1. Introduction
International marketing or business is uniquely different from the local market because the product price, place and promotion is vastly different from what is been offered to local customers (Johansson, 2000) With the emergence of the information technology, cross border marketing has never been a distant dream. However, it has never been easier even for giant multinational companies to face challenges that come in international business. The biggest challenge comes from the culture which varies from country to country. At its basic understanding, international marketing engages the firm in making one or more marketing mix decisions across national boundaries.
At its complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Keegan, 2002). Other interpretations are “International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit (Cateora and Ghauri,1999). The international market goes beyond the export marketer and becomes more involved in the marketing environment in the countries in which it is doing business (Keegan, 2002). The simplest to the complex involvement would depend on many factors that vary from internal factors to external factors.
There are many studies and definitions in to culture and how culture could be a key influencer in business management. Culture according to Caterora (2009) refers to the way in which we do things in different societies. On the other hand Keegan (2002) refers to culture as a collection of elements mainly beliefs, values, language, religion and lifestyle that are unique from another. Kotler (2000) was of the opinion that culture plays a vital role in the success of any international business. Therefore successful international brands have adapted its brands according to the different cultural dynamics of the host country.
According to Rugman (2007) Language is one of the key cultural elements that influence the international business. On its studies it was identified that culture across countries, some countries are multicultural. For instance India, China, US, Russia and even UK and US as a result of immigration are more multi-cultural. According to Keegan (2002) these countries also have several sub-cultures, though they do have monoculture. Counties such as UK, France, Germany, and Columbia, Peru tend to have such sub cultures and Mono cultures. Culture is the “Silent Language” in International business Relationship with Time, Space & Energy High Context – Low context cultures Body language Multinational companies such as Unilever had to use varied languages in order to communicate many cultures in India. In India there are approximately 25 languages or dialects. The main languages being Hindi, Malayalam, Karnataka, Tamil and Urdu as well as English.
Therefore when Unilever have to advertise using the mass media they need to communicate in all these languages in order to reach the target audience. This is a situation where culture influencing the business of Unilever. Similarly it applies the same when a multinational company has to market in Arab sub-continent. Majority of the multinational companies are in Middle East because of higher disposable income. Yet they have to communicate in Arabic language in order to communicate to the target audience. Religion plays a vital part in marketing of services and goods in a particular market (Fallon, 2010). In India where Cow is considered to be sacred, beef is entirely prohibited and same with Nepal. Therefore, McDonalds had to come up with veggie burgers instead of beef burgers at their outlets (Business Today, 2007). This is a classic example on how culture influencing the international business of an organization.
On the other hand, though beef is accepted in Middle Eastern countries such as Saudi Arabia, United Arab Emirates, Jordan, Bahrain or Iran, they need to be Halal certified in order to market in these countries (Chapman, 2007). Similarly, in any country whether they are Muslim or non-Muslim state, when there are Muslim in the community they have to cater with halal certified meet as well chicken. Therefore, this cultural factor has major influence on KFC, McDonalds, as well as Pizza Hut or for that matter all companies who are involved in restaurant and food sector. Hotel chains in Saudi Arabia are been influenced by the culture of the society and the country. For instance, Hilton hotel chains in Saudi Arabia and close to the Mecca and Medina serves mostly to pilgrims rather than the tourist. Hence all activities in Hilton chain needs to be catered to religious cultural activities (Fallon, 2010).
2. Adaptation and standardization
It was in the Fordism era in the early 19th century where standardization was the most widely used strategy across the industrialized countries (Johansson, 2000). Henry Ford when he manufactured Ford Car, the company produced only black Ford. Standardization refers a company providing the same identical product across the globe (Keegon, 2002). Most of the time they are considered to be global brands (Johanson, 2000). Some of the example that could be considered global brands is Coca Cola, McDonalds or Amazon. However, they too have some degree of adaptation in taste or price when it comes to marketing in a different market. According to Carl Ritzer (2007) in its journal on Mcdonaldization of society, he found out that in the phenomena of Mcdonaldization, there are four fundamental underlining principals for Mcdonaldization they are standardization, flexibility. According to Keegan (2005), though standardization may not be possible in present day context, with the globalization and regionalization, some element of business could be standardized in regional basis.
For instance, Sri Lanka, Nepal and Bangladesh use the same advertisement with same celebrities from bolly wood. As within the South Asian region the culture and beliefs are similar to India, it is possible to use the Indian celebrities and adverts within the region. Therefore it is clear that regionalization is possible where there is similar culture. It was identified that when Pizza Hut entered the South Asian region to Indian market, they did not succeed with the exiting range of cheese and onion. They have to change in to more spicy and hot menu thus paving the for Tandoori Pizza. Beliefs and attitudes are another cultural element that influences the international business (Dool and Lowe, 2005). In India when Starbucks had to enter the Indian market, they had to face a huge challenge of changing the attitude of customers towards coffee from traditional tea “Chaye” (Brandchannel.com, 2012). However, Starbucks came up with their own brand of Chaye tea whiles promoting the coffee concept to the consumers. This too is a situation where culture and habits playing a significant role in international business.
