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Advertising In Contemporary Society - Semester 5 project

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ADVERTISING IN CONTEMPORARY SOCIETY



























Advertising

Semester V

Subject : Advertising in contemporary society

Paper-I

Syllabus

1. Advertising in the Indian economy(10 lectures)
• Role of advertising in the Indian economy
• Liberalization and the resultant changes in buying patterns.
• Impact of global competition in the field of advertising.
• Present day economic issues & Policies & their effects on advertising

2. Advertising and culture(10 lectures)
• Role of advertising in bringing about changes in culture, customs and traditions.
• The interdependent nature of advertising and popular culture (i.e., fashion, music, films, slang).
• Effects of globalization on the Indian advertising
• The impact of advertising on commercialization of culture
• Making messages culture-specific
• Cross cultural psychological segmentation
• Need and benefits of for assimilation of universal ideas with local flavour.
• Cross-cultural Advertising

3. Advertising and the audience(6 lectures)
• Market power
• Marketer’s control on the media
• Impact of advertising on attitudes, behaviour, societal norms, perception, needs, lifestyles
• Controversial advertising discuss with the help of current examples
• Social implications of advertising
• Gender, diversity issues, Generational issues-children, youth, elders
• Growing influence of advertising and its criticism



4. Global advertising (16 lectures)
• The scope and challenges of International advertising
• Current global trends
• Multinational competition and its impact
• Product packaging for international markets
• Promotion for international markets

5. Internet marketing (6 lectures)
• WWW as an advertising tool

6. Social marketing (2 lectures)
• What is social marketing?
• Need for and objectives of social marketing
• Tools and components of social marketing

Books list
1. Philip R Cateora and John L. Graham, International marketing-Irwin McGraw Hill 1999
2. D.Lamont Handbook of global marketing-Identify books2000
3. William F arens and Courtland L Bovee, Contemporary advertising-Irwin 1994
4. Philip Kotler and Eduardo L Roberto, Social marketing-strategies for changing public behaviour-The free press-1989
5. Paul Timmers, Electronic commerce – strategies and models for business to business trading-John Wiley and sons 1999
6. Dave Chaffey, Richard Mayer, Kevin Johnston and Fiona Ellis Chadwick, Internet marketing –Financial times-Prentice Hall
7. Mica Nava, Andrew Blake, Iain Macrury and Barry Richards, Buy this book-Studies in advertising and consumption-Routledge 1997
8. Jib Fowles, Advertising and Popular Culture. –Sage Publications 1996
9. Mary Cross, Advertising and Culture-Prentice Hall 2001
10. Elioise Coupey, Marketing and the internet-Prentice Hall 2001
11. Roxanne Hovland and Gary B. Wilcox Lincolnwood Advertising in Society : Classic and Contemporary Readings on Advertising’s Role in Society, NTC Business Books. 1989.
12. Neil Barrett, Getting your message across the World Wide Web
13. Advertising in Contemporary Society by Kim B Rotzoll, James E Haefner, University of Illinois Press 1994.


























THE NEW ECONOMIC POLICIES

The new economic policies were on two levels;
1 Liberalisation measures which was again under
two sections,
New Industrial Policy and New Trade Policy.
2. Macroeconomic reforms and structural
adjustments

I LIBERALISATION MEASURES

1.. New Industrial Policy (.NIP)
Under the New Industrial Policy there was;
a. Liberalisation of industrial licensing which resulted in
-delicensing
-decontrol
-deregulation
-broad banding
-abolition of registration
b. FERA liberalisation. The Foreign Exchange Regulation Act
liberalised foreign
investments and technology import
c. MRTP liberalisation The Monopolies Restrictive Trade
Practices was removed
and threshold asset limit was abolished and clearance for
expansions, mergers
were not needed
d. curtailment of public sector. Several industries hitherto reserved
for public
sector opened up to the private sector. Only eight core industries
remain reserved for the public sector

2. New Trade Policy (NTP)
Under this policy there were seven reforms as follows;;
a. lowering of import tariffs
b...import licences were abolished
c. the exim regime was more open
d. the rupee was made convertible
e. exports were encouraged
f. India’s economy was to be integrated with global economy






MACROECONOMIC REFORMS AND STRUCTURAL ADJUSTMENTS


1 Macroeconomic reforms under which there were three types of
reforms:
a. fiscal and monetary reforms which included
-reduction of fiscal deficits
-reform of tax systems
-interest rate reforms
-inflation control
b. banking sector reforms included the following
-banks to operate as commercial institutions
-priority sector lending to be phased out
-deposit interest rates deregulation
-operational freedom in lending rates
-norms on capital adequacy to be kept up
-disinvestment in public sector banks
-permission for new private sector banks

c. capital market reforms were;
-abolition of CCI (controller of capital issues)
-strengthening of SEBI (securities and exchange board of India;
-opening of Indian capital markets of FII (foreign institutional
investors)
-allowing foreign brokers in Indian capital markets
-private sectors allowed into mutual funds
-allowing Indian firms to raise capital abroad

2. Structural adjustments were
a. market driven price and dismantling of price controls
-phasing out of subsidies
-dismantling price controls
-abolishing fertiliser, sugar, export and petro-product subsidy
-partial decontrol & parallel marketing of kerosene and LPG
- steel price decontrol
b public sector restructuring and disinvestment
-no new public sector units or expansion with government
equity
-budgetary support for PSU to be phased out
-disinvestment of government equity in PSUs
c. exit policy
-support to VRS
-creation of NRF





Effect of policy changes/liberalisation on the Economy

-The protection enjoyed by existing company disappears. New companies could enter any given industry and get a market share. The existing companies had to compete for their share.
-The concept of minimum economic size was shaken. Many existing companies became uneconomic. Companies earlier had to conform to the licence given and the size had to be as per the licence. Licence for larger capacity was normally not given. Now ‘going big’ became the order of the day. Economic size now meant international size. Companies that could not become ‘big’ either sold to the bigger firms or merged with others HLL tookover Tomco and many other mergers, acquisitions took place.
-The industry structure also changed with the entry of multinationals. With their high investment capacity and technology clout, the multinationals are altering the structure in almost all the industries they are entering. Eg in the refrigerator industry there were only four players. Today we have Whirlpool, Samsung, Daewoo LG Siemens-Bosch and many more. The new entrants altered the structure of the industry, market size, market shares, differentiation, brand positions and the nature of competition
-The entry of multinationals also resulted in brand war in which the multinationals are squeezing out the ‘desi’ brands. It means a grossly unequal battle for Indian brands
The MNCs brought in superior technologies and more modern products. They brought in their global brands to the Indian market along with their full marketing and management might.
The opening up of exports also became available through the parent company’s expertise and connections.
The power structure in Jointstock Ventures are in favour of the multinational due to their majority stake. The Indian company has to surrender and also forego their managerial autonomy.
The MNC brands have affected the Indian brands in several ways
Loss of volumes and market share
Squeeze on profit margin
Need to allocate more funds beyond the capacity of the Indian firm
Losing the race finally to the foreign brand
It is overall an unequal battle between players of unequal strength as Indian firms are weak in four areas,
Lack of technology clout
Capital inadequacy
Lack of economy of scale
Lack of product clout and brand po







The role of advertising
Establishing a brand image in emerging markets is an important strategy.
Intense competition and increasing sophistication has led to a need for more sophistication in advertising strategies. Advertisers have to function at the highest creative level. Of course boundaries are placed on creativity by legal, language, culture, media, product and cost limitations. Sales promotion efforts are used to supplement advertising and personal selling.; This is to stimulate consumer purchases and improve retailer effectiveness and co-operation
Local ad agencies have expanded as the demand for advertising services by MNCs have grown
Liberalisation policies of the Indian government have resulted in changes in life styles, changes in needs and wants of consumers. The bargaining power of consumers, of suppliers, threat of new entrants with substitute products and ‘jockeying’ among players in the market can be witnessed today. Breaking up of market segments , products and brand launches, niche marketing and positioning are some of the strategies widely used by Indian advertisers.

The rural market has opened up new vistas for advertisers selling consumer products. Tetra packs, sachets, synthetic bottles have had a revolutionary impact on packaging aspects , leisure and luxury products have thrown open new markets. ( health, beauty parlours, credit cards etc.) Brands are vying with one another to obtain a favourable perception of consumers. Advertisers are trying to create brand personalities entity which consumers can emotionally associate themselves. Advertisers are depicting products with new psychological perspectives, wrist watches, designer wear, two wheelers, chocolates and now the Nano, are being given a symbolic orientation by advertisers.

The social benefits of the increased advertising are;
The increase in employment which in turn generated income and results in the per capita income.
More product innovation take place. Society is better informed and has a wider and wiser choice. The awareness level increases. Social activists instil a civic sense and competition ensures better quality products. This leads to higher standard of living.
Advertising supports 60% of media costs

It can be concluded the effects of advertising upon society, come in mixed forms, depending on the purpose and execution of various campaigns. However, society as we know it is based very heavily upon advertising, and the negative social and economic impact are not serious enough to outweigh the many positive social and economic effects on our society. No one can predict what new forms advertising will take in the future. However the rapidly increasing cost of acquiring new customers makes one thing certain. Advertisers will seek to hold onto the current customers by forming closer relationships with them and by tailoring products, services and advertising messages to meet their individual needs. So while advertising will continue to encourage people to consume, it will also help provide them with products and services which are more likely to satisfy their needs.

The field of advertising contributes different benefits to different fields of activities and to different segments of the market,
To consumers ads provide basic communication to inform them about products. Ads motivate consumers by various appeals.
The welfare role of ads is also important
Ads generate an increase of sales, help build brands, enhance the institutional image
and help the growth of the economy
The social responsibility of advertising has increased.
It sustains the media.
The role of advertising can broadly said to be
-distribution role
-employer role
-life style enhancing role
-consumer choice provider role
-consumer welfare role
-price reducer role through increase in demand and providing economies of scale


The role of advertising in the Indian Economy
More of the people from the richest to the poor will participate in the world’s wealth through global trading.
The emerging global economy will bring us into world wide competition with significant advantages for both marketers and consumers.
With satellite communications and global companies consumers are demanding an ever expanding variety of goods.
Indian economy had been constrained and shaped by policies of import substitution and an aversion to free trader. Real competition was eliminated through import ban and prohibitive tariffs an foreign competition. Industry was so completely regarded that those with proper license would count on a specific share of the market.
Now however times have changed and India has embarked on a transformation
Indian economy grew dramatically and is among the Big Emerging Markets. It has a large middle class about more than 300 million (the size of USA). Among them are college graduates, 40% with degree in science and engineering. India has a diverse industrial base and is developing as a center for computer software. These advantages give India’s reform programmes enormous potential.
India has a weak infrastructure but the Indian government plans to address these deficiencies.
The private sector has been allowed entry into power generation, oil and gas exploration, telecommunication and civil aviation.
An estimate 100 to 300 million Indian posses sufficient disposable income to form an expanding consumer class
As India is developing, incomes change, expectations for a better life adjust to higher standards and social capital investments are made, market behaviour changes and eventually groups of consumers with common tastes and needs arise
With the rise of incomes, new demand is generated at all income levels for everything from soap to automobiles. The poorest slums in Kolkata are home to 1,00,000 TVS and video facilities
More household money goes for food in emerging markets than in developed markets then the next category of expenditure is for appliances and other durables.


Changes in Lifestyle and Buying Habits

There are significant changes in lifestyles and buying habits of Indian consumers. Convenience foods and ready-to-eat foods are now popular. Modern gadgets have gained entry into most homes. Teenagers are also becoming influencers of change in their family’s buying patterns. The average Indian is now spending money more liberally than before.
The middle class constitutes the largest segment of consumers for manufactured goods in the country. A virtual explosion has been taking place in the Indian middle class. It is now placed at around 300 million people. It is now emerging as the ‘consumption community’ of the country. They are better educated and exposed to global lifestyles, and their aspirations are constantly growing and their spending is steadily on the increase.
This change is not confined to the metros and other big cities. There is now product penetration even in smaller towns. Even in rural areas penetration is reasonably good;
The top end of the middle class is now aspiring for a second car, a second TV and a second refrigerator.
Consumer credit is gaining ground. On the whole the Indian consumer is in the grip of big change.
The well -off segments are becoming more cosmopolitan inj work-culture, food habits, entertainment and lifestyle in general. A fusion of the east and west seems to be taking place. The internationalisation of the upper middle class society is on.
The Indian middle class has long been a security seeking class. This class has been moving towards more material comforts,
The change in the dress habits is a new trend. There is a shift from the tailor-stitched garments to ready-mades and that too branded ones. Travel is now becoming very popular. People are now travelling to see places and for relaxation and not just to see relatives.
The middle class has become status conscious or prestige conscious. The changing fashion of college going children are on the rise.
The middle class woman is no longer confined to the four walls of the kitchen. She is now educated and also employed, she is the image builder. The new found purchasing power has fuelled the demand for cosmetics, toiletries, packaged foods and beverages.
Consumers are now quality conscious as well as cost conscious
The middle class also seeks leisure. Time saving devices are popular.
Sense of grooming is a strong motive force behind several purchases
The younger generation is fast becoming more international in style. They are more modern and adventurous than their elders and are quick in adapting to fashions.

The new middle class is
-confident, full of energy and drive and is making things happen
- the centre of the socio-economic upheaval now taking place
-the fastest growing segment in the Indian society
-street smart, pragmatic, non-ideological, and result oriented
-demonstrating that there is a way up from the bottom to the top
-is seizing key slots in the global information and media industries
-open to a lot of opportunities


Present day Economic Issues & Policies & their effects on Advertising


The present day economic policies changed from a regime of quantitative restriction to a more open price based market force determined system.
The three pillars of the economic policy are;
-liberalisation
-privatisation
-globalisation
The entry of multinationals have come with new technology and market practices that lay more emphasize on advertising as an important tool
As entrants increase, products and competition also increase and thus demand for advertising increased
After the entry of cable television India has seen a blast of channels. The numbers of newspapers and magazines have also increased. Now there are new wayus of reaching the consumer. Due to the media explosion, there is accfess to foreign channels. Through these viewers are exposed to a ‘materialistic western culture’ new products are and features are noticed in these programmes and that creates awareness and need to by the product.
Dressing habits have changed, new trends are set in everyday life.
All these small cultural changes are also the result of advertising. Advertising creates brands, association and draws aspirers into the western culture of material culture of material possessions

Privatisation has also affected the world of advertising. Government organisations survive only because they are government owned. There is no profit motive and urge to sell. With privatisation there is a radical shift in the management system. It is moving towards modern managerial techniques and advertising. The volume of advertising and its creating capabilities have increased.

With the opening up of the economy and integrating the economy with the world economy there was a vast impact on advertising industry. Restrictions on foreign entry,
scrapping of FERA, massive import restrictions and reducing tariffs etc brought the world closer Advertisers had to ‘think global and act local’. Indian agencies came of age. Ads for global causes are also now a days being made in India. Through the global ventures, the advertising agencies collect social and cultural inputs and even story boards sometimes are made in India.
Internet has become a great marketing tool. Advertising experience is on the increase with the increase in ad expenditure.
At present, the Indian economy is experiencing the pressure of several economic issues such as unemployment, poverty, illiteracy, inflation.




































CULTURE

Culture is pervasive in all marketing activities-pricing, promotion, distribution packaging and styling. Culture is the human made part of human environment. When designing a product, the style, uses and other related marketing activities must be made culturally acceptable..
The manner in which people consume , the priority of needs and wants, are function of their culture.
For example; there was a drop in Japanese birth rate in the year of the fire horse because if girl child was born in that year she would be very unhappy and would even murder their husband.
In Chinese culture, being born in the year of the dragon is considered good.
Britishers love their chocolates; the Spaniards love fish but they do not even come close to the Japanese in their love for fish. Pasta was actually invented in China but was brought to Italy by Marco Polo
The best international marketers not only appreciate the cultural difference pertinent in their business, they also understand the origins of these differences.

Origin, Elements and Consequences of Culture

Geography
[climate, topography, flora, fauna, microbiology]

History

Technology and Political economy



Social institutions
[[family, religion, school, media, government]

Elements of culture
Peers imitation rituals, values, beliefs, symbols


Consumption decisions Management style

Social institutions, including family religion etc affect the ways in which people relate to each other. The position of men and women in society, the family, the social classes group behaviour and how societies define decency and civility are interpreted differently within every culture. Where social organisations 1result in close knit families it is usually more effective to aim a promotional campaign at the family than individual members. Travel ads in the English speaking areas of Canada are aimed at the women while in the French speaking areas both the man and the wife are shown.
The roles and status positions found within a society are influenced by the dictates of social institutions. Family forms and functions vary substantially around the world. In Cairo, India and many other countries extended family lives in one apartment. In Japan grandparents look after the grandchildren and the working male often catches up on his sleep during the four rides by train to work. An American family in California both working like dogs worrying about parents half way across the country in Texas. All these differences lead directly in how children think and behave.
The influence of religion is quite often strong. So when marketers have little or no understanding of a religion, it is easy to deeply offend. The French fashion house had taken design, which looked very nice, from a book on Taj Mahal. He was unaware of the meaning. The fashion house had to destroy the dresses.
Education affects all aspects of culture. From economic development to consumer behaviour. Literacy has a profound effect on marketing.

