Marketing in a multi-cultural market: challenges and ethical issues

Author: Iloka Benneth Chiemelie
Published: 16/12/2013

1.      Introduction

The main purpose of this project is to address five ethical issues that have been identified with respect to multicultural market. By combining a  number of research articles, existing academic literatures and the views of the author, each of these issues are critically review with real-life applications and examples in bid to propose solutions on the best practices that companies can adopt in order to address these issues. Additionally, the research also looked into the ethical implications of marketing in multicultural environment as they relate to the five issues identified.

Marketing is an important business tool for firms because it is the medium through which needed opportunity are created to communicate, promote and sell their products and services to customers. Traditionally, marketing concepts have been based on one-way mass communication but this this changing into a two-dimensional communication in which messages are tailored for customers individually in order to make the marketing process more effective (Rust et al., 2010). As such, many companies have now acknowledged the understanding that challenges exist when marketing across borders due to the differences in culture (which influences differences in attitude of the market, needs and the opportunities that companies can expect). Literatures have criticized marketing concepts as originating from the western world and limiting the ability of companies to understand that new marketing environments exist when internationalizing (Slater & Yani-­‐de-­‐Soriano, 2010; D’Andrea Et al, 2010). Thus, this research will focus mainly on understanding how MNEs function in new market.

The five issues that will form the bedrock of this research are: 1) shifting in markets, 2), globalization, localization or glocalization?, 3) international branding, 4)  consumer behaviour, and 5) communication across cultures.

2.      Challenges with marketing to a multicultural market

This section will focus on addressing the issues identified as it related to management of marketing activities in multi-cultural market. Each of the issue will be analysed with real-world applications, and solutions for best practices for these issues will also be provided.

2.1.The shift in Market: from developed market to developing market

The suggestions made by Bisson et al (2010) is that developing markets contribute to additional 70 million people being added to the middle class section and this is a clear representation of huge growth as well as opportunities for companies that wish to expand into this market and leverage the losses accumulated as a result of financial difficulties that bewilder the developed market. In any case, recent discoveries have highlighted that MNEs have in some cases failed to understand the differences existing between their developed markets and this developing markets as some of them have offered baseball bats to football loving Argentines and gardening tools to Latin American’s without yarded neighbourhood  (D’Andrea et al, 2010, p:115). As such, it can be seen that challenges exist in terms of how MNEs can effectively market their products to these developing market that is represented by a huge differences in culture and ethical background (Bisson et al, 2010).

Studies conducted in developing markets (D’Andrea et al, 2010; Atsmon et al, 2010.) have shown that consumers from this market prefer to buy offerings with low price and acceptable level of quality. Generally, they are aware of prices of goods and are not willing to pay higher. Also, they tend to save for the aspirational category of goods while omitting the middle categories; thus companies that focus on the middle categories fail to take the opportunity to offer their products this market. Consumers are not generally aware of products and this creates challenges when it comes to sales. Another issue is packaging as these consumers normally but their products fresh from outdoor markets, and can also prefer to handle products before trying them. Another issue is the evolution and growth of these markets as the formerly rural areas are now urbanized (47% of Chinese and 75% of Brazilians now live in cities) and it has influence on the needs of consumers as well as their financial resources.

D’Andrea et al (2010) suggested that the solution to this is by targeting both the low-end and high-end customers in order to ensure competitiveness. For instance, Magazine Luiza is a Brazilian appliance store and it trains its workforce on expertise, which this workforce will later transfer to the market via demonstrations and it will result to a subsequent increase in demand of their products. Some companies (such as Sanlu milk in China) have had issue to handle on terms of quality delivery and extra information is the right tool for reassuring customers of quality delivery.

2.2.Globalization, localization or glocalization?

When internationalizing, companies are also faced with the issue of whether to make their offerings available as they are, to localize them or to choose the alternative of glocalziing it. In any case, quality is more assured via globalized product offerings but differences in culture yield subsequent differences in demand and it makes globalization of products almost impossible. Ooshuizen (2004, p:61.) made known that there is a need to consider global marketing in order to ensure that the cultural values of these markets are reflected in the offerings of the company; a term that is commonly known as “think global, act local.”

