Chapter 3: The Cultural Environment

Chapter Objectives
Structure Of The Chapter
What is culture
The elements of culture
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Social and cultural aspects of a society form its very nature. As "culture" is the essence
of a society, this chapter will concentrate on a discussion of it only.

Of all the so called "environmental uncontrollables", culture, or at least the study of it, is
one of the most difficult to comprehend, take account of and harness to advantage. This
is particularly so when the product or service is "culture bound". Such products and
services include those which are generally indigenous by nature and/or of relatively
small value and very common. This is particularly true of foodstuffs. Sadza in Zimbabwe,
a staple food made from maize meal, would not go down well in Beverley Hills,
California. Neither would Middle Eastern sheeps eyes menus. Products of a more
technical nature, like computers, on the other hand, have a universal appeal.

However there is plenty of evidence to suggest that, with shrinking communications and
with more people than ever travelling, even the most culture bound product or service
can, and is, finding a world market niche. So even the infamous Veldschoen footwear of
the South African pioneers has found its way into most corners of the world.

Chapter Objectives

The objectives of this chapter are:-

· To describe what is meant by "culture" and the numerous ways which have been
devised to study it
· To give an understanding of how "culture" effects global marketing planning

· To show why the study of "culture" is important to marketers.

Structure Of The Chapter

The chapter begins by defining culture and its constituent elements. The chapter then
goes on to describe the various approaches to the study of culture and culminates with a
study conducted by Hofstede which is one man's way of looking at culture's
consequences. The chapter emphasizes the need to study culture carefully as it can be
a major source of failure in global marketing, if hot taken into account.

What is culture
Much has been written on the subject of culture and its consequences. Whilst on the
surface most countries of the world demonstrate cultural similarities, there are many
differences, hidden below the surface. One can talk about "the West", but Italians and
English, both belonging to the so called "West", are very different in outlook when one
looks below the surface. The task of the global marketer is to find the similarities and
differences in culture and account for these in designing and developing marketing
plans. Failure to do so can be disasterous.

Terpstran9 (1987) has defined culture as follows:

"The integrated sum total of learned behavioral traits that are manifest and shared by
members of society"
Culture, therefore, according to this definition, is not transmitted genealogically. It is not,
also innate, but learned. Facets of culture are interrelated and it is shared by members
of a group who define the boundaries. Often different cultures exist side by side within
countries, especially in Africa. It is not uncommon to have a European culture, alongside
an indigenous culture, say, for example, Shona, in Zimbabwe. Culture also reveals itself
in many ways and in preferences for colours, styles, religion, family ties and so on. The
colour red is very popular in the west, but not popular in Islamic countries, where sober
colours like black are preferred.

Much argument in the study of culture has revolved around the "standardisation" versus
"adaption" question. In the search for standardisation certain "universals" can be
identified. Murdock7 (1954) suggested a list, including age grading, religious rituals and
athletic sport. Levitt5 (1982) suggested that traditional differences in task and doing
business were breaking down and this meant that standardisation rather than adaption is
becoming increasingly prevalent.

Culture, alongside economic factors, is probably one of the most important

environmental variables to consider in global marketing. Culture is very often hidden
from view and can be easily overlooked. Similarly, the need to overcome cultural myopia
is paramount.

Approaches to the study of culture

Keegan3 (1989) suggested a number of approaches to the study of culture including the
anthropological approach, Maslow's approach, the Self- Reference Criterion (SRC),
diffusion theory, high and low context cultures and perception. There are briefly reviewed
here.

Anthropological approach

Culture can be deep seated and, to the untrained can appear bizarre. The Moslem
culture of covering the female form may be alien, to those cultures which openly flaunt
the female form. The anthropologist, though a time consuming process, considers
behaviour in the light of experiencing it at first hand. In order to understand beliefs,
motives and values, the anthropologist studies the country in question anthropology and
unearths the reasons for what, apparently, appears bizarre.

Maslow approach
In searching for culture universals, Maslow's6 (1964) hierarchy of needs gives a useful
analytical framework. Maslow hypothesised that people's desires can be arranged into a
hierarchy of needs of relative potency. As soon as the "lower" needs are filled, other and
higher needs emerge immediately to dominate the individual. When these higher needs
are fulfilled, other new and still higher needs emerge. The hierarchy is illustrated in figure
3.1.

