Culture And International Business

Power Distance:

It relates to the different solutions to the basic problem of human behavior. Cultures that demonstrated what Hofstede called "low power distance" in which there's a concern to minimize inequalities between boss and workers. We can find low power distance in these countries: New Zealand, Sweden, Austria. In high power distance cultures, inequalities within society are more acceptable. For example: Spain, Portugal, and all countries of Latin America

Uncertainty Avoidance:

It relates to the level of stress in society in the face of an unknown future. In relatively low uncertainty avoidance cultures, precision and punctuality are less important. Innovation is encouraged and people are motivated by being esteemed by, or belonging to, other above things.Countries with low UAI are Singapore, Jamaica and Denmark. High uncertainty avoidance scores mean that there's a fear of ambiguous situation and a preference of being busy, punctual and precise. For example: Japan, countries of Latin America, South Korea.

Individualism vs. Collectivism:

Individualism means that people in a society take care of themselves and their closest family. It's a loosely-knit social framework. For example: France, UK, Canada.Collectivism represents societies that take care of everybody. It's a tightly-knit framework. Countries with collectivism are Russia, India, Egypt.

Masculinity vs. Femininity

They stand for a division of emotional roles between women and men. In high femininity societies, social gender roles overlap with both men and women valuing 'feminine' qualities like modesty and quality of life above the more traditionally 'masculine' qualities of aggression and competition. For example: Netherlands, Denmark, Scandinavian countries. A high masculinity ranking indicates the country experiences a high degree of gender differentiation. Females are controlled by male domination. Countries in which we can find masculinity are Japan, Germany, U.S.

Long Term vs. Short Term Orientation

It relates to the choice of focus for people's efforts: the future or the present and past. Long  Term: it stresses perseverance and being sparing with resources. For example: China, Taiwan, Japan. Short Term: it involves a greater emphasis on quick results. We can find short term orientation in these countries: Pakistan, U.S., Great Britain.

Indulgence vs. Restraint

Indulgence societies allow relatively free satisfaction of basic and natural human drives related to enjoying life and having fun.  For example: Venezuela, Brazil, U.S. Restraint societies  suppress gratification of needs and regulate it by means of strict social norms. For example: Pakistan. 

AUSTRIA:  This country has very a low power distance. Austrian culture has following characteristics: equal rights, attitude towards managers are informal and on first name basis, citizens of Austria don't like to be controlled by someone else. Austria has a strong preference for avoiding uncertainty. Austrians feel an emotional need for rules and they always make their decisions after a long analysis of all important information. This country has a individualistic society, which means Austrians look after themselves and their closest family. Another characteristic is that offense very often  causes guilt and a loss of self-esteem. Society of this country is also more masculine than feminine. "A clear example of this dimension is seen around election time, with ferocious, no-holds barred battles between candidates." We can say that Austria has a short-term orientation and that Austrians have respect for traditions.

CANADA: Canada is a country with a quite low power distance. Canadian managers rely on individual employees and teams for their expertise and ideas. They often consult one another and share information freely. Canadians value a straightforward exchange of information.Canadian culture accepts uncertainty and is not very rules-oriented. Everyone is free to express their opinions and ideas. Canadians also tend to be less emotionally expressive.Canada is definitely an individualistic country. Employees are expected to be independent and full of energy and initiative. When Canadians hire new people they look for evidence of what they have done or are able to do. We can say that Canadian culture is somewhere in the middle between masculinity and femininity. Canadians are very good at finding balance between working hard and their personal life. They are hard workers who always find time for fun and enjoyment. This country is also short-term oriented. "A Canadian business entity measures performance on a short-term basis, with profit and loss statements being issued on a quarterly basis."

