Download Research Proposal Exploring the Transition of Marketing and the

Research Proposal 1
Exploring the Transition of Marketing and the Influence of Culture on
International Marketing Decisions
Farrah Zak
Abigal Heinger
Wayne State University
December 10, 2012
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I. Background/Introduction
The cultural influence on consumer behavior and its role in marketing and
transitioning of marketing strategies has been modestly explored. As consumers
depend on sale professionals and marketing managers to provide them information
needed prior to purchase decisions it becomes a mandate that marketing specialists
are aware of the different cultural impacts on consumer’s decisions. Investigators and
marketing leaders emphasize a customer-oriented and service-dominated concept of
marketing to define, develop, and deliver customer value that focuses on marketing as
a set of business processes rather than as a separate management function (Srivastava,
Shervani, and Fahey 2001 ). Marketing in particular has changed with technology
innovations, communication advances , and rising competition between industrial
systems across the world . Marketing has become increasingly important in the last
few decades . The field of business now recognizes marketing as the main force in
successfully influencing consumer decisions to purchase specific products and
services. During the 1980s, marketing was seen as a merely economic activity with no
consideration to technology or competition between markets . However, during the
recent years marketing decisions have become highly dependent on assumptions and
knowledge of consumer behavior (Hawkins and Mothersbaugh , 2007). Nowadays
marketing research is becoming more concerned with other issues in international
marketing such as cross-cultural considerations and country-of-origin as they affect
international marketing strategies .
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II. Purpose
This study will primarily focus on the effect of culture on decision making by
executives dealing with international marketing. In the course of this study we will
review the transition between two major developments in marketing:
1. The perspective of the marketing concept as a management philosophy
emphasizing customer orientation.
2. The integration of quantitative methods and behavior science into the
marketing discipline by marketing entering competition and technology
introduced.
III. Literature Review
The transition of international marketing is marked by two major
developments mentioned: first is the perspective of the marketing concept as a
management philosophy emphasizing customer orientation , and the second is the
integration of quantitative methods and behavioral science into the marketing
discipline (Webster, 2002). Although the concept of market segmentation appeared
many years before as a means to improve marketing efficiency and effectiveness , the
practice gained widespread acceptance in this hyperactive market environment ,
stimulated by the publication in the 1900 ’s of Wendell Smith ’s article “Product
Differentiation and Market Segmentation as Alternative Marketing Strategies ”. After
that publication, marketing strategy came to rely increasingly on statistical analysis of
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market research data . Market segmentation strategy was entirely consistent with the
philosophy of customer orientation (Webster, 2002).
Through the 1900 ’s, marketing and segmentation were carried out through the
philosophy of consumer orientation and was relying on statistical analysis of market
research data. There was not much competition in the 1900 ’s, nor the technology to
carry out the tasks that a marketer does nowadays . Marketing was going through an
evolution of being just an economic activity to marketing being a discipline . There
were many environmental forces that helped the marketing function evolve such as
rapid diffusion of computer and telecommunications technology (including the
Internet), globalization , and increased competitive pressures (Webster, 2002). From
the early 1980 ’s until 1989 , marketing management relied heavily on professional
sales until the Internet was introduced , which gave more power to marketing
management . In 2006 until now , communication between marketing managers
became easier through the next-generation communication tools such as Twitter .
Twitter is a tool through which subscribers can further reach their audiences quickly
and effectively at a global level. Users can hear and express their thoughts, broadcast
their messages, and interact with other over different types of electronic media such
as desktops, laptops, tablets, and smart phones.
As of 2012, international marketing as a whole has made a complete turn and
changed from a simple economic activity to a multifaceted model of customer-
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oriented and continuously evolving set of business processes utilizing updated
technology and communication media. Efficient and smart Internet search engines ,
online video and audio availability, improved website technology, and fast Internet
connections have resulted in a paradigm shift of marketing and giant surge of online
sales.
There are many ways that culture may influence international marketing
decisions such as different ways of presenting ourselves , how different people express
opinions, how they make assumptions based on their environment and local
knowledge, how people perceive gestures, voice tones, and body language. When
working inside an international company , these cultural differences become adaptable
with time and should not be a hinderer. Cross-cultural studies are becoming
increasingly important for research inquiry, teaching, and practice in functional
business disciplines . However, these studies cannot contribute to international
marketing knowledge without some challenges being overcome . Cultural differences
cannot just be simply exchanged in original form between cultures . An understanding
of how cultural differences affect international marketing decisions is important to a
firm’s external operation . It can be used to design effective marketing plans and
counteract competing strategies from international businesses. This understanding is
also salient to international sales negotiations (Pye ,1983).