Figure 3.1 Maslow hierarchy of needs

Physiological needs are at the bottom of the hierarchy. These are basic needs to be
satisfied like food, water, air, comfort. The next need is safety - a feeling of well being.
Social needs are those related to developing love and relationships. Once these lower
needs are fulfilled "higher" needs emerge like esteem - self respect - and the need for
status improving goods. The highest order is self actualisation where one can now afford
to express oneself as all other needs have been met.

Whilst the hypothesis is simplistic it does give an insight into universal truisms. In Africa,
for example, in food marketing, emphasis may be laid on the three lower level needs,
whereas in the developed countries, whilst still applicable, food may be bought to meet
higher needs. For example, the purchase of champagne or caviar may relate to esteem
needs.

Case 3.1 The Case Of Maize Meat In Africa

Introduced by the white settler, maize meat is the staple diet of the population of
countries in Eastern and Southern Africa, Zambia, for example is capable of producing
over 30 million x 90Kgs bags with a marketable surplus of 20 million x 90Kg bags, most
of which goes to feed the urban population. For a lot of people, unable to improve their
lot, this remains as the staple diet

throughout their lives. However, many Africans who are able to improve their lot,
progress on to other forms of nourishment -fish. potatoes, good meat cuts and even fast
foods, some of this brought about by social interaction. Interestingly enough, maize is
still often eaten despite the social and economic progression that an individual may
make.

The self reference criterion (SRC)

Perception of market needs can be blocked by one's own cultural experience. Lee
(1965)4 suggested a way, whereby one could systematically reduce this perception. He
suggested a four point approach.

a) Define the problem or goal in terms of home country traits, habits and norms.
b) Define the problem or goal in terms of the foreign culture traits, habits and norms.

c) Isolate the SRC influence in the problem and examine it carefully to see how it
complicates the pattern.

d) Redefine the problem without the SRC influence and solve for the foreign market
situation.
The problem with this approach is that, as stated earlier, culture may be hidden or non
apparent. Uneartherning the factors in b) may, therefore, be difficult. Nonetheless, the
approach gives useful guidelines on the extent for the need of standardisation or
adaption in marketing planning.

Diffusion theory

Many studies have been made since the 1930's to assess how new innovations are
diffused in a society. One of the most prolific writers was Everett Rogers8. In his book,
"Diffusion of Innovations" (1962) he suggested that adoption was a social phenomenon,
characterised by a normal distribution. See figure 3.2.

Figure 3.2 Adopter categories

In this case the innovators are a small percentage who like to be seen to lead, then the
others, increasingly more conservative, take the innovation on. The adoption process
itself is done in a series of stages from awareness of the product, through to interest,
evaluation, trial and either adoption or rejection (in the case of non adopters). The speed
of the adoption process depends on the relative advantage provided by the product, how
compatible or not it is with current values or experiences, its complexity, divisibility (how
quickly it can be tried) and how quickly it can be communicated to the potential market.
In international marketing an assessment of the product or service in terms of these
latter factors is very useful to the speed of its adoption. Most horticultural products, for
example, have no problem in transfer from one culture to another, however specific
types may have. It is unlikely that produce like "squash" would sell well in Europe, but it
does in Zimbabwe.

High and low context cultures

Hall2 (1977) has suggested the concept of high and low context cultures as a way of
understanding different cultural orientations. In low context cultures messages have to
be explicit, in high context cultures less information is required in the verbal message. In
low context cultures, for example like Northern Europe, a person's word is not to be
relied on, things must be written. On the other hand, in high context cultures, like Japan
and the Middle East, a person's word is their bond. It is primarily a question of trust.

Perception

Perception is the ability to see what is in culture. The SRC can be a very powerful
negative force. High perceptual skills need to be developed so that no one misperceive a
situation, which could lead to negative consequences

Many of these theories and approaches have been "borrowed" from other contexts
themselves, but they do give a useful insight into how one might avoid a number of
pitfalls of culture in doing business overseas.

Consumer products are likely to be more culturally sensitive than business to business
products, primarily because technology can be universally learned. However there are
dangers in over generalisations. For example, drink can be very universal and yet
culture bound. Whilst appealing to a very universal physiological need - thirst - different
drink can satiate the same need. Tea is a very English habit, coffee American but neither
are universals in African culture. However, Coca Cola may be acceptable in all three
cultures, with even the same advertising appeal.

Nationalism

Nationalism is a cultural trait which is increasingly surfacing. The break-up of Yugoslavia

and the USSR are witness to the fact. In Western, developed countries a high degree of
interdependence exists, so it is not so easy to be all that independent. In fact, blocs like
NAFTA and the EU are, if anything, becoming more economically independent.
However, less developed countries do not yet have the same interdependence in
general, and so organisations need to reassess their contribution to the development of
nations to make sure that they are not holding them "to hostage".

