Intercultural communication as a strategy of global marketing

Table of Contents

1. Introduction 3

2. Theory 4

2.1. Culture & Intercultural Communication 4

2.2. Marketing and International Marketing 4

2.3. Problems in Marketing Communication 7

3. Case Studies 9

3.1. Case Study I – Marketing McDonald’s in India 10

3.1.1. Products 10

3.1.2. Pricing 12

3.1.3. Promotion 12

3.1.4. Place / Distribution 14

3.2. Case Study II – Marketing McDonald’s in Saudi Arabia 14

3.2.1. Products 15

3.2.2. Promotion 15

3.2.3. Place / Distribution 19

4. Conclusions 19

5. References 22

6. Appendix 25

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1. INTRODUCTION

The world is growing together. In the wake of globalization many companies have expanded their markets to countries around the world. No matter if in Europe, America, Africa, Asia or Australia – everywhere we are greeted by the familiar corporate logos of global players like Coca Cola, McDonald’s and Burger King.

I would like to suggest that an important factor of the international success of

these companies are specialised marketing concepts, which are based on the individual culture of the respective target country. Intercultural communication seems therefore an important element in marketing products worldwide.

In this essay, I will have a look at a company whose name has become synonymous with globalization: McDonald's. The development of the term “McDonaldization” shows that the company’s strategy of efficiency, calculability, predictability and control is effective around the globe (Ritzer in Usunier 2000; Jandt 2004).

I will start with a definition of the terms "culture" and "intercultural

communication" and also characterize “marketing” and “international marketing”. Then I will identify potential problems in international marketing communications. In the second part, I will analyze McDonald’s marketing mix in India and Saudi Arabia focusing on products and promotions, and point out the main adaptations from McDonald’s core strategy and why these are vital to the company’s success. From the two case studies I will draw conclusions in how far intercultural communication can play a role in achieving a company’s business goals.

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2. THEORY

2.1. Culture & Intercultural Communication

There are various definitions of the term "culture" but I would like to focus on the concept of culture acquired in one's socialisation process, "which includes shared beliefs, attitudes, norms, rules, and values" formed in a shared time and place in one’s family and institutions by means of a shared language (de Mooij 2005: p. 36). Culture manifests itself in symbols, rituals, heroes and values (Hofstede 1991), and especially communicative behaviours.

Communication and interaction between cultures is referred to as “intercultural communication”. Referring to the communication framework by Shannon and Weaver, the source belongs to one culture and the receiver is part of another (in Samovar et al. 2003). In the context of Hall’s paper “Encoding/Decoding” (in During 1993), the source has encoded his message according to his cultural standard, e.g. language, script and values; the receiver will decode it according to his cultural background.

In order to communicate successfully with another culture and avoid misunderstandings, knowledge about the receiving culture is important, because the message can not only be expressed by words, but also by culturally loaded non- verbal communication including gestures, images and colours (Madden et al. 2000, Jacobs et al. 1991).

2.2. Marketing & International Marketing

Marketing is “human activity directed at satisfying needs and wants through exchange processes” (Kotler 1980: p. 13). These exchange processes are conducted according to the company’s marketing strategy, the marketing mix, which in its

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traditional form consists of four tools, known as the four Ps: Product, Price, Promotion and Place (also known as Distribution) (McCarthy in Vignali 2001). The four Ps are connected to a set of aspects the marketer has to consider in order to prepare an effective strategy: the product should fulfil the consumer’s needs, so which needs does my target group have? To find out about their needs and buying habits, cultural affiliations, norms and local taste have to be considered. "The more McDonald's” – or any other company – “knows about the people it is serving the more it is able to communicate messages which appeal to them" (The Times 100 2006: p.104).

The price depends on the perceived value of the product. Which values does the product represent? If the product is considered a status symbol, for example by being of a particular brand, the customer is willing to pay a higher price for it (Aaker 2002). Place includes the location where the product is produced and distributed and the market segment it is targeted to.

Promotion is the (direct) communication with the customer, i.e. by advertising, sales promotion and Public Relations activities. Promotions could include handing out free samples or giving special offers.

De Mooij (2005) identifies four elements of advertising style: firstly, the appeal to the consumer in form of representing values; secondly, the communication style; thirdly, the form of advertising, e.g. testimonial, drama or entertainment; lastly, the execution of the idea, including dress, casting and setting. All these factors carry cultural loadings: "To understand and influence the consumer's wants and needs, marketers must understand the culture especially in an international environment" (Jeannet & Hennessey 2004, p. 64).

International Marketing takes the products and their marketing strategy to a global market. The key to worldwide success is cultural awareness (Usunier 2000):

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There are several ways of targeting a group from a different culture, depending on how wide the cultural gap is: standardization, partial adaptation, or full adaptation (Jeannet & Hennessey 2004; Cateora & Ghauri 1999; et al.): firstly, the strategy used in the domestic market could be duplicated in a standardizing way if it represents values that appeal to everyone, no matter if Asian, American or African. Secondly, if there are seemingly little differences between the home and host culture, as for example between Scandinavian countries, only little adaptation might be required, i.e. the dubbing of a Norwegian voice over for the originally Swedish advertisement. If the ‘host culture’ differs in many aspects from the home culture though, a full adaptation to the values and norms of the target culture might be needed to avoid misunderstandings and increase appeal. "Intercultural Marketing is about localizing as much as globalizing; it aims to customize product and marketing strategies to customer needs within the framework of a global strategy" (Usunier 2000: p. 268). Cultural adaptation and standardization are especially important in connection with the product. In this context, Hermeking (2005) discerns between 'culture-free' and 'culture-bound' products: “Culture bonds are strong for a product or service when there is much investment of consumers’ cultural and national background and identity in consumption” (Usunier 2000: p. 150), indicating that non-durable products like food are highly culture bound, as every culture has different food consumption patterns.

The role of intercultural communication in marketing these 'culture bound' products can be deducted from Hofstede (1991) and Hall (1973). Hall discerns between two cultural communication styles, 'high context' and 'low context' style, claiming that members of high context cultures interact more with each other, so that less detailed description is required in their exchanges (Hermeking 2005), while low

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context cultures communicate in an explicit and more formal way, e.g. in written form.

This idea of high and low context can be applied in advertising and website design. Adverts in high context cultures seem to be more visually oriented and colourful, with a focus on appealing emotionally instead of rationally, so that the focus lies on interpersonal relationships (De Mooij 2005).

Deducting from Hall's (1973) features of high context cultures, advertising messages can be implicit and make use of the distinction between in- and out-groups, e.g. consumers and non-consumers of the product.

2.3. Problems in Marketing Communication

There are several reasons for problems in marketing communications.

The most obvious source of misunderstanding is language and translation (Usunier 2000; Jandt 2004; De Mooij 2005; et al.). Firstly, the product name might be misunderstood, because a word can mean one thing in one language, but something else, with possibly negative connotations in the second.

This problem especially appears in the sound-oriented transliteration from Western into Asian syllabic script languages, where every syllable carries a particular meaning. An example for this is Coca Cola. When introducing the product to the Chinese market, the company used the transliteration closest to the original sound, which could be translated to “bite the wax tadpole” (Jandt 2004: p.159). Understandably, the transliteration was modified to different syllables, "kekou kele", which now connote "tasty and enjoyable/happy” (Usunier 2000: p.336). Secondly, there might be translation problems with slogans. "Come alive with the Pepsi generation" acquired a discomforting undertone in Chinese: "Pepsi brings your

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