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Culture is the link between individuals living in the same society (Zaltman,
1965). In this sense culture is not an end product, which is displayed in museums, but
rather a system that is always in motion and that can function and adapt (Chung,
1991).
With the development of marketing and acknowledgement of cultural impact
there remains a shortage of studies that explore the different variables influencing a
manager’s marketing decision. Studies have found that a manager’s home culture
significantly influences his or her international marketing decisions . Studies have
found that the influence of marketer’s home culture diminishes in an open economy
with intense exposure to international markets . Decision-making in three simulated
international marketing situations was studied with executives from China, Hong
Kong, and Canada. The findings confirm that home culture has predictable significant
effects on the decision making by different executives. Executives from China and
Canada were mostly influenced by western thought schools while executives from
Hong Kong were influenced by a combination of western and Chinese cultural norms
(Tse, Lee, I Vertinsky and . Wehrung, 1988).
IV. Research Question:
Does culture influence executives in making international marketing decisions?
V. Proposed Research Method
Definition of key terms
Market Research: Marketing research is the study that links the consumer , customer,
and public to the marketer through collecting and analyzing information. Such as the
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information used to identify and define marketing opportunities and problems;
generate, refine, and evaluate marketing actions; monitor marketing performance; and
improve understanding of marketing as a process .
Consumer behavior: Actions (that is, behavior) undertaken by people (that is,
consumers) that involve the satisfaction of wants and needs . Such actions often , but
not always, involve the acquisition (that is, purchase) of goods and services through
markets.
International Marketing: the performance of business activities that direct the flow
of a company' s goods and services to consumers or users in more than one nation for
a profit (Ghauri, 1999).
Western: referring to the United States culture and marketing decisions
Globalization: the closer integration of the countries and peoples of the world
brought about by the enormous reduction of costs of transportation and
communication , and the breaking down of artificial barriers to the flows of goods ,
services, capital, knowledge, and people across borders ." (from Globalization and its
Discontents)
Marketing: the activity set of institutions and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners,
and society at large.
Culture: refers to the cumulative deposit of knowledge, experience, beliefs, values,
attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations,
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concepts of the universe, and material objects and possessions acquired by a group of
people in the course of generations through individual and group striving. Culture is
also defined as the systems of knowledge shared by a relatively large group of people.
Market segmentation: the process of defining and subdividing a large homogenous
market into clearly identifiable segments having similar needs, wants, or demand
characteristics. Its objective is to design a marketing mix that precisely matches the
expectations of customers in the targeted segment (business dictionary).
Materials & Tools
145 marketing executive participants from three countries will be chosen,
totaling 435 executives. The countries chosen are China, Hong Kong, and Canada.
Each executive will be asked to respond to a memorandum presenting a marketing
scenario that needs an urgent decision without consulting with others. Once the
participants study the issue then they will be asked to respond, describing their
decisions and the reasons for their actions .
In order for this research to be conducted, a lecture hall in each of the chosen
countries will be rented out for one hour. In order for this research to be carried out
correctly and efficiently, the time allowed for decision making is intentionally
shortened to one hour so the impact of culture may be maximized. The study will
explore how fast a problem is analyzed and how a decision is made between different
people from different cultures. The only equipment needed would be blue books and
some pens for a total of $300. The lecture halls may be rented for free as gifts from
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select academic institutions. Other fees such as transportation of executives will not
be included in this study.
Figure 1 below illustrates the stages that must occur if a question (the
memorandum given) is to be valid and reliable. The memorandum given must be clear
and understandable in order for the marketing executives chosen to provide logical
and reliable answers in order to carry out this research efficiently.
Figure 1:Foddy (1994) Constructing Questions for interviews and Questionnaires. Reproduced with permission of
Cambridge
University
Press.
Figure
2 below
illustrates the extent to which a company needs to understand
global cultures at different levels of involvement. The further a company moves away
from only doing national business, the more it needs to understand cultural
differences. “Moving outward on more than one axis simultaneously makes the need
for building cultural awareness even more essential. With the companies chosen, they
must first understand global culture and their different level of involvement”
(Hofstede, G).
