The primary obstacle to success in international marketing is a person’s self-reference criterion (SRC) in making decisions, that is, an unconscious reference to one’s own ability to assess a foreign market in its true light. Having sold a product successfully in the domestic market a firm may assume that the product will, without adaptation, also be successful in foreign markets. Frequently this assumption leads to failure. The SRC refers to the assumption that what is suitable for the home market will be suitable for the foreign market and therefore there is no need to test whether or not the product should be altered.
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In international marketing scenarios, in different cultural environments and hence a self referenced behaviour may not be the “correct” behaviour from the perspective target culture. Hence realization of these differences of culture and the possibility of self reference criterion is important in international marketing. This is not such a big issue in domestic marketing since the cultural difference is not major.
It is of crucial importance when examining foreign markets that the culture of the country is seen in context of the country. It is better to regard the culture as different from, rather than better or worse than, the home culture. James Lee (1966) used the term ‘self-reference criterion’ (SRC) to characterise our unconscious reference to our own culture values when examining other cultures. He suggested a four-step approach to eliminate SRC.
Understanding and dealing with the self-reference criterion are two of the more important facets in international marketing. It is very important to understand cultural differences, otherwise we will fail to recognise the need to take action, discount the cultural differences that exist among countries or react to a situation in a way that is offensive to our host. Like a common mistake made by Westerners is to refuse food or drink when offered. In Europe, a polite refusal is certainly acceptable, but in many countries in Asia and Middle East, a host is offended if we refuse hospitality.
The world is seen as a market segmented by social and cultural, legal, economic, political, and technological (SLEPT) grouping. For all these levels the key to successful international marketing is being able to identify and understand the complexities of each of these SLEPT dimensions of the international environment how they impact on a firm’s marketing strategies across their international market.
Source: International Marketing Strategy by Isobel & Robin Lowe P9
SRC is an unconscious reference
SRC- the unconscious reference to one’s own culture values in comparison to other culture. SRC-if we talk about in basic terms then SRC means to forget about self like if a company is going to some another country then the going company will have to take care about the culture etc of the host country and will have to forget about our culture like McDonalds when entered India they sold product aloo tikki burger in spite of their beef burger.
Source: http://wiki.answers.com/Q/What_is_self_reference_criterion
In relation to international marketing, culture can be defined as: ‘The sum total of learned beliefs, values and customs that serve to direct consumer behaviour in a particular country market’. Such components as values, beliefs and customs are often ingrained in a society and many of us only fully realise what is special about our own culture, beliefs, values and customs when we come into contact with other cultures. This is what happens to firms when they expand internationally and build up a market presence in foreign market for the first time. Often the problems they face are a result of their mistaken assumption that foreign markets will be similar to their home market and so they can operate in a similar manner. Frequently in international markets the toughest competition a firm face is not another supplier but the competition of different customs or beliefs as a result of cultural differences. So in these cases self-reference criterion (SRC) in making decisions is an unconscious reference to one’s own cultural values, experiences and knowledge as a basis for decisions.
SRC affects on cultures
Cultural differences and especially language difference have a significant on the way a product may be used in a market, its brand name and the advertisement campaign. Such as Coca-Cola had to withdraw their two-litre bottle from Spain when they found that Spaniards did not own fridges with sufficiently large compartments. Again Johnson’s floor wax was doomed to failure in Japan as it made the wooden floors very slippery and Johnson failed to take into account the custom of not wearing shoes inside the home. Initially, Coca-Cola had enormous problems in China as Coca-Cola sounded like ‘Kooke Koula’ which translates into ‘A thirsty mouthful of candle wax’. They managed to find a new pronunciation ‘Kee Kou Keele’ which means ‘joyful tastes and happiness’.
When confronted with a set of facts, we react spontaneously on the knowledge assimilated over a lifetime – knowledge that is a product of the history of our culture. Quite often we do not know ourselves why we behave in a certain way in a certain situation, as we do that unconsciously. We seldom stop to think about a reaction; we react. Thus when faced with a problem, another culture, the tendency is to react instinctively, referring only to our SRC for a solution. Our reaction, however, is based on meanings, values, symbols and behaviour relevant to our own culture- and usually different from those of the foreign culture.
Source: International Marketing, Ghauri & Cateora, 2nd Edition
In the West, unrelated individuals keep a certain physical distance between themselves and others when talking to each other or in a group. We do not consciously think about the distance we just know what feels without thinking. When someone is too close or too far away, we feel uncomfortable and either move further away or get closer to correct the distance- we are relying on our SRC. Westerners assume ‘foreigners’ are pushy, while foreigners assume Westerners are unfriendly and standoffish. Both react to the values of their own SRCs, making them all victims of a cultural misunderstanding.
Source: http://www.citeman.com/7414-the-self-reference-criterion-and-ethnocentrism-major-obstacles/
If we evaluate every situation through our SRC, then we are ethnocentric. The ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market. If western marketers are not aware, they may evaluate a marketing mix on Western experiences without fully appreciating the culture differences requiring adaptation. In international marketing, relying on one’s SRC can produce an inadequately adapted marketing programme that ends in failure.
