Analytical Approaches to Cultural Factors

The reason cultural factors are a challenge to global marketers is that they are hidden from view. Because culture is learned behavior passed on from generation to generation, it is difficult for the inexperienced or untrained outsider to fathom. Becoming a global manager means learning how to let go of cultural assumptions. Failure to do so will hinder accurate understanding of the meaning and significance of the statements and behaviors of business associates from a different culture. For example, a person from a culture that encourages responsibility and initiative could experience misunderstandings with a client or boss from a culture that encourages bosses to remain in personal control of all activities. Such a boss would expect to be kept advised of a subordinate’s actions; the subordinate might be taking initiative on the mistaken assumption that the boss would appreciate a willingness to assume responsibility.

1. Maslows Hierarchy of Needs

The late A. H. Maslow developed an extremely useful theory of human motivation that helps explain cultural universals. He hypothesized that people’s desires can be arranged into a hierarchy of five needs. As an individual fulfills needs at each level, he or she progresses to higher levels. Once physiological, safety, and social needs have been satisfied, two higher needs become dominant. First is a need for esteem. This is the desire for self-respect, self-esteem, and the esteem of others and is a power-ful drive creating demand for status-improving goods. The final stage in the need hierarchy is self-actualization. When all the needs for food, safety, security, friendship, and the esteem of others are satisfied, discontent and restlessness will develop unless one is doing what one is fit for. A musician must make music, an artist must create, a poet must write, a builder must build, and so on. Maslow’s hierarchy of needs is, of course, a simplification of complex human behavior. Other researchers have shown that a person’s needs do not progress neatly from one stage of a hierarchy to another. For example, an irony of modern times is the emergence of the need for safety in the United States, one of the richest countries in the world. Indeed, the high incidence of violence in the United States may leave Americans with a lower level of satisfaction of this need than in many so-called “poor” countries. Nevertheless, the hierarchy does suggest a way for relating consumption patterns and levels to basic human need-fulfilling behavior. Maslow’s model implies that, as countries progress through the stages of economic development, more and more members of society operate at the esteem needs level and higher, having satisfied physiological, safety, and social needs. It appears that self-actualization needs begin to affect consumer behavior as well. For example, there is a tendency among some consumers in high-income countries to reject material objects as status symbols. The automobile is not quite the classic American status symbol it once was, and some consumers are turning away from material possessions. This trend toward rejection of materialism is not, of course, limited to high income countries. In India, for example, there is a long tradition of the pursuit of consciousness or self-actualization as a first rather than a final goal in life. And yet, each culture is different. For example, in Germany today, the automobile remains a supreme status symbol. Germans give their automobiles loving care, even going so far as to travel to distant locations on weekends to wash their cars in pure spring water.

Take a Look: Theories of Motivation: Abraham Maslow’s Need Hierarchy Model

2. The Self-Reference Criterion and Perception

As we have shown, a person’s perception of market needs is framed by his or her own cultural experience. A framework for systematically reducing perceptual blockage and distortion was developed by James Lee. Lee termed the unconscious reference to one’s own cultural values the self-reference criterion, or SRC. To address this problem and eliminate or reduce cultural myopia, he proposed a systematic four step framework.

  • Step 1: Define the problem or goal in terms of home-country cultural traits, habits and norms.
  • Step 2: Define the problem or goal in terms of the host culture, traits, habits and norms. Make no value judgments.
  • Step 3: Isolate the Self-Reference Criterion influence and examine it carefully to see how it complicates the problem.
  • Step 4: Redefine the problem without the Self-Reference Criterion influence and solve for the host country market situation.

The lesson that Self-Reference Criterion teaches is that a vital, critical skill of the global marketer is unbiased perception, the ability to see what is so in a culture. Although this skill is as valuable at home as it is abroad, it is critical to the global marketer because of the widespread tendency toward ethnocentrism and use of the self-reference criterion. The Self-Reference Criterion can be a powerfully negative force in global business and forgetting to check for it can lead to misunderstanding and failure. While planning EuroDisney, chairman Michael Eisner and other company executives were blindsided by a lethal combination of their own prior success and ethnocentrism. Avoiding the Self-Reference Criterion requires a person to suspend assumptions based on prior experience and success and be prepared to acquire new knowledge about human behavior and motivation.

3. Environmental Sensitivity

Environmental Sensitivity is the extent to which products must be adapted to the culturespecific needs of different national markets. A useful approach is to view products on a continuum of environment sensitivity. At one end of the continuum are environmentally insensitive products that do not require significant adaptation to the environments of various world markets. At the other end of the continuum are products that are highly sensitive to different environmental factors. A company with environmentally insensitive products will spend relatively less time determining the specific and unique conditions of local markets because the product is basically universal. The greater a product’s environmental sensitivity, the greater the need for managers to address country-specific economic, regulatory, technological, social and cultural environmental conditions. The sensitivity of products can be represented on a two-dimensional scale as shown in the figure. The horizontal axis shows environmental sensitivity, the vertical axis the degree for product adaptation needed. Any product exhibiting low levels of environmental sensitivity-highly technical products, for example-belongs in the lower left of the figure. Intel was sold over 100 million microprocessors, because a chip is a chip anywhere around the world. Moving to the right on the horizontal axis, the level of sensitivity increases, as does the amount of adaptation. Computers are characterized by low levels of environmental sensitivity but variations in country voltage requirements require some adaptation. In addition, the computer’s software documentation should be in the local language. At the upper right of the figure are products with high environmental sensitivity. Food, especially food consumed in the home, falls into the category because it is sensitive to climate and culture. McDonald’s has achieved great success outside the United States by adapting its menu items to local tastes. Particular food items such as chocolate however must be modified for various differences in taste and climate. The consumers in some countries prefer a milk chocolate; others prefer a darker chocolate while other countries in the Tropics have to adjust the formula for their chocolate products to with stand high temperatures.