Download International Marketing

International Marketing
Culture, trust and international
relationship marketing
Evaluation of the role of culture on trust
and importance in international
relationship marketing
After this you will be able to…..



Understand the meanings, roles and functions of culture and
trust
What is international relationship marketing
The importance of culture on trust in international relationship
marketing
Introduction



The globalisation process is creating an international business
environment
Thus, companies have to develop partnerships through an
International Relationship Marketing (IRM)
“The concept of trust has gained increased importance in the
study of interorganisational relationships” (Ring & Van de Ven
1994)

What is culture?




This is a notion vague and abstract. It exists lots of definitions for
culture
The most known: “Culture is a collective programming of the
mind which distinguishes the members of one human group from
another … culture in this sense, includes systems of values; and
values are among the building blocks of culture” (Hofstede
1980)
“A system of values and norms that are shared among a group
of people and that when taken together constitute a design for
living” (Doney 1998)
“Culture affects people and the way they live their lives; in many
respects it dictates how they live their lives and it influence many
day-to-day decisions that people make” (Conway 1998)

What is trust?
 Defining trust is not easy. Each trustor will emphasize on
different beliefs to define trust



Economists definition: “expectation that an exchange
partner will not engage in opportunistic behaviour,
despite short-term incentives and uncertainty about longterm rewards” (Bradach & Eccles 1989)
Psychologists definition: “actions and behaviours that do
not promote individual interests over the interests of the
group accompanied by a positive attitude about the
social behaviours of others” (Strong and Weber 1998)
Sociologists definition: “one party’s ability to rely on
another’s word or promise, stressing the need for
consistency” (Rotter 1971)

What is Relationship Marketing?



Organizations gathering information about customers
Allow buyers & sellers to look together in problem solving, easing
the pressures on buyers
Morgan and Hunt (1994, p. 22) produce the following definition:
“Relationship marketing refers to all marketing activities directed
toward establishing, developing and maintaining successful
relational exchange”
1. Role of culture on trust
1.1. Culture as driver of trust

Trust is a concept with many meanings, but most concepts of
trust share 3 common elements:






Degree of interdependence between trustor and trustee
Trust provide a way to cope with risk or uncertainty in exchange
relationship
The vulnerability resulting from the acceptance of risk will not be
taken advantage of by the other party in the relationship
Recap: Culture is “a system of values and norms that are
shared among a group of people and that when taken
together constitute a design for living” (Doney 1998)
“Trust cannot develop unless individual share common
values” (Talcott Parsons 1951)
“Trust comes out of shared values” (Fukuyama 1995)


“Trust depends on the social norms and values that guide
people behaviour and beliefs” (Hofstede 1980)
In 1983, Hofstede defined that there are 5 dimensions in order
to interpret the world:






Power distance
Uncertainty avoidance
Individualism/Collectivism
Gender identity
Time perspective
He argued that all these dimensions have impacts on trust
attitude


According to him, we have the following hypotheses:
Hypothesis 1: Managers from small power distance cultures
will have higher levels of self-interest than managers from
large power distance cultures who will promote group
interest


Example:
“in France (large power distance country),
government attempted to create more democratic work
environments. However, it failed because workers believed that
they would give superiors a means of avoiding responsibility to
the group” (Wilson 1991)
Hypothesis 2: Manager from individualist cultures will have
higher levels of self-interest than manager from collectivist
cultures

Example: “in an collectivist culture, a personal manager will be
more likely to hire candidates based on their perceived trust
worthiness rather than on their technical qualification” (Adler &
Jelinek 1986)
1.2. Rational development of trust


In 1998, Strong and Weber worked on Hofstede assumptions,
only by considering individualism and power distance
The result of their study was that there were not significant
differences among the 4 culture groups they choose:






small power distance with high individualism,
small power distance with low individualism,
large power distance with high individualism,
large power distance with low individualism.
Thus, they rejected Hofstede hypotheses
“The power distance dimension can not be applied because
for international transactions, relations might be from equal to
equal” moreover, trust development “depends on the
amount of the transactions” (Strong & Weber 1998)




Some people argue that trust is based on a calculative and
rational process
“Trusting involves expectations about another, based on
calculations which weight the cost and benefits of certain
course of action to either the trustor or the trustee” (Axelrod
1984, Coleman 1990, Dasgupta 1988)
“An element of calculation may be present in most trusting
behaviour” (Kramer, Brewer & Hanna 1996)
For example, “in Asian Business Systems, it is obviously very
important to avoid behaviour which might be interpreted as
a sign of distrust” (Sako 1992)
1.3. Both rational and cultural
developments of trust




According to Lane (1998) trust can not be based, neither only
on common values and norms, nor only on a calculative
process
Example: “People from different cultural backgrounds or
between individuals who share no values beyond their
narrow business goals can built trust” (Lane 1998)
The development of trust induces 2 considerations: rational
and cultural
Example: When a French company enters into a partnership
with a Moroccan company, there will be 2 different ways to
develop trust:


Cultural: because of their common history and culture, French
and Moroccan have common values and norms which govern
the business environment
Rational: because of the Moroccan susceptibility, French have
to be careful about what they are saying to their
suppliers/clients…. Indeed, a sign of distrust can conduce to the
partnership’s breach
As a conclusion…
Calculative trust is a…
…Contradiction in terms
Williamson 1993
2. International Relationship
Marketing and its successful
components
2.1. Commitment


“An intention to continue a course of action or activity”
(Hocutt, 1998)
Influenced by social bonding
2.2. Experience / Satisfaction