Culture is a very powerful variable and cannot be ignored. Whilst "universals" are sought
there is still a need to understand local customs and attitudes. These are usually no
better understood than by the making use of in country personnel.

The elements of culture

The major elements of culture are material culture, language, aesthetics, education,
religion, attitudes and values and social organisation.

Material culture

Material culture refers to tools, artifacts and technology. Before marketing in a foreign
culture it is important to assess the material culture like transportation, power,
communications and so on. Input-output tables may be useful in assessing this. All
aspects of marketing are affected by material culture like sources of power for products,
media availability and distribution. For example, refrigerated transport does not exist in
many African countries. Material culture introductions into a country may bring about
cultural changes which may or may not be desirable. (see case)

Case 3.2 Canned Drinks In Zimbabwe

Until the early 1990s, Zimbabwe did not allow both alcoholic and non alcoholic
beverages to be packed in cans. There were both economic and environmental reasons
for this. Economically, Zimbabwe did not have the production facility for canning. Environ
mentally, Zimbabwe had seen the litter in Botswana, caused by discarded empty cans.
By putting a deposit on glass containers they ensured the empties were returned to the
retailer, thus avoiding a litter problem.

However, with the advent of trade liberalisation under the Structural Reform Program,
the Government of Zimbabwe decided to allow the import of some 4 million cans as an
experiment, after which it would assess the environmental impact. The result was a huge
influx of canned alcoholic and other beverages not just from nearby Botswana and South
Africa but from Australia, USA and Europe

Language
Language reflects the nature and values of society. There may be many sub-cultural
languages like dialects which may have to be accounted for. Some countries have two
or three languages. In Zimbabwe there are three languages - English, Shona and
Ndebele with numerous dialects. In Nigeria, some linguistic groups have engaged in
hostile activities. Language can cause communication problems - especially in the use of
media or written material. It is best to learn the language or engage someone who
understands it well.

Aesthetics

Aesthetics refer to the ideas in a culture concerning beauty and good taste as expressed
in the arts -music, art, drama and dancing and the particular appreciation of colour and
form. African music is different in form to Western music. Aesthetic differences affect
design, colours, packaging, brand names and media messages. For example, unless
explained, the brand name FAVCO would mean nothing to Western importers, in
Zimbabwe most people would instantly recognise FAVCO as the brand of horticultural
produce.

Education

Education refers to the transmission of skills, ideas and attitudes as well as training in
particular disciplines. Education can transmit cultural ideas or be used for change, for
example the local university can build up an economy's performance.

The UN agency UNESCO gathers data on education information. For example it shows
in Ethiopia only 12% of the viable age group enrol at secondary school, but the figure is
97% in the USA.

Education levels, or lack of it, affect marketers in a number of ways:

· advertising programmes and labelling

· girls and women excluded from formal education (literacy rates)
· conducting market research
· complex products with instructions
· relations with distributors and,
· support sources - finance, advancing agencies etc.
Religion

Religion provides the best insight into a society's behaviour and helps answer the
question why people behave rather than how they behave.

A survey in the early 1980s revealed the following religious groupings (see table 3.1)3.

Table 3.1 Religious groupings

Groups

Million

Animism
300

Buddhism

280

Christianity

1500

Hinduism

600

Islam

800

Shinto

120

Religion can affect marketing in a number of ways:

· religious holidays - Ramadan cannot get access to consumers as shops are closed.
· consumption patterns - fish for Catholics on Friday
· economic role of women - Islam
· caste systems - difficulty in getting to different costs for segmentation/niche marketing
· joint and extended families - Hinduism and organizational structures;
· institution of the church - Iran and its effect on advertising, "Western" images
· market segments - Maylasia - Malay, Chinese and Indian cultures making market
segmentation
· ensitivity is needed to be alert to religious differences.
Attitudes and values

Values often have a religious foundation, and attitudes relate to economic activities. It is
essential to ascertain attitudes towards marketing activities which lead to wealth or
material gain, for example, in Buddhist society these may not be relevant.

Also "change" may not be needed, or even wanted, and it may be better to relate
products to traditional values rather than just new ones. Many African societies are risk
averse, therefore, entrepreneurialism may not always be relevant. Attitudes are always
precursors of human behaviour and so it is essential that research is done carefully on
these.

