Download Research Proposal Exploring the Transition of Marketing and the

Research Proposal 1
Exploring the Transition of Marketing and the Influence of Culture from
Executives Making 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 previously explored. As consumers
depend on sale professionals and marketing managers to know and provide all the
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 thought leaders emphasize a customer-oriented, servicedominated concept of marketing as the definition , development , and delivery of
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 ,
along with competition across the world . Marketing has become increasingly
important in the past few decades . The field of business now recognizes marketing as
the main force in successfully influencing the customer to purchase products and
services. Marketing was seen as an economic activity during the 1980 ’s, with no
technology or competition between markets . Most recently, however, marketing
decisions are dependent on assumptions and knowledge of consumer behavior
(Hawkins and Mothersbaugh , 2007). Research now is 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. 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
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 marketers carry out now . Marketing at that time was going
through an evolution of marketing 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
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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, effectively, and internationally. Users can hear and express
thought leadership, broadcast their messages , connect to the influencers both on their
desktop and through their mobile units , among other things .
As of 2012, international marketing as a whole has made a complete turn and
change from just being considered an economic activity to a customer-oriented,
service-dominated, development , and delivery of customer value that focuses on
marketing as a set of business processes rather than as a separate management
function through the evolution technology and internet changes . Internet search
engines, online video and audio , website technology, and the fact that the majority of
people online now have access to high speed Internet , means that people have more
ways than ever to research and purchase products and services.
There are many ways culture influences in international marketing such as the
way we present ourselves , how we express opinions , assumptions based on the
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environment and context , as well as perceptions of voice and other personal physical
details. When working inside an international company, these cultural differences
become adaptable and will stop interfering with communication . Cross-cultural
studies are becoming increasingly important for research inquiry , teaching, and
practice in functional business disciplines . However, theses studies cannot be
contributed to international marketing without challenges being overcome . One key
challenge is that because of cultural differences , elements of research designs 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 predict strategies moves and responses of
competitors and hence to design effective competitive strategies . This understanding
is also salient to international sales negotiations (Pye ,1983).
Culture is the link between individuals (Zaltman, 1965) living in the same
society. As such, understanding a society’s behavior or communication processes is
all related to studying the future . 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 the additional impact of culture, there
is a gap in studies that need to reveal if a marketing managers home culture
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significantly influences his or her marketing decisions, whether it is positi vely or
negatively.
To investigate further, studies have found that a manager’s home culture
significantly influences his or her international marketing decisions . “Examinations
whether the impact of home culture diminishes in an open economy with intens e
exposure to international markets , giving way to a process of “globalization ” has also
been an area that marketers have explored. Decision-making in four 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 of the executives from the peoples Republic of China
and Canada. Chinese executives from Hong Kong were influenced by a combination
of western and Chinese cultural norms “(Tse, Lee, I Vertinsky and . Wehrung, 1988).
III. Purpose
This study will explore the transition between two major developments in marketing
in order to grasp a better understanding of 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.
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However, this study will not only explore the transition and meaning of marketing ,
but will mainly focus on how executives make international marketing decisions by
paying attention to cross-cultural considerations and country-of-origin effect on
international marketing strategies .
IV. Research Question:
Does culture affect executives making international marketing decisions?
V. Proposed Research Method
Definition of key terms
Market Research: Marketing research is the function that links the consumer ,
customer, and public to the marketer through information--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
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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,
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. Also, 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 each country will be chosen,
totaling to 435 executives. The countries chosen are China, Hong Kong, and Canada.
Each executive will be asked to respond to a memorandum presenting the decision
situations without consulting others . Once the subjects had read a memorandum they
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will be asked to write a memorandum in response , describing what they would do and
the reasons for their actions .
In order for this research to be conducted, a lecture hall in each of the chosen
countries must be rented out for one hour. In order for this research to be carried out
correctly and efficiently, the purpose is to see how quick marketing managers from
different cultures make marketing decisions, hence why executives will only be given
one hour to read the memorandum with a risky scenario and use the remaining time to
write a response about what marketing decision they will carry out. The only
equipment needed would be blue books for the written responses. The total budget for
435 blue books costing at $.50 cents will total to around $218 USD. The rent for
lecture halls in a randomly chosen university will be free. Other fees just as
transportation of executives are not 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
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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 the 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).
