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Cultural Variations in International Companies

Keywords: business ethnic variations example, international company problems, working cross culturally

This chapter discuses the effects of the ethnical environment on international companies and problems facing them when each goes global. It will discuss a background to the study. It will further present the seeks and targets of the study, problem discussion, and finally the study questions

BACKGROUND TO THE STUDY

As the amount of companies operating internatiomally increases, the issue of cultural distinctions must be addresses for companies to operate a successful market internationally. The data of your country's culture is critical to international marketers in other for them to conform in a international market. Due to the high competition that multinationals face when working abroad, they can be confronted with conquering the social hurdle in other to penetrate the international market efficiently. This challenges all boils down to culture. That is so because business could be inspired by language hurdle, religion, ideals and attitudes, and the traditions of the variety country they are functioning in. International Marketing Managers need to triumph over this hurdles by understanding the neighborhood culure and abiding by the relion, norms and worth of their marketplace.

Thus for Professionals to reach your goals in international business, they need to understand how to adjust to the culture of other countries

Understanding culture affects how multinationals segment their international segments, adapt and standardize their product, and take up their International marketing strategies.

"Professionals need to broaden their perspectives, adjust to other civilizations and make decisions that mirror the desires and needs of those cultures" (Rugman &Hodgetts 2003 p 126)

Several analysts have opined that the marketing strategy of companies will be greatly influenced by the neighborhood culture of the prospective country. Thus, today's body of knowledge shows that international marketing professionals need to, be cautious about ensuring they understand the social differences when producing marketing activities (Herrmann and Heitmann, 2006). Therefore Managers should eschew the ethnocentric approach which targets ones way of doing business in that way ignores the countrywide ethnicities of other countries. Professionals need to learn about the social dissimilarities where their multinationals will be functioning in a overseas country.

OBJECTIVES FROM THE STUDY

The Objectives of this analysis is to

  • Identify the many elements of culture which include language, religion, looks, ideals and education, education and customs and their impact on International Marketing decisions
  • Address the major issues facing International marketers when operating in overseas countries
  • To present a critical analysis of culture study channels in international marketing and offer recommendations for future development

STATEMENT OF THE STUDY PROBLEM

The idea of culture includes complexities which poses as an issue to international marketing. For quite some time, authors who have dealt with culture have come up with different explanations of culture. Culture is intricate and individual behavior is inspired by culture not dependant on it. ( Usunier & Lee, 2009). Hofstede described culture as "the collective development of the mind which distinguishes the associates of one human being group from the other" (1980, p87). Multinational companies have to find marketing solutions by tailoring their marketing mix to fulfill and adjust to social changes and variations far away. This brings us to two possible problems which has long being an issue of controversy.

First, Adaptation which implies the company adjusting its online marketing strategy and adapting its marketing combine to suit each international market.

Second, Standardization which implies the business using the same online marketing strategy and marketing mix in all its international markets.

RESEARCH QUESTIONS

The following questions have being developed predicated on the research problems:

How do social differences have an impact on International marketing generally?

What are the important ethnic factors that international companies should think about when operating in another country?

STRUCTURE OF DISSERTATION

This research project is composed of three(3) chapters. The first chapter is the intro which discusses the background of culture, its importance on international marketing and the research questions. The second chapter talks about the overview of related books which discusses the concept of culture and international marketing, the many elements of culture, the ideas of culture and the consequences of cultural dissimilarities on international business and lastly chapter three, we describe the methodology used in undertaking this research.

PURPOSE OF RESEARCH

Based on the study questions mentioned above, The main reason for this research is to critically analiyse and review the impact of ethnic distinctions on multinational International online marketing strategy and exactly how multinationals can manage cultural distinctions when marketing overseas.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

CONCEPT OF CULTURE

The term "culture" is so complicated and multidimensional that it is difficult to identify. With regards to International marketing, Several Creators have given different definitions of culture. Hofstede (1980, p87) described culture as the " the collective coding of the mind which distinguishes participants of one real human group from the other. " Inside the same vein, Rugman& Hodgetts(2003, p126) described culture as the "acquired knowledge that individuals use to interpret experience also to generate interpersonal behavior". Selfridge & Sokolik (1975) possessed a different description. They described culture is more technical and made up of a "visible and invisible area of the culture". Whichever way we look at it, culture is approximately what we believe in, our norms and values, and our customs or traditions. The issue of culture is sometimes overlooked by companies when each goes international but its root significance cannot be dismissed. International marketing managers sometimes make the error of having an ethnocentric view of marketing internationally which targets using the same procedure to do business abroad as opposed to the polycentric view which targets adopting marketing strategies to meet the needs of every target market in another country. Quite simply, multinationals must think globally and act locally. The business recognizes the value of inherent differences in overseas marketplaces. The polycentric approach of marketing are best suited to cope with local market conditions of your country. For example, Kentuck Fried Chiken must recognize that they way it prepares its poultry in USA for instance might not exactly work in Islamic countries anticipated to values and customs. That is so because culture performs a substantial role in doing business internationally.

