Cross Cultural Marketing

Cross Cultural Marketing for 3 products across India, Europe, America & East Asian Markets Consumer Behavior: Individual Assignment Submitted by: Brian Dsouza, Div D Roll No: 313

Cross Cultural Marketing

Cross Cultural Marketing Introduction Trade today is becoming increasingly global with its outlook today. One of the main reasons for this is technological improvements in transport and communication. Consumers and businesses have access to the best products from different countries. This has also led to increased competition between multinational firms and countries. In part to accommodate these realities, countries in the last several decades have taken increasing steps to promote global trade through agreements such as the General Treaty on Trade and Tariffs, and trade organizations such as the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and the European Union (EU). Today almost all major corporations are actively involved in marketing their products beyond their original homeland borders. The main challenge involved in the cross cultural marketing is “HOW” to do it.

Corporations today are developing strategies to take

advantage of the above emerging economic opportunities. The 2 main reasons for going multinational are 1. Increasing demand of goods and services of one country in another country. 2. Overseas markets represent best opportunity for future growth. What is Cross Cultural Marketing? Cross-cultural marketing is defined as the strategic process of marketing among consumers whose culture differs from that of the marketer's own culture at least in one of the fundamental cultural aspects, such as language, religion, social norms and values, education, and the living style. Cross-cultural marketing demands marketers to be aware of and sensitive to the cultural differences; to respect the right to culture by the consumers in various cultures and marketplaces, marketers should understand that they deserved the right to their cultures. If the marketers want to be the winners in the cross-cultural marketing they must create the marketing mix that meets the consumer's values on a right to their culture. It involves recognizing that people all over the world have different needs

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Cross Cultural Marketing

Why Cross Cultural Marketing? From the anthropological perspective all market behaviors are culture-bound. Both consumer behavior and business practices are performed to a large extent by the culture within which they take place. Therefore, in order to match the marketing mix with consumer preferences, purchasing behavior, and product-use patterns in a potential market, marketers must have a thorough understanding of the cultural environment of that market, i.e., marketing cross-culturally. However, this is by no means to suggest that in the 21st century all marketers should focus on cultural differences only to adjust marketing programs to make them accepted by the consumers in various markets. In contrast, it is suggested that successful marketers should also seek out cultural similarities, in order to identify opportunities to implement a modified standardized marketing mix. To be able to skillfully manipulate these similarities and differences in the worldwide marketplaces is one of the most important marketing strategies for businesses in the 21st Century.

7 tips to successful Cross Cultural Marketing Know Your Own Cultural Background When we learn about other cultures we often think about it as "us” understanding "them". But when developing a deep understanding about cross-cultural issues, we must first start with understanding ourselves or "us" understanding "us". Take a moment and think about how you see the world. How have your education, traveling, gender, faith, children, sexual orientation, hobbies, and/or recreational interests shaped who you are? What celebrations and rituals are important to you? These elements collectively form your unique cultural identity, the lens through which you see the world. In this sense, every encounter we have with another person is essentially a cultural exchange, not just those with someone who obviously speaks, eats, dresses or appears differently. The next time you interact across cultures, share who you are, too. This will help us to learn from each other and not just about each other. Know Your Expertise There are numerous challenges when going overseas. It is vital to understand what your expertise is, and to then find the other expertise that you need to be successful. Don’t be afraid to bring in marketing experts for your target countries. Page 3

