The Global Marketing Environment

Social and Cultural Environment

When marketing products overseas, it's important to be aware of cultural differences. Cultural environments are influenced by religious, family, educational, and social systems within the marketing system. Marketers need to be sensitive to foreign cultures in order to avoid failure in implementing marketing programs. It's not as easy as it sounds because different features of a culture can create an illusion of similarity. Even a shared language doesn't guarantee the same interpretation. For example, in the U.S. we purchase "cans" of various grocery products, while the British purchase "tins."

Here are a few cultural differences that may cause marketers problems when attempting to market their products overseas.

Illustrations of Cultural Differences Around the World

Please read several differences between cultures around the world below:

Maxwell House advertised itself as the “Great American Coffee” in Germany. It found out that Germans have little respect for American coffee.
General Motors' “Body by Fisher” slogan became “Corpse by Fisher” when translated into Japanese.
In German, “Let Hertz put you in the driver’s seat” means “Let Hertz make you a chauffeur.”
In Hong Kong, Korea, and Taiwan, Triangular shapes have a negative connotation.
In Quebec, a canned fish manufacturer tried to promote a product by showing a woman dressed in shorts, golfing with her husband, and planning to serve canned fish for dinner. These activities violated cultural norms.
If you offer a compliment to a Chinese-speaking person, he or she will decline it, because disagreeing is the polite way to accept praise.
Do not say ‘Merci” (thanks) to a French person’s compliment. You might be misinterpreted as making fun.
Italians wave goodbye as Americans beckon someone with palm up and fingers moving back and forth; but in Asia, waving with the palm down is not interpreted as goodbye, but rather, “come here.’
Offering gifts when you visit a home is expected in Japan, but in the Soviet Union, it may be considered a bribe.
In Ireland, the evening meal is called tea, not dinner.
In Asia, when a person bows to you, bow your head forward equal or lower than theirs.
A nod means “no” in Bulgaria and shaking the head side-to-side means “yes.”
Red is a positive color in Denmark but represents witchcraft and death in many African countries.
Americans usually smile as they shake hands some Germans consider smiles overly familiar for new business acquaintances. Americans should not say “Wei Gehts?” (How goes it?); It is also too much information for first meetings.
The number 7 is considered bad luck in Kenya, good luck in the Czech Republic, and has magical connotations in Benin.
Pepsodent toothpaste was unsuccessful in Southeast Asia because it promised white teeth to a culture where black or yellow teeth are symbols of prestige.
In Brazil and Portugal business people like to entertain foreigners in their homes. When it is time to go, the host may feel constrained to insist that the foreigner stay. Foreigners should politely take their leave.

Political and Regulatory Environment

Political stability, trade blocs, tariffs, and expropriation are important factors to consider before expanding into foreign markets.

Business activity tends to thrive in politically stable nations. US companies generate a significant portion of their revenues from selling products in foreign markets, particularly in Asia and Latin America. The United States-Mexico-Canada Agreement (USMCA) has further facilitated export sales by reducing tariffs and enabling companies to offer goods at more competitive prices.
The establishment of the single European market in 1992 was anticipated to have a global impact on marketing. It created a market larger than the United States and introduced the Euro as the common currency for member nations, replacing their individual currencies.
Most nations encourage free trade and foreign investment, while also supporting domestic firms' overseas business activities. However, some governments, particularly in Communist nations, oppose free trade openly.
Multinational firms face the risk of expropriation, which exposes them to the changing laws and potential instability of foreign governments.

Trade Barriers

Tariff - a tax on imports.
Quota - limits either the quantity or the monetary value of a product that may be imported. These help local businesses compete with foreign companies.
Embargo - is a total ban on specific goods entering and leaving a country. An embargo can be imposed for different reasons, like poisoned goods, defective goods, or political reasons.
Protectionism - a government's establishment of economic policies that systematically restrict imports to protect domestic industries. It is the opposite of free trade.

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