The five dimensions of culture:
Hofstede's cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede.
1) Power distance index (PDI): The power distance index is defined as “the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally.”
2) Individualism vs. collectivism (IDV): This index explores the “degree to which people in a society are integrated into groups.” Individualistic societies have loose ties that often only relates an individual to his/her immediate family.
3) Uncertainty avoidance index (UAI): The uncertainty avoidance index is defined as “a society's tolerance for ambiguity,”
4) Masculinity vs. femininity (MAS): In this dimension, masculinity is defined as “a preference in society for achievement, heroism, assertiveness and material rewards for success.”
5) Long-term orientation vs. short-term orientation (LTO): This dimension associates the connection of the past with the current and future actions/challenges. A lower degree of this index (short-term) indicates that traditions are honored and kept, while steadfastness is valued.
example of a product, service or brand that might fit well (or poorly) in a given culture because of the importance of this dimension.
In the best of all possible worlds, marketers would only have to come up with a great product and a convincing marketing program and they would have a worldwide winner.
How Far to Go:
How far a company can move toward global marketing depends a lot on its evolution and traditions. Consider this example:
Although the Coca-Cola Company had conducted some international business before 1940, it gained true global recognition during World War II, as Coke bottling plants followed the march of U.S. troops around the world. Management in Atlanta made all strategic decisions then—and still does now, as Coca-Cola applies global marketing principles, for example, to the worldwide introduction of Diet Coke. The brand name, concentrate formula, positioning, and advertising theme are virtually standard worldwide, but the artificial sweetener and packaging differ across countries. Local managers are responsible for sales and distribution programs, which they run in conjunction with local bottlers.
A company's approach to global marketing depends, first, on its overall business strategy. In many multinationals, some functional areas have greater program standardization than others. Headquarters often controls anufacturing, finance, and R&D, while the local managers make the marketing decisions.
Products that enjoy high scale economies or efficiencies and are not highly culture-bound are easier to market globally than others.
1. Economies or efficiencies. Manufacturing and R&D scale economies can result in a price spread between the global and the local product that is too great for even the most culture-bound consumer to resist.
2. Cultural grounding. Consumer products used in the home—like Nestlé's soups and frozen foods—are often more culture-bound than products used outside the home such as automobiles and credit cards, and industrial products are inherently less culture-bound than consumer products. (Products like personal computers, for example, are often marketed on the basis of performance benefits that share a common technical language worldwide.)
Marketing mix elements:
Few consumer goods companies go so far as to market the same products using the same marketing program worldwide. And those that do, like Lego, the Danish manufacturer of construction toys, often distribute their products through sales companies rather than full-fledged marketing subsidiaries.
For most products, the appropriate degree of standardization varies from one element of the marketing mix to another. Strategic elements like product positioning are more easily standardized than execution-sensitive elements like sales promotion.
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