Culture and International Marketing Mix Decisions

How does culture impinge affect international marketing mix decisions? This question is first dealt with through an assessment of the literature. Postulated or tested relations between cultural dimensions and each marketing mix variable are then presented. Concluding comments cover research issues and managerial implications. As most students of international marketing would agree, culture is a subject of capital importance to this field. If one were to assess its importance by looking at the space which is granted to this topic in international marketing textbooks, one would be easily convinced that, indeed, it is a major issue in international marketing management. As a matter of fact, it is most usually discussed in a full chapter under the general heading of the analysis of the international environment (See for example, Jain 1990, Czinkota and Ronkkainen 1990, Terpstra and Sarathy 1991, Jeannet and Hennessy 1992, and more recently, Toyne and Walters 1993). The approach which is almost invariably adopted consists of, first defining the concept of culture, second, of identifying the various components of culture, and third, of providing vivid examples of cultural differences, and of the dire consequences to be borne by firms not taking these differences seriously enough into account. In addition, the authors seldom fail to invite would-be international marketers to subject themselves to the discipline of the “Self Reference Criterion” (Lee, 1966) in order to avoid the dreadful pitfalls of cultural myopia. This approach is certainly useful when the objective is to make students aware of the fact that cultures may differ substantially between countries, and to induce a minimum level of empathy for cultural differences when approaching foreign markets. It falls short however in pointing out which specific aspects of culture must be taken into account, -2and how these factors will impinge upon marketing strategies. With this perspective, the approach often adopted by authors of consumer behavior textbooks is more appropriate when they identify cultural components such as values or taboos, illustrate how they affect consumption patterns, and explain how to account for them when designing research plans or marketing mix strategies. Dubois (1990) is a good example of this approach. Under these conditions, it is mostly up to those interested in the operational relevance of culture for international marketing decision making to produce their own synthesis of existing material pertaining to this issue. This is precisely the objective of this paper. It will consist of a survey of selected sources which describe the impact of cultural dimensions on the four marketing mix variables (price, product, distribution, and communication). In this survey, cultural dimensions will be treated as independant variables affecting the behavior of marketing mix variables which are seen as dependent variables. This in turn will provide an opportunity to assess the state of the art in this area both from the viewpoint of marketing practitioners, and of researchers. Special attention will be given to the review of more recent work produced in this area, in particular to that of an empirical nature. What has been tested compared to what has been merely postulated, hypothesised, or casually observed will be put in evidence. It is not an easy task to trace the relevant published material. As indicated by Aulakh and Kotabe (1993), readily identifiable material is rather limited. Out of some 900 studies identified by these researchers that were published from 1980 to 1990 in the field of international marketing, only 21 studies deal with the cultural environment (including only eight empirical studies). For a listing of the journals involved in this survey please refer to note 1). Obviously , this research would indicate a much smaller number of studies dealing jointly with marketing mix decisions and culture (see note 2). However, a number of studies relevant to this project may have been published in nonmanagement/marketing journals such as, for instance, the Journal of Applied Psychology, or the European Journal of Communication. Therefore, potentially relevant sources will be located through cross-references, starting with studies mentionned in textbooks and other classic references. Three basic sources have been relied on for this analysis. Buzzell (1968), Dubois (1990), and Usunier (1993) are among those that attempted to correlate cultural influences on marketing strategies. Buzzell was probably the first to sytematically record the relationships between the international environment and multinational marketing strategies and single out a number of factors limiting standardization potentials. After a review of several textbooks, it appears that Dubois’ treatment of the impact of culture on -3marketing decisions would be quite useful for this project. Usunier’s recent book on culture and trade practices was also consulted quite extensively. The impact of culture on pricing decisions Buzzell approaches the notion of culture in a rather candid way. Culture “… is a convenient catchall for the many differences in market structure and behavior that cannot readily be explained in terms of more tangible factors.”. (p. 110). This, of course, is a less than desirable way of taking culture into account but it is nevertheless how it is most often viewed in cross-national management studies. Whatever the differences in consumer, trade or firm practices observed in cross-national studies, these differences are assumed to be the result of cultural disparities. Unfortunately, other environmental differences not specifically taken into account may contribute to the explanation of these “residuals”. With regard to pricing, Buzzell argues that three dimensions of culture are at work: Values which affect the propensity to bargain; the legal framework which determines the extent to which fixed resale prices are to be allowed, and customs which command margins taken by trade intermediaries, and which, as a result, affect the overall price level. According to Dubois, the cultural factors that affect pricing are the politico-legal framework and norms of consumer and trade intermediaires. The politico legal framework is responsible for the adoption of a system of state-controlled prices or alternatively, of a market-controlled price system. As far as norms are concerned, they impinge upon consumer attitudes in shaping quality/ price relationships and credit use. They also affect the propensity of intermediaries to enter into price wars with competitors. Dubois also notes that in a number of cultures, prices are a pretext for discussion between buyers and sellers. In addition, the level at which the price is settled depends on the relative negociating skills of the two parties. Usunier emphasizes the role played by price as a decisive social-interaction instrument (i. e. bargaining and communication). Also noted is the variability of the price/quality relationship across cultures. These relationships between pricing and cultural dimensions are more like observations than like evidences produced by rigorous scientific research processes. Both Dubois and Usunier skillfully put together hypotheses or obervations collected elsewhere. Buzzell’s propositions are claimed to be based on interviews with marketers in multinational firms, -4and, as usual in HBR articles, scant information on research methodology is provided to the “thoughtful businessman” for whom these articles are presumably written. In this respect, the work of Peterson and Jolibert (1960) is an interesting exception. In a study based on an experimental design involving French and American subjects, these two authors explore the relationships between perceived product quality, price and branding. They observe a highly significant nationality effect on perceived quality/price relationships (p < .000). Although the impact of culture on price is not their main research concern, they speculate that consumers of differing cultures may use different cues or use cues differently in evaluating product qualities. In other words, price as a cue of product quality may be interpreted differently across cultures. From a cultural perspective, it could be construed therefore that values inherent to specific cultures affect the way consumer perceive price as an indicator of product quality. Altogether, the relationships between pricing and culture are summarized in Table 1. Table 1Impact of Culture on Pricing Decisions