Media is now having too much influence. Even Americans are complaining about the detrimental effects of media.

Cultures of nations can be studied along four dimensions.
The four dimensions are;
1. Individualism/Collectivism Index [IDV]
2. Power Distance Index [PDI]
3. Uncertainty Index [UAI]
4. Masculinity/Femininity Index [MSI]
5 High Context & Low Context.
Cultures that scores high on IDV reflect the ‘I’ mentality whereas those with low individualism reflect the ‘we’ mentality.

PDI measures the tolerance of social inequality that is inequality between superiors and subordinates. Cultures with high PDI tend to be hierarchical. A low score reflects a more egalitarian society.
Cultures with high UAI are intolerant of ambiguity and distrustful of new ideas. They have a high level of anxiety and stress. They do not like to take risks.
Japan and France are high on UAI scale and USA are low.
Rituals differ across cultures. You have reception before the wedding; In Madrid dessert may precede the entre, dinner often starts at midnight and lasts about three hours.
Language. The importance of understanding the language cannot be overestimated. Advertising copywriters should be concerned less with obvious difference between languages and more with idiomatic meanings expressed. In is not enough to translate into a foreign language.
Tamboo means a roadside inn in Bolivia, Colombia, Equador and Peru. In Argentina and Urugguay it means a dairy farm and a brothel in Chili.

Symbols Arts, folklore, music, dance, drama help define national identities and relationships within a context of culture and product benefits. Without a culturally correct interpretation of a county’s symbolic values a whole host of marketing problems can arise. Japanese revere the crane as being very lucky as it is said to live a thousand years while number 4 represents death.
Beliefs. It is a mistake to discount the importance of myths, superstitions or any cultural beliefs. Superstition plays a large role in a society’s belief system in some parts of the world. In Asia we have beliefs about ghost, fortune telling, phases of the moon bad days of the month etc. Japanese beliefs
about the year of the fire horse and other myths are an integral part of society as the Chinese Feng Shui and Indian Vastu Shastra. It is a mistake to discount the importance of such beliefs.
There are two kinds of knowledge about culture, factual and interpretive. For example 98% of Mexicans are Catholics; but one understand what it means to be a Catholic in Mexico. Each culture practices Catholicism in slightly different ways in different. In India too various festivals are celebrated in different manner in different areas of the country.

A product acceptable to one culture may not be accepted in another or that a promotional message that succeeds in one country will succeed in another. The British say ‘lift’ instead of an elevator as the Americans do’. Americans use the word bathroom for toilet while refer to a place with where one has a tub bath. Similarly economically unified Europe does not mean a common set of consumer wants and needs. So also the unification of Germany does not mean the cultural differences between the two have been erased. Marketers must asses each country thoroughly before planning its venture in international arene.



Differences in culture is often identified using the Hofstede dimension

The Hofstede Dimensions
Cultural variability is the term used to identify differences between cultures using the Hofstede’s dimension.
Power Distance
Uncertainty Avoidance
Masculinity-Femininity
Collectivism-Individuality
Long-Term Orientation (LTO) versus short-term orientation:

Power Distance Index (PDI) that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'
Power Distance refers to the manner in which interpersonal relationships are formed when differences in power are perceived. In some cultures a vertical relationship is typical whereas in others relationships are based on equality and informality. In USA individuals address each other on a first name basis regardless of rank. Top managers illustrate their solidarity with the lower ranks by engaging in work activities going to the plant floor or eating with the lower staff. In other countries it is a mistake to address a superior informally or for a superior to mingle with the underlings. It is important in such cultures to address senior management first before addressing other individuals

Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and ambiguity; it ultimately refers to man's search for Truth. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth; 'there can only be one Truth and we have it'. People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.
Uncertainty Avoidance refers to the extent to which individuals feel threatened by uncertainty, risk and ambiguous situations and thus adopt beliefs, behavior and institutions that help them to avoid the uncertainty. The feeling is that what is different is dangerous. Consumers are resistant to change and focused on risk avoidance. However it is interesting to see the changes taking place in the transition Economies

Masculinity (MAS) versus its opposite, femininity refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women's values differ less among societies than men's values; (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other. The assertive pole has been called 'masculine' and the modest, caring pole 'feminine'. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values.
Masculinity is the degree to which a national culture is characterized by assertiveness, rather than nurturing. Femininity is the degree to which a national culture is characterized by nurturing, rather than by assertiveness. Masculine societies emphasize values such as wealth, material success ambition and achievement; whereas in feminine societies, benevolence, equality, caring for the weak and preserving the environment are emphasized. In masculine societies such as Australia, Canada, UK, USA successful marketing strategies focus on consumers’ achievement motivation. They stress personal accomplished and have ego appeal. In feminine societies, such as Asian cultures, marketing strategies should steer away from a materialist, acquisitive focus and instead appeal to consumers’ sense of good will

Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.
Individualism versus collectivism refers to the degree to which people in a country prefer to act as individuals In their self-interest rather than as members of a group, which is a characteristic of collectivist societies. Individualistic cultures are ones that tend not to follow social norms but rather make decisions and initiate behaviors independently (UK< USA<Australia) Such cultures stress the individuals’ ability to achieve personal goals, make their way on their own and in the process seek self-fulfillment and excitement. Collectivist societies (Latin America, Asia and Middle East) stress subordination to the collectivity (group, business family) and require acting in the interest of the group rather than in one’s self interest. As countries become more industrialized cultures move from collectivist to individualisms

Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.







Differences in Cultures
Increasingly, managers must deal with multiple ethnic groups with very different cultures. Thanks to globalization, you are likely to work with Japanese, French, Chinese, German and all sorts of other nationalities. It is important to recognize that people from different cultures are different in a variety of ways, including
• different ways of looking at things
• different ways of dressing
• different ways of expressing personality/goodness
In an ideal world ...
• the policemen would be English
• the car mechanics would be German
• the cooks would be French
• the innkeepers would be Swiss,
• and the lovers would be Italian
In a living hell ...
• the policemen would be German
• the car mechanics would be French
• the cooks would be English
• the innkeepers would be Italian
• and the lovers would be Swiss
These differences can cause problems interpreting what the other person is doing. Some simple examples:
• In the US, a firm, short handshake indicates self-confidence and (heterosexual) masculinity. A limp handshake by a man can be interpreted (usually wrongly) as a sign of homosexuality or wimpiness. But in most parts of Africa, a limp handshake is the correct way to do it. Furthermore, it is common in Africa for the handshake to last several minutes, while in the US a handshake that is even a few seconds too long is interpreted as familiarity, warmth and possibly sexual attraction.
• In Britain, men do not look at women on the streets. The French do. Recently, a French public figure mentioned in a speech that the Brits are all gay -- the evidence was their lack of overt interest in women.



Some dimensions along which cultures vary:
High Context vs. Low Context

Context

The amount of information given in communication is called context. Context includes both the vocal and non-vocal aspects of communication.
In verbal communication, information is transmitted through a code that makes meanings both explicit and specific.
In nonverbal communications, the nonverbal aspects become the major channel for transmitting meaning.
The verbal factors include the rate at which one talks, the pitch or tone of one’s voice, the intensity or loudness of the voice, the flexibility or adaptability of the voice to the situation, the variation of the rate, pitch and intensity, the quality of the voice, the fluency, expressional patterns, or nuances of delivery .
Nonverbal aspects include eye contact, pupil contraction and dilation, facial expression, odour, skin colour (blushing) , hand gestures, body movement, proximity and use of space.
The greater the contextual portion of communication in any given culture, the more difficult it is for one to convey or receive a message.
In high context cultures, information about an individual is provided through mostly nonverbal means. It is also conveyed through status, friends and associates. Information flows freely within the culture although outsiders who are not members of the culture may have difficulty reading the information.
In high context cultures, the external environment, situation and nonverbal behaviour are crucial in creating and interpreting communications. Members of this cultures are programmed from birth to depend heavily upon covert clues given within the context of a message which is delivered verbally. Subtlety is valued and much meaning is conveyed by inference. Communication is faster, more economical and more efficient. But if common programming does not exist between the sender and the receiver, communication is incomplete.
A low context culture is one in which things are fully (though concisely) spelled out. Things are made explicit, and there is considerable dependence on what is actually said or written. A high context culture is one in which the communicators assume a great deal of commonality of knowledge and views, so that less is spelled out explicitly and much more is implicit or communicated in indirect ways. In a low context culture, more responsibility is placed on the listener to keep up their knowledge base and remain plugged into informal networks.
North Europe, a low context culture, tends to emphasize the technical, the numerical, the tested, the quality.
Americans tend to be low context and focus on substantive issues, on what if being said. Just the facts are important; the environment, situation and nonverbal are relatively less important and more explicit information has to be given. A direct style of communications is valued and ambiguity is not well regarded. Cultural patterns tend to change faster in Low context cultures.
German culture is low context. Therefore more specific terms and concepts are very important
Germans are people of their word; a handshake is as good as a written contract. However they are concerned with the precision of ;the written word. Germans tend to be detailed oriented
German society is quite paternalistic. Germans do not appreciate emotional gestures; hands should never be used to emphasize points

High context cultures are Japan, Mexico, Russia, China, Korea, Vietnam, Greece. Italy, Spain and to a lesser extent France, the Middle East, Latin America and South America
Low context cultures include Anglos, Germans and Scandinavians. High context cultures include , Arabs and French also

In high context countries one has to have sufficient knowledge of the culture to communicate understandably and acceptably
Implications
• Interactions between high and low context peoples can be problematic.
o Japanese can find Westerners to be offensively blunt. Westerners can find Japanese to be secretive, devious and bafflingly unforthcoming with information
o French can feel that Germans insult their intelligence by explaining the obvious, while Germans can feel that French managers provide no direction
• Low context cultures are vulnerable to communication breakdowns when they assume more shared understanding than there really is. This is especially true in an age of diversity. Low context cultures are not known for their ability to tolerate or understand diversity, and tend to be more insular.
Monochronic vs Polychronic
Monochronic cultures like to do just one thing at a time. They value a certain orderliness and sense of there being an appropriate time and place for everything. They do not value interruptions. Polychronic cultures like to do multiple things at the same time. A manager's office in a polychronic culture typically has an open door, a ringing phone and a meeting all going on at the same time.
Polychronic cultures include the French and the Americans. The Germans tend to be monochronic.
Implications
• Interactions between types can be problematic. German businessman cannot understand why the person he is meeting is so interruptible by phone calls and people stopping by. Is it meant to insult him? When do they get down to business?
• Similarly, the American employee of a German company is disturbed by all the closed doors -- it seems cold and unfriendly.
Future vs. Present vs. Past Orientation
Past-oriented societies are concerned with traditional values and ways of doing things. They tend to be conservative in management and slow to change those things that are tied to the past. Past-oriented societies include China, Britain, Japan and most spanish-speaking Latin American countries.
Present-oriented societies include the rest of the spanish-speaking Latin American countries. They see the past as passed and the future as uncertain. They prefer short-term benefits.
Future-oriented societies have a great deal of optimism about the future. They think they understand it and can shape it through their actions. They view management as a matter of planning, doing and controlling (as opposed to going with the flow, letting things happen). The United States and, increasingly, Brazil, are examples of future-oriented societies.
Quantity of Time
In some cultures, time is seen as being a limited resource which is constantly being used up. It's like having a bathtub full of water which can never be replaced, and which is running down the drain. You have to use it as it runs down the drain or it's wasted. In other cultures, time is more plentiful, if not infinite. In old agricultural societies, time was often seen as circular, renewing itself each year.
Implications
• In societies where time is limited, punctuality becomes a virtue. It is insulting to waste someone's time, and the ability to do that and get away with it is an indication of superiority/status. Time is money. In cultures where time is plentiful, like India or Latin American, there is no problem with making people wait all day, and then tell them to come back the next day.
• Time-plentiful cultures tend to rely on trust to do business. Time-limited cultures don't have time to develop trust and so create other mechanisms to replace trust (such as strong rule-by-law).


Power Distance
The extent to which people accept differences in power and allow this to shape many aspects of life. Is the boss always right because he is the boss, or only when he gets it right?
Implications
• In high power distance countries (most agrarian countries), bypassing a superior is insubordination. In low power distance countries (US, northern Europeans, Israel), bypassing is not usually a big deal.
• In the US, superiors and subordinates often interact socially as equals. An outsider watching a party of professors and graduate students typically cannot tell them apart.
Individualism vs. Collectivism
In individualist cultures, individual uniqueness, self-determination is valued. A person is all the more admirable if they are a "self-made man" or "makes up their own mind" or show initiative or work well independently. Collectivist cultures expect people to identify with and work well in groups which protect them in exchange for loyalty and compliance.
Paradoxically, individualist cultures tend to believe that there are universal values that should be shared by all, while collectivist cultures tend to accept that different groups have different values.
Many of the asian cultures are collectivist, while anglo cultures tend to be individualist.
Implications
• A market research firm conducted a survey of tourist agencies around the world. The questionnaires came back from most countries in less than a month. But the agencies in the asian countries took months to do it. After many telexes, it was finally done. The reason was that, for example, American tourist agencies assigned the work to one person, while the Filipinos delegated the work to the entire department, which took longer. The researchers also noticed that the telexes from the Philippines always came from a different person.




Problems Caused by Cultural Differences
• You greet your Austrian client. This is the sixth time you have met over the last 4 months. He calls you Herr Smith. You think of him as a standoffish sort of guy who doesn't want to get really friendly. That might be true in America, where calling someone Mr. Smith after the 6th meeting would probably mean something -- it is marked usage of language -- like "we're not hitting it off". But in Austria, it is normal.
• A Canadian conducting business in Kuwait is surprised when his meeting with a high-ranking official is not held in a closed office and is constantly interrupted. He starts wondering if the official is as important as he had been led to believe, and he starts to doubt how seriously his business is being taken
• A British boss asked a new, young American employee if he would like to have an early lunch at 11 am each day. The employee said 'Yeah, that would be great!' The boss immediately said "With that kind of attitude, you may as well forget about lunch!" The employee and the boss were both baffled by what went wrong. [In England, saying "yeah" in that context is seen as rude and disrespectful.]
• A Japanese businessman wants to tell his Norwegian client that he is uninterested in a particular sale. So he says "That will be very difficult." The Norwegian eagerly asks how he can help. The Japanese is mystified. To him, saying that something is difficult is a polite way of saying "No way in hell!". Dave Barry tells the story of being on a trip to Japan and working with a Japanese airline clerk on taking a flight from one city to another. On being asked about it, the clerk said "Perhaps you would prefer to take the train." So he said "NO, I want to fly." So she said "There are many other ways to go." He said "yes, but I think it would be best to fly." She said "It would very difficult". Eventually, it came out that there were no flights between those cities.