Cross Cultural Marketing

Do Your Homework Spend time researching the culture of the target countries. Learn about communication, negotiation and work styles. Is your target market a high context (for example Latin America) or low context market (US)? What do you need to know about non-verbal communication? Cross Cultural Meetings We all know communication is the key to ensuring good relationships, no matter who we are communicating with. But, when communicating across cultures, it is even more important. If you are having meetings with participants from different cultures, put more of your communication in writing than you normally would. Under each agenda item, put bullet points of topics to covered and key issues that need discussion. This ensures that everyone (even those with more limited English skills) can feel confident that they understand what is being presented. Ask Open Ended Questions When we function in a foreign language, we have a tendency to say yes when we are asked a question, even if we don't understand what was asked. This is even true when we are asked "Do you understand?" The next time you are interacting cross culturally, ask an open-ended question such as "Can you tell me what we need to do next?" instead of "Do you understand?" If the person is unable to answer what needs to happen next, then you know that you need to explain further. Always Use Professional Translators Translating materials into foreign languages is always a challenge, even more so when you are trying to convey a concept in a way that is appealing to foreign cultures. Ensure that the translation firm that you are using has the ability to use native speakers for the translation. Ask if they also do a secondary translation check with another native speaker to act as a back-up. It is better to be more careful up front, then to try and correct mistakes later. Know the National Holidays and Religion If you are working overseas, make sure that you learn about local holidays and how they might impact campaigns and other business projects. The month of Ramadan is important

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Cross Cultural Markeeting

in many parts of the e world, and d, having crritical deadllines during g this month h is challen nging. If your target t counttries have a strong reliigious basiss for their culture, mak ke sure thatt you learn about the religion and itss taboos, resstrictions an nd ways tha at religious beliefs can work in your favor. f

Cross Cultural Consum mer Analy ysis To deterrmine whetther and hoow to enterr a foreign market onee needs to conduct a cross cultural consumer analysis. It is defined as efforrt to deterrmine to what w extentt the consumeers of two orr more natioons are sim milar or diffeerent. It can n provide an n understan nding of the psychological, social an nd cultural characteristics of speccific nationa al markets they wish to target. t

East Asian •Centred on set of relationsships defined by religioous doctrine •A closed worldview, prizing stability s and harmony y •Values a persons duties too family, clan •Submisssive to authority y •Weight on o vertical inter perrsonal relaltion n

Am merican •Centred on o individual •An open view v of the world, em mphasizing change an nd movement •Values in ndividual personality ance •Self-Relia •Weight on n horizontal inter perssonal relations

Ind dian •Centred on n relationsh hips •A closed worldview, w more stresss on stability p •Values a persons duties to family, fa society nt •Self Relain •Weight on n vertical inter perso onal relations

Euro opean •Centred on n individual •A closed wo orldview, more stresss on harmony nt •Self Relian •Weight on horizontal inter person nal relations

Processs for Cro oss Cultu ural Mark keting The proccess for Crosss Cultural Marketing is explained d in terms of o the flow chart given below

Markeeting in the age a of complexity

Definiing the isssue

Resea arching Intern national Marrkets

The Export ocess Pro

Crooss Culttural Mark keting

Consumert aviour Beha

Chann nels and Distriibution Stra ategy

Priciing and Strate egy in an Intern national Envirronment

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Cross Cultural Markeeting

Internattional Comm munication Strategies S

Straiight Exten nsion •The firm adoptss the samee strategy ass in the home h marke et

Comm municatio n Ada aptation

Communicattio n Innovation I n

•The company t the cater to needs and wantss of its foreign n custom mers

•Th he firm de esigns a product from scrratch for itss forriegn customers

The Marrketing Mix is the tool that t the international marketer m ha as availablee to form a total t commun nications pro ogram. It coonsists of •

A Advertising

•

P Personal sellling

•

P Publicity

•

S Sales promottion

•

S Sponsorship

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Cross Cultural Markeeting

Cross Cultural Marketing for Pr roducts Pepsi uction Introdu Pepsi-Coola, common nly called Pepsi, P is a sooft drink produced and d manufactu ured by PepsiCo. It is sold d worldwide e in stores, restaurantss and vendiing machinees. Pepsi ga ained popullarity following g the introd duction in 1934 1 of a 12-ounce botttle. Initiallly priced att 10 cents, sales were slow, but when the price was slasheed to 5 cents sales pick ked up. Pepsi also owns the ntain Dew brands. b Frito-Lay and Moun Marketiing PepsiCo gained enttry to India a by creatin ng a joint venture v witth the Punjab governm mentowned Punjab P Agro o Industria al Corporatiion (PAIC) and Voltass India Lim mited. This joint venture marketed and a sold Leehar Pepsi until 1991 when the use of foreeign brands was allowed; PepsiCo bo ought out its partners and a ended the t joint ven nture in 199 94. The stra ategy used for Pepsi is one e of Commu unication Ad daptation an nd Product Extension

