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June 24, 2014

Multinational Marketing

Before delving into the topic of cross-cultural marketing, it sounds appropriate to define what is culture exactly, what is Globalization and Cross-Cultural Marketing.
Culture may be defined as behavior peculiar to human beings, together with material objects used. Culture consists of language, ideas, beliefs, customs, codes, institutions, tools, techniques, work of arts, rituals, ceremonies and so on. The existence and use of culture depends upon ability possessed by men alone. This ability has been called variously the capacity for rational or abstract thought.
Diversity and Globalization in the new economy and the present business situation has produced a work force made up of people all around the world. They have different life experiences, perspectives, preferences, values and style. This diversity of work force is reshaping and rewriting the way of doing business.
Globalization is the process, which cannot be avoided in 21st Century. Marketing in this global village become more difficult as nations become more and more culture conscious. This consciousness has given birth to the concept of cross-cultural marketing.  
Cross-Cultural Marketing:
It is important to notice that not only culture affects the marketing but marketing also affects the culture and marketers can be regarded as agents of changes within the culture. Thus we can say that there exists an interaction between culture and marketing, which can be examined from three perspectives:
  1. As we have discussed above, culture defines the consumer purchasing behavior and product use pattern. If we take the example of business gifts, in some cultures it is very commonly in practice and helped the business to achieve customer’s trust while on some other cultures it could be misinterpreted as inappropriate and have negative impact on customer’s behavior 
  2. Each component of marketing is influenced by each component of culture. For example promotion of any product is greatly influenced by the language, attitudes towards change of a particular culture influenced the acceptance of any product and distribution of a product is influenced by the social interaction and social institutions
  3. Marketing also influenced the culture through its contribution to cultural borrowing and change. The rate of cultural changes increases as the product acceptance and standardization increases
But marketers cannot depend on the cultural change for marketing their products as culture changes slowly. Thus the main task for cross-cultural marketers is to find the similarities between different cultures and then adapt such marketing strategy that their product will never face any resistance.
The most important problem, while marketing for different culture, is the belief that your culture is superior to others. This ethnocentrism of marketers can ruin the acceptance of any product whatever the marketing strategy may be.    
Thus in order to develop a solid and comprehensive cross-cultural marketing strategy, a cross-cultural marketer has to consider the following points:
·         Develop cultural empathy, i.e. understand and respect the sensitive issues of other cultures and the differences between the cultures of the marketer and the region where the product is marketed
·         Never believe that one culture is superior to other
·         Never transfer the concept of one culture to another culture
·         Use cultural informant people in the process of decision-making
As far as the adaptation of cultural environment is concerned, it is a good idea that marketer adapt the cultural environment of region before start marketing there because although marketing also influence culture but this influence and the process of change in a culture is very slow and marketer needs immediate results for its business.   
Literature Review:
            Cultural similarities between the two foreign firms are sure to effect the decision concerning the level of control (Erramilli and Rao, 1993). It appears that as cultural distance between the two firms increases, the investment in the non-redeployable assets in an overseas country gets riskier (Gatignon and Anderson, 1988). This is partly because it becomes more difficult to understand each other, support each other, and resolve differences and conflicts. Therefore, two firms of different countries and cultures are likely to favor a low-control operation mode when the cultural distance between them is substantial.
            It has been found that foreign owners prefer to introduce different managerial philosophies, of which control is an important element (Child et al., 1994). These philosophies are in the main consistent with the stereotypes of management said to characterize these cultural regions.  
            It has often been suggested that ventures fail because of cross-cultural misunderstandings (Lane and Beamish, 1990). Researchers believed that a successful strategic alliance requires more than operational skills alone, indicating the need to study cultural differences in management style and objectives. Researchers found the primary causes of failure to be cultural differences, disagreement about objectives, poor communications, and partner opportunism (Gugler and Dunning, 1993). Some have also added that multiform, multicultural perspectives were integral to the long-term success of their marketing problems (Parkhe, 1991). All kinds of cultural differences have substantially affected the marketplace (Harrigan, 1987). Thus all the above-mentioned literature reviewed, suggested that cultural difference is the root cause of all marketing problems of large multinational corporations.
Western Pursuit of Globalization:
Marketing and organizing are culturally dependent because they do not consist of making or moving tangible objectives, but of manipulating symbols, which have meaning to the people who are managed.
Culture can be defined as the set of key values, beliefs, understandings, and norms shared by members of an organization (Kilmann et al., 1986). Culture represents the unwritten, informal norms that bind organization members together. Culture can be analyzed at visible and invisible levels (Schein, 1984).
Cross-cultural marketing can be defined as the process of marketing for people, which belong to different cultures. Thus it is recommended that the cross-cultural marketers must know and respect the sensitive issues of other cultures. Cross-cultural marketers must create the marketing mix that is suitable for consumers of different cultures.
It has been noticed that almost all market behaviors of consumers and marketers are culture-bound. Consumer’s purchasing behavior and product use patterns all depends upon the culture of the country. It is necessary for marketers, while formulating the marketing strategy of a product, that they have a thorough knowledge and understating of consumers purchasing behavior and product use patterns. Thus it is essential for a marketer to identify the sensitive cultural issues of consumers while marketing for a product.    
According to different marketing scholars, “a person's processes are psychologically channelized by the ways in which they anticipate events”  (Kelly, 1955). This theory suggests that every individual has a unique personality but the social relations in general and culture in particular have a direct impact on an individual and on the groups.
Thus it is not true to say that the globalization approach for marketing has made the Emic understanding irrelevant. 
Cultural environment Vs. Scientific method:
The above-mentioned literature and other literature on International business strategy suggest that firms with worldwide operation face the challenge of balancing two strategic orientations: multi-domestic (or country centered) and global (Porter, 1986). To counter this challenge, researchers suggest that firms must adopt a multidimensional mind set (Bartlett and Ghoshal, 1989). They believed that firms competing in multi-domestic industries should apply a multi-domestic orientation and those competing in global industries should adopt a global strategy. Thus, in other words, researchers have adapted a cultural environment instead of scientific method and this is more successful and appropriate strategy for business.


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