The late 1990’s have been proved to be the beginning of the most exciting and opportunistic years in the history of marketing. Mass marketing, as we know it is “out” and customized marketing becomes more and more important as we are entering the 21st Century. It is clear that marketers in the 21st Century will need to face challenges more than ever before in terms of electronic marketing, global marketing, and cross-cultural marketing. At the same time these three formats of marketing provide more opportunities for the marketers in the practice. These three types of marketing, so far as I can see, are the most discussed hot topics in the marketing area theoretically and practically as well; they will generate certain impacts and influences on the whole marketing areas and directions.
As marketing professionals, we not only need to realize these potential impacts and influences but also need to seriously deal with these impacts and influences. Each of these three types of marketing could be a series of topics for college marketing course lectures. For example, new marketing techniques are growing as quickly as the Internet and thus generate electronic marketing, in turn electronic marketing may uncover every phase of marketing in the 21st Century in terms of electronic media, e-mail, CD Roms, Internet and rapidly growing Infomercials, etc. The marketplace in the 21st century will be exposed to every new marketing technique that will be producing volume sales for thousands of outlets and corporations any time in today’s marketplace. It is unlikely that I will be able to cover all these three areas in my presentation today, accordingly I will focus my discussion on cross-cultural marketing.
Globalization is an inevitable process in the 21st Century, and so is the cross-culturalization. On the one hand, the world is becoming more homogeneous, and distinctions between national markets are not only fading but, for some products, will disappear altogether. This means that marketing is now a world-encompassing discipline. However, on the other hand, the differences among nations, regions, and ethnic groups in terms of cultural factors are far from distinguishing but become more obvious. It is suggested that the claims for “a right to culture” by national states in recent years can be important criteria for trade policy making, intellectual property rights protection, and the resource for national interests. The last summit of francophone nations in the 20th century called for a “cultural exception” in GATT/WTO rules governing trade of goods. The claims will not only affect public policy in these nations but international trade rules. It might initiate a worldwide cultural protectionism for trans-national marketing while we are approaching the globalization economically in the 21st Century. From a marketing point of view it is very important for marketers to realize that as the world becomes globalized the cultural imperative is upon us; markets in the 21st century are world and yet cross-cultural markets. To be aware of and sensitive to the cultural differences is a major premise for the success in the 21st Century marketplace. Previous research on the global marketing issues has focused on the globalization per se and the homogeneous features of the process, few studies have shed lights on the significance of cultural differences in the global marketing (Czinkota et. al., 1995; Dahringers & Muhlbacher, 1991). On the other hand, there is a larger body of literature on cross-cultural issues but not many take the theme of marketing into consideration (Giovannini & Rosansky, 1990; Harris & Moran, 1987). Clearly in the 21st Century we need an examination of “borderless” markets where national boundaries are no longer the only relevant criteria to be considered in marketing, economic planning, and business decisions. Understanding cultural borders is especially important for products and industries that are “culture bound”. National culture is one critical factor that affects economic development, demographic behaviour, and general business policies around the world.
We also need to realize that Cross-cultural issues not only affect international marketing but also will affect the domestic marketing as well. For instance, in the United States foreign culture is not the exclusive domain of foreign citizens. In this new multicultural age of 21st century American citizens could be of Vietnamese, Chinese, Japanese, Haitian, Russian, Bosnian, Native American, or Indian ethnic descent. Therefore, understanding of culture is of major importance, even to those who deal with only domestic plants and domestic customers. To those who do deal with foreign customers, suppliers, and bankers, understanding culture becomes not only important but also mandatory. The changed world makes marketing a cross-cultural process that requires marketers must be well informed with cultural difference nationally, locally, and ethnically to be the winner in the 21st Century markets.
Define Cross-cultural Marketing: An Examination of Cultural Impacts
The globalization of the economic environment had made it increasingly important for today’s marketing mangers to understand how to do business in different cultural context. Effective distribution of products cross-culturally has become a critical factor for success. The following observation by a young professional businessman in China can be used to demonstrate our argument (Wang, 2000).
