radio) ads that are in sync with the worldwideaudience and similarly does other marketing efforts. Anappropriate example for this would be the ads that were airedon television during the World Cup and other global events. Itis a mix of all: global event, passionate viewers and the gameICTCM Module Delivery Team Marketing Autonomy: In international marketing themarketing efforts are generated from within the domesticmarkets However, in global marketing, every marketing strategy isdevised and implemented from the corporate headquartersICTCM Module Delivery Team192011 Use of Social Media: In international marketing, a companywill (generally) open multiple social media accounts each onetargeting a different market or country. This way the companycan customize their messages to read in the correct languagewith the right semantics to ensure accuracy of the intendedmessage in every market On the other hand, in global marketing, a company will(generally) maintain one page on each social media platformICTCM Module Delivery Team Customers’ engagement: Customers’ engagement is morevisible in International Marketing. A company can betterconnect with its customers by installing in place bettercommunication channels Global marketing is also as effective when it comes tocustomers’ engagement only the international marketingstrategies are little different. However, it is proved thatinternational marketing seems to create greater amount ofengagement than global marketing does.ICTCM Module Delivery Team212212 Hierarchy of Decision Making: With international marketing,the decision-making hierarchy is rather decentralized, asforeign offices are given the liberty to take marketing actionsbased on their perceptions and preferences Since global marketing takes a home-based approach tomarketing overseas, almost all marketing-related decisionsare made by the marketing department in the home countryICTCM Module Delivery TeamThere are some key factors that firms need to think about: Language Languages vary across the world One single language cannot be used for an international campaign, or even inone country, e.g., there are between 6 and 12 main regional variations ofChinese languages Marketing products or services in an unfamiliar language always has itsinherent challenges Meaning and implication is often lost in translation from one languageto the next, and things become even more cloudy when local dialectsand colloquialisms come into play Symbolism and dress Laws and policiesICTCM Module Delivery Team232413➢ Uneven playing fields➢ In many cases there are laws and regulations in place that favour localindustry over outside companies➢ In these cases, your marketing and distribution network may have todeal with tariffs and limitations that your competition never has toconsider➢ Consumer Interest:➢ Foreign market segments come with their own set of needs, wants,tastes and desires➢ These must all be analysed and considered when your marketing isbeing developed.ICTCM Module Delivery TeamPolitical Climate:➢ Some regions around the world are less stable politically andlegally than others➢ In these areas, the issues you face as a marketing head canchange as fast as the next election or even the nextrevolution➢ Instability makes all business harder to conduct and lesspredictable into the future➢ Marketing campaigns in such locations must take intoaccount the ebb and flow of the society, and focus more onconstants than trendsSource: Module Delivery Team252614Development of a Strong CultureCommitmentby the firm toethicalbehaviorFounder orstrong leaderwith strongvaluesStrongCultureClosely aligning corporate culture with therequirements for proficient strategy execution meritsthe full attention of senior executives.ICTCM Module Delivery TeamHealthy Cultures That Aid Good StrategyExecutionGood StrategyExecutionAdaptiveCulturesHighPerformanceCulturesCommitment toachieving stretchobjectives andaccountabilityWillingness to acceptchange and take onchallengesPerformanceICTCM Module Delivery Team272815Unhealthy Cultures That Impede GoodStrategy ExecutionChange-resistantculturesIncompatibleSubculturesPoliticizedculturesUnhealthyCulturesInsular, inwardlyfocused culturesUnethical and greeddriven culturesICTCM Module Delivery TeamCultural changes are set in motion in three ways1. Invention – which is the process of creating new culturalelements Invention has given us the telephone, the airplane and thecomputer each of these elements of material culture has had atremendous impact on our way of life The same is true of the minimum wage, school desegregation, andwomen’sshelterseachanimportantelementofnonmaterialconstantly.culture. Theprocess ofinventiongoes on ICTCM Module Delivery Team2930162.Discovery – which involves recognizing and understandingmore fully something already in existence perhaps a distant staror the foods of another culture or women’s political leadershipskills3. Diffusion – which is the spread of cultural traits from onesociety to another➢ Because new information technology sends information aroundthe globe in seconds, cultural diffusion has never been greaterthan it is todayICTCM Module Delivery TeamSteps to Take in Changing a ProblemCulture• INSERT CONTENTICTCM Module Delivery Team313217Substantive Culture-Changing Actions• Replace key executives who are stonewalling neededorganisational and cultural changes.• Promote individuals who advocate for cultural shiftsand can serve as a role model for the culturalbehavior.• Appoint outsiders with the desired cultural attributes tohigh-profile positions.• Screening candidates for positions carefully, hiringonly those who appear to fit in with the new culture.• Mandate that all personnel attend culture-training.• Design compensation incentives that boost the pay ofteams and individuals.ICTCM Module Delivery TeamSymbolic Culture-Changing ActionsTop executiveand uppermanagementbehaviorsCeremonialevents to honorexemplaryemployeesPhysical symbolsthat representthe new cultureChanging the cultureof an organizationICTCM Module Delivery Team333418Hamilton, L. and Webster, P. (2015). The International BusinessEnvironment, Third Edition, Oxford University Press. Alsoavailable at: Module Delivery TeamICTCM Module Delivery Team3536


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