Three basic kinds of problems: interpreting others comments and actions, predicting behaviour, and conflicting behaviour.
Some Perceptions of Americans
Europe & especially England. "Americans are stupid and unsubtle. And they are fat and bad dressers."
Finland. "Americans always want to say your name: 'That's a nice tie, Mikko. Hi Mikko, how are you Mikko'
Indian. "Americans are always in a hurry. Just watch the way they walk down the street."
Kenyan. "Americans are distant. They are not really close to other people -- even other Americans."
Turkey. "Once we were out in a rural area in the middle of nowhere and saw an American come to a stop sign. Though he could see in both directions for miles, and there was no traffic, he still stopped!"
Colombia. "In the United States, they think that life is only work."
Indonesia. "In the United States everything has to be talked about and analyzed. Even the littlest thing has to be 'Why, why why?'."
Ethiopia. "The American is very explicit. He wants a 'yes' or 'no'. If someone tries to speak figuratively, the American is confused."
Iran. "The first time my American professor told me 'I don't know, I will have to look it up', I was shocked. I asked myself 'Why is he teaching me?'"
INDIA
1. India has a high POWER DISTANCE (77), much higher than the world average (56.5). In India social hierarchies are very much in place and even at work it is not easy to be friendly with one’s boss in most organisations. Calling one’s boss by his first name is rare in India. In fact abuse by seniors is also common and usually the employee is helpless and his only recourse is to leave. As for Indian politics, one can see the groveling that goes on!
China has a slightly higher PD (80) as compared to India and both India and China are higher than the Far Eastern Asian nations which have an average of 60. Japan is only 50.
Countries In Northern Europe have a lower PD as compared to countries in Southern andEastern Europe. The United States has less than 40 and the United Kingdom around 30.
2. India is at 61 in LONG TERM ORIENTATION, higher than the world average of 48 but lower than the Asian average of 85. Asian cultures generally have higher scores on long-term thinking…which means that they are more “perseverant and parsimonious.” It’s interesting to note that even when Indians travel abroad they work very hard and sacrifice a lot for long-term benefit, which is the education of their children. Staying put in one job is also an indication of long term orientation and this is used to be very common in India once. It is changing now. Perhaps because staying in one job is not that beneficial in the long run! Leads to stagnation as opportunities to grow become limited.
China is at 95 and Japan at almost 80.
Western nations are on the opposite ends of the scale. The United States and Sweden score below 30. Britain and Canada score even lower, around 20!
3. India’s MASCULINITY score is 56, slightly higher than the world average of 51 and theAsian average of 53. I am not at all surprised that we score high on masculinity as compared to countries like Sweden. But at the same time in India we are not as “masculine” as Japan, but the materialism and aggression in our society seems to be increasing. Our scores are bound to change soon, as India tries hard to reach the ‘developed’ state level. Just one example – at one time in India businessmen were not respected, but today they are revered. A poor teacher would get as much respect as a rich person, but not any more. However India has always been ‘male oriented’ so I am not sure why high “masculinity” scores (materialism and aggression) in a society are associated with male dominance and a greater difference in between the sexes (in terms of these qualities). I am sure that this was always so in our society.
Japan is the most “masculine” culture with scores of above 90. Such cultures are usually “male” oriented and workplaces are often autocratic. China at 50 has average scores.
Sweden is the most “feminine” culture in the sense that the Swedish population has qualities the qualities of sensitiveness and empathy and they give less importance to material things than countries with “masculine” traits. This also means that there is less difference between the sexes with regard to these qualities. Both men and women are like this. Canada is just below 50,United States just below 60 and Britain just above 60.
4. India gets just 40 in the UNCERTAINITY AVOIDANCE (UA) dimension as compared to the world average of 65. A low score is good, as it means that the society that has “fewer rules and does not attempt to control all outcomes and results”. It also means “a greater level of tolerance for a variety of ideas, thoughts, and beliefs” and a “high tolerance for ambiguity.” Well, it is not surprising that we are like this, the multi-cultural cauldron that we are! However we do have rigid rules where religion and dress (for women) are concerned so I am not sure that we deserve such a high score. We are also an extremely prudish society and therefore I wonder how we scored so well on this dimension. Maybe they didn’t ask questions regarding sexuality!
The Asian average is 60, but Japan is almost at 90! This indicates a less tolerant society. Chinadoes good at 35.
The US is 46, Canada around 45 and Britain at 30. The European average is 74, and it is theMediterranean cultures which bring it up. Germany (around 60) and Switzerland (58] don’t do too well but its the Swedes who are the best, at 25.
5. India doesn’t do too badly on the INDIVIDUALISM dimension (45) if one compares it to the Asian average of 24. Well, we Indians are pretty much bound by community ties, but at the same time I see that individuals in that community get a fair amount of leeway to be individualistic. I don’t know whether it is our democratic tradition, or the freedom within the Hindu religion, but overall individuality is not seen as threatening. From what I read religion does influence individualism. Some religions have a greater set of rules that need to be followed.
Japan is also just about average (40), but China ranks poorly here (20). A low score means that the society has committed members as in a collectivist culture. Loyalty in a collectivist culture is considered the most important thing and generally people in this society are bound together strongly.
The higher the Individualism score, the poorer the bonds that people in the society have with each other.
The European average is about 52, but Germany scores 62 and Sweden 68…and Britain 85! Britain is at the same level as the United States (almost 90) and Canada (80). Such high scores indicate a highly individualistic culture with “loose bonds” with others. The populace is self-reliant and independent and guards their privacy zealously
Cultural Influences on advertising

The way cultures react to communications and messages differ. Advertisers that understand these differences succeed.
Korea and China are word-of-mouth advertising country. A customer’s testimony is more effective than television or newspaper advertising. The testimony of a friend, family member or opinion leader is valued. The concept of family is important to the Chinese and is thus played up in ads.

The contents of ads with in a society mirrors that of the society.
Ads in countries high in collectivism contain more group-oriented situations than ads found in individualistic societies.
Cultures high on the power dimension have more ads with characters of unequal status than low-context countries
Asian cultures get more information from contextual items than Europeans
Tv ads that work well in low-context cultures often seem cold and arrogant to those from high-context cultures. Similarly ads made for high-context cultures confuse low-context cultures
Verbal ads preferred by high context cultures tend to be too language dependent, boring and poor at eliciting imagery when viewed by those from low-context cultures.
Indian visuals contain a disproportionately high percentage of children, France uses the aesthetic visual proportionally higher.
Korea include the price 38% of the time.
USA has five to ten times more comparative ads.



Advertising and Popular Culture

Popular culture refers to beliefs and practices and the objects through which they are organised that are widely shared amongst a population.
Popular culture is what we make out of the products and practices of mass produced culture. It is the expressive content that is produced and consumed. It is light entertainment that is delivered through the channels of mass media and finally absorbed voluntarily, to be interpreted by the individual who receives it. Information then goes back in the form of ratings or sales figure that will influence the subsequent round of offerings.
To ‘Popular culture is everything from ‘common culture’ to ‘folk culture’ to ‘mass culture.
Popular culture consists of symbols; Instances of popular culture are television serials, films, comic books, music etc. Popular culture gives pleasurable sensations upon reception. This pleasure giving feature is a central aspect of the popular culture experience.
Advertising on the other hand refers to the paid for messages that attempts to transfer symbols into commodities to increase the possibilities of its purchase. For this reason advertising may be looked at warily. Although advertising comes in many forms, television, radio and magazines are normally focused more.
Some see advertising as a subset of first order intentions. It is developed with both first order and second order intentions. The first order is when communication occurs. The second orders intentions are of purchasing the advertised goods. Advertising aims at changing behaviour while popular culture aims to give pleasure and not to change viewers
Advertising is almost always briefer than instances of popular culture (30 sec of a commercial against 30 minutes of popular culture) Media and space is expensive and advertisers have to work within budgets
However advertising and popular culture share much in common. Both are products of culture industries. Both are to be understood as artistic products. Both pay great attention to style. Both share the use of same mass media method.
Popular culture is more welcome than advertising
Advertising and popular culture have come to occupy central positions with a global economic growth. Both are approached as economic entities as well as symbolic entities.
Popular culture offers lavish store to advertisers who try to create attractive messages for consumers. Advertisers will appropriate popular culture material as celebrities, music, comedy styles and anything else that can be used as accepted and enhanced symbol for their products. To communicate with consumers, advertisers thus have a fertile an ample mixture of symbolic material to draw upon. The lore of popular culture that advertisers find usable are comedies, music and celebrities. Music has the ability to stimulate extraordinary emotional feelings. Adult consumers derive emotional benefit from popular music. It is this appeal that advertisers try to exploit to stimulate consumer’s interest in their products.
An advertiser’s choice of leading entertainers as spokespeople, as opposed to
lesser known individuals, carries with it valuable contextual inferences when
the transfer of meanings from the endorser to the product and from the
performance to the ad works well, it becomes a success.
The utility of music is acknowledged within the advertising industry. Background music can set up a mood with targeted consumers and lend an emotional dimension to a brand.Although much of the music in advertising is original an increasing proportionof it consists of reused popular cultural hits.
Advertising is not depleting or obliterating popular culture. The interpenetration of advertising and popular culture is recognised. Highlights from one adds lustre to the other. The target audience are always on the lookout for symbols and meanings which reverberate back and forth between the two domains. Popular culture can even aid in the creation of new norms.
To communicate with consumers, advertisers have an ample stock of purchasable symbolic material to draw upon. Advertisers turn to popular culture that if pleasurable, emotional and non-coercive.
Popular culture is the seed belt of the stars who can command general recognition from a diverse population. The stars are likely to deliver the emotional material the spectator is looking for;
The popular song ‘Dhoom Machale’ became a part of the day to day
lingo ofyoungsters. Advertisers use ‘Dhoom Macha Diya’ below their visual have
reported increase in sales.
Although cultures meet most newness with some resistance or
rejection, that can be overcome. Cultures are dynamic and change occurs when
resistance slowly yields to acceptance gradually there comes an awareness of the need for change, ideas once too
complex become less so because of the cultural gains in understanding. Once
the need is recognized, the acceptance cannot be prevented. Possible methods
and insights are offered by social scientists that are concerned with concepts of
planned social change.
Growing influence of advertising and its criticism

Advertising by its very nature receives wide exposure. It presumably has an effect on what people buy and thus on their activities. The wide exposure and advertiser’s persuasive vehicle, it is argued, has its impact on the values and lifestyles of society and that this impact has its negative as well as positive side.

It is argued that appeals to mass markets tend to promote conformity, appeals to status promote envy, pride and social competitiveness, appeals to fear promote anxiety, appeals to youth promote reduced family authority and appeals to sexuality promote promiscuity.

The key issues are which values and lifestyles are to be encouraged as healthy, which are to be avoided and what relative impact or influence advertising has on them.

It is interesting that the issues are hotly debated a the international level.
Three issues have attracted particular attention:
- the relationship of advertising to materialism
- the role that advertising has played in creating harmful stereotypes of women and ethnic minorities
- the possible contribution of advertising in promoting harmful products.

Materialism is defined as the tendency to give undue importance to material interests and presumably there is a corresponding lessening of importance to non-material interests such as love, freedom and intellectual pursuits. In the world of television commercial all of life’s problems and difficulties, all of our individual yearnings, hopes and fears can yield instantly to a material solution and one which can work instantly without any effort skill or trouble on our part.
Such a link is impossible to prove or disprove. It is true that advertising and the products advertised are a part of our culture and thus contribute to it in some way. It is also true that advertising does not have the power to dominate other forces (family, religion, literature etc) that contributes to the values of society. There is little support the view that advertising is a pervasive force in altering consumer spending and savings habits
In a free society people can choose the degree to which they indulge their desires, needs and fantasies
Promoting Stereotypes. The accusation that advertising has contributed to the role stereotyping of women and ethnic minorities has been supported by several studies. The ads reflected that women do not do important things, are dependent on men, are regarded by men as primarily as sex objects and should be at home. Minorities were in low status roles
Advertisers are aware of these accusations and are sincerely trying to avoid such situations in their ads. The image of women in advertising has changed significantly in the last few years.
Promoting harmful products. After many debates advertising of cigarettes and alcohol are now banned. Ofcourse arguments have been put forward that ads do not promote consumption, it is only geared toward brand choice. It is also argued that countries that have banned advertising of alcohol and cigarettes have lowered the consumption of these products. It is felt, therefore that banning such products may not be the most effective way of handling the problem

Green Marketing has brought up a new issues about advertising its effect on values and life styles. Advertising has been a part of the Environmental Protection Agency. These ads have had many ecologically positive behaviour. However may corporations have begun using environment appeals in marketing regular products to sell their products and services.

This so called green marketing has been challenged on a number of grounds. Authorities have attempted to establish voluntary guidelines on the use of the terms such as ‘recycled’ and ‘recyclable’. Many products with environmental claims susch as shaving creams that ‘contain no CFCs’, laundry detergents that are ‘biodegradable’ and disposable diapers that are ‘degradable’ require special scrutiny because they are especially likely to confuse consumers.

Advertising makes people buy things they do not need. Critics claim advertising merely increased demand for unnecessary products that are not really needed by consumers. The counter argument to this is who is to determine the need of a consumer? Advertisers try to convince people that their brand will make them sexier, healthier or more successful but they cant make them buy. If it is so easy to convince people to buy why do more products fail than succeed? Advertising’s power has been greatly exaggerated.
Another aspect of the manipulation argument is that advertising creates artificial needs. Consumers control the marketplace by the choices they make with their discretionary income.

Advertising debases our language. Critics claim that advertising copy is too breezy, too informal and too casual and therefore improper. They believe that advertising has destroyed the dignity of the language. Research however has shown that people respond better to down-to-earth conversational language than to the dignified , formal copy. Good copywriters develop a style that is descriptive, colourful and picturesque as well as warm, human and personal. They use simple words that are lively, full of personality and reflects the language usage and patterns of their target audience

Advertising is in bad taste. Taste is highly subjective. What is bad taste to some is perfectly acceptable to others. Also taste changes. What is offensive today may not be so tomorrow. People were first outraged when the first deodorant ad for underarms appeared. Today no one questions such ads. Today grooming and personal hygiene products often use near nudity in their ads. In international markets nudity in commercial is commonplace. Ultimately the market has the veto power- it can simply ignore material it considers offensive or in vbad taste

Advertising is deceptive. Critics define deceptiveness not only as false and misleading statements but also as false impressions conveyed, whether intentional or not. For advertising to be effective, consumers must have confidence in it. So continued deception is self-defeating. Even puffery claiming to be ‘best’, or ‘greatest’ or ‘premier’ is sometimes believes and therefore deceptive.

Numerous regulations determine what advertisers can and cannot do but they also allow a significant amount of leeway. Thats where ethics and social responsibility come into play. An advertiser can act unethically or socially irresponsibly and not break any laws.



Social implications of advertising

The central issues of advertising and society can be divided into three categories. The first is nature and content of the advertising to which people are exposed.
Is advertising inherently unethical:?
Are appeals used to manipulate consumers against their will?
Is advertising too repetitious?
Is it too preoccupied with sex?
There is also the questions about the fairness of advertising to children+

The second category represents the aggregate effects on society as a whole. It refers to the sescondary consequences or effects.
What is the effect on society’s values and lifestyles? Some believe that advertising competes with or dominates such other socialization agents as literature, plays, music, the home and the school. That it fosters materialism at the expense of other basic values. That it may serve to reinforce racial discrimination or that it promotes harmful products.

The third category is the effect advertising has on society’s economic well-being and the efficiency of the operation of the economic system. Can the power of advertising lead to the control of the market by a few firms, which will weaken competition and raise consumer prices?

Is alcohol and cigarette advertising ethical. These advertising are now banned in India. A much wider range of ethical issues and concerns are now being addressed as packaging, professional services ads by physicians, attorneys, accountants and emerging social issues about environmental or green marketing.

There is considerable overlap between what many consider to be ethical issues and the issues of manipulation, taste and advertising’s effects on values and lifestyles

Does advertising manipulate? The essence of a free marketplace and a free society is the freedom to make decisions to select or not select a particular brand. Some feel this freedom is overpowered by advertising which can manipulate a buyer into making a decision against his or her will. When advertising utilizes appeals that go beyond a basic communication the charge of manipulation via emotional appeals is raised. The implication is that with emotional appeals the consumers will make less than optimal decisions. A typical theme running through these commercials is to hold the brand out as the pathway to success and happiness and the antidote to what is otherwise a drab, boring or lonely life. Dishwashing liquids are advertised as sweeping away the dullness of life. Bath soaps have rejuvenating capacity and so on. These observations are related to issues of deception.
There is also a general claim that advertisers have the raw power to manipulate consumers by their capacity to generate large numbers of ad exposures and highly sophisticated scientific techniques to make ads effective. However the fact remains that consumer choice behaviour is determined by many factors in addition to advertising- the advice of friends, decisions and lifestyles of family members news stories, prices and so on. Advertising is but one of many variables and it has a limited role.

Some feel that advertising is objectionable because the4 creative effort behind is not in good taste.
Some feel that television advertising is often like a visitor who ahs overstayed his welcome

Advertising to children has been a major focus and concern for many years. It is said that children between 2 to 11 spend about 25 hours a week watching television and see approx20,000 ads per year/

Ads presumably have and effect on what people buy and on their activities. It has an impact on the values and lifestyles of society and that this impact has its negative as well as positive side.

It is stated that
appeals to mass markets tend to promote conformity
appeals to status promote envy, pride and social competitiveness
appeals to fears promote anziety
appeals to newness promote disrespect for tradition, durability, experience,
appeals to youth promote reduced family authority and
appeals to sexuality promote promiscuity

The key issues are which values and lifestyles are to be encouraged as healthy, which are to be avoided and what relative impact or influence ads have on them

The environmental movement has thrown up a number of new issues about advertising and its effects on values and lifestyles. Advertising has played a valuable role to encourage recycling, energy conservation and many ecologically positive behaviours. It was informative and educative
However advertisers have seized on environmental advertising claims as an effective way to sell their products and services by using terms such as ‘recycled’ and ‘recyclable’

Gender Roles

Gender roles refer to the roles that women and men are expected to hold in a society

When one engages in business or advertising internationally, it is important to understand the role that women are expected to hold in the respective society.
In East Africa and in parts of West Africa (Nigeria) the role of women in business is crucial and more important than the role of men. However men still hold an important decision-making role when it comes to major sales or purchase decisions
In India and Pakistan women share responsibility with men in business. Women play a more limited role politically where a few hold notable positions, despite women leaders who have left important legacies in these countries.
In most traditional Islamic countries, women’s business activities are channeled toward interaction in a women-only environment.
In Saudi Arabia women depend on men in the family for simple activities, such as driving them to and from a destination; the law does not permit women to drive a car. Personal services can be performed only by individuals of the same gender. Eg women can bank only at women’s bank , can have their hair done only by other women. The genders, typically do not interact in the very traditional Islamic countries except within the family.
Even in less traditional Islamic countries women are seated separately form men. In countries such as Turkey and Pakistan women have historically held prominent government positions.
In Saudi Arabia women cannot be portrayed in ads. It is appropriate to show the covered arms and wrists of a woman demonstrating a product use. In Malaysia , women should not be shown sleeveless, whereas in Turkey one can actually see ads of women modeling bras
It is also necessary to study the Masculinity-Femininity Index for the gender roles.
Making Messages Culture Specific

Cultural misunderstanding can raise havoc on the best business plans. Even though it is basic communication tool of advertising in foreign lands advertisers often fail to develop even a basic understanding of a foreign, much less master the linguistic nuances that reveal unspoken attitudes and information. Even a good interpreter does not solve the problem.
Linguistic communication, no matter how imprecise is explicit, but much of the business communication depends on implicit messages not verbalised. In some cultures, messages are explicit, the words carry most of the information. In other cultures less information is contained in the verbal part of the message since more lies in the context.
The advertiser must achieve expert communication that is gained by a thorough understanding of the language for making messages culture specific. Advertising copywriters should be concerned less with the obvious differences between languages and more with the idiomatic meanings expressed.eg Tamboo means a roadside Inn in Peru, Equador,Columbia and Bogota. In Argentina and Uruguay it means a dairy farm and in Chile it means a brothel. A dictionary translation is not the same as an idiomatic interpretation and will not suffice. In USA a very successful advertising slogan’ it takes a tough man to make a tender chicken’ came out in Spanish as ‘ it takes a virile man to make a chicken affectionate’ Carelessly translated message not only lose its intended meaning but can suggest something very different
obscene, offensive or just plain ridiculous.
Advertisers should never take it for granted that they are communicating effectively in another language. What is needed is a cultural translation. Translating a message and getting the right meaning is a problem for all cultures. Eg in Acapulco, a hotel had the following message to convey quality control ‘ all the water in the hotel has been personally passed by the manager.’
Advertisers have to realise that different cultures often seek the same value or benefit from the primary function of a product eg a car to take you from A to B, a camera to take pictures or a wrist to tell time. But what is important is that other features and psychological attributes of the items can have significant differences. Eg a camera in America can be taken with easy foolproof operation. In Germany and Japan the camera must take excellent pictures but it must also be ‘state of the art’ in design. In Africa the concept of taking pictures must be sold .In all the three excellent pictures as it is the primary function of a camera but the additional utility or satisfaction from a camera differs among cultures. Thus many companies follow a strategy of ‘pattern advertising’, a global advertising strategy with standardized basic message allowing some degree of modification to meet local situations. The popular saying i8s ‘think globally, act locally’. In this way some economies of standardization can be realized while specific cultural differences are accommodated.
Lee Strauss & Co changed from all localized ads to pattern advertising where broad outlines of the campaign are given worldwide but the details are not. Quality and Levi American roots are given worldwide but in each country different approaches express these two points.