Brands such as McDonald’s and KFC have exemplified this strategy based on the understand that food is a global product that people wants to eat, and they also want to enjoy convenience as well as satisfy their utilitarian needs  (Merz et al, 2008). In any case, these brands offer differing products across these markets in relation to variations across cultures and natural differences in terms of preference. Vignali (2001, p:99.) also made known that McDonald’s have standardized products across its markets such as the “Big Mac”,  that tastes the same across these markets and it is designed to ensure economies of scale. However, other products are based on the obtainable tastes and cuisines of the respective markets such as Pork Burger in China and Vegetarian Burger in India.

Merz et al (2008) made known that the solution for this problem is that companies needs to understand how their offerings are translated in their new markets as well as understand the needs of the new market. In cases where the offerings are translated with the same value, it can led to globalization of the product and understanding the needs of the local market will also ensure new products offerings that meet such needs. As such, companies can be competitive by serving the market both locally and globally.

2.3.Challenges with international brands

Branding is something that is created in a polycentric world and as such it is very difficult to control in mode cases (Cayla & Arnould, 2008, p: 97). This is because language differences means that similarities can exist with different (and sometimes negative) meanings. Thus, marketing the same brand across different markets might have positive meaning in one market and associated negative meaning in another market.

In order to gain personalities for themselves, numerous companies now have shifted the focus of their branding strategy away from just their products and services. For instance, while Xerox is defining itself as making copying equipment, they also market their brands as helping improve efficiency in offices (Kotler & Keller, 2009, p:83). P&G is also another company that has attempted to solve this issue as the brand has now established an identity of not just solving household problems but producing household goods (Mead &Andrews, 2009, p:378).

Cayla and Arnould (2008) made the suggestion that western ideology of branding needs to be revised and companies now need to focus on aligning their brands together with the cultural values of their markets. Thus, companies should create a sense of associated personality with their brands in the different markets and this personality will then be used to position the brand in these markets.

2.4.Changes in consumer behaviour

Current marketing researches have defined consumer behaviour in line with certain acceptable norms (Kotler & Keller, 2009). For instance, the hofstede’s model defined cultures in the dimensions of power distance, individualism-vs-communism, feminism-vs-masculinity, long-term orientation, and uncertainty avoidance. However, increased globalization has led to a common standard in terms of consumers’ order and the effect is an experienced change in the cultural value.

For instance, the success of Starbucks in China has been credited to the company’s positioning of Starbucks as a getaway from the communism experienced in homes and stress of job to a whole new place where the consumers can be alone and relax (Plog, 2005). Additionally, McDonald’s decision not to sell alcohol in China offers an idea of equality by removing the distance between women and men in China as more Chinese women visit their restaurant than in order places where alcohol are made available (Eckhardt & Houston, 2002, p:79).

Slater and Yani-­‐de-­‐Soriano (2010) made known that this issue is because of the generalization of the globe market by western views. As such, the recommendation is that companies need to conduct researches in their respective markets to understand the current trends and changes and then align their offerings in line with these trends and changes.

2.5.Challenges of communication across cultures

Communication is one of the promotional mix that require high attention across markets with different cultures (Kotler & Keller, 2009, p: 650). The challenge here is as to how companies can make their message in foreign market as effective as it is in their local market, while also allowing for differences under strict guidelines by creating pools of ads that managers can select in the process.

As such, the company needs to understand local and traditional taboos in order to ensure that their communication activities don’t come against such values. Another challenge is to understand the right medium for communication as it will determine the message reach. For instance, research has shown that irrespective of the high volume of internet users in China, Chinese consumers will not consider any brand they see advertised in the internet if they have not seen that particular brand on TVs before (Atsmon et al, 2010).

The challenges of communication is as a result of flaws in marketing mix and the company needs to understand its market in order to design the right mix that will reflect both the cultural values of the country and the corporate objectives. This is the solution to the communication issue.

3.      Ethical implications

While the above issues have been discussed and possible solutions provided, there is also the need to understand the ethical implications in consideration with the fact that differences in culture also influences definition of ethics.

