Culture and International Marketing Mix Decisions. Jean-Emile Denis

Transcription

1 Culture and International Marketing Mix Decisions Jean-Emile Denis Department of Management Studies Faculty of Economics and Social Sciences University of Geneva 102, Bd Carl-Vogt CH-1221 Geneva 4 Switzerland FA: (4122) ABSTRACT: How does culture impinge affect international marketing mix decisions? This question is first dealt with through an assessment of the literature. Postulated or tested relations between cultural dimensions and each marketing mix variable are then presented. Concluding comments cover research issues and managerial implications. As most students of international marketing would agree, culture is a subject of capital importance to this field. If one were to assess its importance by looking at the space which is granted to this topic in international marketing textbooks, one would be easily convinced that, indeed, it is a major issue in international marketing management. As a matter of fact, it is most usually discussed in a full chapter under the general heading of the analysis of the international environment (See for example, Jain 1990, Czinkota and Ronkkainen 1990, Terpstra and Sarathy 1991, Jeannet and Hennessy 1992, and more recently, Toyne and Walters 1993). The approach which is almost invariably adopted consists of, first defining the concept of culture, second, of identifying the various components of culture, and third, of providing vivid examples of cultural differences, and of the dire consequences to be borne by firms not taking these differences seriously enough into account. In addition, the authors seldom fail to invite would-be international marketers to subject themselves to the discipline of the "Self Reference Criterion" (Lee, 1966) in order to avoid the dreadful pitfalls of cultural myopia. This approach is certainly useful when the objective is to make students aware of the fact that cultures may differ substantially between countries, and to induce a minimum level of empathy for cultural differences when approaching foreign markets. It falls short however in pointing out which specific aspects of culture must be taken into account, -1-

2 and how these factors will impinge upon marketing strategies. With this perspective, the approach often adopted by authors of consumer behavior textbooks is more appropriate when they identify cultural components such as values or taboos, illustrate how they affect consumption patterns, and explain how to account for them when designing research plans or marketing mix strategies. Dubois (1990) is a good example of this approach. Under these conditions, it is mostly up to those interested in the operational relevance of culture for international marketing decision making to produce their own synthesis of existing material pertaining to this issue. This is precisely the objective of this paper. It will consist of a survey of selected sources which describe the impact of cultural dimensions on the four marketing mix variables (price, product, distribution, and communication). In this survey, cultural dimensions will be treated as independant variables affecting the behavior of marketing mix variables which are seen as dependent variables. This in turn will provide an opportunity to assess the state of the art in this area both from the viewpoint of marketing practitioners, and of researchers. Special attention will be given to the review of more recent work produced in this area, in particular to that of an empirical nature. What has been tested compared to what has been merely postulated, hypothesised, or casually observed will be put in evidence. It is not an easy task to trace the relevant published material. As indicated by Aulakh and Kotabe (1993), readily identifiable material is rather limited. Out of some 900 studies identified by these researchers that were published from 1980 to 1990 in the field of international marketing, only 21 studies deal with the cultural environment (including only eight empirical studies). For a listing of the journals involved in this survey please refer to note 1). Obviously, this research would indicate a much smaller number of studies dealing jointly with marketing mix decisions and culture (see note 2). However, a number of studies relevant to this project may have been published in nonmanagement/marketing journals such as, for instance, the Journal of Applied Psychology, or the European Journal of Communication. Therefore, potentially relevant sources will be located through cross-references, starting with studies mentionned in textbooks and other classic references. Three basic sources have been relied on for this analysis. Buzzell (1968), Dubois (1990), and Usunier (1993) are among those that attempted to correlate cultural influences on marketing strategies. Buzzell was probably the first to sytematically record the relationships between the international environment and multinational marketing strategies and single out a number of factors limiting standardization potentials. After a review of several textbooks, it appears that Dubois' treatment of the impact of culture on -2-