BELGIUM: Belgium has a high power distance. In business, inequalities between workers and boss are expected. There should be more formal attitude towards managers. The information flow is hierarchical as well. There's a high lever of uncertainty avoidance in Belgium. Rules and security are very important otherwise the lack of rules would create stress.Trainings and teachings are more inductive. Belgium is one of the most individualistic countries. Even though Belgium is an individualistic country, Belgians still need a hierarchy. "High score on power distance and high score on individualism create a specific “tension” in this culture, which makes the relationship so delicate but intense and fruitful once you manage it." Similarly like Canada, Belgium is also somewhere in the middle of masculinity and femininity. Mutual agreements are more important  than actual winning and discussion. Win-lose style would not be very effective in Belgium. Belgium is a short-term orientated country. Belgians feel a need for norms and absolute truth as guidelines.Management and business are based on self reliance, personal achievement, hard work and managers are judged on short term results.

International Marketing

There are more reasons why international marketing has grown so much during this decade. One reason is a development and enlargement of market opportunities. Nowadays, there's greater economic security which makes producers expand their markets. Some nations have complementary economic bases and they offer and produce similar products or services. Therefore, producers have started realizing that some of their products might be even more successful abroad. Another reason is that political relations between countries are much better and more positive than they were in the past. A market arrangement between the countries is very important. The countries with a very similar culture have the biggest of making free trade agreements too. Cultural similarities support the economic cooperation with other nations. Three major factors that support development of international marketing are economic, political, and cultural factors.
There's many  reasons why it's beneficial to sell product in foreign market.
1. Poor trading conditions in the home market
2. Potential to increase profits and to earn more money
3. Spreading risks between different markets
4. Saturated new markets
5. Experience
Political Differences:
The change of government as well as terrorism or other threats might cause instability  in countries and might lead to destruction of a company's assets.  This could really hurt your business, so before  you start doing business in some country, you should check its political situation. For example: Egypt (it was attacked by terrorists, and there is an instability caused by the change of president & government).
Economic & Social Differences:
Difference in tax rates, interest rates, the age structure of the population, importance of marriage, and the role of women play a huge role in your marketing activities. In order to be successful in your international marketing, you should realize that living standards of countries vary across the globe. For example: There are so many economic and social differences between countries like U.S. and Ethiopia.
Legal Differences:
Some products like weapons are in some countries illegal. Just because you can sell and buy them in one country doesn't mean that they are sold everywhere. Product labeling control are much stricter in some countries than in the others. For example: North Korea is known for its production of nuclear weapons. On the other hand, it's illegal to sell or produce nuclear weapons in South Korea.
Cultural Differences:
Even though cultural differences are not laws that you have to follow, they play a significant role in people's behavior which affects marketing. For example: In some countries you cannot really use a woman as a model in a advertisement. It's just not acceptable. For example: Many Arabic/Muslim countries have totally different culture than Europe. Women rights and etc...
Differences in Business Practices:
Accounting standards and rules vary in parts of the world. Also some formalities might take much more time in one country than in another one. For example: In the UK it can take a few days to set up a limited company. On the contrary, in Sierra Leone it might take one year.

Distribution Arrangement

Intensive

It's a product distribution where the company sells as many outlets as possible, so the consumers can find the product everywhere they go. The advantage of intensive distribution is that it makes customers remember and eventually buy the product, because they come across the product frequently. Products that are distributed in this way are the ones that you use everyday like a toothpaste. The original shop for toothpastes is a drug store, but you can buy them in grocery stores and supermarkets too.

Selective

This retail strategy involves making products that are available only in certain markets. It's the opposite of intensive distribution. Basically, the benefits of selective distribution are that a retailer is able to control his product, which means he can limit distribution of his products to specific geographical areas. This creates a "good image" of products, because it looks like they are special in some way as you can't get them everywhere. An example of this is luxury goods, or goods that are expensive because of their brand. These products are just for one group of people (upper class) so not everybody can afford, and are not sold everywhere.

Exclusive

It's a distribution where distributors and suppliers make an agreement that allows only some named distributors to sell a product. A positive thing about exclusive distribution is that a supplier has once again a control of how distributors display the product. It gives  a competitive advantage to retailers too because they can pay for displaying the product in a particular section of the store. For example, Nike and Adidas use this technique all the time.

Integrated

Integrated means combining or putting this together. Therefore, integrated distribution is a distribution that puts different types in one effective group. Advantage is that a supplier has a close relationship with other channel members. An example is the Carnegie Steel Company where the company controls not only the mills where the steel is made but also the mines where the iron is extracted. 