COMPONENTS OF CULTURE

According to Usunier (1993) Culture is made up of three essential components

· Values which is a big variety of mental and verbal processes which represent our knowledge and evaluation of products and services (Usunier, 1993)

· Principles which are the signals consumers use to serve as manuals for what's appropriate behavior, they tend to be relatively enduring and stable over time and widely accepted by customers of a specific market (Usunier, 1993)

· Customs that happen to be methods of behaviour those constitute culturally approved or suitable ways of behaving in specific situations. Traditions are visible at major occasions in ones life like birth, marriage, fatality, with key incidents in the year like Christmas or Easter (Usunier, 1993)

Beliefs, values and customs will be the three components of culture which influence the international marketing (Usunier, 1993). These three components have an impact on utilization behaviours and the purchase routine of the average person. Each individual buy products because of some sources in his own culture. Values, values and traditions send immediate and indirect communications to consumers regarding the collection of goods and services; it is the cultural communication (Doole & Lowe, 2001). The culture a person live determines and affects its decision process. Companies must adapt their product and campaign to match their area of procedure. (Usunier, 1993)

ELEMENTS OF CULTURE

This will be the characteristics that differentiate one culture from a different one. Corresponding to Doole & Lowe (2001) This elements are very important for handling cultural distinctions from a marketing point of view because they affect marketing decisions and how companies adjust their marketing strategies to suit a particular country for that reason cultural elements

LANGUAGE

This is an integral factor of culture. Without a proper understanding of a country's culture, International companies may find it very hard to conduct business. Regarding to Czinkota et al (2001) Terms assists four important tasks in international business. First It is vital tool in obtaining information and communication a about a particular market. Secondly, Language provides easy access to the local society. Additionally it is becoming relevant in company communications. And finally, dialect provides more than the capability to connect. (Czinkota et al 2001) The main role of words in marketing is within business's negotiations. The vocabulary of country needs to be understood properly for any business negotiation to be successful. This has a substantial impact on the international marketing a technique of multinationals who wish to enter a overseas market. However issues could arise whenever a language is not interpreted properly which results in translation blunders. A particular sentence or term in japan may meant a whole different thing in Sweden. ( Czinkota et al 2001).

Hall&Hall (1986) explained that with dialect, one has to consider whether national culture falls under the high context culture or low context culture. In the high context culture, verbal communication have a tendency not carry a direct message. This means what is said is probably not what is intended. Countries like Nigeria, Japan, and Arabic countries show the High framework culture. Low framework culture on the other hand, emphasizes on what's said. This means your term is ur connection. Countries like Usa, Australia and Sweden are low context cultures.

RELIGION

Religion is another essential requirement of culture that has a huge impact on International marketing. The religious beliefs of an country must be studied under consideration when operating within an international market.

In Islamic countries like Pakistan, Saudi Arabia, Oman etc, religious holidays and celebrations for example Ramadan are firmly honored. Hence all overseas companies must follow the Islamic spiritual laws. Religious beliefs is important to Managers because it influences lifestyles, beliefs, principles and attitudes. In addition, it impacts work and societal traditions as well as politics and business generally. According to Blowing wind & Douglas (2007) in their article on International marketing segmentation, " Difference in perception systems between civilizations may affect consumer behavior and purchasing patterns" Dietry regulations associated with one religion could influence marketing of food products and service delivery. (Blowing wind & Douglas 2007) For example, Regarding to Islamic religious beliefs, a rooster must be drained of blood before it is cooked or prepared( Halal). It really is thought that eating a fowl with blood vessels could affect your spirituality and deeds in Islam. This impacts the marketing mix of Fastfood companies that are based in Islamic countries because they have to abide by the Islamic rules. Far away like India, the family can be an important element. How big is the family could impact purchasing ability. Hence this allows marketing analysts in assessing the marketplace potentials and use patterns. ( Czinkota, M et al 2001)

Aesthetics

This aspect of cultural have implications for international market strategy. Regarding to Rugman& Hodget (2003 p. 131), Looks refers to imaginative taste of any culture. This flavor could in forms, colours, music, design or presentation. Aesthetics values change depending on the country. International companies have to be aware of the several flavour in culture. It is because what's generally accepted in one country may be a taboo internationally. Aesthetic values have an impact on the development and product packaging designs of manufacturing business that operate in another country. International managers need to be aware of preference in colors and symbols when packaging and distributing their products.

EDUCATION

The degree of Education a country has will have an impact on International marketing. The literacy degree of a country decides how products and services can be marketed. In west African countries where the literacy rate is low, visual aids could be more appropriate throughout a marketing promotion. On the other hand, In Europe and north America which have high literacy rates, Using Printed materials will be a suitable approach to marketing. The International administrator faces the obstructions of recruiting and training the right staff especially in countries with high illiteracy rates.

VALUES AND ATTITUDES

Values are distributed values or group norms that contain been internalized by individuals. ( Czinkota, M et al 2001, p45) An attitude is a continual propensity to feel and act in a specific way towards an object( Rugman &Hodgetts 2003, p129). Principles and attitudes change between and within countries. In that case International markets need to adjust their promotion methods or brand announcements In 2004, China prohibited a Nike television commercial showing U. S. field hockey star LeBron James in a struggle with animated animation kung fu masters and two dragons, since it was argued that the advertising insults Chinese countrywide dignity.

CUSTOMS AND MANNERS

Customs and manners have a significant impact on consumer behavior, use patterns and presentation. In america and Europe black colored is employed for mourning the useless, while in Japan and china and taiwan white is the color used for mourning. In countries. In countries where status quo is respectable, Multinationals have to send a delegation of senior staff to handle a business negotiation.

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