In Japan, the Blue Diamond brand of almonds was an unknown commodity until it launched its campaign of exotic new almond- the basic products that catered to local tastes. Television ads featured educational messages on how to use almonds in cooking, their nutritional value, the versatility of almonds as a snack and the California mystique and health benefits of almonds. As a result, Japan is now the Association’s largest importer of almonds


No generalised recommendation can be made about whether to adapt or standardize international advertising. It depends on the products, the culture, the usage pattern and so on. Advertising efforts are moving towards a centralized position, standardized where possible and adapted where necessary.

Nescafe has a global brand but advertising messages and formulations vary to suit cultural differences. In Japan and UK tea is popular, in France, Germany & Brazil ground coffee is preferred. Even in this situation there some standardization. All ads have a common emotional link ‘whatever good coffee means to you and however you like to serve it, Nescafe has a coffee for you’

Markets are constantly changing and are in the process of becoming more alike but the world is far from being a homogenous market with common needs and wants for all products.

McDonald’s worldwide is well known for the high degree of respect for the local customs and cultures. It has developed a menu especially for India with vegetarian selections to suit Indian tasted and preferences. It has introduced vegetarian and non-vegetarian items with local flavours that have appealed to the Indian palate.


CURRENT GLOBAL TRENDS

Developing markets all over the world are experiencing rapid industrialization, creating growing industrial and consumer markets, economic growth and new opportunities for foreign investment. In China, few days before the new year the foreign outlets are jammed with bargain hunters pushing carts loaded high with food, kitchen appliances and clothing. The shoppers here are China’s noveau rich. Mega stores have opened in a number of Chinese cities. The Chinese market may be difficult to tap and may not be profitable for short business firms as they are learning about the ways and tastes of the east, which is so different from the west.

Extended families are spending money on kids, a common form of conspicuous consumption in the developing world. Even in China the spending power of youth is not to be discounted. China and other emerging markets throughout the world will account for 75% of the world’s total growth. The transition from socialist to market driven economies, the liberalization of trade and investment policies in developing countries, the transfer of public sector enterprises and the rapid development of regional alliances are changing the way countries will trade and prosper.

Decades ago larger parts of the developing world were hostile toward foreign investment and imposed severe regulatory barriers to foreign trade. Today it is different with the collapse of the Marxist- the socialist economic setup and the spectacular success of Taiwan, South Korea, Singapore and other Asian countries. It has become apparent that the path to prosperity was open and direct investment.

China, Taiwan, HongKong, South Korea, Poland, Argentina, Brazil, Mexico and India are some countries undergoing impressive changes in their economies and emerging as vast markets. In these countries there is over expanding and changing demand for goods and services, markets are dynamic and developing entities are reflecting the changing life style of culture. A pattern of economic growth and global trade appears to be emerging. It consists of three international market region that comprise major trading blocks. Europe, Asia, America, Indonesia, Malaysia, Thailand and the Philippines are beginning to chase the lenders.

These are the global trading blocks of the future. India now has the look and feel of the next China, but it continues to have problems. While it has overthrown the restrictions of earlier years it is not moving towards reforms and open markets with the same degree of vigour found in other emerging markets. Resistance to change comes from bureaucrats, farmers, union members as well as some industrialists who have lived behind protective barriers that excluded competition.

India is second in size only to China and both contain enormous low- cost labour. India ghas a large industrial base and is developing as a centre for computer software. These give India enormous potential. India’s weak infrastructure makes many aspects of doing business difficult and costly but the Indian government is addressing these problems. Private sector have entry power generation, oil and gas exploration, telecommunications, civil aviation, cellular phones. India still presents a difficult business environment. Widespread corruption and a deeply ingrained system of bribery make every transaction complicated and expensive. This corruption is persuasive, systematic, running from the bottom to top of the political order.


Cross Cultural Advertising

A portion of the consumers’ exposure to different cultures tend to come about through consumers’ own initiatives, their travel, working in foreign countries, immigration to a different country, movies, theatre, art and exposure to unfamiliar and different products.
The other major category of cultural exposure is often undertaken by marketers and advertisers seeking
To expand their markets by in a different country possessing a different cultural view. In this context advertisers in foreign provide a form of ‘cultural transfer’

Cross- cultural advertising is a responsible effort to borrow those cultural ways seen as helpful for the better solutions to a society’s particular problem. It is important for an advertiser to learn about the different cultures world wide if a brand has to be sold in a foreign country..

There are two types of knowledge, factual knowledge about culture which is obvious and must be learnt. Different meanings of colour, different tastes and other traits indigenous to a culture are facts that an advertiser can anticipate, study and absorb. The other is interpretative knowledge, an ability to understand and fully appreciate the meanings of different cultural traits and patterns eg the meaning of time, attitudes towards other people and certain objects, the understanding of one’s role in the society can differ considerably from one culture to another and require more than factual knowledge.

Factual knowledge as a fact about culture assumes additional significance and has to be interpreted within the context of the culture eg Mexico is 98% Roman Catholic. However it is equally important to remember that in Spain or Italy or any other country Catholicism is practiced in a slightly different manner.
Another conflict arises if one possesses factual knowledge but little interpretative knowledge. Taiwanese emphasise the collective while the westerners emphasise the individual. Emphasis on the collective results in a close-knit, supportive teams and creates a mind set which does not work with the western client. The problem is that when the local staff acts humble and cautious the westerner perceives the humility as ignorance or lack of knowledge.

An example of a good cross cultural advertising is the ‘Idea’ ad which has a Sumo wrestler buying vegetables. That was a fantastic way of advertising a foreign product in a country. ‘Idea’ wanted to go local in India. For that they showed a sumo wrestler buying vegetables in a typically Indian vegetable market. He is talking to the grocer and finding out the rates, which a very typical Indian way of buying vegetables and how the rates are brought down.


Multinational Competition and its impact on Indian Brands

With the entry of multinationals companies Indian brands now had to compete with the array of MNC brands.
theMNC brands enjoyed several strengths:
-money that support brand building over several years
-superior marketing/brand building skills
-ability to adapt to the local conditions
-backup of superior technology
-experience gained from operations in several markets around the globe.

The Indian brands had the advantage of operating in the home ground, they were culturally closer to the consumer and had a well entrenched distribution channel and a reasonable amount of brand patronage and loyalty. However the MNC’s were able to easily nullify all such advantages enjoyed by Indian brands. Indian brands had the the advantage of the lower cost of production and therefore they could compete on price. But the trouble was that these brands were often perceived to be of a lower quality compared to the multinational brands. The MNC’s were able to narrow the cost/price differential and also redefine the quality standards and improve the price-performance equation of their brands relative to the Indian brands.

The Indian consumer has no particular affinity for Indian brands. The average Indian consumer does not seem to be guided by the ‘be Indian- buy Indian’ slogan.
Indian brands were affected in multiple ways:

-loss of volumes and market shares
-squeeze on profit margins
-the compulsion to allocate additional resources for the brand, often beyond the capacity of the firm
-losing the race finally to the foreign brand
-takeover of the brand by the MNC if the brand managed to do well.

The onslaught of the foreign brands is most visible in the colour television segment. While ther collective share of BPL, Videocon, Onida and other desi brands has dropped, the MNC brands have grown. Some Indian players have been forced to do contract manufacturing for MNC brands to make use of their idle production capacity.
In the Audio segment the MNC brands like Aiwa. Sony and Panasonic have been gaining steadily and Indian brands like BPL are now going further down in their market shares.
In shampoos too MNC brands have been dominating the Indian market. Sunsilk, Clinic, Pantene. Pantene holds the number one position among shampoos internationally

It has been an unequal battle between players of unequal strength. It was unequal due to:
- lack of technology clout
- capital inadequacy
- lack of economy of scale
- lack of product clout and brand power
The MNC’s with their global capacities could feed the Indian market on the basis of marginal costing. Against this the Indian companies had very unviable production capacities and cost,.
The new all pervasive competition is the major challenge facing business firms in India in the liberalised era. The ground has become free for all. There is competition from imported products, competition from substitute products, from new sources of supplies. There is competition from the technology angle.
Many industries turned to exports due to domestic competition.
Most Indian firms find global marketing a difficult game due to;
- lack of global size
- low productivity
- low quality
- lack of brand power



ADVERTISING AND CHILDREN

The world of children has changed a great deal over the last decade; Kids are no longer
Passive consumers of brands that they once used to be, but are active seekers and influencers for a
whole range of products affecting their lives.
While this is true for products like chocolates, biscuits, ice-creams, it is also true for a whole other
range of high end consumables like packaged food, computers and believe it or not, cars
The new generation of youngsters sis an avid consumer of mass media, especially television. They
are increasingly vocal and influential when it comes to ‘brand choice’ and ‘brand purchase. The
influence spreads to categories which may not be directly used by kids (refrigerators, mobile
phones, (salt ads, spices )
advertisers are making their pitches to more and more younger audiences. ‘ catch them young’
seem to be the motto of the day.
Children learn how an item fits the lifestyle from cartoons, soap operas and serials. Children
Develop an unrealistic idea of how people live.
Children are getting older beyond their years. Todays generation is more computer literate and
advertising literate. Children are the now generation
Children respond more positively to messages communicated visually, rather than voice message.
Visual action is closer to their own play experience where actions speak louder than words.

One of the most controversial topics advertisers must deal with is the issue of advertising to
children Studies have also shown that tv is an important source of information for children about
products .
Critics argue that children are especially vulnerable to advertising because they lack the experience and knowledge to understand and evaluate critically the purpose of persuasive advertising appeals. They also feel that pre-school children cannot differentiate between commercials and programmes and cannot distinguish between reality and fantasy. Critics charge that advertising to children is inherently unfair and deceptive and should be banned.
On the other hand are those that advertising is a part of life and children must learn to deal with it in consumer socialization process of acquiring the skills needed to function in the marketplace.
Some feel that parents should be involved in helping children interpret advertising and can refuse to purchase products they believe are undesirable for their children.
Some countries have strict guidelines for advertising to children
The issues of advertising directed to children has been receiving greater attention recently. There is also a growing concern over how advertisers are using the internet to communicate with and sell to children
Advertising to children will remain a controversial topic. Some groups feel that government is responsible for protecting children from the potentially harmful effects of advertising while others argue that parents are ultimately responsible for doing so.

It is important to many companies to communicate directly with children. However only by being sensitive to the naivete of children as consumers will they be able to do so freely and avoid the conflict with those who believe children should be protected from advertising.
One group feels that banning tv ads will deny advertisers the right of free speech to communicate with other audience members. They also feel that no authority has the professional competence to serve as the ‘national nanny’ deciding what children should be exposed to. They say children are aware that fruits and vegetables are more nutritious than the highly sugared foods.
There have been attempts to ban sugared food products directed to or seen by children with nutritional and or health disclosures

It is reported that children between the ages of two and eleven spend about 25 hours per week watching television and see approx 20,000 ads per year and 7,000 of these ads are for sugared products.

Realising that children are imaginative and that make-believe play constitutes and important part of the growing-up process, advertisers should exercise care not to exploit the imaginative quality
of children. Unreasonable expectation of product quality or performance should not be stimulated
either directly or indirectly by advertising
Recognising that advertising may play an important part in educating the child, information should be communicated in a truthful and accurate manner with full recognition by the advertiser that the child may learn practices from advertising that can affect his or her health and well-being
The controversy on ads aimed at children has generated an ongoing steam of research on the effects of children’s advertising.

The effect of advertising can be both positive as well as negative .

All toothpaste ads like Colgate, Pepsodent etc inculcate a good habit of brushing the teeth in the morning and at night. They create awareness among the children regarding the ill effects of germs, weak gums etc.
The Raymond ads shows depressed school student wishing good bye to their principal. Out of respect and love for their principle they buy him a Raymond suit piece. It influences the kids to give the teacher the respect they deserve and love them for the knowledge they bestow on them.
The Thums up ad had a man standing at a cliff and performing ;bungee jumping’ A kid after watching this ad attempted a similar feat and jumped from the fifth floor of a building only to fall to his death.
Kwality Walls came out with a series of double meaning ads with lines like what on your stick?’ it showed a group of girls ragging a few guys, where an extremely rude and vulgar behaviour was
displayed with an all the more vulgar line ‘the big F. Several parents complained
Clinic Shampoo ad featured a girl child who is embarrassed because of her extremely lifeless hair. Is this the age when a kid should be worried about her looks and hair? Such ads make children grow older beyond their years and thus induce wrong attitudes and beliefs in them
The LG television ad showed a kid not going back home from school and standing outside a TV show room just to watch TV because at home his mother does not allow him to do the same. The ad said that kids could watch TV for unlimited hours without spoiling their eyesight. This influenced the child in a negative way.
The Lizol ad shows a child taking a biscuit and takes it all around the house, even the dirty nooks and corners of the house, even the toilet. After this he takes the biscuit and puts it the plate from which he had taken it.

Although many influences affect a child’s personal and social development, it remains the prime responsibility of the parent to provide guidance for children. Advertisers should contribute to this parent-child relationship in a constructive manner.

Advertising and Women

The role of the women in our society has changed. The traditional role cannot be accepted now. Women are playing a diversified role in the socio-economic context in our society. Women are emerging as a powerful influence group.
The portrayal of women in advertising is an issue that has received a great deal of attention through the years. Advertising has been criticised for stereotyping women and failing to recognize the changing role of women in our society. Critics have argued that advertising of ten depicts women as decorative objects or sexually provocative figures. Gender stereotyping has varied little over time. Women have been shown as lacking intelligence and credibility. They are shown as dependent on men and do make decision on their own
Advertising’s portrayal of gender roles was a representation of the long-existing unequal relationship of dominance and subservience between the two sexes.
The axe ad shows that a body spray can make the sexual availability of women easy.
Gender stereotyping is also prevalent in ads aimed at children. Boys are shown as being more knowledgeable, active, aggressive and instrumental than girls. Dominance and control are associated more with boys than girls
Feminist argue that advertising that portrays women as sex objects contributes to violence against women.
Some feel that image of the educated woman is type cast as arrogant, insensitive, self-centered,
Wily or the economically independent woman shown as domineering, hard, ruthless and the cause of all the suffering around her.
While sexism and stereotyping still exist, advertising’s portrayal of women is improving in many areas. Many advertisers have begun to recognize the importance of portraying women realistically.
He increase in the number of working women has resulted not only in women having more influence in family decision making but also in more single-female households, which mean more independent purchasers
Women have now crossed the boundary from the domestic sphere to the professional arena, expectations and representations of women have changed as well. Many ads are now depicting women in a diversity of roles that reflect their changing place in society. In many ads, the stereotyping traits attributed to women have shifted from weak and dependent to strong and autonomous.
The advent of woman reporters and the presence of some senior women journalists in positions of responsibility have made a significant difference to the coverage of women’s issues in the press .
While sports and athletics sported more men than women in the past. However, real achievers like Sania Mirza have changed all that. You see a cricketer like Mahendra Dhoni almost as often as you see Mirza..