3 marketing decisions would be quite useful for this project. Usunier's recent book on culture and trade practices was also consulted quite extensively. The impact of culture on pricing decisions Buzzell approaches the notion of culture in a rather candid way. Culture "... is a convenient catchall for the many differences in market structure and behavior that cannot readily be explained in terms of more tangible factors.". (p. 110). This, of course, is a less than desirable way of taking culture into account but it is nevertheless how it is most often viewed in cross-national management studies. Whatever the differences in consumer, trade or firm practices observed in cross-national studies, these differences are assumed to be the result of cultural disparities. Unfortunately, other environmental differences not specifically taken into account may contribute to the explanation of these "residuals". With regard to pricing, Buzzell argues that three dimensions of culture are at work: Values which affect the propensity to bargain; the legal framework which determines the extent to which fixed resale prices are to be allowed, and customs which command margins taken by trade intermediaries, and which, as a result, affect the overall price level. According to Dubois, the cultural factors that affect pricing are the politico-legal framework and norms of consumer and trade intermediaires. The politico legal framework is responsible for the adoption of a system of state-controlled prices or alternatively, of a market-controlled price system. As far as norms are concerned, they impinge upon consumer attitudes in shaping quality/ price relationships and credit use. They also affect the propensity of intermediaries to enter into price wars with competitors. Dubois also notes that in a number of cultures, prices are a pretext for discussion between buyers and sellers. In addition, the level at which the price is settled depends on the relative negociating skills of the two parties. Usunier emphasizes the role played by price as a decisive social-interaction instrument (i. e. bargaining and communication). Also noted is the variability of the price/quality relationship across cultures. These relationships between pricing and cultural dimensions are more like observations than like evidences produced by rigorous scientific research processes. Both Dubois and Usunier skillfully put together hypotheses or obervations collected elsewhere. Buzzell's propositions are claimed to be based on interviews with marketers in multinational firms, -3-

4 and, as usual in HBR articles, scant information on research methodology is provided to the "thoughtful businessman" for whom these articles are presumably written. In this respect, the work of Peterson and Jolibert (1960) is an interesting exception. In a study based on an experimental design involving French and American subjects, these two authors explore the relationships between perceived product quality, price and branding. They observe a highly significant nationality effect on perceived quality/price relationships (p <.000). Although the impact of culture on price is not their main research concern, they speculate that consumers of differing cultures may use different cues or use cues differently in evaluating product qualities. In other words, price as a cue of product quality may be interpreted differently across cultures. From a cultural perspective, it could be construed therefore that values inherent to specific cultures affect the way consumer perceive price as an indicator of product quality. Altogether, the relationships between pricing and culture are summarized in Table 1. Table 1- Impact of Culture on Pricing Decisions Cultural Dimensions Pricing Dimensions Values Legal and Political Framework Customs Norms - Negociation Process - Resale Price Maintenance - Trade margins - Command/ Market Price System - Quality/Price Relationships - Credit - Price wars -4-

5 The impact of culture on channel decisions Channel decisions cover several areas. They include decisions with regard to the consumer needs to be addressed through channel organization, the type of channel available for market penetration or of intermediaries to be adopted within a given channel, and the management of internal channel relationships. Earlier work in international marketing focused on the second type of issues (for instance, Wadinambiaratchi, 1965). Attention was then drawn by Buzzell to the impact of consumer requirements distribution management. It would appear that since the 80's, the study of internal channel relations has become more fashionable (Rosson and Ford 1982, Johnson, Sakano and Onzo, 1990, Kale and McIntyre 1991). With regard to the specific influence of cultural variables on international channel management, a review of the literature indicates that inquiries fall fairly equally in these three categories. Buzzell draws attention to customs expressed through consumer shopping patterns that affect both the type of channel structure available to international marketers, and to consumers needs to be addressed through that system. A rather substantial body of writing deals with the specific nature of foreign distribution systems as an expression of the overall cultural setting of specific countries (For instance for Japan, see both Usunier, and Dubois). In these studies, it is rather the overall cultural system which is taken into account rather than any specific cultural dimension whose impact on channel management is to be assessed across more than one country. This last remark also applies to Wadinambiaratchi whose description of distribution systems in six environments (Venezuela, Turkey, Egypt, Japan, India and tropical Africa) focuses on differences in channel length, and on the type of function assumed by specific intermediaries. If one were to attempt to attach specific cultural dimensions to these channel characteristics, one could perhaps single out, as Dubois does, values and social organization as key variables affecting distribution. The last category of channel decisions, namely those dealing with the management of within-channel relations includes a rather respectable number of studies including a few specifically concerned with culture. One of the earlier ones is by Rosson and Ford, It is based on the analysis of the business relationships between some twenty pairs of Canadian manufacturers and their respective distributors located in the United Kingdom. Relationships between these pairs are defined in terms of formalization, standardization, reciprocity, contact intensity, and conflict. The quality of these relationships is postulated to be a function of geographical, social as well as cultural distance. However, cultural -5-