When you are choosing a distribution channel it is important to realize that it is not short term. It also requires careful choosing among and between distributors, direct marketing, retailers and sale force. Distribution is one of the two main roles of marketing., therefore it definitely requires strong strategic thinking.
Here are some things you must consider about  selecting a channel partner: Services capabilities, Partnership attitude, Noncompetitive, Marketplace credibility, Sales capabilities, Geographic coverage, Cost model., Technology fit.

How does the promotional mix change at different stages of the product life cycle

Before the first stage which is introduction, the product is still just an idea. During this very first stage, the product producer develops plans for the future product and starts researching marketing methods that might be very useful in the future. This includes ways to promote the product or to attract customers' attention through campaigns and other promotions. This phase is all about planning, which means the producer doesn't use any marketing strategies yet. As the product hits the market, which happens during the introduction stage of a product life cycle, it's very important to bring awareness of the product. For this stage, the producer should choose a type of promotion techniques that will make customers be aware of the product. This requires lots of effort. During the second stage, which is growth the customers are already aware of the product and sales usually increase. In order to keep it this way, the company should start to use marketing techniques like branding, which would make the product different from the others. Maturity stage is a stage, where the product gains over its competition. In this stage, the producers want to get costumers from competitors. That's why it is important and very beneficial to use special, and interesting promotions. The last stage of the product life cycle is decline. The company can retain their old customers, but it's hard to attract new sales from new customers. The company tries to keep the good and positive image of the company. The main focus is on the reinforcing the brand image. During this stage marketing efforts decline.

Case Studies

Blood Donors Respond

In Pennsylvania, American Red Cross was organizing an interesting summer blood drive campaign. To motivate and attract donors, all the donors who participated and gave their blood, received a small Route 56- logoed Red Cross Keytag. All of them had also a chance to win a year's supply of gas that was around $2,000. Eventually, donations increase more than 16% over the last year. This blood donation was very important because when people are on vacation they usually don't donate blood. In my opinion the reason why it was that effective is that people like getting new things for free. They got a good feeling for helping others and at the same time they were rewarded for it by having a chance to win something special. A year's supply of gas served as a temptation and drove peoples' attention.

Museum gets huge membership boost!

The Cleveland Museum of natural history, which is a great and popular destination for visitors, started to feel a need for more members that would support the Museum's collection. In order to promote a new traveling exhibit and to entice visitors, a new tactic was used. They started to send an instant prize promotion-"Conceal & Reveal" game cards in a form of a direct email. The email included a custom scratch-off that gave people a chance to win great prizes like free tickets for the Museum party. This campaign attracted more than 500 new members in the first 10 days which was an unexpected success. This is just another example of attracting people by giving them a chance to win. Even though, the chance of winning is very small and not everyone can win, people still want to try it.

A Starbucks "Gotcha!" 

The aim of this interesting and unusual campaign was to increase the awareness of the Starbucks Holiday Red Cups. The chief at Free Car Media, Dew Livingston, got an idea of attaching these cups to the roofs of cars. These cars would drive around in huge cities like New York, Seattle, Chicago and San Francisco. It gives people the impression that a driver put this cup on the roof of his car, and then forgot about it. This promotion produced a favorable reviews on some Internet websites and definitely did increase the attention of customers. It was a non-traditional way of promoting cups that attracted people the most. This is an example of "targeting marketing."

Nike Incentive Program Boosts Attendance 

Nike is a huge company that gives a job to factory workers all around the world. Without these customers, Nike would be forced to shut down some of their factories, which would cost the company lots of money. In order to avoid this situation, Nike developed a one-year program that would motivate workers. In each quarter, the workers were given mugs. These mugs were different every quarter which makes workers to compete between each other. To make it even more interesting, Nike started to reward workers who were in some way better than the others with a T-shirt with a slogan "Just do it." The results of the campaign were great. There were no shutdowns and the attendance of workers rapidly improved. I think this idea was very effective and smart because it motivated workers and made them to compete between each other.