Advertising and youth

Youth is seen as the most global segment as it is felt they show amazing similarities in taste, interest, language and attitude, music, fashion, film, video games & technology for global culture.
The youth in USA< Latin America, Europe, Asia, Australia are surfing the net, talking on their cell phones, playing their video games, watching MTV, drinking Coke and Pepsi
Young consumers around the world are spending, substantial money
Global youth is very ripe and growing market as there are over 200 million teens in Europe, Latin America and the Pacific Rim countries of Asia along with 40 million in USA and Canada.
There are;
-21% of US is 14 years and under
-25% in China
-33% in India
-37% in Philippines
-29% in Brazil
-27% in Argentina
Many youth around the globe have a strong interest in US culture and lifestyle and their hunger for Americana is being fed by their access to satellite tv and the net. Music, movie and sports are universal language for young people. Celebrates with global appeal appear in ads targeting youth. Pepsi (Britney Spears), Tiger Woods, Micheal Jordan (Nike)
The most important characteristic of young consumers globally is the sense of collectivist values have been the norm.
Although there are similarities of global youth, cultural differences still exist from one country to another.


Role of advertising in bringing about changes in culture, customs and traditions
Impact of advertising on attitudes, behaviour, societal norms, perceptions, needs life styles.


A characteristics of human culture is that change occurs. Reading a 20 year old magazine can see that people’s habits, tastes, styles, behaviour and values are not constant but continuously changing. However, this gradual cultural growth does not occur without some resistance. New ideas, methods and products are held to be suspect before they are accepted even if they are right.
The degree of resistance to the new pattern varied. In some cases new ideas are accepted completely and rapidly and in others, resistance is so strong that the acceptance if never forthcoming.

Concern is often expressed over the impact of advertising on society, particularly on values and lifestyles. While a number of factors influence the cultural values, lifestyles and behaviour of a society, the overwhelming amount of advertising and its prevalence in the mass media lead many critics to argue that advertising plays a major role in influencing and transmitting social values.
Rapid industrialisation has change many long honoured attitudes regarding time and the position of women. Today instant food other time saving devices all support a changing attitude. Although a variety of innovations have been accepted there are many that face resistance.
India has been engaged in intensive population control programmes for many years but the progress has been limited. Most attribute this to the low level of education and beliefs. The high birth rate is due to early marriage. Religion’s emphasis of bearing a son, the dependence on children for security in old age. All these are important cultural values are in variance with the concept of birth control.
The introductions of the I pill and the 72 hour pill to stop pregnancy are gaining popularity.
The institutions of family, religion and education have grown noticeably weaker over each generation. Many feel traditional authority is lessening and advertising has become a kind of social social guide. It provides ideas about style, morality and behaviour. Ads establish what is cool in society, ads show whites, blacks and kids from different social strata, dancing together. Ads show gays.
Ads on pizzas McDonalds fast foods, jeans etc have definitely has influenced our food habits, dress and our life but this has taken place only at the superficial level and mostly in the metros and bigger town and cities. Recent years have seen a lot of changes in our cultural base. This has been the result of the opening up of the channels of communications and exposures of other cultures.
The educated class has grown and some transformation was achieved without any change in the entrenched social cultural structure.
The life style of many have changed. Expensisve cars, gadgets, designer clothes and five star living was adopted due to the ad bombardment. The economic liberalization have altered the lives of the middle class too. They have become more international in their outlook and aspiration, more sophisticated and liberal in the lifestyle and attitude and certainly more adventurous and demanding of holiday and leisure activity
Now almost every consumer durable can be had on instalment and loans.
The credit card industry has mushroomed to more than a Rs 2000 crore business. Consumer giant companies spend more than Rs 600 crores in advertising.
The explosion of satellite tv brought home the consumer message with more than 100 channels. The impact if such exposure in terms of a desired life style cannot be overestimated

The core cultural values in India has still the cultural values of ethics and the social sensitivity of the olden days in spite of the vast changes that have taken place in the behavioural patterns of the Indian people.
The pressure of modernity is not strong enough to force a qualitative change in our cultural values.


The scope and challenge of international marketing

A global economic boom unprecedented in modern economic history has been underway as the drive for efficiency, productivity and open market sweeps the world. Powerful economic, technological, industrial, political and demographic forces are converging to build the foundation of a new global economic order.
Of all the events and trends affecting global business today four stand out as the most dynamic.
The rapid growth of world trade organisation and regional free trade areas.
The trend towards the accepting the free market system among developing countries LATIN America, Asia and Eastern Europe
The impact of the internet and other global media
The mandate to properly manage the resources and global environment for the generations to come.
It is not possible to avoid the influence of the globalisation of the world markets and the growth of emerging markets. For a growing number of companies, being international is no longer a luxury but a necessity for economic survival.

Domestic and International marketing.

Marketing concepts, principles and process are universally applicable and the marketers task is the same whether doing business in Africa or Japan. What then is the difference between domestic and international marketing? The difference lies in the environment within which the marketing plans have to be implemented. There are uncontrollable elements like government controls,legal restraints are some factors that affect marketing plans. Each country in which a company operates adds its own set of uncontrollable factors. The adaptation of the marketing mix to these environmental factors determine the ultimate outcome of the marketing enterprise. The uncontrollable elements are:

Political/legal forces
Competition
Level of technology
Economic forces
Geography
Culture
Distribution

Aspects of domestic environment
A political decision involving domestic foreign policy can have a direct effect on a firm’s international marketing success.
1) For example US government placed a total ban on trade to Libya to condemn Libyan support for terrorist attack. It also placed a total ban on trade with S Africa to protest apartheid.
2) Domestic economic climate is another important home based uncontrollable variable with far reaching effects on a company’s position in foreign markets. A capacity to invest is to a large extent a function of domestic economic vitality. If internal economic conditions deteriorate restrictions against foreign investments may be imposed to strengthen domestic economy.
Competition within the home country can also have a profound effect on the international marketer’s task. Eastman Kodak, leader in the domestic market planned to go international. However the competitive structure changed radically. Fuji Photo Film opened a 300 million dollars plant and gained 12% share of the market. Kodak had to direct its resources and energy back to the domestic market.


Foreign environmental uncontrollables often involves substantial doses of culture, political and economical shock. In China, which has moved from a communistic legal to a transitional period, new laws are passed but there is a lot of confusion as to what rules are still in force and what rules are not applicable.
The more significant elements of uncontrollable international environment.also include distribution, geography, infrastructure, cultural forces, level of technology, economic forces, and legal/political forces.
Level of technology exist between developed and un derdeveloped countries. Technical expertise may not be available. A marketer cannot assume technical concepts will be the same in all countries.
Political and legal issues are often amplified be the ‘alien status’ where foreign companies are viewed as outsiders and not to be trusted. The point is that foreign companies are foreign and always subject to the local political whims of the local government than a domestic firm.
The task of cultural adjustment is the most challenging and important one confronting international marketers. A westerner must learn that white is a mourning colour in parts of Asia; they are not prepared to understand the meaning of time to Latin Americans. Cross cultural misunderstanding can also occur a simple hand gesture has a number of different meanings in different parts of the world. When wanting to signify something is OK Americans raise a hand and make a circle with the thumb and forefinger. The same gesture means zero or worthless to the French, it means money to the Japanese and a general sexual insult in Greece. A US president sent an unintentional message to some Australian protesters when he held up his first two fingers with the back of his hand. To the Australians it meant putting up the middle finger.
Cultural conditioning is like an iceberg. We are not aware of nine-tenths of it. Foreigners must constantly guard against measuring and assessing the markets against the fixed values and assumptions of their own cultures.

Self reference criterion is the major obstacle to success in international marketing. It is the notion that one’s own cultural values, experience and knowledge is the basis for decision making. It is the notion culture is the best. When faced with a problem in another culture the tendency is to react instinctively and refer to one’s SRF. For eg in USA unrelated individuals keep a certain physical distance between themselves and others talking or in groups. In some cultures the acceptable distance is substantially less. A common mistake by westerners is to refuse food or drink. In Asia and Middle East a host is offended if you refuse hospitality. ESSO, the brand name in Japan phonetically means ‘stalled car’ the brand Pet in Pet Milk means flatulence in France. Unilever reformulated its detergent in Brazil. It realised the most Brazilian wash their clothes in rivers so the powder was wrapped in plastic and not paper and also that most Brazilians were poor and buy in small quantities so the product was in small low priced packages. In Germany ‘Vicks’ sounds like the crudest slang for intercourse, so it was changed to Wicks.
To go global one has to have tolerance of cultural differences and have knowledge of cultures, history, market potential and global economic, social and political trends.
Historical Perspective in Global Business

History helps define a nation’s mission, how it perceives its neighbour, how it sees its place in the world and how it sees itself. Insights into the history of the company are important for understanding the attitude about the role of government and business, the relationship between the managers and the managed, the sources of authority and attitudes towards foreign corporations. Unless we have a sense of the many changes have taken place in Japan’s history it will be difficult to understand why the Japanese have such strong loyalty towards their companies; or understand the loyalty in their distribution system, or why decisions are made by consensus. Loyalty to family, to country, to company, to social groups and the strong drive to co-operate to work together for a common cause, permeate many facets of Japanese behaviour
Why do Mexicans have a love-hate relationship with the USA? Latin Americans see the Monroe Doctrine as an offensive expression of US influence in their country.
Manifest Destiny and the Monroe Doctrine was the USA foreign policy. Manifest destiny meant in fact that USA was chosen by God to create a model society; it referred to territorial expansion of the US from the Atlantic to Pacific
The idea of Manifest Destiny was used to justify the annexation of Texas, New Mexico and California and later US involvement Cuba, Alaska, Hawaii and the Philippines. US prohibit non American intervention in Latin American affairs but it would police the area and guarantee that Latin America met their international obligations. The manner in which the USA acquired the land for the Panama Canal Zone typifies their policy ‘what is good for America is justifiable.

Geography and Global Markets
Geography is an element of uncontrollable environment that confronts every marketers. It is important in the study of markets and their environment. Altitude, humidity and temperature extremes are climatic features that affect uses and functions of products and equipments. The construction of equipment used in the USA requires extensive modifications to cope with the intense heat and dust of the Sahara Desert. A Taiwnese company sent a shipment of glasses packed in wooden crates with hay to prevent breakage.due to the warm climate and less humidity, the moisture content dropped and the hay shrivelled and the glasses arrived in pieces. Climate differences in Europe caused Bosch-Siemens to alter its washing machines. Germany and Switzerland needed a spin cycle of 1000rpm to 1600rpm. In Italy and Spain a spin cycle of 500 was enough. South America represents a well defined example of the importance of geography in marketing. 2/3rd is like Africa in climate, 48% is forest and jungle and only 5% arable .the location, quality and availability of resources will affect the pattern of world development and trade.





Context in cross-cultural communication

The amount of information given in a communication is called context. Context includes both the vocal and non-vocal aspects of communication that surround a word or passage and clarify its meaning.
In verbal communications, information is transmitted through a code that makes meanings both explicit and specific.
In non verbal communication, the non verbal aspects become the major channel for transmitting meaning.
The verbal factors include the rate at which one talks, the pitch or tone of one’s voice, the intensity or loudness of the voice, adaptability of the voice to the situation, the variations of rate, pitch and the intensity, the fluency, expressional patterns,


CROSS CULTURAL INFLUENCES ON ADVERTISING

Advertising and promotion are one of the most culture bound of the firm’s marketing functions. Messages must be adapted according to local culture. Japanese advertisers suggest rather than persuade, vague indirect messages are used. Comparative ads are not considered good taste and testimonials are seen as pushy and phony. Cheer detergent was advertised in Japan similar to those used in USA. These ads were found to be the most hated in Japan. Commercials in some countries have to be 29 seconds and not 30 seconds because 1 sec of silence at the beginning of the ad was necessary. Adaption becomes operationally imperative
The way culture reacts to communication and messages differs. Advertisers that understand these differences succeed. Koreans value the testimony of a friend, family member or opinion leaders. The Chinese consumers tend to rely more on word-of –mouth communication. The concept to the family is important in China and is thus played up in ads.
Ads in countries high in collectivism contain more group-oriented situations than found in individualistic societies. Cultures high on power dimension have ads with characters of unequal status Asian cultures get more information from contextual items than Europeans do. Ads which are popular in low context cultures frequently seem cold and arrogant to those from high context culture. Similarly commercials made for high context cultures confuse low context cultures because in spite of all the ads contextual richness the people in low context cultures never seem to “get to the point” American ads are more informative than Japan, China and Korea. Information strategy is more likely to be used in individualistic, polychromic and in cultures with low uncertainty avoidance.
Argument strategy is more likely to be used in monochromic cultures with low power distance, high uncertainty avoidance.
Motivation with psychological appeals is used in collective cultures with high power distance.
Symbolic association is more frequently used polychromic cultures with low power distance.
With non-verbal or visual ads it should be noted that body motions are interpreted differently among different cultures. In Japan, pointing to one’s chest with a forefinger indicates that the person wants a bath. In India kissing is considered indecent in public places or on ads. Symbols are not universal, snakes symbolize danger in Sweden while it symbolizes wisdom in Korea. In Saudi Arabia and other Arab countries it is against the law to publicly advertise symbols that contain Christian or Jewish connotations.
Cultural differences can create problems when potential customers translate the message into their own knowledge. The ads for Camay soap did not work in Japan because the ad featured men complimenting women on their appearance; the directness was not well received.
When dealing with different cultures, translation problems can be, if not fatal, at least embarrassing. Estee Lauder decided not to export it’s Country Mist make-up to Germany when it found that the word “mist” is slang for manure. The product was marketed un the name Country Moist. Parker pens had to change its ad campaign; bola means “ball” in some countries but revolution or lie in other Latin American countries. In Arabic countries thirty differe4nt dialects exists and even the printed language is not uniform.
Companies that understand differences exist make accommodations in their ads. Volvo emphasizes economy, durability and safety in America, status and leisure in France, performance in Germany, safety in Switzerland, price in Mexico.
French ads use more emotional appeals than American ads but American ads contain more information cues. The French use humour in their ads. American commercials are more information laden than British commercials. In Japan self-assertive communication style, the hard sell ad is often seen as arrogant, insensitive, egocentric, disrespectful. Indirect is better. Japanese ads are designed to appeal to emotions, produce good feelings and create a happy atmosphere. The ads are visually attractive and eye-catching, featuring bright colours. They often use symbols and strong gestures in their TV commercials. They do not contain much product information. It is sometimes difficult see what the product is from viewing the ad.
Cross Culture Psychological Segmentation

The system of segmenting consumers, clustering them on different behavioural and psychological dimensions is psychological segmentation.
In the USA the popular classification is VALS 2 where the respondents are classified on the basis of resources and the extent to which they are action oriented. There are eight groups as follows:
Fulfilleds
Believers
Actualizers
Achievers
Strivers
Strugglers
Experiencers
Makers
In Japan a specially designed VALS is operative
In Europe other approaches to psychographic segmentation have been used. One large study of 7,600 European from the continents five major luxury markets were conducted to identify the relationship between culture, trend following, income and the acquisition of luxury goods.
Consumers worldwide traits, presenting opportunities for standardized advertising. Among the global psycho-demographic segments that have emerged are the following:

Global teenager Psychographically, teenagers are described as astute consumers with precise desires for brand name clothing, products and entertainment. They purchase Levi’s and Jeans, Nike shoes and Ralph Lauren clothing. They listen to Madonna and World Beat music, go to discos and see newly released movies. This segment has been successfully targeted with messages local and international celebrity endorsers. MTV and CNN and Star Tv are into homes across the globe; global fast food franchise are appearing at street corners; it appears that we are moving toward one homogenized global community. Teenagers all over the world are more exposed than most cultural influences from other countries through music, clothing food, personal appearance and sports. Teenagers are less likely to be parochial and nationalistic and more likely to identify with pan national organizations.

Global Elite. This group has the highest income of all consumers; From a psychographic perspective, they travel the globe, often have homes in more than one country and spend money on luxury brands, such as Rolex and Mercedes. Targeting this group focuses on status, exclusive distribution, high price and status-oriented ad messages
While a common ad strategy might be possible for some countries, the need is also to accommodate country specific difference.
An interesting segment is a combination of the two, a youth driven Euroculture where natural heritage has become less important for a multilingual, educated, well traveled, cosmopolitan commonalities based on continental values and lifestyles. This spectrum covers a wide spectrum of male, female consumers

A study suggests that 95% of the population surveyed in 18 countries can be put in one of the five global segments given below:
Strivers 26% , Achievers 22% , Pressured 13%, Adapters 18% and Traditional

Young and Rubicum had its own theory based global segmentation scheme called “Cross Cultural Consumer Characterisation in which consumers in 20 countries have been placed in seven segments based on their goals, motivations and values

In sum, there are many others with various groups of consumers varying chiefly on the dimensions of income, desire for material success and social acceptance and personal or social idealism

Every country has its rich, middle class and poor, those that live their lives keeping up with the Joneses those who are dreamers and rebels.
Human nature and circumstances are essentially the same no matter where you live. The challenge facing the global advertiser is not only knowing the global segment to which the target consumer belongs but also the local difference.
There is need to focus on both simultaneously..