6 distance is not specifically taken into account since it is the same for all the pairs of relationships involved in this study. Rather, Rosson and Ford argue that distance as an impediment to performance can be overcome by contact intensity and reciprocity. In what terms could cultural distance be expressed in this case? The authors do not mention it. But one could argue that it refers mostly to values and customs as dimensions of culture affecting the quality of the relationship between manufacturers and their foreignbased distributors. More recently, Johnson, Sakano and Onzo (1990) investigated the impact of influence on business relations between some seventy American exporters and their respective Japanese distributors. They conclude that non-mediated influence (that is influence of a non-coercive nature) is likely to decrease conflict in the US-Japanese channel. This is explained by socio-psychological factors, namely, a mixture of norms and values specific to the Japanese culture. As the authors speculate, in other cultures with a different socio-psychological make-up, mediated inflence as opposed to non-mediated influence might actually reduce rather than increase the propensity for conflict in international distribution channels. To these empirical papers one might add another one of a purely speculative nature. Kale and McIntyre (1991) have put forward a model that they invite other researchers to adopt when investigating distribution channel relationships across cultures. They propose a framework for evaluatating the impact of cultural dimensions on intra-channel interaction processes. Cultural dimensions to be taken into consideration are to be borrowed from Hofstede, namely individualism, power distance, uncertainty avoidance, and masculinity. Intra-channel processes involve initiation, implementation, and review processes. These constitutes basic stages in the development of international channel relationships. They formulate nineteen propositions to be tested by other interested parties (for instance, P13: Channel relationships in high masculinity cultures would evidence frequent conflicts and relatively low co-operation among channel members, p.39). Kale and McIntyre have felt the need to adopt some basic features of national character in order to operationalize the concept of culture when attempting to evaluate its impact on channel behavior. These features are not unlike Inkeles and Levinson's modal personality patterns (1969) that shape national character. They are however, fully cognizant of the magnitude of the task that await those willing to follow their recommendations as they confess that empirical research on their propositions "...represents no small task, as data collection, in a multicountry, multicultural -6-

7 environment is fraught with logistic and methodological problems, and would require serious resource commitment in both time and money..." (p. 44). A summary of hypothesized and observed relations between cultural and distribution dimensions is presented in Table 2. Table 2- Impact of Culture on Distribution Decisions Cultural Dimensions Distribution Dimensions Customs Values Social Organization Norms Personality Patterns - Channel Structure - Channel Length - Channel Member Functions - Intra- Channel Behavior The Impact of culture on product decisions Product decisions are rather diverse, ranging from packaging to branding issues and product specifications. As suggested by Usunier, it is convenient to separate product decisions from branding decisions. International branding issues constitute an area of their own, and for the most part are covered under the heading of the Country of Origin Effect (COOE). The impact of culture on product decision will be discussed here exclusively with regard to non-branding issues. According to Dubois, marketers designing product strategies have to take the impact of culture into account mostly in the area of positionning, product presentation, and packaging. As far as the specific elements of culture which affect these strategies, Dubois singles out the symbolic representation of objects as the key factor. Symbolic -7-