Fig 1: Exxamples of Different D Pep psi Ads in Different D Coountries Page 7

Cross Cultural Marketing

Product Extension manifests itself in the form of Pepsi being marketed in US and Europe as a side drink to go with pizza or lunches, In East Asia it is associated with being hip and cool and thus there is the use of local pop and sports stars. In India Pepsi is marketed more in terms of being a thirst quencher and being a drink that provides a lot of fizz. The advertising in East Asia and India is always in the local languages. In India, Sachin Tendulkar, Amitabh Bachhan and Shahrukh Khan have endorsed Pepsi. This is an approach that East Asian consumers appreciate and respond to. There is also the movement towards standardization of advertising by using celebrities that are recognizable worldwide such as soccer stars and Hollywood actors. There is also a use of personal selling across all the four markets but this is not so prevalent except for in the use of new products that are introduced in markets. Pepsi also provides sponsorship to cricket team of Pakistan and sponsors major cricket tournaments in the sub continents. Sales promotions are used across the 4 markets but there is the major prevalent scheme of “Pepsi Stuff”. Pepsi Stuff refers to a landmark marketing strategy and global integrated campaign launched by PepsiCo, first in North America and then around the world, in the 1990s and continuing into the 2000s featuring merchandise that could be purchased with Pepsi Points. There are two ways to acquire Pepsi Points: •

Collect Points from specially marked Pepsi packages and fountain cups.

•

Purchase supplemental Points on the Pepsi Points redemption order form, for 10 cents per Point.

This sales promotion scheme though is more prevalent in North America. Gillette Introduction Gillette is a business unit of Procter & Gambl and successor of The Gillette Company, which was founded by King C. Gillette in 1901 as a safety razor manufacturer. On October 1, 2005, The Gillette Company finalized its purchase by Procter & Gamble. As a result of this merger, the Gillette Company no longer exists. The merger created the world's largest personal care and household products company. Before the merger, Gillette had grown to become a leading global supplier of products under a variety of brands. In addition to Gillette, the company marketed under Braun, Duracell and Oral-B, among others.

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Cross Cultural Marketing

Marketing The strategy used in marketing of Gillette products worldwide is that of Product Extension and Marketing Extension where the firm uses the same policy of marketing it has used in its home market. Gillette is mainly a manufacturer of personal care products for men and thus worldwide the advertising concentrates on the using sports celebrities and models for their advertisements. The Gillette strategy is a global strategy, which aims to foresee the future (notably by the Committee horizon) and concerns the world which is beside went up to “one nation”. That is clearly evoked in the formulation strategy. By its long experience, Gillette could achieve its global strategy with safety. The shaving system does not require a local adaptation of products. Moreover, consumption becomes increasingly homogeneous around the world by a convergence of needs. This peculiarity of the market shaving system enhances the hypothesis of standardization of production and of the marketing variables. The advertising used stresses on the fact that the safety razor (i.e. Mach3, Vector Plus etc) are safe to use, do not give you an itch after shaving and does not leave cuts giving you a smooth shave. The advertising is more or less standard over the world. Gillette sponsored the World up in 2006, Rugby Nations league as well as other sports events across the Globe. Sports like soccer have a universal appeal and therefore have an impact on consumers from all 4 markets. There is not much of a prevalence of sales promotions in developed markets of Europe and USA. With a view to realizing higher unit sales in the developing and untapped economies of East Asia and India where there is not much awareness about usage of safety and disposable razors. These are in terms of clubbing 2 Gillette personal products together and offering a discount. Personal selling is also taken up in Asian markets.

