Lecture 1
Marketing: performance of business activities designed to plan, price, promote, and direct the
flow of a company’s goods and services to consumers or users for a profit. International
marketing: same activities performed in more than one nation, presenting unfamiliar
problems, varying levels of uncertainty.
Adaptation vs. universalism: background: Global vs multinational: Global corporation:
operates in multiple countries, with constancy at low relative cost, as if the entire world (or
major regions of it) were a single entity, sells the same things in the same way everywhere.
Standardization: lower prices, greater learning opportunities (knowing anything about one
thing). Multinational corporation: operates in multiple countries, adjusts its products and
practices in each, at high relative costs. Adaptation to local tastes: higher prices, less learning
(knowing something about many things). Cultural universals: value and segment convergence:
(consumer common characteristics across nations) preference for lower prices, advertising
elasticity, preference for modernity and reliability, cosmopolitanism as a defining
characteristic of all sectors
Levitt: the globalization of markets: “Only global companies will achieve long-term success by
concentrating on what everyone wants rather than worrying about the details of what
everyone thinks they might like.”, “In 1909 I announced one morning, without any previous
warning, that in the future we were going to build only one model, that the model was going
to be “Model T”, and that the chassis would be exactly the same for all cars, and I remarked:
Any customer can have a car painted any color that he wants so long as it is black.” → These
approaches still work today; you can cover a huge portion of the market with a relatively
standardized offering.
Interbrand: global brand measures: % of revenue coming from outside of the brand’s home
region, significant presence in Asia, Europe and North America as well as broad geographic
coverage in emerging markets, public profile and awareness across the major economies of
the world → even for big famous brands, you need some levels of adaptation, of cultural
sensitivity
Global ≠ standardized (examples of companies that adapted and made money from it):
Toyota: “Vehicle names, technical details, equipment specs and colors of the model presented
here may vary from country to country. Not all models are available in your country”,
McDonalds: “Customized sandwiches across countries”, LV: “Product and price customization
in Japan”, IKEA: “Adaptation to the US (e.g., walk-in closets and bigger beds) and Chinese
markets (changes in product features, pricing, advertising)”, JP Morgan: “Islamic banking”
(because of laws, when banking companies enter Islamic countries, they have to adapt),
Volkswagen: “Some cars with the Volkswagen logo are found only in selected markets.” (in
India they make smaller cars you can park easier and pay less taxes for) → Even though these
firms are successful as they are and they could sell the same product everywhere, they
adapted to the other markets and they were very successful from it.
Cultural universals: etic vs emic: Etic constructs: constructs that apply equally well to other
cultures, not equally important yet equally applicable across cultures, survey-based studies
with cross-sectional comparisons (e.g., Hofstede’s cultural dimensions, humor and beauty can
be both etic and emic). Emic constructs: constructs that apply to a given culture, not applicable
,across cultures, determined through perceptions of culture members (e.g., Guanxi, Hygge,
non-discrimination).
Fairness norms: construct that makes us similar because it’s equally important no matter what
country we go to, it’s not a product of any particular culture. Marketing implications of fairness
norms: marketing managers should be very careful when it comes to fairness norms for prices.
Universal vs country-specific behaviors: Consumer behaviors/attitudes that are similar across
cultures, e.g., how do we assess quality: brand, physical features, price, retailer reputation.
Dawar and Parker study: Research question: are there culture-invariant consumer behaviors?
Empirical test in 38 countries (Latin, Germanic, Anglo, Nordic, other), n = 640, technology
products, matched-sample approach (young, mobile, affluent, educated) → they were similar
in many characteristics e.g., education, main difference being their nationality. Cultural
clusters = they paired them into country categories, e.g., “Germanic” countries = Austria,
Germany, Israel, Switzerland. Cultural universals testing: Measure: in general, how likely are
you to personally use brand names (physical appearance/prices/retailer reputation) as a sign
of quality for purchasing electronics products? (in a 7-point scale). Existence of specific
behaviors (how likely they are to use these features as a sign of quality from 1 to 7) = universal,
relative order of importance of behaviors across cultures (rank from least to most important
feature) = universal, absolute level of behavior across cultures (level to which a given feature
is used the same for all countries) → There are a lot of similarities in the ways consumers treat
different ques when it comes to evaluating the quality of a given product. Problems with the
study: small sample size, if you retest it maybe you would get different results. When we have
bigger samples, we have a better idea of what the averages are and if we retest, we will
probably get the same results. Also, country categories have many different countries that are
not very similar, making your averages very uninformative.