8 representation is presented, in turn, as an expression of habits and customs prevalent in any cultural setting. Usunier also singles out the symbolic value of products as the key cultural factor involving product decisions. Cultural differences may lead to differing symbolic interpretations, specially with regard to the physical aspect of products and to their packaging. If a symbolic attribute of the product is perceived differently or negatively in a foreign market, then appropriate product adaptations have to be made (p. 223). Symbolic codes are deeply ingrained in consumers, often unconsciously, and nurtured through habits and customs. A cross-cultural analysis of colour perception performed by Jacobs (1991) illustrates the variance in the symbolic value of colours from one country to another. Buzzell does not dwell much upon the impact of culture on product strategies. He recognizes that "...There are many examples of cultural differences that have affected marketing success or failure." (p. 110) but discusses only the question of consumer attitudes towards foreign goods, an issue which relates to COOE. By comparison, Hill and Still in their research on product adaptation to LDC markets (1984) devote more attention to the cultural dimension. This study in based on some sixty interviews with the marketing people of European and American multinationals. They relate factors causing product changes to product dimensions like measurement units, labelling, package and product features, product constituents and brand names with a view of estimating product adaptation rates as well as optimal product change sequence. Factors causing product changes include environmental factors like legal factors, purchasing power differences and, of particular interest here, "sociocultural customs and taboos". Other factors causing product changes include not only so-called marketing factors such as competition, distribution and material availability, but also (again, of major interest here) consumer preferences, and consumer purchasing habits. The dichotomy between environmental and marketing factors which is adopted in this study is somewhat awkward if one wants to isolate the impact of the cultural dimension on product decisions. Obviously, differences in consumer preferences and purchasing habits could be accounted for, at least in part, by differences in cultural settings. This explain why, in this study, the cultural dimension, defined only in terms of customs and taboos, is found to be responsable for only two per cent of all product changes. Since the categories of consumer preferences and purchasing habits are so vast, they are also bound to impinge upon practically all product decision areas. This, of course, is what happens in this study (see Table II, p. 99). This being said, the data collected by the authors indicates that customs and taboos cause product changes mostly with regard to -8-

9 labelling, package aesthetics (supporting the claims of Dubois and Usunier), and products constituents. All these findings are summarized in Table

10 Cultural Dimensions Table 3- Impact of Culture on Product Decisions Product Dimensions - Product Positionning - Product Presentation - Labeling - Packaging - Product Constituents Customs and Habits Taboos The impact of culture on communication decisions According to Dubois, culture is at the center of all social interaction processes. It is therefore to be expected that the impact of culture on communication decisions would be more clearly identifiable than on any other marketing mix variable. Dubois states that culture will affect the type of roles depicted in ads, and the choice of themes which relate to underlying values and norms. Advertising budget and structure will depend on buyers' habits and consumption style, that is on values and norms, and on media availability which in turn depends on the state of the material culture. Buzzell singles out attitudes (values and norms) towards selling as the key cultural factor affecting sales force decisions, and language, literacy, and symbolism as the major ones affecting advertising and promotion decisions. Usunier devotes considerable attention to culture and communication strategies. As far as advertising is concerned, he observes that there are variations from country to country (culture to culture?) in attitudes (related to prevalent norms and values) towards the social role and acceptability of advertising, comparative advertising, and information content of advertising. Language, and roles affect advertising copy and slogans as well as do mores, customs and religion. Advertising spending and media allocation are both affected by material culture. -10-

11 Regarding sales management, Usunier refers to Hofstede's framework (1980) to illustrate the impact of values and norms on the definition of sales objectives and on performance evaluation, and of their implications regarding the design of appropriate remuneration schemes. This is indirectly supported by Hill, Still, and Boya (1991). Relying on Boddewyn's comparison of promotional practices in twelve countries (1988), Usunier draws the reader's attention to the impact of the constraints imposed upon the choice of sales promotion devices by the national legal framework. A non-empirical paper by Foxman, Tansuhaj, and Wong (1988) support this point of view. A number of empirical studies related to communication decisions have been produced ever the years, some of which of particular relevance to this paper. Attitudes towards advertising (values) have been studied by Wills and Ryans (1982), roles (values and norms) have been analysed across countries by Gilly (1988), information content of advertising (values) by Johnstone, Kaynack and Sparkman (1987), and by Martenson (1987), and agency/client relationships (customs) by Kaynack and Ghauri (1986). The use of symbols and linguistic cues in printed advertising in Europe has been recently analyzed by Snyder, Willenborg and Watt (1991). Interestingly, they come to the conclusion that over the 1953 to 1989 period, culturally neutral ads are on the wane but that there is an increase in foreign products using foreign imagery, and that domestic products are more likely to display domestic cultural symbols (p. 463). The authors conclude that their data does not show any increase in the Americanization of advertising image in Europe over the last 36 years, and that the frequency of advertisements using European-wide cultural symbols actually decreased over that period. -11-