Marketing - Advertising Techniques

Repetition
It's a way to keep product or brand in consumers' minds by repeating. Repetition basically builds familiarity. To make it effective, repetition must occur in right time intervals, otherwise consumers will get tired of it.
Benefits: Consumers are able to remember the product or brand for a long period of time. It imprints to their memory. http://www.youtube.com/watch?v=f_SwD7RveNE

Slogan
Identifies product or service with a short positive sentence, quote, or with an idea. Slogan should be catchy and interesting so it drives consumer's attention. Slogan is usually placed after the company name and it helps to give a positive image.
Benefits: It kind of reveals the purpose of the product or the company.

Logo
It's a symbol or an image that identifies the product. The logo design is the illustration of the business nature, its character, energy, and personality. 

Benefits: Your company or the the product is recognized and memorized by the logo design. Logo makes your company or product unique, because no one else has the same logo as you do. It also makes your company or product look professional. Logo establishes the brand identity.

Snob Appeal

The attributes of something that appeal to people who associate those qualities with social or intellectual superiority. Basically, businesses create an image that elite and tempt rich costumers to use their products.

Benefits: Snob appeal makes customers believe that the product that the business sell is much better and have a higher quality than other cheaper products of other brands. Most of the people want to have the best and they like competing between each other so that's why snob appeal is something that they like

Testimonial

Recommendation from a celebrity or a very satisfied costumer affirming the quality of a product or a service. It makes customers believe that the product or service is very good when other popular people recommend it or use it.

Benefits: It provides a good image for the business, company, or for the product itself. http://www.youtube.com/watch?v=O20LUWtT5vI 

Sex Appeal

The product enhances the sexual attractiveness of costumers.

Benefits: It drives customers' attention. Sex appeal becomes associated with products and services. Sex appeal has also an impact on mood. It basically "plays" with customer's mood. Eventually the mood of the customer is related to the product. http://www.youtube.com/watch?v=zLrUJY4D5Bc 

Bandwagon

It's an advertising technique that uses pressure to influence and persuade consumers. It makes consumer think and believe that "if everyone else is having this product, so should I."

Benefits: The business might get a large amount of customers, just because of the bandwagon.

http://www.youtube.com/watch?v=VQ3d3KigPQM 

Technical Jargon
In order to persuade and impress the costumer, the business uses technical words. Even though costumers might not understand these terms, it makes them believe that the product has a good quality.
Benefits: It makes a very professional image of the product. 
http://www.youtube.com/watch?v=R55e-uHQna0 


Name Calling
It's a technique, where the advertiser compares his product with other similar products of other brands in a way that is favorable to to the advertiser. 
Benefits: It gives costumers reasons, why they should buy the product that advertiser is promoting and not the products of other brands.


Wit and Humor

In order to attract customers to the products or services, the business makes and an advertisement or a commercial that entertain costumers, and makes them laugh. It brings customers a positive emotion.

Benefits: People/customers will like the product because of the positive emotion. It attracts them even though they might not be aware of it. http://www.youtube.com/watch?v=uuainpwmxlw

O'Donnell Learn

Key to O' Donnell Learn's Success

Putting customers front and center. 

Company Values
1. Creativity combined with expertise
2. Professionalism
3. We are always learning

What They Do

They help clients to design better educational products and digital learning experiences. They also develop content and technology products ranging from online courses to assessment. Their goal is to help educational companies to evolve and to launch new brands and products.

How They Do It
O'Donnell Learn uses the broad knowledge gained from research and consulting over the past decades in order to help clients to design, develop, and launch successful products and services. Thanks the gained experience, O'Donnell also helps clients to build strong, meaningful customer relationships.

History

O' Donnell was found in 1990 by Carrie O'Donnell who is a change-agent in the industry. O' Donnell Learn's  company has been set up as a virtual company, with around 100 project professionals who have been working on the company's engagements. In 1991, the first media project based on market feedback was accomplished. In 1994, O'Donnell's company started helping publishers who got first successions of best -selling products. In 1999, OD&A began to built the professional development and large satellite courses. In 2004, OD&A helped to launch publisher platforms. In 2010, O'Donnell's company conducted a study in order to find out what makes students buy educational materials and tried to better understand the behaviour behind the purchase of  textbooks. In 2012, OD&A rebranded itself as O'Donnell Learn. Joanna Jebsen took over as a president and Carrie O'Donnell formed the O'Donnell Group.