Decision to continue  satisfaction increases

Good experience
2.3. Customer Orientation &
Empathy

Sellers emphasis buyers

Liking

Important in the development of close interpersonal and business
relationship (Friedman et al., 1988; Moorman et al., 1992)
2.4. Communication


“Process of establishing a commonness or oneness of
thought between a sender and a receiver” (Schramm, 1954,
p. 3)
Feedback is important
2.5. Trust

Virtual factor of successful relationship

Dealing with employees, clients, partners…etc

Can run profitably

Higher degree of trust  better result of company [Kerry
Larkan, Value Your Workforce]
3. Role of culture on trust in
relationship marketing (Ali, Haider and
Sue Birley, 1998)

Enthusiasm

Share value
Trust
Customer



institutional based trust
characteristic based trust
process based trust
Marketer
4. Importance of culture on
trust in relationship marketing
3.1. Loyalty


Increases while trust increases
US suppliers still lost customers to competitors with being
particular automakers for over 50 years
3.2. Economic Trust

Calculative trust

E.g. supplier stock
3.3. Good Image & History
Development

Social memory – e.g. Ford, Coca-Cola

Serial equity
3.4. Intensity of Relationship

Between buyers & sellers trust increase

Face-to-face interactions
3.5. Long Term Relationship


Find the correct ones, cooperate and become business
partners
E.g. Nike & Michael Jordan
3.6. Reduce Paradox Psychic
Distance

“Applicable for different culture, language, level of economic
development” (Vahlne and Wiedersheim-Paul 1973)

“A degree of uncertainty about a foreign market for a
company” (Kogut and Singh 1988)

Companies start internationalization process

Important variable in understanding the dynamics of the
internationalization process

Fail, due to:

the unexpected differences
Similarity
Proximity
Success

size and certainty





paying not enough attention
e.g. USA and Canada are in different business pattern, HK
and China as well
3.7. Bourdieu Habitus

Structural code of the culture is inscribed as the “habitus”
and generates the production of social practice

Principles which structuring the culture

“Habitus as a method for achievement”

2 types:


specific habitus
general habitus
3.8. Gift Exchange

Increases while trust increases

Different cultures in different styles:


Arab business offer tea as an important ritual of establishing
friendship & trust
Chinese negotiations include banquets




Case study: Toyota
Japanese automakers develop trusting relationships with US
suppliers as offering assistance (1996)
US suppliers received more assistance from Japanese
automakers than required
US suppliers were surprised as the Japanese automakers
willingness

Case study: Hong Kong Disney
Hong Kong Disney Web-site

Case study: Paris Disney
Paris Disney Web-site
Case study results:

Due to the cultural differences between Asia & Europe,





style
pattern
design, color
welcome
tone
are respectively different, so as the different business
running and international marketing relationship patterns
Conclusions



Trust has a very complex building process
Trust, one of the key element of a successful
relationship
Trust and international relationship marketing
References

Articles References:




Paradox Psychic Distance, (1999),
Doney, P. M., Cannon, J. P. & Mullen, M. R. (1998), Understanding
the influence of national culture on the development of trust.
Academy of Management Review, 23 No.3: 601-620.
Conway, T. & Swift, J. S. (2000), International relationship
marketing. the importance of psychic distance. European
Journal of Marketing, 34 No.11/12: 1391-1413
Kelly Strong, James Weber (Jun 1998), The myth of trusting
culture, Business and Society; 37, 2; ABI/INFORM Global, pg. 157

Books References:





P. Christopher Earley and Harbir Singh, (2000) Innovations in
International and Cross-cultural Management
Jean-Claude Usunier, (1998) International & Cross-Cultural
Management Research
McGraw Hill, (2005) International Marketing
Jeannet / Hennessey, (2004) Cases in Global marketing
Strategies
Lane and Bachmann (1998), Trust within and between
organisations, Oxford University Press

Web-site References:






Believe in Your Team:
[http://www.classifiedpost.com/jsarticle.php?lcid=HK.EN&arttype=C
ADV&artsection=CAREER]
The Role of Trust in the Marketing Activities of Entrepreneurs
Establishing New Ventu
[https://dspace.lib.cranfield.ac.uk/retrieve/1293/SWP1298.pdf] OR
[http://scholar.google.com/scholar?hl=en&lr=&q=cache:lXZKN7kYR
f4J:https://dspace.lib.cranfield.ac.uk/retrieve/1293/SWP1298.pdf+]
Hong Kong Disney:
[http://www.disneylandparis.com/uk/introduction.htm?c=uk&l=uk]
Paris Disney:
[http://www.disneylandparis.com/uk/introduction.htm?c=uk&l=uk]
Bourdieu, ‘Habitus’, and Educational Research: is it all worth the
candle? [British Journal of Sociolog y of Education, Vol. 20, No. 2
1999] [http://www.paulofreireinstitute.org/Documents/Habituseducational_implication.pdf#search='is%20it%20all%20worth%20the
%20candle‘]

Photo References:



Ford Car
[http://hk.wrs.yahoo.com/_ylt=AknLi7fxvT4l8DrDfXrH9MW.ygt./SI
G=11ro2c738/**http%3a//files.psycco.de/1967_Ford_Mustang_S
helby_GT-500]
Coca-cola
[http://www.scanraptor.com/cabernet/ccolaads8/pages/pCoca_Cola_195.htm]
Disney
[http://www.mrshmedia.com/bella/tnews/0905/hkdisneymickeycastle.jpg]
[http://mch3w.ch.man.ac.uk/theory/staff/student/mbdtszt/imag
es/france_disney2.jpg]
[http://www.alfatour.ru/contents/cities/photos/France_Disney_6.j
pg]
[http://www.mrshmedia.com/bella/tnews/0905/hkdisneycastle.jpg]