12 Relationships between culture and communication decisions are summarized in Table 4. Table 4- Impact of Culture on Communication Decisions Cultural Dimensions Communication Dimensions - Advertising Themes, Slogans and Copy - Advertising Budget and Structure - Advertising Agency/Client Relationships - Attitudes towards Advertising - Information Content of Advertising - Sales Force Management - Sales Force Remuneration Schemes - Sales Promotion Tools Discussion -12-

13 After this review, a number of key obervations can be drawn with regard to coverage of the issue in the literature, and to the approach adopted by the authors. -13-

14 Coverage Altogether, and inspite of its acknowledged importance, the topic has not received very much attention. Only a limited number of papers dealing specifically with the issue have been traced. Marketing mix strategies are at the crux of international marketing, as well as the theme of standardisation/adaptation of international strategies. One would therefore expect to find a more plentiful production than what as been found. No doubt, some relevant papers may not have been traced by this author. However, there should not be very many which would have escaped his attention. Indeed, the aforementioned inventory drawn by Aulakh and Kotabe does not give the impression that many articles have been written that are directly or even indirectly relevant to this topic (at least in mainstream English-speaking journals). There is a chance, however, that some contributions may have appeared in non-business journals in such fields as anthropology, social-psychology, psychology or communication. These articles are more difficult to detect if they have not been referred to in international marketing/management sources. A few years ago Dubois (1987) wrote that the impact of culture on buying and consumer behavior remained largely unexplored. Not much has changed since, and the same could be said with regard to the impact of culture on marketing mix decisions. Methodologies Synthesizing existing knowledge in this area is a difficult task not only because contributions are scattered in journals belonging to a wide array of disciplines but also because the theoretical, or simply the conceptual frames which are referred to by the authors are either vastly different or insufficiently specified. More precisely: - cultural dimensions are sometimes not specified. Culture refers to a broad category of variables which are not defined; - culture is sometimes presented as being the factor responsible for cross-national differences which are otherwise unexplained; - cultural dimensions are only loosely identified. For instance, some authors will use almost interchangeably terms like values, attitudes or norms. In turn, marketing dimensions may not be defined precisely enough. For instance, an assessment of the cultural impact on distribution cannot be performed meaningfully in -14-

15 broad terms. The dependent distribution variable must be broken down into such factors as, for example, mediated or non-mediated influence or conflict potential. Even if these concerns were properly addressed, a key issue would remain: how to identify commonly shared traits in societies before attempting to investigate their impact on marketing variables? Existing studies presume that the differences observed in the measurement of cultural variables between countries reflect real differences in commonly shared attributes in each country. This may not necessarily be the case. It should first be established that commonly shared traits of each country have been isolated. As a matter of fact, Inkeles and Levinson (1969) in their discussion of national character warn that "...it appears unlikely that any specific personality characteristic, or any character type, will be found in as much as percent of any modern national population." One would suspect that the same would hold true with respect to cultural traits relevant to consumption behavior. Researchers should therefore check whether the differences they have observed in their studies, do indeed reflect differences in modal cultural structures and not merely "... subcultural variations in socioeconomic class, geosocial region, ethnic group, and the like, which appear to exist in all modern nations." (Inkeles and Levinson, p. 982). In other words, it is not because a researcher observes a statistically significant difference in some aspect of the behavior of, let say, a sample of American consumers compared to that of another sample of German consumers that he or she should characterize Germans in one way and Americans in another! Unfortunately, the dangerous road to national stereotyping is paved with plenty of statistically significant yet irrelevant findings. Opportunities for further research A cursory look at Table 1 to 4 reveals that a large number of cells remain empty, and that only a few relations have been clearly identified and validated. Since marketing mix decisions, and standardization/adaptation policy options are central to international marketing management, it would appear that further research on the impact of cultural variables would be appropriate. However, aside from the usual problems involved in cross-cultural and comparative research, some of which were illustrated earlier, the general issue of the identification of modal cultural structures relevant to marketing phenomena should be addressed first. This is a problem which has not escaped the attention of the academic community, and many a researcher has attempted to rely on national cultural descriptors which appeared appropriate. This is why a number of researchers have borrowed Hofstede's four dimensions to estimate cultural differences in their studies (for example Kogut and Singh, 1988) or invited others to do so like Kale and McIntyre 1991, and Kale Yet, Hofstede's dimensions may not be appropriate -15-