CROSS CULTURAL ISSUES IN SALES AND SALES MANAGEMENT

Sales

Products that are higher priced and complex require demonstrations or hands-on training or must be customized for each individual customer.
A manufacturing of Data System, a producer of computer software, finds that a sale in the US requires an average of two calls per sale. In Europe frequent call backs are necessary, each time with a higher level of management which means more time and cost. In Japan, a sale requires even more time than in Europe. In Malaysia it requires an average of only five demonstrations to make a sale bu 20 in the Philippines. Bargaining still dominates the exchange process in Saudi Arabia and all sales personnel are men. In Chinese society an aggressive salesman may frighten customers, who may be humiliated and then lose face. Chinese like to do their shopping without interference. They tend to chose someone who they are familiar with.
In Taiwanese culture, sales personnel rank low in the hierarchy of occupational prestige.
An American firm trained 40 young Brazilians in sales techniques for an entire week. After that they were told to go door-to-door selling the product. They were appalled. It is beneath the dignity of Brazilians to ring the doorbell and talk to women about a product.
In Japan cars are delivered on a lucky day. Every thing is done on a auspicious day
Regulations often influence the selling process. Customs and manners are also important. In Brazil it is important to dress as the customer dresses, casual or formal.
The English do not , as a rule, make deals over the phone. A Frenchman neither likes instant familiarity nor refers to strangers by their first names. Germans dislike overstatement and ostentatiousness. . ,
In China “no problem” frequently means there is a bit of problem.
Sales persons in Germany should address their customers by title eg Herr Doktor Schmidt.in Italy allow plenty of time for appointments since customer is very likely to spend several hours chatting with a salesperson. In the Middle East one should not be too distant or aloof as Arabs consider the sense of touch a means of communication
The Japanese selling process is human intensive rather than product intensive. Selling in Japan is a lengthy process with numerous repeat visits. In Japan the sales people lack respect. The route to the top goes through manufacturing not marketing and sales as in many American firms.

Sales Management
Sales management includes recruiting, training, motivation, compensation, evaluation, budgeting and supervision of a sales force. It is highly culture bound
Large differences in languages and dialects, social customs and government regulations will sometimes dictate the local hiring practices,
In Argentina there are severe regulations firing or discharging of personnel. In Brazilian law indicate that each salesperson must be assigned an exclusive territory and if reassigned the firm has to maintain the same salary for 12 months. In Venezuela dismissal laws are more severe; if the sales person has worked for 3 months he gets one months pay plus 15 days pay for every month of service exceeding 8 months plus 15 days pay for each year employed.

SALES PROMOTION AND CULTURE

Sales Promotion consists of those promotional activities other than advertising, personal selling and publicity. Common promotional tools include coupons, sweepstakes, games, contests, price-offs, demonstrations, point-of-purchase offers, price-off deals, event sponsorship and trading stamps
Differences in preferences for sales promotional tools are a direct expression of cultural differences. Eg French consumers prefer coupons and twin-pack promotions unlike British consumers who, for the same brand, respond better to a certain percentage extra free.
Price-offs tend to be ineffective in environments where prices are subjected to bargaining and can be subject to trade misuse. Stamps tend to be ineffective where the target market is not amenable to delayed gratification and their handling and redemption both require stable and sophisticated channels. In USA sweepstakes and contests are popular when targeted to lower income groups.
Coupon usage in USA is correlated with socioeconomic standing; the higher one’s level of education and income the greater is his or her use of coupons. 300 billion coupons are distributed to American consumers with a redemption rate of 2.5 %. The concept of coupons does not exist in many parts of Latin America. Coupon distribution in Italy continues to grow while if Spain it is declining In Eastern Europe the use of coupons is on the rise.
Fair trade regulations in Japan limit the value of premiums to a maximum of 10% of retail price and no more than 100 yens. The small stores in Japan precludes the use of some promotional tools that occupy store space (in store sampling) In Europe the emphasis is on price-oriented trade deals and in-store consumer promotions. In high-inflation economies, consumer promotions that offer immediate return work best. Money back guarantees make the Spanish think that the product is not good.
Mexico requires all special offers and price-off deals be approved by a government agency In France premiums are called “sales with a bonus” In Belgium it is called “linked offers”
Corporate event sponsorship are big in Japan.
The disparity in income throughout the world is and important obstacle to worldwide product standardization

Personal selling is the largest portion of the promotional mix in business-to-business marketing. However, in modern times, with the high growth of direct marketing, personal selling has taken on new life.
The process varies greatly across cultural and political borders. A sale in US requires on an average 2 calls per sale, in Europe frequent callbacks are necessary. In Japan it requires more calls than in Europe. Electrolux required 5 demonstrations to make a sale in Malaysia and 20 in Philppines. Since bargaining still persists in Saudi Arabia, personal selling is used to conduct transitions. All sales personal are men
Cultural norms must be understood before personal selling is undertaken.. eg An American salesperson visits a Saudi official for an introductory meeting for a new product. The Saudi offers the American coffee which is politely refused. He sits down, crosses his legs, exposing the sole of his shoe. He passes the documents to the Saudi with his left hand, inquires after his wife and assertively pursues the deal, within the first ten minutes the American had unwittingly offended the Saudi five times
Arabs like to meet sellers.. They are not good when it comes to correspondence. One must visit regularly and establish a direct personal relationship. In a 10 year contract between a Canadian firm and an Arabb manufacturer, minimum annual quantity was agreed upon. After the sixth year the order stopped coming. What happened was that the Canadian contract signer had left the company.


Channels of Distribution and Culture

A channel of distribution is the path the goods take from the manufacturer to the ultimate user. A channel provides the services needed to make a product available when it is demanded and in the quantities demanded by the customer.
For business to business goods, the4 path (or the channel length) is short, usually directly between manufacturer and the customer via the direct sales force of the manufacturer or often with an industrial distributor or agent. For consumer goods, channels are usually longer and typically have one or two levels of wholesalers before reaching the retailer and the final consumers/
The presence of intermediaries perform functions that the manufactures cannot or will not do. Their presence usually adds efficiency and effectiveness to the marketing process. The functions of the intermediaries include-shipping, advertising and promotion, financing, buying, selling, negotiation, stocking, etc International channel members may provide the export activities such as customs and tariff documentation, insurance and shipping.;
International channel alternatives are many. Distributors, agents, commission houses, import merchants, jobbers, brokers, trading companies cooperative exporters, state trading companies, vertical marketing systems, such as franchises and cooperatives.

An example of culturally determined fifference in distribution channels can be seen amongst dealers in India and USA. The Indian environment is characterized by greater unidirectional communication from suppliers to dealers, lower communication frequency, greater fuse of formal communication modes and greater supplier use of direct influence strategies. A typical dealer is small and this leads to asymmetrical power relationship and thus the communication flows are mostly unidirectional from suppliers to dealers.
Retailers in underdeveloped countries are small family owned business and carry few lines of goods, serving few customers. In these cultures the weekly market continues to be an important source of goods. As economies develop retailers tend to grow in size, widen their assortments, offer less personal service and segment their markets
Distribution in Japan is typically complex, multilayered, inefficient and highly unique. While USA needs two people to build a car and one to sell it, Japan requires one man to build a car and two to sell it. In USA the average price of a car is 1.7 times the factory invoice price; in Japan it is 3 times the factory price. Japan has more wholesalers and retailers per capita than any other advanced industrial nation. The ratio of wholesale to retail sale if four to one, three times higher than that found in the USA. Japanese wholesalers sell their goods to other wholesalers twice as frequently as of western countries. Japan has 30 times the number of food wholesalers as does the USA. A product ends up in a consumer’s ahnd only after it has passed through a distribution chain consisting of at least two or sometimes five layers of wholesale before landing on the retailer’s shelf. Prices escalate rapidly. Most retailers need frequent deliveries Campbell Japan Inc.’s typical delivery of soup to a retailer in Japan is six cans. In USA it is three to twenty-five cases, each case contains twenty-four cans. So in Tokyo soup costs four to five times more than in USA
The Japanese emphasize freshness and quality of produce and thus has three deliveries a day. Consumers buy less quantity and visit outlets more frequently
Italian distribution has fragmented retail and wholesale structure.
In Japan channel members are not altogether fifferent form family members, with all levels and members tightly interlocked by tradition as much as by emotion. It is traumatic and sometimes tragic decision if channel members have to be dropped. Such members may be unable to bear the social conseequence4 of losing face and pride. Because of this small or inefficient channel members are often retained and tolerated
In Netherlands buyers cooperative deal directly with manufacturers. In Germany mail order is important but not so in Portugal. Consumer Cooperatives control almost a quarter of food sales in Switzerland
In Kenya retail and wholesale business is controlled by Asians. In the Philippines, Indonesia and Malaysia the Chinese dominate. In Finland retailers predominate; the four wholesaling houses handle the major portions of all trade.

Channels differ by country and culture since where consumers buy certain goods also differ country by country. Eg contact lens solutions in Germany are found only that sell eye-glasses while in France it is found in drugstores as well Baby foods are bought only in pharmacies in Italy while in Germany consumers can buy them at grocery stores.
Motivation

Motivating subordinates to achieve company objectives is one of the most important responsibilities of a manager. Although individuals from differrent countries value different things, some generalisations can b e made. For example, in USA people are more individualistic, and are motivated by monetary rewards. The extent to which a country promotes individualism or collectivism is relevant when considering motivational techniques. Japan is a highly collectivist society, and its people are committed to group accomplishment. Individuals strive to receive recognition from their work group rather than monetary rewards.
Uncertainty avoidance and masculinity-femininity also influence motivational technique. Societies with weak uncertainty avoidance and highly masculine characteristics tend to take more risks and are motivated by trying to fulfill their need for achievement. In these societies a manager should provide challenging tasks and relatively high-level goals
In contrast, societies with strong uncertainty avoidance and feminine characteristics find an environment that is structured, well defined and secured to be highly rewarding. A manager who reduces ambiguity and uncertainty in working conditions may be highly regarded in this type of society. For example, worker self-management will not work well in this type of cultural condition.


Leadership Styles

Leadership can be defined as the ability of a person to inspire others to do tasks-related activities. However the responsibilities of a manager and a leader are not always the same. Motivation is only one component of leadership. In addition to being a motivator, the responsibilities of a leader also include providing direction and inspiration for subordinates.
Research on leadership indicates that there is no one ‘best way’ to lead. Many factors come into play, including the values of the subordinates. Two of Hofstede’s dimensions of culture, individualism-collectivism and power distance are relevant to leadership.
People in countries that measure high in terms of individualism like work that rewards individual effort. This does not however mean that they do not want structure . individuals from these countries prefer management programmes that establish objectives and provide guidelines for reaching those objectives.
On the other hand, individuals from collective societies prefer to be rewarded for group performance. People in countries that score high in power distance, such as China, prefer a more autocratic management style over one that is participatory. Subordinates believe that a superior cannot do his or her job if the subordinates are included in the decision-making process.

Current Global Trends

Developing markets all over the world are experiencing rapid industrialization, creating growing industrial and consumer markets, economic growth and new opportunities for foreign investment.
In China, few days before the New Year, the foreign outlets are jammed with bargain hunters pushing carts loaded high with food, kitchen appliances and clothing; the shoppers here are China’s noveau rich. Mega stores have opened in a number of Chinese stores.

The China market may be difficult to tap and may not be profitable for short term business firms as they are learning about the ways and tastes of the east which is so different from the west.
Extended families are spending money on kids, a common form of conspicuous consumption in the developing world. Even in China, the spending power of youth is not to be discounted.
China and other emerging markets throughout the world will account for 75% of the world’s total growth. The transition from socialists to market driven economies, the liberalization of trade and investment policies in developing countries, the transfer of public sector enterprises and the rapid development of regional market alliances are changing the4 way countries, will increase trade and prosperity.

Decades ago larger parts of the developing world were hostile toward foreign investment and imposed severe regulatory barriers to foreign trade.
Today it is different with the collapse of the Marxist-socialist economic setup and the spectacular success of Taiwan, South Korea, Singapore and other Asian countries. It has become apparent that the path to prosperity was open direct investment.
China, Taiwan, Hong Kong, South Korea, Poland, Argentina, Brazil, Mexico and India are some of the countries undergoing impressive changes in their economies and emerging as vast markets. In these countries, there is ever expanding and changing demand for goods and services, markets are dynamic developing entities and are reflecting the changing life style of a culture.

A pattern of economic growth and global trade is emerging. It consists of three multinational market regions that comprise major trading blocks- Europe, America and Asia. Indonesia, Malaysia, Thailand and the Philippines are beginning to follow. These are the trading blocks of the future.
The wave of change that has been washing away restricted trade controlled economies, closed markets and hostility to foreign investments in most developing countries has also reached India.

India has now the look and feel of the next China, but it continues to have problems. While it has overthrown the restrictions, it is not moving towards reforms and open markets with the same degree and vigour found in other emerging markets. Resistance to change comes from bureaucrats, farmers, union members as well as some industrialists who have lived behind protective barriers that excluded competition.

India is second in size only to China and both contain enormous low-cost labour. India has a large industrial base and is developing as a center for computer software. These give India’s reforms enormous potential. India’s weak infrastructure makes many aspects of doing business difficult and costly but Indian government is addressing these problems.
Private sectors have entry to power generation, oil and gas exploration, telecommunications, civil aviation, cellular phones etc

India still presents a difficult environment. Widespread corruption and a deeply ingrained system of bribery make every transaction complicated and expensive. This corruption is persuasive, systematic,
Structured –running from the bottom to top of the political order.
Trade is well over other developing countries and India has the capacity to be one of the more prosperous nations of Asia.

The Impact of Global Competition in the field of Advertising
The integration of western Europe and the opening up of the eastern European market and the crumbling of political, economic and customs barriers made it easier for companies to operate in a truly global manner. Consumers in the rapidly emerging markets of Asia and elsewhere are showing a voracious appetite for branded goods.

This has led to the increased attention to the need to create global brands that can take advantage of such growing economies. N America, Europe and Japan realised the need to look for other markets for their growth.
The growth of global media & satellite and cable-basedTV channels across the world has also led to increase in global/international advertising campaigns.

There is no doubt that global marketing and advertising are becoming very important today because major companies and brands have begun to see the need to grow in countries outside their traditional domestic bases

Advertising agencies themselves have begun to form global networks and alliances. This was because their global clients began to seek global servicing capabilities and also because they wished to gain a larger share of the fast growth in advertising revenue

The advantage that global companies enjoy is operating economies of scale. This means that having larger volumes of the same product and sold over a larger market area can produce and market them at a lower cost per unit due to economies of scale.

The globalisation has thus resulted in the rush of companies to market their products on a global scale. The competition of the various brands introduced by various firms along with the competition of local or domestic brand had a impact on the advertising world.
Ad agencies began to form global networks and alliances. The increasing global clients began to seek global servicing capabilities and also because these agencies wished to gain a larger share of the fast growth in advertising revenue

Advertisers realised that advertising campaigns that work in one market may not work in another. Consumers in every country are still somewhat differe4nt from each other, with different habits, tastes and preferences. Eg Americans like to drink orange juice for breakfast the French don’t. In the Middle East most prefer toothpaste that tastes spicy; this taste may not work in other markets McDonald’s has to vary its menu in different countries.

Advertisers are aware of the disastrous mistakes made by agencies that failed to understand local consumer differences. Pepsodent was trying to a teeth whitening appeal in parts of Asia but failed because dark-stained teeth were considered prestigious A multinational advertiser must understand the cultural nuances of a local market inorder to be successful because it may differ substantially from the culture of the home market.
Advertisers have to know about the government regulations and the media availability and distribution arrangements of the country where they have their campaign.. The competitive environment may vary dramatically. Agencies may also face brands that follow very different positioning strategies across many markets

Controversial advertising

The controversy about many ads shows how our traditional conservative society is still trying to decide how much sexuality to allow in advertising. India’s growing economy and rapid internationalization are adding to the issue as they challenge India’s home-grown mores in new ways.
The Ministry of Information and Broadcasting refers all complaints of ads that are controversial to the ASCI, Advertising Standards Council of India, which is the industry’s self-regulatory body. Once the ad-industry council has issued its opinion, the ministry has the final say.
The ASCI has taken action on ads that it thought went too far.

Dark Temptation ad showed a woman taking bites out of a man who is coated in chocolate after using the chocolate flavoured deodorant. the Ministry of Information and Broadcastion stopped the from being broadcast after receiving a complaint from a viewer who found it offensive the shot of a woman biting the chocolate off a the man’s bottom.The ASCI banned the ad and now the ad is shown without the woman biting off the chocolate
Wild Stone, a deodorant ad shows a woman tricking her way into her brother-in-law’s arms because of the effect his deodorant has on her. The brands tag line says ‘barely legal’. Another deo ad called Fuel for Men launched by Elder Health Care Ltd in alliance with VLCC Healthcare Ltd, shows a woman so attracted to a man using the product that she starts unbuttoning her blouse.

The ASCI , after receiving a complaint contact the respective advertisers for their explanation before taking a decision to pull these ads off-air.
These companies, however say they have not stepped out of line with the above commercials. They feel that there are certain category truths that are known to sell products like toothpaste results in clean teeth and shampoo in clean hair. Similarly, fragrances are associated with attraction and the above ads are based on that premise. The ad agency that created these ads also defended it. They argued that behavioural scientist have established that males groom themselves for the female species and that is exactly what the ad is reflecting. However, it may be that males groom themselves for the female species , the objection is the reaction of the female in the ads that is offensive. It is demeaning to women
There are several ads on deodorants that have raised objections such as Fa Men’s Xtreme and Zatak are also airing ads with sexual overtones. These ads gained ground after the campaign for the Axe deo ad. The Axe ad has been the only body spray to face scrutiny from the government even though competitors have run racy ads of their own.