                     

Ethics and Marketing

Ethics are described as a collection of principles of right conduct that shape peoples' or organizations' decisions. In order to practice ethics, the business or the company should apply moral rights and fairness to marketing decision-making. Business Ethics is the behavior of the business that includes how the business interacts with a world and how it deals with costumers. Business Ethics can really be applied to everything. Nowadays, businesses use and practice many wrong, unfair, and deceptive practices that make their businesses behaviors very unethical. An example of deception is when customers believe that they will get more value from the product  than they actually receive. The reason why ethics are so important to marketing is not just a matter of being "nice", but  they also keep the economy running. Without business ethics or a "lubricant" the economy would be much less efficient (lower quality, higher prices). One benefit of business ethics is that they provide a "good image" of a business, which automatically drives customers' attention. Lance Armstrong is a famous, rich biker who has won many cycling competitions as Tour De France and who is a founder of the Livestrong Foundation which is a major cancer-fighting charity. His name has been mentioned in lots of advertisements for Nike and other popular brands. The issue is that Lance Armstrong was accused from cheating. His good reputation of a cancer survivor and the cycling legend changes to an accused doper. In order to save a good name, Nike and Livestrong resigned their contracts with the cyclist. They believe this is the only way they can save the popularity of their businesses. They think that if they continued in supporting Lace Armstrong, it would rapidly decrease the profits of their companies. Nike and Livestrong hope that the departure of Lance Armstrong can be seen as a good thing because it gives them an image of loyal companies. They also assume donors will be still involved with organizations, because donors' values are same as the values of Nike and Livestrong. In this case Nike and Livestrong are still able to raise money. I understand why Nike and Livestrong did what they did, but the way they gave up on Lance Armstrong seems to me quit unfair.

Stakeholder Conflict and TESCO

1. & 2.  (between which stakeholders is the conflict?, what is the nature of the conflict?)

The conflict is between Tesco and its employees. Transport workers who deliver fuel to Tesco fear that they will use their jobs because of the plans that say transport workers' employment is going to be transfer from Wincanton to another firm, TDG.

 

Shareholders (investors) highly disagree about giving 2-year rolling contracts to chief executive (Terry Leahy) and to other board members. Despite this discontent Tesco wins the pay battle.

 

Another conflict is that Tesco operates more than 2,300 stores around a world and this fact highly affects smaller independent retailers. Many small shops have to close down in a current area because they get almost no profit. The explanation is that recycling money goes to a big multinational chain, rather than to small local traders.

Local Community doesn't want the another (fourth) store of Tesco in the city they live which creates a conflict. People who live in this city think that 3 stores of Tesco is definitely enough, but Tesco company still wants to build another one.

 Tesco and its suppliers have a conflict as well. Tesco is blamed after one of its suppliers revealed they will close Trafford Park Bakery. This means that lots of people will loose their jobs. Suppliers and other firms think Tesco should take a responsibility and compensate it somehow.

3. (what is the adverse result that is expected to occur with the specific stakeholder  group?) 

  

Transport workers (stakeholders) may loose their jobs, and their pay and conditions are under threat.

Shareholders think and argue that 2-year contracts maximize chance of failure.

Customers have less choices for shopping because many small retailers' stores close down.

Local Community & Local Council believe that 4th Tesco store is just a waste of space. There's no need for it.

Many local workers loose their jobs because one of the Tesco suppliers decided to close down Tesco is blamed. 

4. (what would your advice be to settle the issue using a compromise) 

Tesco should compensate the possible loss of jobs, pay and condition to make a compromise transport

workers.

They should make everybody to vote.

There should be a policy that only one Tesco store can be placed in a particular area which means retailers' stores wouldn't have to close down, and customers would have more choices for shopping.

As I've already mentioned there should be some deal between people who live in the city with Tesco. Local people should have a right to say how many Tesco stores can be placed in their city.