16 measures for international marketing purposes, and may not be adequate measures for identifying true cultural modal stuctures (see note 3). It would appear therefore that basic research would be worth undertaking with the aim of identifying culturally distinct (or common) consumption traits. In terms of methodology, much could be borrowed from anthropology or social psychology. Concluding comments: Implications for international marketing practionners To question the usefulness of what has been written to date by academia on the impact of culture on international marketing mix decisions might appear unfair after this review. There is obviously little firm ground on which to stand, and little way, for example, to tell an inquiring business person what she or he should do with her/his price or her/his packaging should she/he attempt to enter the Ruritanian market. Yet, what has so far been done is far from useless since at least it sensitibilizes the interested party to the relevance of the cultural dimension, and points to some areas of concern in terms of specific cultural variables (values, norms, etc.), and their likely incidence on marketing variables. Beyond that, in order to answer more specific questions the inquirer is still warmly recommended, as is suggested in most textbooks, to consult with knowledgeable foreign nationals, distributors, consultants and the like, and to indulge in appropriate testing and market research (for instance, Usunier 1993, p. 233). NOTES 1- Aulakh and Kotabe's article is based are the following 21 journals: Advances in International Marketing, Business Horizons, California Management Review, Columbia Journal of World Business, European Journal of Marketing, Harvard Business Review, Industrial Marketing Management, International Marketing Review, International Journal of Advertising, Journal of the Academy of Marketing Science, Journal of Advertising, Journal of Advertising Research, Journal of Business Research, Journal of Consumer Research, Journal of International Business Studies, Journal of Marketing Research, Management International Review, Marketing Science, Sloan Management Review, Strategic Management Journal. As usual with this type of survey, the inclusion or non-inclusion of some publications might appear questionable or even suspect to some researchers. -16-

17 2- There were 452 entries under Marketing Management out of a total of 893 entries. Marketing Management entries included 84 articles for product, 14 for pricing, 71 for promotion, and 49 for channels. Out of 218 entry for marketing mix decisions, 94 were of an empirical natural. 3- Hofstede national samples were controled for sex and age (see Usunier 1993, p. 74). However, they were not controlled for socioeconomic class, geosocial region, ethnic origin and the like. For a critique of Hofstede's framework, see in particular Triandis REFERENCES Aulakh, Preet S., and Masaaki Kotabe (1993), "An Assessment of Theoretical and Methodological Development in International marketing: ", Journal of International Marketing, 1-2, Boddewyn, J. J. (1988), Premiums, Gifts and Competition, International Advertising Association, NY. Buzzell, Robert D. (1968), "Can You Standardize Multinational Marketing?", Harvard Business Review, November-December, Czinkota, Michael R. and Ilkka A. Ronkainen (1990), International Marketing, Second Edition, The Dryden Press, Fort Worth. Dubois, Bernard (1987), "Culture et marketing", Reherche et Applications en Marketing, 11-1, Dubois, Bernard (1990), Comprendre le consommateur, Dalloz: Paris. Foxman, Ellen R., Patriya S. Tansuhaj, and John K. Wong, "Evaluating Cross-national Sales Promotion Strategy: An Audit Approach", International Marketing Review, April, Gilly, Mary C. (1988), "Sex Roles in Advertising: a Comparison of Television Advertisements in Australia, Mexico, and the United States", Journal of Marketing, 52 (April), Hill, John S., and Richard R. Still (1984), "Adapting Products to LDC Tastes", -17-

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