Chapter 2.
International Marketing environment
2.1 Definition and classification of IM environment
2.1.1 Definition of IM environment
2.1.2 Classification of IM environment
2.1.3 Importance of studying IM environment
2.2 (Uncontrollable) environmental factors in foreign markets
2.2.1 Economic environment
2.2.2 Political and Legal environment
2.2.3 Cultural environment
2.2.4 Demographic environment
2.2.5 Natural/ Ecological environment
2.2.6 Technological environment
2.2.7 Competitive environment
2.3 (Controllable) environmental factors (or firm characteristics)
2.3.1. Human resources
2.3.2. Finance
2.3.3. Technology
2.3.4. Organizational culture
2.4 Particular factors of international marketing environment
2.2.3. Socio-cultural environment
• Culture–ways of living, built up by a group of
human beings, that are transmitted from one
generation to another
• Culture has both conscious and
unconscious values, ideas, attitudes, and
symbols
• Culture is acted out in social institutions
• These institutions reinforce cultural norms
• Culture is both physical (clothing and tools)
and nonphysical (religion, attitudes, beliefs,
and values)
2.2.3. Socio-cultural environment
• “Culture is the collective programming of the
mind that distinguishes the members of one
category of people from those of another.”
~Geert Hofstede
• A nation, an ethnic group, a gender group,
an organization, or a family may be
considered as a category.
2.2.3. Socio-cultural environment
Task of Global Marketers
• Study and understand the cultures of countries in which
they will be doing business
• Understand how an unconscious reference to their own
cultural values, or self-reference criterion, may influence
their perception of the market
• Incorporate this understanding into the marketing
planning process
2.2.3. Socio-cultural environment
Social Institutions
• Family
• Education
• Religion
• Government
• Business
These institutions function to reinforce cultural norms
2.2.3. Socio-cultural environment
Material and Nonmaterial Culture
• Physical Culture
– Clothing
– Tools
– Decorative art
– Body adornment
– Homes
• Abstract Culture
– Religion
– Perceptions
– Attitudes
– Beliefs
– Values
2.2.3. Socio-cultural environment
• Global consumer cultures are emerging
– Persons who share meaningful sets of
consumption-related symbols
– Pub culture & (craft-brew), coffee culture, fast-
food culture, fashion culture, soccer culture,
E-gaming
• Primarily the product of a technologically
interconnected world
– Internet
– Satellite TV
2.2.3. Socio-cultural environment
Attitudes, Beliefs, and Values
• Attitude-learned tendency to respond in a consistent way
to a given object or entity
• Belief-an organized pattern of knowledge that an
individual holds to be true about the world
• Value-enduring belief or feeling that a specific mode of
conduct is personally or socially preferable to another
mode of conduct
• Subcultures-smaller groups of people with their own
shared attitudes, beliefs, & values (ex. Vegetarians)
2.2.3. Socio-cultural environment
Religion drives business
• The world’s major religions
include Buddhism, Christianity,
Hinduism, Islam, and Judaism
and are an important source of
beliefs, attitudes, and values.
• Religious tenets, practices,
holidays, and history impact
global marketing activities.
Religion
Source: Baack et al. (2013)
Aesthetics
• The sense of what is • Visual-embodied in the
beautiful and what is not color or shape of a
beautiful product, label, or package
• What represents good • Styles-various degrees of
taste as opposed to complexity, for example,
tastelessness or even are perceived differently
obscenity around the world
Aesthetics
Dietary Preferences
• Kosher
• Halal
• Vegan & vegetarian
• Cheese and Dairy
• SPICE!!!