We will have to aware that not every activity within a marketing programme is different from one country to another: there are probably more similarities than differences. Such similarities may lull the market into a false sense of apparent sameness. This apparent sameness, coupled with our SRC and ethnocentrism, is often the cause of international marketing problems. Undetected similarities do not cause problems; however, the one difference that goes undetected can create a marketing failure. To avoid this, we need to conduct a cross cultural analysis of each situation and isolate the SRC influence that induces us to be ethnocentric. Cross cultural classification approaches tend to be either mere list or incredibly theoretical complex structures (Triandis 1989). There is a recognised lack of a universal broadly generalisable framework within which to visualise national cultures. Consequently, the work of Hofstede (1984, 1994) and Hall Hall (1987) are seen as holding the maximum potential for providing methods for cross- cultural analysis.
Hall and Hall’s (1987) main thesis was that one culture will be different from another r if it understands and communicates in different ways. Hall classified cultures into what he preferred to as ‘low context cultures’ and ‘high context cultures’.
** Low context cultures rely on spoken and written language for meaning. Senders of messages encode their message expecting that the receivers will accurately decode the words used to gain a good understanding of the intended message.
** High context cultures use and interpret more of the elements surrounding the message to develop their understanding of the message. In high context cultures the social importance, knowledge of the person and the social setting and extra information will be perceived by the messages receivers.
Source: International Marketing Strategy by Isobel & Robin Lowe P79
B)
MARKET SEGMENTATION
Market segmentation means breaking down the total market into self-contained and relatively homogeneous subgroups of consumers, each possessing its own special requirements and characteristics. This enables the company to modify its output, advertising messages and promotional methods to correspond to the needs of particular segments. Accurate segmentation allows the firm to pinpoint selling opportunities and to tailor its marketing activities to satisfy consumer needs.
Source:
http://books.google.co.uk/books?id=q58kPJgifT8C&pg=RA1-PA190&lpg=RA1-PA190&dq=definition+of+international+Marketing+Segmentation&source=bl&ots=_T2Qb7nj1T&sig=TVAfqBKbf9QDKmURUWvz2YW8bQs&hl=en&ei=khbdStyfPMSMjAfD5JFc&sa=X&oi=book_result&ct=result&resnum=10&ved=0CDQQ6AEwCQ#v=onepage&q=definition%20of%20international%20Marketing%20Segmentation&f=false
While market segmentation can be done in many ways, depending on how we want to slice up the pie, three of the most common types are:
Geographic segmentation – based on location such as home addresses;
Demographic segmentation – based on measurable statistics, such as age or income;
Psychographic segmentation – based on lifestyle preferences, such as being urban dwellers or pet lovers.
In another way we can say, market definition leads into issues of market segmentation. Segmentation means breaking down the market for a particular product or service into segments of customers that differ in terms of their response to marketing strategies. It means breaking down the total market into self-contained and relatively homogeneous subgroups of consumers, each possessing its own special requirements and characteristics. For example, on the basis of language, there are French, German and Italian-based segments in Switzerland.
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Different orientations that evolve in a company as its moves through different phases of international marketing involvement- from casual casual exporting to global marketing- is the often quoted EPRG schema. Orientation to international marketing is illustrated by the domestic company seeking sales extension of its domestic products into foreign markets. Domestic business is its priority and foreign sales are seen as a profitable extension of domestic operations. This domestic market extension strategy can be very profitable; large and small exporting companies approach international marketing from this perspective. Sporadic export of cheese to Germany and Belgium by some Dutch dairy producers is an example of this concept. Firms with this marketing approach are classified as ethnocentric in the EPRG schema. The world as a whole is viewed as the market and the firm develops a global marketing strategy, although pricing, advertising or distribution channels may differ in different markets. The development and marketing of the Sony Walkman or Play Station are good examples of a global marketing orientation. The global marketing company would fit the regiocentric classifications of the EPRG schema.
Once a recognises the importance of differences in overseas markets and the importance of offshore business to the organisation, its orientation towards international business may shift to a multidomestic strategy. A company guided by this concept has a strong sense that country market s is vastly different and that market success requires an almost independent programme for each country. Firms with this orientation on a country-by- country basis, with separate marketing strategies for each country. A company with this concept does not look for similarity among elements of the marketing mix that might respond to standardisation; rather, it aims for adaption to local country markets. Control is typically decentralised to reflect the belief that the uniqueness of each market requires local marketing include and control. Production and sale of detergent and soaps by Uniliver, all over the world, is a typical example of this concept. Firms with this orientation would be classified in the EPRG schema as polycentric. Although the world has not become a homogeneous market, there is strong evidence of identifiable groups of consumers (segments) across country borders with similar purchasing power, needs and behaviour patterns.
