According to Glossary of Marketing (2010, p. 1), self reference criterion refers to “the assumption that a product can successfully be sold abroad on the basis of its success in the home market. ” cultural diversity is experienced in the global markets such that different people interact in the global markets. Marketers should recognize the fact that customers from different backgrounds have different cultural aspects. It is very important for marketers operating in the global markets to understand the cultural differences of their customers.
Self reference criterion is an aspect which does not allow marketers to incorporate the culture of other people. As such, people believe that other people will accept their cultural believes and that there are no cultural conflicts between different cultural groups (Noth, Bishara, 2007). Businesses in the modern era are experiencing a lot of changes in terms of social, economic, technological, political and cultural aspects. Emerging trends in business indicate that cultural diversity is affecting many organizations since managers lack the ability to adopt strategies which match the cultural needs of their customers.
Jackson, Loehr and Azman (n. d. ) explain that changes in technology have led to changes in economic conditions and organizations should come up with policies which reduce costs and maximize profits. There is need for managers operating in multicultural environments to develop proper policies to satisfy needs of customers located in different regions (Mueller, 2008). Obstacles to international marketing Decision making is a very important aspect in the organization and managers should attempt to integrate the needs of all stakeholders. Decisions which affect all stakeholders should be made by combing ideas from different people.
Imposing decisions is a very dangerous activity that managers can engage in since people have different perceptions about how things should be done. Self reference criterion in decision making leads to conflicts in an organization since all stakeholders do not own the decisions made by the management. Communication is a very important factor to consider when making decisions since misunderstanding between people may lead to poor decisions being made. Diversity in culture requires people to understand the needs of each other and to create a link between all people involved in the activities of the organization.
Different countries have different culture and marketers in the global scene need to understand the cultural aspects of the people they work with. The culture of the people determines their perception towards the products in the market and they will attach a particular image to a brand according to their cultural perspective. The brand image of a product is the perception that people have towards a certain product in the market. The marketing programs should aim at improving the brand image of a product in the market.
Customers create meaning about a product depending on the general market perception of the product and managers should identify the specific cultural aspect of their customers in order to improve brand image. The culture of the consumers shapes the brand image of a product (Gupta, 2003). Self Reference Criterion impedes the ability to assess a foreign market Organizations working in global markets tend to incorporate cultures of different people. Foreign markets have different aspects from local markets and cultural diversity is an important aspect that managers operating in such environments need to note.
In the modern business environment, global marketing has become a very important aspect since competition has intensified. Globalization has a great impact on the marketing strategies adopted by companies and managers must use modern technologies in their marketing process to maintain a high customer profile. International markets require integrating and understanding the cultural diversity of different customers in the global markets. The branding strategies of a company must integrate the cultural needs of the people in different countries.
The marketing mix, that is, the price, product, promotion and the place must be aligned to the cultural diversity of the people involved in the global markets (Batra, V Ramaswamy, Alden, Steenkamp, and Ramachander, 2000). Managers tend to use their cultural concepts when solving problems at a multicultural environment. This creates misunderstanding especially when solutions do problems to not favor some cultural groups. Culture is defined as the set of believes, values, attitudes and behavior that people in a given region share in common. People tend to use their own experiences in life to interpret things.
Culture is a strong factor which determines the decisions made by individuals. The purchasing behavior of the consumers will be shaped by the brand image of the product in the market. The marketing mix strategies will be determined by the purchasing habit of the consumers and hence; is a factor of cultural perception of the consumers in the market. To establish a competitive advantage in the market, the marketers need to identify the perception of the customers towards the products in the market. Culture determines the brand image since it affects the attitudes, behavior, and lifestyle of the customers.
Satisfaction of the consumers depends on the experiences they have with the products and the emotional connectivity derived from the use of a variety of brands (Gupta, 2003). Possible impact of the SRC to marketing strategies in different cultures Self reference criterion causes poor communication between people in an organization. Communication is a process where people exchange understanding with each other. Communication is more efficient when the parties are able to understand each other. The sender of the message must encode the message in a manner that the receiver will be able to understand it.
The receiver must decode the message to reveal the information contained in it. Misunderstandings occur when people fail to communicate effectively. Gupta (2003, pg 71) suggests that “culture works by generating a sequence of paraconscious vibrations in human life, which reverberate through the mental attitudes, psychological beliefs, physical behaviors and social breeding of individuals in the system. ” Culture affects the overall marketing strategies of an organization; it influences product awareness, trial and repeat purchase by the consumers. It also affects the relationship and communication between the marketers and their customers.