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Cross Cultural Marketing

Fig 2: Ads for Gilette For all the focus on razors and blades, it is worth noting that Gillette has diversified products in its portfolio. In the writing instruments category, it now has the Parker Pen brand in addition to the Paper Mate and Waterman brands it acquired earlier. It also acquired Duracell in a much-publicized takeover in 1996. It has the Oral-B toothbrush and a slew of other products in toiletries. What sets Gillette apart from most other companies that also have a continuous stream of new products is that Gillette seeks worldwide leadership for all its new products. Gillette's success in achieving its new product goals is reflected by the fact that in 1996, 41% of Gillette's sales came from products introduced in the past 5 years, up from 30% in 1990 United Colors of Benetton Introduction UCB is is a global upmarket clothing brand, based in Treviso, Italy. Benetton is present in 120 countries around the world with a strong Italian character whose style, quality and passion are clearly seen in its brands: the casual United Colors of Benetton, fashion oriented Sisley and the leisurewear and street wear brands Playlife and Killer Loop. The Group has a total yearly production of around 130 million garments and a distribution

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Cross Cultural Markeeting

network with 5,00 00 contemp porary storees, mainly managed by indepen ndent partners, generating a total turnover t of over 1.9 biillion euro. Established d in 1965, Benetton B is now one Holding g (a holding g company wholly w owneed by the Benetton B Fam mily) controlleed by Edizio with a 67% 6 stake. It I listed on the stock exchanges e in n Milan in 1986, in Frrankfurt in 1988 and in New N York in 1989. Marketiing UCB concentrates more on creating a world bra and productt i.e. produ ucts which h are manufacctured, pacckaged and d positioned d in exactlly the sam me way as they are sold worldwid de. Althoug gh the adveertising is in i specific target t langu uages, the ads remain n the same. Th he advantag ge of having g a global brrand is that UCB get th he following g three benefits •

Q Quality Sign nal

•

G Global Myth

•

S Social Responsibility

Fig 3: Beenetton cam mpaigns: Cloockwise from m top left 1.C Chimpanzeees 2003 2. Condoms C 19 991 3. Dying AIIDS patientt 4.Gender and a Race Eq quality 1990 0 Page 11

Cross Cultural Marketing

One of Benetton’s key aims is to provide clothes of a consistently high quality as well as attempting to provide clothes that appeal to a large portion of the population. Benetton ensure that they keep in touch with global demand and continue to keep their brand well known and liked. This may seem like a relatively easy one to achieve but Benetton enjoy exploiting extremely controversial issues as part of their ‘Institutional Campaigns’. These campaigns aim at publicizing the entire company as a whole rather than any one range of clothing. Through this marketing technique they aim to not only keep public attention for their corporate name, but to associate Benetton with trying to raise awareness about certain issues. As can be seen from the response to their most recent campaign, pictures of death-row inmates, this does not always generate a favorable response. Benetton stress the fact that they are not trying to use shock techniques to advertise their products, they continue to insist that they are only raising awareness in the interests of public education. Benetton seem to have a sustainable global brand. The only aspect that Benetton need to be concerned with is the brand image that consumers develop. Benetton’s current communication strategy is diverse. A large portion of their communication budget is spent on their ‘Institutional Campaigns’. These campaigns are designed to advertise the company and corporate image rather than specific product lines. Although they do develop standard product based advertisements, these are on a much smaller scale and generally specifically geared to a certain market rather than promoting the global brand. Benetton prefer in all markets to do some form of local marketing wherein the brand in promoted in a around the premises or city the retail outlet is present in. Sales promotions done by Benetton are few in all the 4 markets. Benetton are having a sizeable chunk of their collection in the form of sportswear which is why they sponsor teams in F1 as well as basketball which are viewed by their target market.

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