SUB CULTURE OR CROSS-CULTURAL ISSUES
Cross-cultural marketing is defined as the strategic process of marketing among consumers whose culture differs from that of the marketer’s own culture at least in one of the fundamental cultural aspects, such as language, religion, social norms and values, education, and the living style. Cross-cultural marketing demands marketers to be aware of and sensitive to the cultural differences; to respect the right to culture by the consumers in various cultures and marketplaces, marketers should understand that they deserved the right to their cultures. If the marketers want to be the winners in the cross-cultural marketing they must create the marketing mix that meets the consumer’s values on a right to their culture.
Within which they take place. Therefore, in order to match the marketing mix with consumer preferences, purchasing behaviour, and product-use patterns in a potential market, marketers must have a thorough understanding of the cultural environment of that market, i.e., marketing cross-culturally. However, this is by no means to suggest that in the 21st century all marketers should focus on cultural differences only to adjust marketing programs to make them accepted by the consumers in various markets. In contrast, it is suggested that successful marketers should also seek out cultural similarities, in order to identify opportunities to implement a modified standardized marketing mix. To be able to skilfully manipulate these similarities and differences in the worldwide marketplaces is one of the most important marketing strategies for businesses in the 21st Century.
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.
Source: http://www.studyoverseas.com/america/usaed/crosscultural.htm
In sociology, anthropology and cultural studies, a subculture is a group of people with a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong. If a particular subculture is characterized by a systematic opposition to the dominant culture, it may be described as a counterculture. In 1995, Sarah Thornton, drawing on Pierre Bourdieu, described “sub cultural capital” as the cultural knowledge and commodities acquired by members of a subculture, raising their status and helping differentiate themselves from members of other groups. Ken Gelder argued in 2007 that subcultures are social, with their own shared conventions, values and rituals, but they can also seem “immersed” or self-absorbed; a feature that distinguishes them from countercultures. Gelder identified six key ways in which subcultures can be understood:
Through their often negative relations to work (as ‘idle’, ‘parasitic’, at play or at leisure, etc.);
through their negative or ambivalent relation to class (since subcultures are not ‘class-conscious’ and don’t conform to traditional class definitions);
through their association with territory (the ‘street’, the ‘hood, the club, etc.), rather than property;
through their movement out of the home and into non-domestic forms of belonging (i.e. social groups other than the family);
through their stylistic ties to excess and exaggeration (with some exceptions);
Through their refusal of the banalities of ordinary life and massification.
Subcultures can be distinctive because of the age, ethnicity, class, location, and/or gender of the members. The qualities that determine a subculture as distinct may be linguistic, aesthetic, religious, political, sexual, geographical or a combination of factors. Subcultures have been chronicled by others for a long time, documented, analyzed, classified, rationalized, monitored, and scrutinized. In some cases, subcultures have been legislated against, their activities regulated or curtailed.
Source: http://en.wikipedia.org/wiki/Subculture#Identifying_subcultures
Most cross-cultural studies on country of origin or product-country image (PCI) effects have implicitly assumed that national markets are composed of homogeneous consumers. Although many investigations in this field are described as cross-cultural, most are in fact cross-national. The overarching hypothesis of the present research is that PCI effects may vary across subcultures within a country. The results indicate that sub cultural differences exist in the evaluation of culturally affiliated countries and their products. Cognitive responses converged to show that consumers’ perceived linkages significantly influence the weight given to the country of origin in product evaluations.
Impact of culture on International Marketing
Culture is the totality of our life style & personality. At a glance is can be said that, culture is that what we are i.e. our way of dressings, specking, eating, thinking, learning, attitude, believes, values, norms etc all included in our culture. International marketing is the marketing activities of a company outside their country of origin.
Culture has a great impact on international marketing. A marketer must have to study about the local culture in-depth before offering a product to them. Because of every marketing promotion has done to promote the product i.e. communicating product feature to the customers and influence customers to buy it.
To have an effective communication one must send the message according to the receiver’s culture, customs and learning process. There are some major barriers by which effective communication can be hampered. Self Reference Criterion (SRC) and Ethnocentrism can make the effort worthless.
Here we can draw an example how SRC can make all effort worthless. As we know that Disney land is a name of success in the amusement park business around the globe. But when they have started their journey in France they faced a tremendous problem and fall in billion Dollar loss.
In USA, Hong Kong, Singapore, and Japan they earned a great amount of profit. But why they failed in France? Disney management started a study and find out that self Reference Criteria of American managers make the French people hart. As a result they do not used to be here in Parish Disney Park.
Not only in France out of every ten US managers eight have to replace from Saudi Arabia within three month of their joining. It is because they fail to cope with the Saudi culture and customs.
It is human nature that, everything want to judge according to self learning process and Cultural measurement. But a single thing can have different meaning in different culture. For example showing thumb carries the signal of all right to the western but it carries a serious negative meaning to the Bengali rural people.
For this reason a marketer in international market must have to convert his all thinking into the culture of the local people. Sometime marketer fails to make this conversion successfully as a result they fail to have local people attention and make huge loss.
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