Social organisation

Refers to the way people relate to each other, for example, extended families, units,
kinship. In some countries kinship may be a tribe and so segmentation may have to be
based on this. Other forms of groups may be religious or political, age, caste and so on.
All these groups may affect the marketer in his planning.

There are other aspects of culture, but the above covers the main ingredients. In one
form or another these have to be taken account of when marketing internationally.

Hofstede's contribution

One of the most prolific writers on culture is Hofstede, a Dutchman. Working with two
colleagues Franke and Bond1 (1991) he sought to explain why "culture" could be a
better discriminator than "material" or "structural conditions" in explaining why some
countries gain a competitive advantage and others do not.

They noted that in Michael Porter's 1990 book on the "Competitive Advantage of
Nations" he popularized the idea that nations have competitive advantage over others.
Unfortunately he stopped short of the key question as to why certain nations develop
competitive advantage and others do not. In their study Hofstede, Franke and Bond
sought to answer that question in research entitled "Cultural Roots of Economic
Performance". They hypothesized that differences in cultural values, rather than in
material and structural conditions (the private and state control) are ultimate
determinants of human organization and behaviour, and thus of economic growth.

They took two examples of 18 and 20 nations, comparing rich countries like the USA,
UK, Canada and Australia, to poor countries like India, Pakistan and Thailand and those
on the rich/poor dividing line like Hong Kong, Taiwan and Singapore. Nigeria and
Zimbabwe were in the study.

In order to understand the results a word of explanation is needed on what the authors
mean by "cultural variables". There are as follows:

· "Power distance" - Society's endorsement of inequality, and its inverse as the

expectation of relative equality in organizations and institutions
· "Individualism" - The tendency of individuals primarily to look after themselves and their
immediate families and its inverse is the integration of people into cohesive groups

· "Masculinity" - An assertive or competitive orientation, as well as sex role distribution

and its inverse is a more modest and caring attitude towards others

· "Uncertainty Avoidance" - Taps a feeling of discomfort in unstructured or unusual

circumstances whilst the inverse show tolerance of new or ambiguous circumstances

· "Confucian Dynamism" - Is an acceptance of the legitimacy of hierarchy and the

valuing of perseverance and thrift, all without undue emphasis on tradition and social
obligations which could impede business initiative.

· "Integration" - Degree of tolerance, harmony and friendship a society endorses, at the

expense of competitiveness: it has a "broadly integrative, socially stabilizing emphasis"

· "Human Heartedness" - Open-hearted patience, courtesy and kindness.

· "Moral Discipline" - Rigid distancing from affairs of the world.

· In the research work these variables were called "constructs" or "indices".

Now, the results of the research have a revealing, and sobering effect on economies
seeking economic growth via structural or material changes viz:

a) "Confucian dynamism" is the most consistent explanation for the difference between
different countries' economic growth. This index appears to explain the relative success
of East Asian economies over the past quarter century.
b) "Individualism" is the next best explanatory index. This is a liability in a world in which
group cohesion appears to be a key requirement for collective economic effectiveness.

c) In extrapolations on the data after 1980 economic growth seems to be aided by

relative equality of power among people in organizations (lower power distance) and by
a tendency towards competitiveness at the expense of friendship and harmony (lower
integration).

In conclusion, therefore, "better" economic growth can be explained more by culture

than structural or material changes. Economic power, from this study, comes from
"dynamism" - the acceptance of the legitimacy of hierarchy and the valuing of
perseverance and thrift, all without undue emphasis on tradition and social obligations
which could impede business initiative; "individualism" - the tendency of individuals
primarily to look after themselves and their immediate families (its inverse is the
integration of people into cohesive groups) and finally a tendency towards
competitiveness at the expense of friendship and harmony.

Whilst debatable, this research may attempt to explain why the Far East, as compared to
say Africa, has prospered so remarkably in the last ten years. The cultural values of the
populations of the East may be very different to those of Africa. However, further
evidence is required before generalisation can be made.

Culture has both a pervasive and changing influence on each national market
environment. Marketers must either respond or change to it. Whilst internationalism in
itself may go some way to changing cultural values, it will not change values to such a
degree that true international standardisation can exist. The world would be a poorer
place if it ever happened.

Chapter Summary

Along with "economics", "culture" is another so called "environmental uncontrollable"

which marketers must consider. In fact, it is a very important one as it is so easy to
misread a situation and take decisions which subsequently can prove disastrous.