Tesco should "practise" Corporate Social Responsibility and supplier shouldn't close down the Trafford Park Bakery but they should try to make a deal with Tesco again.

It's Not Acceptable to Produce Potentially Dangerous Goods!

I totally disagree with a production of potentially dangerous goods. Just because nobody found it out yet, it doesn't mean it is okay. The goods that are harmful  which means they have in some way a bad impact on people's health should not be produced. Nowadays, we have many kinds of diseases in the world and some of them have still unfamiliar background, we don't know where these diseases come from. The reason why some children have a terrible disease might be fault of your business.What kind of people are we when we prefer more our businesses and profits than our own health?

Few years ago, there was an issue with Chinese manufactures. They were accused of producing potentially dangerous children's toys. An example was the toy giant Mattel that contained unsafe levels of lead and loose magnets.What European Union should have done immediately was to forbid importing Chinese toys to the EU because otherwise many children's lives would be risked. The issue was that on the other hand, if the EU forbids the import of Chinese toys, it will harm the welfare of Chinese families.What is acceptable then? The risk of children's lives or the unemployed Chinese families? In my opinion health is more important.

Children and Teens As Victims of Marketing

Advertisements are all around us: on TV commercials, magazines, or on the Internet. It has happened to me many times that I was watching some very popular family TV show, where the family was having breakfast and they were eating for example a yogurt of a particular brand. I didn't really pay attention to it until I watched the next episode of this TV show, and I saw that they are eating the yogurt of the exact same brand as they did before. .What I later found out was that everybody from that TV show has actually always eaten a product of the same brand. I bet it wasn't a coincidence. That's the way how advertisements drive our attention. They want us to persuade that we need the products or services they offer. The truth is the opposite, we don't! The biggest victims of the marketing are children and teenagers. Marketers have found out that the best way how to make lots of money is to target children. Marketers know that parents spend more money on their children because they believe it makes them happy, so they tempt kids and assume that parents will buy them the particular product and eventually marketers make a profit from it. For example: The only reason why there are story book characters and heroes on the cover of the cereal box is that it serves as a temptation for kids. Marketers put the commercials of the coolest and newest toys always at the time when children programs are on TV so it drives the attention of the kids. Suddenly every kid wants to have "that toy from the commercial" because their friends are going to have it soon and they beg their parents until they finally buy them the wished-for toy. This "must-have toy" is just one of the many things that will  toss in the trash, because another even "cooler" toy will come and replace the old one. My question is "Where do these cool trends come from? and Who make them up?" Marketers also assume that the most important thing that teenagers care about is sex, which is in my opinion an absolute nonsense. Therefore they have decided to place the appearance and sex on literally everything. You can find it in TV shows, Music programs and etc..Marketing also makes young girls feel insecure. Girls can see the skinny models with long legs and a perfect face in every music video or TV show they watch, and they want to look exactly like "the sexy models from magazines" do. These naive young girls don't realize it is all just a photo-shop and they would do anything to look like the models. They think that's how women should look like. Girls are on diets, and buy products that are supposed to make them skinnier. Eventually they become anorexic and bulimic, or both. I understand that advertisements make money, but where are the boundaries? Do we really care just about the profit? It seems to me like we put wealth and money on the first place and mental and physical health of children and teenagers is totally unimportant.

Corporate Social Responsibility

1. What does it mean?

Corporate Social Responsibility is a company's sense of responsibility towards the community and environment in which it operates. This concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers employees, communities and the environmnet.

2. Why is it a common objective in business?

The reasons why objectives that focus on social responsibility are very important and common for business organizations are that they maximaze short-term sales revenue and shareholder value. Maximasing short-term sales revenue = managers and stuff benefit when salaries depend on sales revenue levels. Maximasing shareholder value = Interests of shareholders are above those of other stakeholders.

3. Positive example. 

-less unemployment

-customers can choose from more services and products, bigger choice

For example: Recycling

 



4. Negative example. 

- pollutions, destroying the environment 
- if increased sales are achieved by reducing prices, the actual profits of the business might fall.
- McDonalds