The Amul Macho underwear ad was another very controversial ad which was found very offensive. It showed a young woman comes to a river to wash her husband’s clothes. She pulls pair of men’ bovver shorts from the laundry pile and begins to wash it, giving sultry looks to the camera and throwing her head back in a suggestive manner. The ad ends with a breathy female voice saying ‘Amul Macho’ crafted for fantasies’

Pepsi ad was banned after human rights groups said it promoted child labour. It depicted a young Indian boy bringing drinks to the Indian national circket team. The ad was withdrawn. India is a signatory to the Convention on the Rights of the Child and is committed to putting an end to child labour in any form
A cancer vaccine commercial seen on Indian television urge parents to get their young girls inoculated the vaccine Gardasil to protect against cervical cancer, the second most major cancer in women.
What the ad hides is that it is mired in a controversy in the USA. It was launched in India in October 2008 with television ads. Advertising prescription on television is unethical enough, but using fear to sell them is worse. Gardasil is an efficient vaccine but the safety and risk information about it has not been available to parents.

Anchor and Havells were involved in a ‘hair raising controversy. Anchor electricals accused Havell of copying a concept for its hair raising television commercial and demanded that Havells take the campaign off the air.
The Havell ad showed a boy whose everyday life is disrupted when his hair stands on end because he used a faulty switch at home. Anchor claimed the concept was taken from a previous television ad created for Anchor switches.
Anchor wrote a letter to Havell to stop airing the ad. Havell said they had not received the letter.

An insurance ad showing a father in a hospital carrying a new born baby girl saying ‘hai to pyari magar boge hai bhari’. The authorities in Delhi had the ad scrapped.
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The makers of Complan moved the Mumbai High Court to stop the Horlicks from airing their Horlicks ad which said it had all the required 23 nutrients but was still
Priced at Rs 128 against Rs 174 the price of Complan. The Mumbai High Court refused to grant any relief to the makers of Complan.


THE GLOBAL ENVIRONMENT
One of the major developments in the business world during the decade of the 90s was the globalization of markets. The emergence of a largely borderless world has created a new reality for all types of companies. Today, world trade is driven by global competition among global companies for global consumers. With the development of faster communication, transportation, and financial transactions, time and distance are no longer barriers to global marketing.
Products and services developed in one country quickly find their way to other countries where they are finding enthusiastic acceptance.
Consumers around the world wear Nike shoes and Calvin Klein jeans, eat at McDonald’s, shave with Gillette razors, use Apple and Dell computers, drink Coca-Cola and Pepsi Cola soft drinks and Starbucks coffee, talk on cellular phones made by Nokia and Motorola, and drive cars made by global automakers such as Ford, Honda, and Nissan.

Companies are focusing on international markets for a number of reasons. Many companies in the U.S. and Western Europe recognize that their domestic markets offer them limited opportunities for expansion because of slow population growth, saturated markets, intense competition, and/or an unfavorable marketing environment.

Many companies must focus on foreign markets to survive. Most European nations are relatively small in size and without foreign markets would not have the economies of scale to compete against larger U.S. and Japanese companies. For example, Swiss based Nestlé and Netherlands-based Unilever are two of the world’s largest consumer product companies because they have learned how to market their brands to consumers in countries around the world. Two of the world’s major marketers of cellular telephones are from Scandinavian countries. Nokia is based in Finland and Ericsson is located in Sweden. Australia’s tourist industry is a major part of its economy and relies heavily on visitors from other countries.

Companies are also pursuing international markets because of the opportunities they offer for growth and profits. The dramatic economic, social, and political changes around the world in recent years have opened markets in Eastern Europe and China. China’s joining of the World Trade Organization in 2001 has provided foreign competitors with access to more than 1.2 billion potential Chinese consumers, and Western marketers are eager to sell them a variety of products and services. The growing markets of the Far East, Latin America, and other parts of the world present tremendous opportunities to marketers of consumer products and services as well as business-to-business marketers.

International markets are important to small and mid-size companies as well as the large multinational corporations. Many of these firms can compete more effectively in foreign markets, where they may face less competition or appeal to specific market segments or where products have not yet reached the maturity stage of their life cycle.
Advertising and promotion are important parts of the marketing program of firms competing in the global marketplace. More and more companies recognize that an effective promotional program is important for companies competing in foreign markets.


Many companies have run into difficulties developing and implementing advertising and promotion programs for international markets. Companies that promote their products or services abroad face an unfamiliar marketing environment and customers with different sets of values, customs, consumption patterns, and habits, as well as differing purchase motives and abilities.
Languages vary from country to country and even within a country, such as India or Switzerland. Media options are quite limited in many countries, owing to lack of availability or limited effectiveness. These factors demand different creative and media strategies as well as changes in other elements of the advertising and promotional program for foreign markets.


GLOBAL ENVIRONMENT: There are eight types of global environments. They are:
1) Demographic Environment
2) Economic Environment
3) Natural Environment
4) Technological Environment
5) Political Environment
6) Legal Environment
7) Social Environment
8) Cultural Environment
The advertiser must also necessarily consider the differing media patterns in different countries and also the manner in which the above mentioned environments impact media & advertising.

Demographic Environment:
Major demographic differences exist among countries as well as within them. Marketers must consider income levels and distribution, age and occupation distributions of the population, household size, education, and employment rates. In some countries, literacy rates are also a factor; people who cannot read will not respond well to print ads. Demographic data can provide insight into the living standards and lifestyles in a particular country to help companies plan ad campaigns.
Demographic trends are highly reliable for the short & intermediate run. The main demographic force that marketers monitor is population, because markets are made up from people.

Marketers are keenly interested in the size and growth rate of population in cities, regions, and nations; age distribution and ethnic mix; educational levels; household patterns and regional characteristics & movements.

Worldwide Population Growth:
The world population is showing explosive growth. It totaled 6.1 billion in 2000 and will exceed 7.9 billion by the year 2025. Population growth highest in countries & communities that can least afford it.
 In developing countries while the death rate has been falling considerably due to modern medicine, the birth rate has remained fairly stable. Feeding, clothing and educating children, while also providing a rising standard of living, is nearly impossible in these countries.


 A growing population does not signify a growing market unless these markets have sufficient purchasing power. E.g. the Chinese Govt. in order to curb the population has passed regulations limiting families to one child. Hence these children are fussed and pampered and known as ‘ little emperors’ in China.
 These children are being showered with everything from candies to computers as a result of the “six pocket syndrome.” As many as six adults – great grandparents, grandparents, parents, and aunts & uncles- may be indulging the whims of each child.

This trend has encouraged toy companies like Japan’s Bandai Company, Denmark’s ‘lego’ group, and the US’s Mattel to aggressively enter the Chinese market.
 Population Age Mix: National populations vary in their age mix. At one extreme is Mexico, a country with very young population & rapid population growth.
At the other extreme is Japan, a country with one of the world’s oldest population.
There is a global trend toward an aging population.


A population can be subdivided into 6 age groups: preschool, school age children, teens, young adults aged 25-40, middle-aged adults aged 40-65, and older adults aged between 65 and up.
For marketers, the most populous age groups (the most dominant age group in any population) shape the marketing environment.
The American population is indicated by various terms such as ‘Baby Boomers’ (1946-1964), Gen-X (1965-1976), Gen-Y (1977-1999), Gen-Z (2000 onwards). Gen-Y & Gen-Z are also referred to as ‘Net-Gens’- because of their obsession, fluency & comfort with the Internet.

 Sex Ratio/ Gender Issue:
Sex Ratio is ratio of men to women(No.of Men:No. of Women)
Gender is a social construct & Sex is a biological construct.
The sex ratio provides an indication regarding the need for goods & services that are sex specific. Correspondingly, their marketing potential will increase or decrease.

The term ‘Gender’ refers to the social perception regarding the roles played by men & women in the society. In a gender neutral society, more goods & services that are women friendly can be advertised and promoted.

 Household Patterns:
 Traditionally, we had joint families, then changed to Nuclear families. Now there are many others like single-live-alones, adult-live-togethers’ of one or both sexes, single-parent families, childless married couples, double income no kids(DINK).
More people are divorcing or separating, choosing not to marry, marrying later or marrying without the intention to have children.
Each group has a distinctive set of needs & buying habits. For example, people in the SSWD group ( single, separated, widowed, divorced) need smaller apartments, smaller appliances etc. Marketers must consider the needs of non-traditional households.

Each type of structure may require different kinds of products & services.
 Income Level: Income level of the population determines its ability to use certain goods & services. This in turn determines the advertising potential.
 Educational Level: The population in any society falls into distinctive groups based on their education. They could be illiterates, high school drop-outs, high school diplomas, college degrees, professional degrees. In Japan, 99% of the population is literate. The educational background will determine the kind of goods and services that can be offered to the population & the types of advertisements that can be produced.

 Demographic information can reveal the market potential of various foreign markets. India’s population topped 1 billion in 2000. Only China, with over 1.2 billion people, has a larger population.18 Latin America remains one of the world’s largest potential markets, although the meager income of most consumers in the region is still a problem. Brazil, the largest consumer market in South America, now has a population of 200 million and is a growing market for many products and services. More than 50 percent of the Latin American market is younger than age 26, and 30 percent is under 15. Moreover, children are the fastest-growing segment of that market. These numbers have caught the attention of international advertisers such as Mattel, Hasbro,
Burger King, and others.19 Indonesia also has a very young population, with more people under the age of 16 than the United States, and they are very receptive to Western ways and products. For example, Tower Records, a California-based chain of music stores, opened stores in Bangkok that are nearly identical to its U.S. outlets and are very popular with the youth in Thailand.


 Economic Environment:
 Economic Structure- The market situation is referred as Economic Structure. A country’s economic conditions indicate its present and future potential for consuming, since products and services can be sold only to countries where there is enough income to buy them.
 The economic level of a country is the single most important environmental element to which the foreign marketer must adjust the marketing task.
The stage of economic growth within a country affects the attitudes toward foreign business activity, the demand for goods, distribution systems found within a country, and the entire marketing process.

 Developed countries have the economic infrastructure in terms of the communications, transportation, financial, and distribution networks needed to conduct business in these markets effectively. By contrast, many developing countries lack purchasing power and have limited communications networks available to firms that want to promote their products or services to these markets.
 For most companies, industrialized nations represent the greatest marketing and advertising opportunities. But most of these countries have stable population bases, and their markets for many products and services are already saturated. Many marketers are turning their attention to parts of the world whose economies and consumer markets are growing.

 In the early to mid-1990s many marketers began turning their attention to the “four Tigers” of Asia—South Korea, Singapore, Hong Kong, and Taiwan—which were among the fastest-growing markets in the world. However, in 1997 the Asian economic crisis hit, and these countries, as well as other parts of Asia, experienced a severe recession which resulted in major declines in consumer spending. Latin America also experienced a severe economic crisis in the past several years. The economy had been particularly bad in Argentina as a result of government instability and fiscal policies that have resulted in the peso losing its value against the dollar and euro. Advertising spending in Argentina declined from more than $3 billion in 1999 to barely half a billion in 2002. Brazil, which is another major market in Latin America, has also experienced economic problems recently.

 The global economic slowdown that began in 2001 and the ongoing slowdown has created problems for most multinational companies and has led to reductions in advertising spending in most countries. The economies in many countries are stagnant making it difficult for companies to meet their growth objectives. However, a number of multinational companies are focusing on markets experiencing stronger economic growth, such as those in China. Many are also turning their attention to third-world countries where consumer markets are slowly emerging.
In static economies, consumption patterns become rigid, and marketing is typically nothing more than a supply effort. In dynamic economies, consumption patterns change rapidly. Marketing is constantly faced with the challenge of detecting & providing for new levels of consumption, and marketing efforts must be matched with ever-changing market needs and wants
 Economic development presents a two-sided challenge.
1) A study of the general aspects of economic development is necessary to gain empathy for the economic climate within developing countries.
2) The state of economic development must be studied with respect to market potential, including the present economic level and the economy’s growth potential.
The current level of economic development dictates the kind and degree of market potential that exists, while knowledge of the dynamism of the economy allows the marketer to prepare for the economic shifts and emerging markets.

 Economic development is generally understood to mean an increase in national production that results in an increase in the average per capita gross domestic product(GDP).
 GDP & GNP are two measures of a country’s economic activity. GDP is a measure of the market value of all goods & services produced within the boundaries of a nation, regardless of asset ownership. Unlike GNP, GDP excludes receipts from that nation’s business operations in foreign countries, as well as the share of reinvested earnings in foreign affiliates of domestic corporations.

 Economic development, as commonly defined today, tends to mean rapid economic growth- improvements achieved in “decades rather than centuries”- & increases in consumer demand.
 The United Nations uses a system to classify a country’s stage of economic development based on its level of industrialization. It groups countries into 3 categories: MDCs (more developed countries)- industrialized countries with high per capita income such as Canada, England, France, Germany, USA, Japan; LDCs(less-developed countries)- industrially developing countries just entering world trade, many of which are in Asia & Latin America, with relatively low per capita incomes; and LLDCs(least-developed countries)- industrially under-developed, agrarian, subsistence societies with rural populations, extremely low per capita income levels and little world trade development. They are found in Central Africa & parts of Asia.

 The UN system has been criticized because it no longer seems relevant in the rapidly industrializing world today. In addition, many countries that are classified as LDCs are industrializing at a very rapid rate while others are advancing at more traditional rates of economic development.
 Countries that are experiencing rapid economic expansion & industrialization and do not exactly fit as LDC or MDCs are more typically referred to as newly industrialized countries(NICs).These countries have shown rapid industrialization of targeted industries & have per capita incomes that exceed other developing countries. They have instituted significant free-market reforms & therefore attract both trade and foreign direct investment. Chile, Brazil, Mexico, South Korea, Singapore & Taiwan are some of the countries that fit this description- exporters of steel, automobiles, machine tools, clothing, electronics as well as markets for imported goods

 Brazil, large exporter- exports alcohol, carbon, steel, orange juice, soy-beans,& weapons(world’s 6th largest weapon exporter). Ships cars, trucks & buses to Third World Countries- Volkswagen has produce more than 3 million VW Beetles in Brazil.
 Markets require purchasing power as well as people. The available purchasing power in an economy depends on current income, prices, savings, debt and credit availability.
 Marketers must pay careful attention to trends affecting purchasing power because they can have a strong impact on business, especially, if the products are targeted to high-income groups and price-sensitive consumers.

 There are four types of industrial structures-
1) Subsistence economies(few opportunities for marketers)- African countries.
2) Raw- material- exporting economies like Zaire(copper) and Saudi Arabia(Oil), with good markets for equipment, tools, supplies and luxury goods for the rich.
3) Industrializing economies, like India, Egypt and the Philippines, where a new rich class and a growing middle class demand new types of goods.
4) Industrial economies, which are rich markets for all kinds of goods.

 Income & Wealth Distribution in the Economy-
In global economy, marketers need to pay attention to the shifting income distribution in countries around the world, particularly where the affluence levels are increasing.
Marketers distinguish countries with 5 different income- distribution patterns-
1) very low incomes 2) mostly low incomes 3) very low, very high incomes 4) low, medium, high incomes and 5) mostly medium incomes.
 Currency Stability- Foreign Exchange Rate- The foreign exchange rate is the rate at which the currency of a country is exchanged against the currency of another. It is the price of one currency against another currency. The exchange between rupee & dollar refers to the number of rupees exchanged or are required to be given to obtain one dollar.
Exchange rate is determined by the monetary authorities in a fully controlled system. Monetary authorities decide the rate based on demand and supply forces. In a free market, exchange rate is determined purely by market forces i.e. demand for and supply of foreign exchange.

 Monetary Mechanism & Control: (Central Bank) Mechanism & Control refers to the policies that are made by the Central Bank. It shows how effective the bank’s policy could be.
Inflation: Too much money chasing too few goods.
 Fiscal Measures: Taxation policies.

 Natural Environment:
It comprises of I) Forests ii) Rivers iii) Climate
iv) Mineral wealth v) Disaster
The deterioration of the natural environment is today a matter of global concern. Air & water pollution have reached dangerous levels in many cities of the world.

‘Greenhouse gases’- due to the burning of fossil fuels
Depletion of the ozone layer due to certain chemicals
Increasing shortages of water- All of these and more is of growing concern today.
In Western Europe- ‘green parties’ have pressed for public action to reduce industrial pollution.
The recent problems concerning ‘Natural Environment’ may be indicated as:
a) Scarcity of resources due to unscrupulous usage.
b) Increase in pollution & the creation of ‘Asian Brown Haze’- the pollution ring above the Asian scene is turning black from light brown. It has created a dent in the Ozone layer that leads to global warming in an overall manner. This leads to floods and other disasters.
New regulations have hit certain industries badly.
Steel companies & public utilities have had to invest in pollution control equipment & more environmentally friendly fuels.
The auto industry introduced expensive emission controls in cars. Companies, hopefully will adopt practices that will protect the natural environment.
Anti-Pollution measures- Industrial activity does damage the Natural Environment-chemical pollutants, littering of environment with plastic, bottles and other packaging materials.
A large market has been created for pollution-control solutions such as recycling centers.
Governments in many countries promote a clean environment- though the efforts vary- poorer nations lack the funds or political will to do so.