The study of culture has taken many forms including the anthropological approach,
Maslow's hierarchy of needs, the self reference criterion, diffusion theory, high and low
context culture, and perception approaches. "Culture" itself is made up of a number of
learned characteristics including aesthetics, education, religion and attitudes and values.
One of the principal researchers on culture and its consequences is Hofstede, who, as a
result of his studies, offers many insights and guides to marketers when dealing with
diverse nationalities. Ignoring differences, or even similarities, in culture can lead to
marketers making and executing decisions with possible disastrous results.
Key Terms

Anthropology Diffusion theory High context culture Attitudes and values Hierarchy of
needs Low context culture Culture Self reference criterion

Review Questions

1. Describe the main elements of culture.

2. List the major approaches to the study of culture and show their relevance in
international marketing citing examples.

3. How does Hofstede's approach to cultural differences aid the international marketer?
Do you think his approach is reasonable and valid?

Review Question Answers

1. Main elements of culture -

"Definition of culture" - The integrated total sum of learned behavioral traits that are
manifest and shared by members of society.
Elements are - language, social norms, religion, ethics, socio economics, mores,
traditions, societal regulations, nationalism, aesthetics, material culture, attitudes,
values, social organisation. (Discuss each in turn with students).

2. Main approaches to culture

a) Anthropological - relevance to interpretation of ways of doing business e.g. Japan

versus USA.
b) Maslow's hierarchy of needs - relevance to product type, sophistication and price

c) Self reference criterion - relevance in the standardisation versus adoption concepts of

marketing strategy.

d) Diffusion theory - relevance to rates of adoption of innovations and of new products.

e) High and low context - relevance to the degree of necessity to have explicitly verbal or
written communications e.g. contracts.

f) Perception - relevance to sensitivity in operation of the marketing mix variables e.g.

advertising.

3. Students should be asked to describe Hofstede's approach first. Whilst he

concentrated in his original theories on "power distance" and "masculinity versus
femininity" dimensions, students should note how he adapted this approach to the study
described in the text. Whilst his approach may be reasonable it can only be valid if it is
repeated with the same results across a number of studies and/or experiments.

Exercise 3.1 Cultural dimensions group discussion.

The following is a group discussion/participation exercise aimed at discovering

dimensions of culture, and their effect on business attitudes. The tutor is required to ask
each question in turn and discuss the response.

NB. - The tutor should be sensitive to group dynamics before using this exercise.

1. In one word give your basic impression or image of the following:

a) English people....................................
b) Africans...........................................
c) Indians (Asians).................................
d) Japanese............................................
e) Americans..........................................
f) Italians...............................................
g) Russians............................................
h) Arabs................................................
2. Why do you think these people are what you say they are

a) English.............................................
b) Africans...........................................
c) Indians (Asians)................................
d) Japanese..........................................
e) Americans........................................
f) Italians..............................................
g) Russians...........................................
h) Arabs...............................................
The tutor can pause here and lead a discussion on the responses.

3. Which of these people do you think you would most like to do business with and why?

4. Which of these people would you least like to do business with and why?

5. Describe briefly your attitude towards the following products. Why do you feel this
way? If you do not know the product still describe your attitude.

Japanese cars

Kenyan tea

Ugandan chillies

Zimbabwean beef

Tanzanian coffee

Malawian tobacco

Indian cashewnuts

Malaysian rubber

Nigerian beer
References

1. Franke, R.H., Hofstede, G. and Bond M.H. "Cultural Roots of Economic Performance:
A research note". Strategic Management Journal Vol. 12, Sum. 1991, pp 165-173.

2. Hall, E.T. "Beyond Culture". Anchor Press/Doubleday, 1976.

3. Keegan, W.J. "Global Marketing Management", 4th ed. Prentice Hall International
Edition, 1989.

4. Lee, J.A. "Cultural Analysis in Overseas Operations". Harvard Business Review, Mar-
Apr 1966, pp 106-114.

5. Levitt, T. "The Globalization of Markets". Harvard Business Review, May-June 1983,

pp 93-94.

6. Maslow, A.H. "A Theory of Human Motivation. In Readings in Managerial

Psychology". Eds. H.J. Leavitt and L.R. Pondy, University of Chicago Press, 1964, pp 6-
24.

7. Murdock, G.P "The Common Denominator of Culture in the Science of Man in the
World Crisis". Ed. R. Linton, Columbia University Press, 1945, p 145.

8. Rogers, E.M. "Diffusion of Innovations". Free Press 1962.

9. Terpstra, V. "International Marketing", 4th ed. The Dryden Press, 1987.