Furthermore, in China when GM (general motors) marketed Hummer, they pasted a huge Dragon on the Hummer in order to closely associate with the culture. In Japan it is considered and belles that Black represents mourning whiles White represents pure. Therefore for automobile companies, they have to take particular care in marketing the type of colored cars in to Japan (Dool and Lowe, 2005). Johansson (2000) identified that Hofstede’s Cultural Dimensions is one way to identify the cultural dimension in a country. Some countries are Individualistic whiles some are collectivist. Some countries are Masculine or male dominant while some are Feminism or female dominant. Uncertainty Avoidance Vs Risk Taking are another two dimensions which culture could be measured.
The other aspect is the Power Distance which helps in positioning a brand in consumers mind. Confucian Dynamism vs Long term outlook is another element which helps marketers in changing their marketing strategies when selling a product in a country. Discussing in detail, in most of the western European countries and US it is considered the culture is more of individualistic rather than collectivism. Hence, when brands such ZARA or any fashion designing company markets in such countries they have to reflect of individual personality rather than the entire family. But when marketing in India or Sri Lanka or any other Asian country it is vital to offer to the entire family and speak to the entire family. For an example Walls Ice cream Magnum, Cornetto range failed in Sri Lanka because ice cream in Sri Lanka is consumed as a family entertainment (Business Today, 2005). These are clear indication as to how culture influcing the business decision of a company. Perception is another element of culture (Jeffery, 2001). Accordingly Culture is one of the key in underlying value framework that helps in guiding an individual’s or consumer’s behavior. According to Keegan (2002) Culture is reflected through perceptions, social interactions and business interactions.
Furthermore Culture guides the selection of appropriate responses in social situations. According to Johansson (2000) Culture is a learned behavior where People learn do’s & don’t as they grow up. For instance, in a closely knitted culture such as in Asia night life and clubbing is considered a taboo whereas in Western countries it is considered to be more of a norm. Hence an organization who is involved in restaurant and night club business this is a factor to be considered as the customer walk INS’ would be affected as a result of culture. Keegan (2002) also identified that quality is perceived in different ways in different countries. As a result of these change in perception global companies have to localize in order to deliver perceived quality. Quality is the key to succeed, but in USA quality refers conformance to the standard or it works. In Japan quality refers to Perfection.
Whiles in Germany quality refers to Made according to the standard. In France Quality refers to Luxury whiles in India Quality refers to Reliability. Therefore any organization who is involved in producing a quality product they need to fulfill perceived quality standards in these cultures. Finally it is important to examine the effects of culture that would have in managing the organization and human resources. According to Johansson (2000) Managerial Styles of an organization would be influenced as a result of Culture that tends to generate different managerial styles. Keegan (2002) identified that Management styles are heavily influenced as a result of home country culture. It was identified that Japan has a High Context culture which influences mangers to read body language. However in US, where there is a low context culture that tends to ignore body language. Hence, when managers from two different contexts go to work, they are usually inadequately trained to handle different cultures.
Conclusion
Culture plays a vital role in managing international business. There are many cultural elements that need to be considered. Culture is known as the way in which a society does things. They are language, beliefs and attitudes, religion as well as rituals. If an organization ignores these cultural elements there is a greater tendency the organization to fail. Most of the organization tends to adapt its marketing strategies and decisions in order to suite the culture of the country. It is very rare a standardized product is marketed in accords the globe. Culture affects market demand. Managerial behavior is driven by his/her cultural knowledge. Knowledge of Native culture is useful when dealing with home markets but it has little value when dealing in foreign markets
References
Robert,J; Watkins, Micheal D. (2000) “ The Fine Art of Freiendly Acquisition.” Harverd Business Review, November-December 2000, vol 78 Issue6, p100 Bamford, James; Ernst, David;Fubini, David G. “ Launching a World-Class Joint venture” Harvard Business Review, February 2004, Vol82 Issue 2, p 145 Bengtsson, A.(1992). Managing Mergers and Acquisitions,
Gower, England Chapman, N (2004). “Key Success Factors in Mergers and Acquisitoins.” Strategic HR Review, November –December 2004, Vol 4 Issue 1, p27 Fallon, I and Srodes, J. (1998) Takeovers, Pan Books, London Stallworthy, A and Kharbanda, P (1988). Takeovers, Acquisitions and Mergers: Strategy for Rescuing companies in Distress. Kogan Page, London Doole, I. and Lowe, R. (2001), International Marketing Strategy – Analysis, Development and Implementation, Thomson Learning, 3rd Ed. Johansson, J.K. (2000), Global Marketing – Foreign Entry, Local Marketing, and Global Management, Johansson, International Edition. Cateora, P.R., and Ghauri, P.N. (1999), International Marketing, McGraw-Hill Publishing Company, European Edition. Muhlbacher, H., Helmuth, L. and Dahringer, L. (2006), International Marketing – A Global Perspective, Thomson, 3rd Ed. Keegan, W.J., (2002), Global Marketing Management, Prentice Hall, 7th Ed. http://www.geert-hofstede.com/hofstede_india.shtml
Hofstede, Geert (2001). Culture’s Consequences: comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: SAGE Publications Schott, Jeffrey J. (1991). “Trading blocs and the world trading system”. World Economy 14 (1): 1-17 http://www.marketingteacher.com/Lessons/lesson_international_marketing_culture.htm
