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Essay 2: A man called Geert
November 9, 2008, 8:55 pm
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Soldiering on with exam revision, I’m making the effort to neglect neither my studies nor my blog. So here’s the second of my revision essays for international marketing. For my fellow course sufferers, feel free to read up – though if the first one is anything to go by, you probably wouldn’t want to copy. Do tell me if there’s bits I can improve on 🙂

Topic: ‘Define and discuss the primary components of Geert Hofstede’s cultural classification scheme for classifying cultures. Comment on the effect that these various elements might play on marketing products internationally.’

Once upon a time, there was a man named Geert Hofstede.

The ongoing research by Geert Hofstede into effective cultural classification methodology has been used extensively by marketers as a guide for buyer behaviour. Hofstede has collated results from surveys of IBM subsidiary employees across the world to rate each country in regard to each of five factors. The factors used to classify culture are power distance, uncertainty avoidance, individualism, masculinity and long-termism.

Power distance is defined as the degree of power inequality between people that is socially acceptable. In Malaysia, a country with high power distance, there is a perception that everyone has a designated place in society and its customs reflect the preservation of this. A superior status is clearly marked and highly respected. Many Asian, Latin American and Arab countries have a high power distance score. Low power distance scores, in places like the UK and Scandinavia, indicate that members of the culture are more likely to try to have the same status as everyone else.

A country’s power distance score can indicate to marketers what type of positioning their product should have. Luxury products in high power distance countries should act as status symbols, with promotion, pricing structure and placement which differentiates them from standard products. However, the same product in a low power distance country might be more successful if it is less showy and more accessible.

Partnerships and relations can also be affected by power distance, so international businesspeople must be careful to respect class systems and positions of power in high power distance countries.

Uncertainty avoidance scores indicate how comfortable people in a culture are with the unknown. High uncertainty avoidance is common in Japan and Europe, where formality and rules prevail. They are more likely to be threatened by different ideas and prefer punctuality. However, low uncertainty avoidance countries like Singapore and Hong Kong are more comfortable with innovation.

In high uncertainty avoidance countries, businesspeople need to be aware of social norms such as greetings and punctuality. Products which are simpler and natural are more likely to be successful, and in some cases these cultures show a preference for products which originate in their country.

Individualism in a culture, as opposed to collectivism, highlights the needs and wants of the individual over the common good. Collectivist societies, mostly seen in Asia and Latin America, will usually place high importance on family or loyalty to a group. Individualism is high in the US, UK and Australia, where most people become financially and socially independent at an earlier age.

Communications in individualist cultures can focus on the personal benefit to be gained, where collectivist societies may be more receptive to the common good or the opinions of others. When conducting market research in collectivist societies, there may be a broader spectrum of target groups as they are dependent on each other. For example, promotion of foreign universities to Asian students often focusses more on values which are important to parents of prospective students over student preferences.

It has also been noted that personal spending power of young adults in individualistic cultures may be greater, as they have their own discretion on consumption. In collectivist countries young people may have greater financial backing from their ‘group’ but less discretion to spend as they choose.

Cultures were also ranked by emphasis on ‘masculine’ values as opposed to ‘feminine’ values. Male values were considered to be assertiveness, status and competitiveness. Female values were consideration of others, quality of life and people orientation. Countries rating as being more masculine had a larger gender gap, whereas in feminine countries there was higher gender equality. Japan, Austria and Italy were considered masculine and Thailand, Sweden and the Netherlands feminine.

Correspondingly, in ‘masculine’ countries target groups with buying power were more likely to be male. Marketers need to be conscious that in those countries, appeals to female empowerment are likely to get a neutral or negative response.

The final factor is long-termism, referring to whether the culture tends to focus more on the far-reaching effects of their actions or short-term results. This factor has also been called Confucian v Dynamism. Asian cultures tend to have high long-term scores with traits such as perseverance and thrift. However, Western cultures are more likely to focus on the present or past and what gains can be made in the short term.

Clearly, marketers need to be mindful of the values of the cultures that they are targeting when their companies choose to expand internationally. These factors can have effects on everything from the marketing mix to the way in which relationships are established in the target country. However, they must also be mindful that Hofstede’s model is not intended to predict consumption patterns. What they can do is offer a better indicator than otherwise of the tactics that a company should employ in light of the prevailing culture in another country.

[Just…kudos to the nice people at Open University. Free, and a better explanation than my $100+ textbook.]

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