It was reported that the Japanese made color TV sets dominated the imported TV set market in China during the period of later 1980s to the 1990s. In the early 1980s, many foreign TV set manufacturers, primarily Japanese and Europeans, made comprehensive studies of Chinese market. After their initial research the European marketers decided not to market their products in China. They concluded that given the low GDP per capita in China at the time when they probed the Chinese market it was unlikely that the Chinese people were willing to buy the luxury like color TV sets. However, the Japanese TV set marketers, after a long careful observation, found out that the Chinese people had a cultural tradition by handing down savings from generation to generation. They also found out that the Chinese tend to save money for future consumption, which differs from the western culture of spending future money for the present consumption. Moreover, they realized that although there were Chinese domestic color TV set makers the Chinese consumers were more confident about imported products. Accordingly, the Japanese marketers concluded that the Chinese families were able to mobilize their financial resources to purchase color TV sets with high quality made by Japanese. As they anticipated, almost every family in China had been accumulating their monthly wages for 2-3 years to realize their dream of getting a TV set. As the result the Japanese color TV set marketers had made their great profits in the Chinese market due to their sound understanding the Chinese cultures while the European competitors lost their opportunities for their lack of understanding the Chinese cultures. Such examples could be endless; for instance, to be successful on the Persian Gulf most American franchisers have to make some adaptability and flexibility in their operations and policy because of the cultural sensitivity (Martin, 1999).
The impacts of culture on marketing is obvious, to study about these impacts we need to probe culture per se first. There are many definitions about culture; however, the most cited one by the marketing scholars is the one that Harris and Moran (1987) defined. According to them, culture gives people a sense of who they are, of belonging, of how they should behave, and of what they should be doing. It provides a learned, shared, and interrelated set of symbols, codes, and values that direct and justify human behavior. In marketing and consumer behavior research the use of the culture concept has been minimal; it has been common for marketers and consumers to ignore the depth of the concept and its implications for the analysis of human behavior (Douglas & Craig, 1995; Griffith & Ryans, 1995).
Researchers indicate that culture can be characterized as a continuum between two extremes: tradition-based versus modern-based. This classification is further defined along with two interrelated dimensions: economic and cultural boundedness. Economically, modern-based cultures are characterized as market-driven, competitive, post-industrialized economic systems. The United States, Canada, and other Westernized societies are categorized as modern-based. In contrast, Africa, Asia, and Middle Eastern societies are typically categorized as tradition-based which is featured with centralized, cooperative, agrarian, pre-industrialized systems.
In terms of cultural boundedness, tradition-based cultures place a great deal of emphasis on their history, traditions, and established conventions. Whereas, modern-based cultures are not strongly tied to traditions within their society (Bandyopadhyay & Robicheaux, 1993; Harris & Moran, 1987). The cultural boundedness of tradition-based societies carries over into its market system. Samiee (1993) indicates that developing countries, which are classified in general as tradition-based societies, have strikingly dissimilar market systems than modern cultures. Consistent with the modern-versus tradition-based cultural orientation, he suggests that both economic and social factors influence the development, and adaptation, of marketing institutions.
The understanding of cultural boundedness of business (i.e., the willingness of a culture to relinquish its traditional methods and adopt new ones) is not only imperative for international marketing effectiveness but also for marketing to ethnic populations domestically (Reese 1998). A research conducted by the author (Tian 1987) in a minority region in China (a tradition-based culture) indicates that culture influences consumer behavior regarding products distribution. It is noted that the cultural orientation of the ethnic group consumers has helped to establish and maintain, through vendor loyalty, plenty of small retailers supported by an inefficient, multi-tired distribution networks. It makes the Chinese State-owned retail business far from being profitable let alone the foreign commercial institutions. Similarly, Griffith and Ryans indicate that cultural overtones in marketing operations are derived, to some extent, from consumer preferences.