MNEs such as Wal-Mart and Tesco can wield high influence on the consumers and as such there is a need to protect the uninformed consumers in the developing market. This should be done with regulated marketing principles that defines what is obtainable in the developing market and reduce the influence of misleading information on purchase.

The presence of MNEs has also been characterized with attitudes towards vulnerable customers. As an example, KFC and McDonald’s have been blamed for rise in obesity within the Chinese market (Li et al, 2000). Therefore, it is important that the MNEs display their nutritious information in order to protect these consumers.

Issue of branding and communication is also unethical in some cases as performed by MNEs such as using stereotyping and misuse of cultural elements that can be offensive in advertisement (Burgos, 2008). Thus, MNEs need to be ethical by ensuring that their advertisements are not done in such way.

Market research also represents another area where ethics need to be addressed. This is because such studies exposes the sensitive information about the consumers and make them defenceless against these MNEs (Ashworth & Free, 2006). Thus, they need to be ethical when it comes to this area and ensure that such researches are not conducted.

4.      Conclusion

In conclusion, the research has broadened the areas of multicultural marketing and the understanding is that MNEs face a number of issues with respect to such business activities. However, these issues arise as a result of differences in culture and it is important that companies take cultural perspective into consideration when designing their marketing activities in order to ensure that such issues are mitigated. Additionally, MNEs need to be ethical and ensure that they don’t haunt vulnerable consumers and the government has a role to play in this aspect by defining marketing principles that guide marketing in their country.

5.      References

Ashworth, L. & Free, C. (2006) Marketing Dataveillance and Digital Privacy: Using Theories of Justice to Understand Consumers Online Privacy Concerns’, Journal of Business Ethics, 67, p:107--‐123.

Atsmon, Y. (2010) ‘China’s new pragmatic consumers’, McKinsey Quarterly, October, p:1--‐13.

Bisson, P, Kirkland, R., & Stephenson, E. (2010) ‘The great rebalancing’, McKinsey Quarterly, June, p:1--‐7.

Burgos, D. (2008) ‘Use and Abuse of Cultural Elements in Multicultural Advertising’, Journal of Advertising Research, June, p:117--‐118.

Cayla, J. & Arnould, E. J. (2008) ‘A Cultural Approach to Branding in the Global Marketplace’, Journa of International Marketing, 16, (4), p: 86–112.

D’Andrea, G. Marcotte, D. & Dixon--‐Morrison, G. (2010) ‘Let the Emerging Market Be Your Teachers’ Harvard Business Review, December, p:115--‐120.

Eckhardt, G. M. & Houston, M J (2002) ‘Cultural Paradoxes Reflected in Brand Meaning: McDonald's in Shanghai, China’, Journal of International Marketing, 10 (2), p:68-­‐82.

Kotler, P. And Keller, K.L. (2009) Marketing Management 13th ed. Upper Saddle River, NJ: Pearson Education.

Li, Y. Zhai, F. Yang, X., Schouten E. G., Hu, X. He, Y. Luan, D. And Ma, G. (2007) ‘Determinants of childhood overweight and obesity in China’, British Journal of Nutrition, 97, p:210–215.

Mead, R. & Andrews, T. (2009) International Management 4th ed: Chichester England: John Wiley & Sons.

Merz, M. A., He, Y. & Alden, D. L. (2008) ‘A categorization approach analyzing the global.

Oosthuizen, T. (2004) ‘In Marketing Across Cultures: Are You Enlightening The World or Are You Speaking In Tongues’, Design Issues, 20 (2), p:61--‐72.

Plog,S.(2005)‘Starbucks: More than a Cup Coffee’,Cornell Hotel and Restaurant Administration Quarterly, 46 (2) p:284-­‐287.

Rust R.T., Boorman, C. & Bhalla, G. (2010) ‘Rethinking Marketing’ Harvard Business Review, January, 88 (1), p:94--‐101.

Slater, S. & Yani--‐de--‐Soriano (2010) ‘Researching consumers In multicultural societies: Emerging methodological ssues’, Journal Of Marketing Management, 26 (11–12), p:1143– 1160.

Vignali, C. (2001) ‘McDonald's: “think global, act local'' -­‐ the marketing mix’, British Food Journal, 10 (2) p: 97-­‐111.