• Non-beef eaters (big animals)
• Dogs
• “Lion, Serpent and Phoenix” soup
Language and Communication
• Semiotics-the study of signs and their
meanings
• Semiotics includes both spoken and
unspoken language
• Unspoken language includes gestures,
touching, body language
• Spoken language has four areas
Language and Communication
English Around the Globe Nonverbal Communication
• More people speak English as • In the Middle East, Westerners
a 2nd language than there are should not show the soles of
native speakers shoes or pass documents with
• 85% of E U teens study the left hand
English • In Japan, bowing has many
• Sony (Japan) & Nokia nuances
(Finland) require upper • Asians place greater value on
managers to pass a proficiency nonverbal communication than
test Westerners
Lost in translation
• Translation
– “It’s not words, but subtle combination of words, the echo,
repercussion of the words within the mind of the reader-
that is the subtleties that translation fails to carry”
• Challenge of encoding and decoding slogans and tag lines
in different national and cultural contexts
– In Asia, Pepsi’s “Come Alive” was interpreted as asking to
bring ancestors back from the dead
– In China, Citicorp’s “Citi Never Sleeps” was taken to mean
that Citi had a sleeping disorder, like insomnia
High-and Low-Context Cultures
• High Context • Low Context
– Information resides in – Messages are explicit and
context specific
– Emphasis on – Words carry all information
background, basic – Reliance on legal paperwork
values, societal status
– Focus on non-personal
– Less emphasis on legal documentation of credibility
paperwork
Switzerland, U.S., Germany
– Focus on personal
reputation
Saudi Arabia, Japan
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Table 4-1: High-and Low-Context Cultures
Factors or Dimensions High Context Low Context
Lawyers Less important Very important
A person’s word Is his or her bond Is not to be relied upon; “get
it in writing”
Responsibility for Taken by highest level Pushed to lowest level
organizational error
Space People breathe on each other People maintain a bubble of
private space and resent
intrusions
Time Polychromic-everything in life Monochronic-time is money;
must be dealt with in terms of linear-one thing at a time
its own time
Negotiations Are lengthy- a major purpose is Proceed quickly
to allow the parties to get to
know each other
Competitive bidding Infrequent Common
Country or regional Japan, Middle East United States, Northern
examples Europe
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Contextual Background of Various
Countries
Chinese High
Context
Arabian
Implicit
Latin American
Spanish
Italian
English (UK)
French
North American (US)
German
Swiss
Low Scandinavian
Context
Explicit
Impacts on ads and
communication
• How people communicate varies
– IDV/PDI-: Low context - explicit, direct, facts, data, words
– COL/PDI+: High context - implicit, indirect, visual, metaphors
• Implications in advertising, web design, interpersonal
communication
• Different styles relate to different purposes
– Anglo-Saxon world, Germany: sale/ persuasion - ads persuades
through argumentation, direct style
– Most of Europe, Asia: relationship/ trust/ likability - more indirect,
complex communication styles, e.g. emotions, metaphors, art. -
direct style offends.
Hofstede’s Cultural Typology
• Individualism/Collectivism
• Power Distance
• Uncertainty Avoidance
• Achievement/Nuturing
• Long-term Orientation
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Hofstede’s Five Dimensions of National
Culture (1 of 2)
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Hofstede’s Five Dimensions of National
Culture (2 of 2)
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Self-Reference Criterion and Perception
• Unconscious reference to one’s own cultural
values; creates cultural myopia
• How to Reduce Cultural Myopia:
1. Define the problem or goal in terms of
home country cultural traits
2. Define the problem in terms of host-
country cultural traits; make no value
judgments
3. Isolate the SRC influence and examine it
4. Redefine the problem without the SRC
influence and solve for the host country
situation
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2.2.4. Demographic environment
• Refers to people’s characteristics in a
country.
• Affects categories and quantities of goods and
services consumed in the marketplace.
2.2.4. Demographic environment
Elements of demographic environment:
• Height/ weight of individual consumers
• Family size, household structure, and cycle
• Marriage and divorce rates
• Birth and death rates
• Population, gender and age distribution
• Immigration
Household structure
• A shared residence & common
housekeeping arrangement
– Traditional family: nuclear family
– Non-traditional: only one adult after divorce,
reconstituted families, no children, or children
returning home to avoid cost of living
– Non-family households: one adult because of choice
not to get married, unmarried couples, gay couples
• Differences among countries?
• Implications for marketers?
The Family Life Cycle
2.2.4. Demographic environment
2.2.5. Ecological environment
• Includes factors such as natural resources,
climate, soil type, water… that affect inputs,
operations, and outputs of a firm.
2.2.5. Ecological environment
Influence of ecological environment?
• Climate and consumer goods structure
• Geographic location, topography and infrastructure
• Soil, water, and climate conditions and agriculture
• Natural disasters, environmental pollution,
overexploited natural resources opportunities and
challenges for firms
• State policy regarding the protection of ecological
environment