4P’s: international edition: 1. Product: taste is hard to export. 2. Place: Unilever in Philippines:
1 million retail locations, 95% = mom-and-pop stores (convenience and retails stores), carry
200 items, 36% of FMCG sales. Solution: Cooperate with some of the supermarkets that
already exist in the market as co-distributors, the supermarkets could get the product at a
discount and then they would distribute these products, host some events where convenient
store owners could learn about the products and make an order for them, but then the
supermarket would have to deal with these tasks. Supermarkets would benefit from
differences in prices of buying from Unilever and selling to convenience stores, and Unilever
would benefit from having better access for their products through entering the convenience
stores segment. 3. Price: Rexona in Philippines (purchasing power very low in this market):
50% buying deodorant regularly, too pricey for rural consumers, they came up with mini-sticks
35 cents but still too expensive, consumers won’t buy and mom-and-pop stores won’t stock.
Solution: reduce the size even further to single use packs, making more money per pack,
market penetration increased because the product got affordable to the consumers. This
seemingly ease of changing price has to be adapted across the markets, it’s not always going
to be easy because in some emerging markets to make your product affordable it will require
change in product packaging for example, offering something that’s so small that you can still
make money from your product and consumers will buy it. 4. Promotion: Coke China, the
original name sounded weird in Chinese and they needed to change it to something better.
Bledina Russia, the name in Russian means a bad word so the product is no longer there
anymore.
, Lecture 2
Campbell’s in Russia: 2007 – Campbell’s soup launched in Russia, population of Russia is 143
million, Russians eat 32 billion bowls of soup a year (vs 14 billion in US), no competition in the
canned soup category. 2011 – Campbell’s pulls out of the market. Problem: while all the hard
indicators seemed to suggest that Russia would be a perfect target for Campbell’s, the brand
failed to take into account culture. In Russia, since they eat so much soup as part of their
culture, if you’re a woman that can’t cook soup, you’re not considered a good wife. → culture
can make a difference for a brand’s success in a particular market.
Culture: Definitions: Complex whole which includes knowledge, belief, art, morals, law,
custom, and any other capabilities and habits acquired by man as a member of society (Tylor).
System of publicly and collectively accepted meanings operating for a given group at a given
time. This system of terms, forms, categories, and images interprets a people’s own situation
to themselves (Pettigrew). Complex of meanings, beliefs, practices, symbols, norms and
values prevalent among people in a society (Schwartz). Cultural differences: Why bother?
Culture shapes the way we think and behave, our assumptions about behavioral norms, power
and other’s behaviors, as well as our actual behaviors, values and norms. → we need to
understand our own culture and other people’s culture so we can see what the potential
differences could be or sources for misunderstanding, and to adjust for potential biases in our
own understanding of other people’s behaviors. Cultural differences: measurement: 1970’s
Cross-cultural dimensions by Hofstede → 1990’s Culture Value Orientations by Schwartz →
2000’s World Values Survey by Inglehart et al. → 2000’s GLOBE project by House et al.
Hofstede’s cultural dimensions: Background: 1965-1971 – Hofstede worked at IBM on
personnel research, set up an employee opinion survey program for all its national
subsidiaries, 1969-1973 – data collection for original survey, originally 71 countries
represented by IBM subsidiaries, sample of over 88000 employees. 4 cultural dimensions:
1. Power Distance: the extent to which he members of a society expect and accept that power
in institutions and organizations in distributed unequally. High power distance: accept
hierarchical order and power inequality, superiors are superior, power determines the rules.
Low power distance: need for power equalization and justification for power inequalities,
superiors introduce order, same rules for everyone. (in high power distance societies, high
power individuals would rarely be prosecuted for breaking the low, while in low power
distance societies, this often happens). Measurement by Hofstede: “How frequently in your
experience does the following problem occur: Employees being afraid to express
disagreement with their managers”, “As an employee I would prefer to work under: a
manager with a consultative/autocratic/persuasive/democratic style” (in this question, only
autocratic style translates into high power distance). Measurement by GLOBE: “In this
organization, a person’s influence should be based primarily on: 1 = one’s ability and
contribution to the organization, 7 = the authority of one’s position”, “In this organization,
people in positions of power try to: 1 = increase their social distance from less powerful
individuals, 7 = decrease their social distance from less powerful individuals” (there is part of
the survey that tests how things should be, and part that tests how things are). Advertising
content: Hierarchical interpersonal relationships in societies, more unequal relationships in
advertising for higher power distance, measure: number of ads with unequal status
relationships between major characters. (they conducted content survey of ads to see if the
ads display unequal or equal status relationships between the characters. In US and Germany
there were fewer ads that display unequal status relationships, while in Korea and Thailand