 Technological Environment:
Technology is today changing people’s lives. Technology has released big wonders that have been beneficial to mankind but also has seen some horrors too.
The economy’s growth rate is affected by how many major new technologies are discovered.
Backward countries nave poor infrastructure, lack of know-how, lack of finance.
Developing countries have a steady economic growth, scientific advancement.
Highly developed countries- Media convergence, media boom- Virtual Reality- enabling an individual to experience a 3D effect in the internet. Fuzzy logic technology- provides the 6th sense to consumer durables like washing machines & refrigerators.




Political Environment:
Political environment is a comprehensive term, includes political parties, government agencies, pressure groups that influence and control individuals & organizations in society.
These factors may vary considerably between nations. A country may have- Democracy, where there is maximum freedom; Military Regime; Communist Regime or Monarchy.
However, irrespective of the type of political set up, trade and industry will flourish depending on the stability of the government in the country.
 Regulations differ owing to economic and national sovereignty considerations, nationalistic and cultural factors, and the goal of protecting consumers not only from false or misleading advertising but, in some cases, from advertising in general.
 Economic systems provide another base for classification of governments. They can be- Capitalist Economy, Socialist Economy, Mixed Economy.
 In a capitalist / free market economy, an entrepreneur is free to invest and produce goods of his choice. The government exercises minimum control in planning and regulating the working of market.
 In a socialist economy, the govt. has absolute control over various factors of production and its allocation among various units. The govt. decides what to produce and what should be consumed. This concept is now wearing out- the downfall of Soviet Union has brought an end to communist philosophy excepting in Cuba.

 In mixed economy, a combination of capitalist and communist economic system. Allows investments by private and public sectors.
 A number of political risks also govern the political environment such as social unrest in the country, unfriendly foreign policies of the government.
 It is difficult to generalize about advertising regulation at the international level, since some countries are increasing government control of advertising while others are decreasing it. Government regulations and restrictions can affect various aspects of a company’s advertising program, including:
• The types of products that may be advertised.
• The content or creative approach that may be used.

• The media that all advertisers (or different classes of advertisers) are permitted to employ.
• The amount of advertising a single advertiser may use in total or in a specific medium.
• The use of foreign languages in ads.
• The use of advertising material prepared outside the country.
• The use of local versus international advertising agencies.
• The specific taxes that may be levied against advertising.


 Legal Environment:
 Provides laws, rules, regulations and procedural formalities laid down by the govt. there may be laws related to every element of the marketing mix such as Product Quality, Pricing, Packaging, Cancellation of agreements etc.
 Constitutional Provisions
 Consumer protection Laws (Consumer protection act of 1986, RTI, MRTP- Monopolies & Restrictive Trade Practices of 1969- yoga, haldi, neem- US & other nations trying for a patent right over them).
 Legal machinery , through which grievances are settled.
 Parliamentary Act, generates from constitutional practices.
 Public Awareness/ Public Activism.

 A number of countries ban or restrict the advertising of various products. Cigarette advertising is banned in some or all media in numerous countries besides the United States, including Argentina, Canada, France, Italy, Norway, Sweden, and Switzerland.
 The Australian government limits tobacco advertising to point of purchase. The ban also excludes tobacco companies from sponsoring sporting events. In Malaysia, a government ban on cigarette-related advertising and sponsorship was initiated in 2003 in an effort to curb the rising number of smokers in the country. In China, tobacco and liquor advertising are banned except in hotels for foreigners.

 Recently the tobacco industry has been reducing its advertising efforts in markets around the world, including Asia and Eastern Europe, where they have enjoyed much more regulatory freedom. Three of the largest tobacco companies are leading an effort to implement self-imposed restrictions and requirements for their advertising. For example, the tobacco industry agreed to stop all television advertising in Mexico at the end of 2002 as part of a raft of new self-regulatory measures. Many of these restrictions are already being forced on the companies in North America, Western Europe, and North Asia, where governments take a tough stance on tobacco advertising. However, regulations in
many other countries, such as Indonesia and the Philippines, are minimal. The industry’s self-regulatory efforts are seen as a move to head off a campaign by the World Health Organization for a worldwide ban on all tobacco advertising.
 In Europe there has been a longstanding ban on advertising for prescription-drug products, which is designed to keep government-subsidized health care costs under control. The European Union has argued that advertising increases the marketing budgets of drug companies and results in higher prices. The ban prevents prescription-drug companies from mentioning their products even on their websites or in brochures, although some relaxation of these restrictions is being considered by the European Commission for drugs used to treat AIDS, diabetes, and respiratory ailments.
 While international marketers are accustomed to restrictions on the advertising of cigarettes, liquor, and pharmaceuticals, they are often surprised by restrictions on other products or services. For example, margarine cannot be advertised in France, nor can restaurant chains. For many years, the French government restricted travel advertising because it encourages the French to spend their francs outside the country.
 Many countries restrict the media advertisers can use. In 1999 the European Commission threw out an appeal against Greece’s national ban on toy advertising on daytime television. Thus advertisers can advertise toys on TV only during the evening hours. Some of the most stringent advertising regulations in the world are found in Scandinavian countries. Commercial TV advertising did not begin in Sweden until 1992, and both Sweden and Denmark limit the amount of time available for commercials. Advertising aimed at young children has not been legal in Sweden since commercial television was introduced in the country a decade ago. The Swedish government feels that young people are not able to differentiate
between advertising and programming and are not capable of understanding the selling intent of commercials. Saudi Arabia opened its national TV system to commercial advertising in 1986, but advertising is not permitted on the state-run radio system. Advertising in magazines and newspapers in the country is subject to government and religious restrictions.
 Many governments have rules and regulations that affect the advertising message. For example, comparative advertising is legal and widely used in the United States and Canada but is illegal in some countries such as Korea and Belgium. In Europe, the European Commission has developed a directive to standardize the basic form and content of comparative
advertising and develop a uniform policy. Currently, comparative advertising is legal in many European countries, illegal in some, and legal and rarely used in others such as Great Britain. Many Asian and South American countries have also begun to accept comparative ads. However, Brazil’s self-regulatory advertising codes are so strict that few advertisers have been able to create a comparative message that has been approved. Many countries restrict the types of claims advertisers can make, the words they can use, and the way products can be represented in ads. In Greece, specific claims for a product, such as “20 percent fewer calories,” are not permitted in an advertising message.

Copyright and other legal restrictions make it difficult to maintain the same name from market to market. For example, Diet Coke is known as Coca-Cola Light in Germany, France, and many other countries because of legal restrictions prohibiting the word diet.
 Government restrictions can influence the use of foreign languages in advertising as well as the production of the ad. Most countries permit the use of foreign languages in print ads and direct mail. However, some do not allow foreign language commercials on TV or radio or in cinema ads, and some restrict foreign-language ads to media targeted to foreigners in their country. Some countries also restrict the use of
foreign-produced ads and foreign talent. For example, with few exceptions, such as travel advertising, all commercials aired on Malaysian television must be made in Malaysia. However, the Asian country is considering changing its rules to allow foreign commercials to air on the new legalized satellite signals into the country.
These restrictions are motivated primarily by economic considerations. Many countries require local production of at least a portion of commercials to build local film industries and create more jobs for local producers of print and audiovisual materials.
 Nationalistic and cultural factors also contribute to these restrictions, along with a desire to prevent large foreign ad agencies from dominating the advertising business in a country and thus hampering its development. Restrictions affecting the advertising industry took a new twist recently in China when the government began strictly enforcing regulations governing licenses it requires of magazine publishers. Since the new enforcement took effect on January 1, 2000, Western publishers have been required to use a direct translation of the often-obscure name that appears on their license or use no English name at all. Thus, magazines such as Cosmopolitan, Esquire, and Woman’s Day are not able to use their popular names.

 In some countries, steps are being taken to ease some of the legal restrictions and other barriers facing international advertisers. For example, the Maastricht Treaty was designed to create a single European market and remove many of the barriers to trade among the 12 member nations of the European Community. One of the goals of this plan was a single advertising law throughout the EC, but when the treaty was ratified in November 1993, many of the advertising directives were not agreed upon—so many advertising regulations are still decided by each country. A directive was passed by the European Commission banning all tobacco advertising, which most of the 15 European
Union countries are now implementing. The European Commission may also take steps to restrict alcohol advertising and marketing. Sweden has been leading a Pan-European effort to ban TV advertising targeted at children under the age of 12 that has been gaining support from other members of the European Union. However, marketers, ad agencies, media, and trade associations in several European countries including the United Kingdom and France have begun pushing for self-regulation that would include efforts to help children understand and interpret advertising effectively rather than banning efforts to reach them.


Socio- Cultural Environment:
Purchasing power is directed towards certain goods and services and away from other according to people’s tastes and preferences. Society shapes the beliefs, values and norms that largely define these tastes and preferences.
High persistence of cultural values
 The people living in a particular society hold many core belief and values that tend to persist. Core beliefs and values are passed on from parents to children and are reinforced by major social institutions – schools, temples, business and governments. Secondary beliefs and values are more open to change. Thus marketers shall have some chance of changing secondary values but a little chance of changing core values.
 Cultural variables marketers must consider include language, customs, exhibits cultural traits that influence not just the needs and wants of consumers but how they go about satisfying them. Marketers must be sensitive not only in determining what products and services they can sell foreign cultures but also in communicating with them. Advertising is often the most effective way to communicate with potential buyers and create markets in other countries. But it can also be one of the most difficult aspects of the international marketing program because of problems in developing messages that will be understood in various countries.
 International advertisers often have problems with language. The advertiser must know not only the native tongue of the country but also its nuances, idioms, and subtleties. International marketers must be aware of the connotations of words and symbols used in their messages and understand how advertising copy and slogans are translated. Marketers often encounter problems in translating their advertising messages and brand names into various languages.
 Advertisers can encounter problems with the connotative meaning of signs and symbols used in their messages. For example, Pepsodent toothpaste was unsuccessful in Southeast Asia because it promised white teeth to a culture where black and yellow teeth are symbols of prestige. An American ad campaign using various shades of green was a disaster in Malaysia, where the color symbolizes death and disease.
 Problems arising from language diversity and differences in signs and symbols can usually be best solved with the help of local expertise. Marketers should consult local employees or use an ad agency knowledgeable in the local language that can help verify that the advertiser is saying what it wants to say. Many companies turn to agencies that specialize in translating advertising slogans and copy into foreign languages.


 Tastes, traditions, and customs are also an important part of cultural considerations. The customs of a society affect what products and services it will buy and how they must be marketed. In France, cosmetics are used heavily by men as well as women, and advertising to the male market is common. There are also cultural differences in grooming and hygiene habits of consumers in various countries. For example, though many U.S. consumers use products like deodorant and shampoo daily, consumers in many other Western countries are not as fanatical about personal hygiene, so consumption of products such as deodorants and mouthwash is much lower than in the United States.

 Another aspect of culture that is very important for international marketers to understand is values. Cultural values are beliefs and goals shared by members of a society regarding ideal end states of life and modes of conduct. Society shapes consumers’ basic values, which affect their behavior and determine how they respond to various situations. For example, cultural values in the United States place a major emphasis on individual activity and initiative, while many Asian societies stress cooperation and conformity to the group. Values and beliefs of a society can also affect its members’ attitudes and receptivity toward foreign products and services. Values such as ethnocentrism, which refers to the tendency for individuals to view
their own group or society as the center of the universe, or nationalism often affect the way consumers in various countries respond to foreign brands or even advertising messages. For many years, consumers in many European countries were reluctant to buy American brands and there was even a backlash against American imagery. In fact, many U.S. companies doing business in Europe were careful not to flaunt their American roots.
 One European country, in particular, where American-made products were not well received for many years is France. The French have always been very protective of their culture; for example, they have quotas for
French-language shows on TV and music on the radio. As historian Richard Pells notes: “France, like the U.S., has traditionally seen itself as a country with a mission and a country whose culture and civilization is worthy of being exported around the world.”However, in recent years many American brands have become popular in France, particularly among younger consumers.
In recent years, U.S. brands have become popular in many other European countries as well as in Asia. Marketers attribute the rising popularity of many U.S.-made products to the worldwide distribution of American music, films, and TV shows; the growth of the Internet; and the increase in travel to the United States. These
factors have made consumers in foreign countries more familiar with American culture, values, and lifestyle. Japan is one of the more difficult markets for many American advertisers to understand because of its unique values and customs. For example, the Japanese have a very strong commitment to the group; social interdependence and collectivism are as important to them as individualism is to most Americans. Ads stressing individuality and nonconformity have traditionally not done well in Japan, but westernized values have become more prevalent in Japanese advertising in recent years. However, the Japanese dislike ads that confront or disparage the competition and tend to prefer soft rather than hard sells. A recent study found that Japanese and American magazine ads tend to portray teenage girls in different ways and that the differences correspond to each country’s central concepts of self and society. In many American ads teens are associated with images of independence, rebelliousness, determination, and even defiance that are consistent with the American value of individuality. In contrast, Japanese ads tend to portray a happy, playful, childlike, girlish image that is consistent with the Japanese culture’s sense of self, which is more dependent on others.
 Another recent study examined gender-role portrayals in Japanese magazine advertising and found that some of the previously used
hard-line stereotyping of both men and women has softened considerably since the 1980s. Men are not associated as much with stereotypical male traits, while women are shown in more positive ways. The researchers suggest that this may reflect the westernization of the depictions of men and women in Japan.
• As advertisers turn their attention to China, more consideration is also being given to understanding the cultural system and values of the world’s most populous country. Chinese values are centered around Confucianism, which stresses loyalty and interpersonal relationships. Chinese culture also emphasizes passive acceptance of fate by and seeking
• harmony with nature; inner experiences of meaning and feeling; stability harmony; close family ties; and tradition. A recent study of advertising appeals used in China found that advertising reflects these traditional Chinese cultural values. Chinese advertisers tend to base their advertising strategies on creating liking for a product through image and emotional appeals rather than information-laden ads. However, the study also found subtle changes in appeals to cultural values used by advertisers, particularly for ads targeting younger consumers. Youth and modernity appeals were found to be prevalent, reflecting the westernization, as well as the modernization trend in China. Marketing is just beginning to emerge in China, and advertising is a relatively new social phenomenon, so it will be important for marketers to develop a better understanding of Chinese cultural values and their implication for communications strategy.
 Religion is another aspect of culture that affects norms, values, and behaviors. For example, in many Arab countries, advertisers must be aware of various taboos resulting from conservative applications of the Islamic religion. Alcohol and pork cannot be advertised. Human nudity is forbidden, as are pictures of anything sacred, such as images of a cross or photographs of Mecca. The faces of women may not be shown in photos, so cosmetics use drawings of women’s faces in ads. In conservative Islamic countries, many religious authorities are opposed to advertising on the grounds that it promotes Western icons and culture and the associated non-Islamic consumerism.
 Procter & Gamble recently took on tradition in Egypt by underwriting a new groundbreaking TV talk show on feminine hygiene called “Frankly Speaking” that tackles some of the most sensitive issues facing women in an Islamic country. The program has the support of the Egyptian government, which has launched its own health education drive. P&G does not promote its products during the show, but the program does contain numerous commercials for its Always brand, which has 85 percent of the disposable sanitary pad market in the country.


Existence of subcultures
 Each society contains subcultures, groups whit shared values emerging from their special life experience or circumstances. Members of subcultures share common beliefs, preferences and behaviors. To the extent that sub cultural groups exhibit different wants and consumption behavior, marketers can choose particular subculture as target markets.
 Marketers sometimes reap unexpected rewards in targeting subcultures. They have always loved teenagers because they are society's trendsetters in fashion, music, entertainment etc. Marketers also know that if they attract someone as a teen there is always a good chance they will keep the person as a customer later in life. E.g. Pepsi, Lays etc.

Shifts of secondary cultural values through time
 Although core values are fairly persistent, cultural swings do take place. In the 1960’s hippies, the Beatles, Elvis Presley and other cultural phenomena had a major impact on young people’s hairstyles, clothing and life goals. Today’s young people are influenced by newer heroes and activities.






The Scope and Challenges of International Advertising


Scope

Never before have business, large and small, been so deeply involved in and affected by international business. A global economic boom, unprecedented in modern history, has underway as the drive for efficiency, productivity and open unregulated market sweeps the world. Powerful economic, technological, industrial political and demographic are converging to build the foundation of a new global economic order on which the structure of a one-world will be built.
The world is mesmerised by information technology boom.
International advertising is affected by all these things. Now more than ever one cannot escape the effects of the ever-increasing number of firms exporting, importing, and manufacturing abroad.
Of all the events and trends affecting international business and therefore affecting international advertising there are four which stand out as dynamic
- the rapid growth of World Trade Organisation and regional free trade areas like NAFTA and EU
- the trend towards thre acceptance of the free market system among developing countries in Latin America, Asia and Eastern Europe
- burgeoning impact of the Internet and other global media on the dissolution of national borders,
- the mandate to properly manage the resources and global environment for the generation to come.
Today most business activities are global in scope. Technology, capital investment, production ands marketing, distribution and communications all have global dimension. Every business, including advertising must be prepaid to compete in an increasingly interdependent global economic and physical environment. The globalisation of the world’s market and the growth of emerging markets cannot be ignored. Being international is no longer a luxury but a necessity.

Challenges of International Advertising

Cultural Diversity

Culture is pervasive in all marketing and advertising activites,
International advertisers need to operate at the highest creative level. For successf

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