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Figure 2: Hofstede, G. (1997). Cultures and Organizations: Software of the mind. New York: McGraw
Hill.
VI. Hypothesis
The basic hypothesis of this study is that cultural backgrounds drastically
affect marketing decision-making. Differences are expected to be seen in choice ,
determination , and adjustment of decision environment .
Method of Evaluation
In order to explore if culture impacts international marketing decisions , one
must take executives from different countries and cultural backgrounds. The countries
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chosen were China , Hong Kong, and Canada. 145 executives from each country were
randomly chosen . Chinese business executives have been relatively isolated from
contacts with international markets for many years (Tse, Lee, I Vertinsky and .
Wehrung, 1988). Hence cultural effects on their marketing decision process , if
present, would represent a relatively pure form of cultural influence on business
behavior (Montgomery and Weinberg , 1979).
“The Chinese executives represent an Oriental business community with
intense and continuous interactions with the western business world . If globalization
of markets has eroded the impact of ethnicity on marketing decision making , one
would expect Hong Kong executives to behave similarly to North American
executives” (Tse, Lee, I Vertinsky and . Wehrung, 1988). The Canadian executives ,
whose decision processes in risky situations have been found to be similar to those of
U.S executives (MacCrimmon and Wehrung 1986), represent the western managerial
culture.
Figure 3 below illustrates typical activities in culturally overlapping situations
such as decision making (crucial to this study) as well as communication and cultural
assessment of situations, by linking it to areas of marketing activities such as market
research (also crucial to this study) and connecting it to a culture-sensitive market
(main focus of this study).
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Figure 3: H, Hartmurt (2001). International marketing manager’s cultural sensitivity: relevance, training
requirements, and a pragmatic training concept. International Business Review. 10(6)597-614
VII. Expectations
We expect that culture has predictable and significant effects on decisionmaking by executives and will vary depending on the cultural background as it is
being influenced by western norms and/or other norms. This study will attempt to
provide confirmation from the final analysis of the blue books collected from
executives from different countries. The study will subsequently confirm the cultural
impact on international marketing decisions.
Limitations
Time is a limitation in this study. Some executives are accustomed to making
quick and risky decisions where others may need longer time to study the problem in
hand and make informed decisions. Another limitation is the variation in age and
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experience among the participants. Since the marketing executives chosen have no
specific age group, answers might differ according to past experience and knowledge.
VIII. Conclusion
Conducting this research is important for international marketing. An
understanding of how cultural differences affect international marketing decisions is
important to a firm’s external operation. It can be used to predict strategy moves and
responses of competitors and hence to design effective competitive strategies. This
understanding is also salient to international sales negotiations (Pye ,1983). The field
of business now recognizes marketing as the main force in successfully influencing
customers to purchase products and services. Marketing has evolved throughout
history, it was seen as an economic activity during the 1980’s, with no technology or
competition between markets. Recently marketing decisions become dependent on
assumptions and knowledge of consumer behavior (Hawkins and Mothersbaugh,
2007). Research now is focusing other issues in international marketing such as crosscultural considerations and country-of-origin as they affect international marketing
strategies. This research is an important contribution to cross-cultural considerations
in international marketing. Sampling marketing executives from different countries
will provide invaluable information about culture-driven decisions in different
international markets. Limited time allowance for serious decision-making is not
practical but remains critical for the purpose of this study. Participants from different
age groups may have different experiences but selecting random samples from
different countries may alleviate this age bias. The limitations to this research project
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will be considered and revised but will not be a deterrent from conducting this critical
study.
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IX. Bibliography
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critical assessment of earlier development and a look forward. Journal of
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Publishing Company, European Edition.
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David K. Tse, Kam-hon Lee, Ilan Vertinsky and Donald A. Wehrung
Journal of Marketing Vol. 52, No. 4 (Oct., 1988), pp. 81-95.
Hartmurt (2001). International marketing manager’s cultural sensitivity: relevance,
training requirements, and a pragmatic training concept. International
Business Review.10(6)597-614
Hofstede, G. (1997). Cultures and Organizations: Software of the mind. New York:
McGraw Hill.
Foddy (1994) Constructing Questions for interviews and Questionnaires. Reproduced
with permission of Cambridge.