The customers select, scan, interpret, validate and prioritize the information they receive from the marketers. There is a positive relationship between the effectiveness of communication and the cultural understanding by the marketers in the survey conducted. The international marketing strategies require the management of global businesses match the cultural aspects of the societies they operate in with the brand image of their products (Jain, 1989). Ethnocentrism and self reference criterion The product features should match the culture of the consumers.
Companies operating in the global markets should study the culture of their customers and design products which have cultural attachment. Prices in different markets will be determined by the culture of the customers. Some people believe that high prices represent good quality in products and as such, the marketers should provide suitable prices according to believe of the consumers. When the lifestyle of people changes, new products are demanded. Marketers with the ability to provide products which match new lifestyles charge high prices since they are able to satisfy the needs of a particular niche.
Promotional strategies should be matched to the cultural needs of the consumers. Customers respond positively to adverts which capture their culture. The place element of a marketing model requires marketers to introduce their products at the right place. Since different countries have different cultures, marketers should not place certain products in places where the culture does not accept such products. For example, Muslims do not consume pork. A marketer who delivers such products to Muslim countries might not sell anything.
When introducing products in a new market; marketers should collaborate will all stakeholders in the market to identify the best strategy to forecast the market demand for the new products (Lindgreen & Hingley, 2009). Cross cultural analysis International marketing refers to the trade of products in many countries. The marketers should research about the most viable markets before establishing their products in those markets. Strategic planning is required to establish the relevance of the marketing strategies to the cultural aspects of the international consumers.
The international markets are composed of people with different cultures and this affects the strategies to be adopted by the marketers. Some companies operating in the international markets have failed in some countries due to poor cultural analysis of the consumers in the global market. Wal-Mart is a U. S. company which has opened stores in many countries. The company operates departmental stores and is ranked among the largest organizations of its kind in the country. The company established strategies to open stores in different countries to expand its operations.
However, the strategy of opening subsidiaries in Germany, South Korea and other countries failed due to poor cultural analysis of consumers in these markets (Gupta, 2003). PART (B) Market differentiation according to sub-cultures There are different subcultures in the world and marketers must recognize that global markets are not homogenous. There are different groups of customers with different needs. Establishing a uniform marketing strategy for a multicultural market may not be profitable since different consumers have different needs. Marketing policies should be differentiated to ensure adequate coverage of consumer needs.
In some cases, marketers are required to differentiate their markets according to regions since within a country, there are cultural differences. Gupta (2003, pg 71) suggests that “culture works by generating a sequence of paraconscious vibrations in human life, which reverberate through the mental attitudes, psychological beliefs, physical behaviors and social breeding of individuals in the system. ” Culture affects the overall marketing strategies of an organization; it influences product awareness, trial and repeat purchase by the consumers. It also affects the relationship and communication between the marketers and their customers.
The customers select, scan, interpret, validate and prioritize the information they receive from the marketers. In order to succeed in global marketing process, a marketer should be able to identify the needs of different customers and design marketing strategies which match their needs. Cultural diversity within geo-political boundaries Within a country, there are different cultures since different groups exist and marketers should assume that domestic markets are homogenous. However, cultural diversity in domestic markets is lower compared to international markets.
Multinational companies operate in different cultures and the marketing strategies to be adopted should match the cultural aspects of different customers from different regions. There is need to understand cultures of different countries when working with a multinational company since multicultural aspects determine the success of the company (Rao, 2003). Subcultures in marketing It is important for marketers to subdivide their markets according to sub-cultures in order to use the best marketing mix strategies which satisfy specific needs of their consumers.
Traditional theories of management assumed that people and cultures are homogenous. Managers should understand that cultural diversity affects the activities of an organization and that they should integrate cultural aspects in their marketing strategies to avoid conflicts. Productivity in an organization requires developing ideas which create understanding in cross-cultural environments. The behavior pattern of people is determined by the culture of the place they work, live and interact. Culture gives people a sense of belonging since human beings like identifying themselves with certain social groups.
Culture is dynamic and changes as time goes by. The competitiveness of the organization in the global markets depends on the ability to understand the different cultures and integrating the culture in the products manufactured by the company. The management should do market research about the different cultures of the people they are working with. Products which match the culture of the people develop high demand in the global markets. Therefore, culture should be understood from internal and external systems of the organization (Krueger & Nandan, 2008).