CHAPTER 3



CHAPTER 3

Social and Cultural Environments

All societies have seven (7) social institutions: Political, Economic, Legal, Family, Religious, Education, Culture (PELFREC) and these make up the uncontrollable environment within which global marketing takes place. Since different societies order these institutions in different ways, the environment across countries tends to be very different if not unique. Because of the environmental differences across countries, firms are often not able to standardize all aspects of their marketing mix (4 p’s). At the same time, some aspects of the marketing mix can be standardized as different countries also share some things in common. This chapter focused on the degree to which the environment affects the way in which firms market their product(s) in different countries.

The Social Institutions

Politics – process by which power is passed from one person or group to another. All societies have some process for determining power – age, birth, strength, elections, coup, military might, and so on. If there is no process then anarchy will reign. The way power is distributed and used in the society shapes the way we view the world and affects the other social institutions.

Economic – means by which individuals gain a livelihood. The economic system is also the means by which wealth is distributed. It focuses on competition and competitive forces, technology, innovation and the like.

Legal – the legal system governs what is right (acceptable) and wrong (unacceptable) in the society and sets up a system of adjudication and punishment when rules/norms are broken. The legal system tends to be closely tied to the political system since those with political power tend to make the rules (laws). Laws govern almost every aspect of social life to include how business is practiced, who can practice, where, and when. Indeed, some law or regulation affects how marketers use the marketing mix (also called the 4 p’s).

Family – Unit of procreation in the society. Regardless of how you define the concept of the “family” – the family serves as the unit that give rise to new life and care for the infants. In general, through the reproductive systems, the family ensures the perpetuation of the society by replacing persons who die or migrate.

Religious – system of beliefs. All societies have some system of belief and this helps in the development of “mores.”

Educational – means by which the society passes on the values and the lessons needed to perpetuate the society. In traditional societies the educational system may be as simple as girls follow their mothers or other females and learn and do what they do and boys follow their fathers and other males and learn what they do. In developed societies there is a need to learn more than just the traditional things so industrial/developed societies use formal education (schools with teachers and books) to impart the knowledge accumulated and thought necessary for productive live in the society.

Cultural – culture is the way of life of a people. Culture determines what we value, how we think and view the world. Culture is transmitted from generation to generation and includes aspects of all the other social institutions. Culture has two main aspects: concrete or hardware (tangible) aspect and abstract or software (intangible) aspect. The concrete aspect of the culture includes the tools and technologies we use – shoes, clothes, houses, tools, cars, computers, and so on. The abstract aspect of the culture includes such things as language, music, notions of beauty, sounds, thought processes, and so on. The concrete and the abstract parts of the culture are very closely related, for example, we and a concrete machine/tool to speed up calculation and gives it a name (computer) that then becomes part of our language and thought processes in that it affects how we think and communicate.

Social Institutions and Global Marketing

While there are some similarities across countries, there are also differences with respect to the seven social institutions. The similarities make it possible for marketers to possibly use relatively similar marketing mixes across cultures. However, the differences may mean that the marketer has to use different marketing mixes for different cultures. For example, one group might see read as a beautiful color while another group might view red as a color to be avoided. One culture may see a word as acceptable while another will not.

Because of this, marketers need to be careful of what they do and say when they go across cultures. The book Blunders in International Business (by David Ricks, 1993) outlines numerous blunders that result from differences in social institutions across cultures. This is not to imply that the differences are the root cause of the blunders. Rather, ethnocentric (my country is best) tendencies and the thinking that all countries are the same (the attempt to over standardize the marketing mix) often cause some of the problem. In the home market we all tend to know the language, norms and expectations. However, when we go global, those norms, language and expectations may be different from those to which we are accustomed. Therefore, even when both countries seemingly speak the same language (Australia, Canada, UK, USA) the same word can have vastly different formal and or informal meaning. For example, Canadians and the British often speak of the “WC” or water closet. Most Americans might think that that’s a place where you go to get water instead of it being “the toilet.” Instead Americans say “bathrooms” and Canadians and the British think that that’s the place to go and have a shower or a bath. This simple example should indicate that if we are developing an advertisement than we would have to use different words to communicate the same meaning depending on which group (country) we are targeting.

Types of Cultures

Cultures may be classified as high context or low context depending on the extent to which there is reliance on the written word (contract) or the spoken word to reach an understanding or a contract.

High Context Cultures – messages tend to be implicit with the context and associations carry most of the meaning. Less information resides in the verbal part of the message. People do not tell you exactly what they mean; you have to read between the lines. High-context cultures rely less on contracts and legal requirements than low-context cultures. Decisions based on who you are and what you stand for instead of on contract (a person’s word is good enough to bind them).

Low Context Cultures – messages are explicit with words carrying the most meaning, that is, people say or tell you what they mean and you do not have to read between the lines.

Communication and Negotiation

Communication and negotiation gets more complicated across cultures as words, gestures and processes differ. For example, people from the far east are known to say “yes” when they mean “no” since saying not would mean that some one will be embarrassed (not save face). Within their culture they are able to “read” when “yes” means “no.” However, westerners are often not able to read the “true” meaning of a “yes” and go away thinking that there has been an agreement. To get the true meaning one has to view the entire context for the communication and not just listen to what is being said.

In general, people tend to be enthnocentric in their approach to negotiating. Negotiating skills that work in your home country may not work across cultures. Hence, it is important to use a team approach to negotiating when dealing across cultures. Other factors that affect communication and negotiations are:

• Degree of formality across cultures

• Language skills

• Manner of negotiating – directly to the point versus first building rapport

• Dealing with silence or lulls in conversation

• Willingness to accept “No” for an answer

• Avoid the “hard sell”

• Universal or holistic approach versus one thing at a time (linear) approach

• Willingness to be flexible in style and timing

• View of time – is time cyclical or is it linear (time is money versus time is something to be used and appreciated)

Hofstede’s Cultural Typology

Hofstede asserts that cultures can be assessed along four (4) dimensions that yield useful interpretations in international business.

1. Power Distance – the extent to which less powerful members of the group accept and expect power to be unequally distributed.

2. Individualist Cultures – degree to which members of the society is mainly concerned with self and family-interest over society’s or group interest or in Collectivist Cultures, the degree to which members of the society integrated into a cohesive group.

3. Masculinity versus Femininity – society in which men are expected to be assertive, competitive, successful and women expected to be concerned with child welfare and nurturing versus a society focused on Femininity – social roles of men and women overlap

4. Uncertainty Avoidance – extent to which members of the society are uncomfortable with unclear, ambiguous, or unstructured situations.

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