Figure 2: Hofstede, G. (1997). Cultures and Organizations: Software of the mind. New York: McGraw
Hill.
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VI. Hypothesis
The basic hypothesis of this study is that general cultural differences
drastically affect marketing decision-making. Differences are expected to be seen in
choice, determination , and adjustment of decision environment .
Method of Evaluation
To experiment if culture impacts international marketing decisions , one must
take executives from different countries and study their responses and decisions after
being presented with memorandums discussing certain risky issues . The countries
chosen were China , Hong Kong, and Canada, 145 executives from each 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
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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 ass 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).
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
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VII. Expectations
What is expected to be revealed is that culture has predictable, significant
effects on the decision of executives based on their influence by western norms and/or
other norms. This study will attempt to provide confirmation from the answered
memorandums from marketing executives that are from different countries having
different approaches on marketing decisions. The study will confirm the purpose of
this study, whether or not culture has an influence on executives making international
marketing decisions.
Limitations
A limitation to this study is inappropriate training of marketing executives,
which can lead to misapprehension of the memorandum asked for data collection.
Time also is a limitation in this study. Some executives are used to making quick and
risky decisions where others prefer to research further more and are extra careful.
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 strategies 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
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the customer to purchase products and services. Marketing has evolved throughout
history, it seen as an economic activity during the 1980’s, with no technology or
competition between markets. Most recently, however, marketing decisions are
dependent on assumptions and knowledge of consumer behavior (Hawkins and
Mothersbaugh, 2007). Research now is concerned with other issues in international
marketing such as cross-cultural considerations and country-of-origin as they affect
international marketing strategies, with this research being an important contribution
to cross-cultural considerations in international marketing. Taking marketing
executives from different countries such as in this study, will provide researches
information about how culture based decision is seen differently throughout countries.
Limitations such as inappropriate training of marketing executives, which can lead to
misapprehension of the memorandum asked for data collection will be taken into
account. Time being constrained will also be considered regarding the fact some
executives are used to making quick and risky decisions where others prefer to
research further more and are extra careful. Also, the limitation of marketing
executives chosen have no specific age group, answers might differ according to past
experience and knowledge will be taken into consideration. The limitations to this
research will be considered and revised but will not be the main determinate of the
outcome.
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IX. Bibliography
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Karademir, B. (2007). How do business groups function and evolve in emerging
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an emerging market. International Journal of Conflict Resolution, 17(4), 332351.
Kandermir, D., & Cavusgil, T. (2005). Alliance orientation: Conceptualization,
measurement, and impact on market performance. Journal of the Academy of
Marketing Science, 34(3),
324-340.
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exporting firms: Evidence from Austria, nNrway, and the United States.
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Emden, Z. (2005). Learning from experience in international alliances: Antecedents
and firm performance implications. Journal of Business Research, 58(7), 883892.
Deligonul, S., & Cavusgil, S. (2000). International marketing as a field of study: A
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critical assessment of earlier development and a look forward. Journal of
International Marketing, 13(4), 1-27.
Varner, I. (2000). The theoretical foundation for intercultural business
communication: A conceptual model. Journal of Business Communication,
37(1), 30-55.
Shaw, EH (2012) Marketing strategy: From the origin of the concept to the
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Marketing, 4(1) 20-55.
Jain, S. (1982). The evolution of strategic marketing. Journal of Business Research ,
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Duffy, LD. (2005) The evolution of customer loyalty strategy. Journal of Consumer
Marketing, 22(5)284-286.
Webster, FE. (2005) A Perspective on the Evolution of Marketing Management.
Journal of Public Policy & Marketing, 24(1)121-126.
Firat, FA Shultz, CJ, (1997) "From segmentation to fragmentation: Markets and
marketing strategy in the postmodern era", European Journal of Marketing,.
31(4)183-207.
Srivastava, RK, Shervani, T, Fahey, L, (2001) “Marketing, Business Processes, and
Shareholder Value: An Organizationally Embedded View of Marketing
Activities and the Discipline of Marketing” Journal of Marketing. 63(Special
Issue), 168-179.
Cateora, P.R., and Ghauri, P.N. (1999), International Marketing, McGraw-Hill
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.