2.4. Culture and marketing mix

Cultural variables can become barriers or opportunities. Let’s consider how to adapt marketing tools to local cultural tastes. To make international growth successful marketing managers need to analyze a lot of facts, and make very important decisions – how to adopt our marketing mix strategy according to these cultural differences. The formula works everywhere: Product + Pricing+ Distribution+ Promotion. But consumer behavior in different regions is not the same, so international marketing mix needs changes.

Returning to Wal-Mart, this principal worked in all countries of international entry. In Latin America or China consumers have their special national food preferences. Of course, Wal-Mart supports their habits and added new products. One more thing is that in these regions a lot of low-priced things are produced, so some stuff was exchanged to domestic. It helped to cut expenses on manufacturing and distribution.

As for pricing Wal-Mart has a low-price policy. And it works! However, in some countries, like Japan and Germany, consumers had to have discounts and sales. But Wal-Mart was steady and did not change its main principal. It was one of the reasons company lost Germany, in Japan the situation was stabilized, but for a number of years Wal-Mart had losses. To sum up, international growth period is not the best time to be stubborn. At the same time policy of low-prices is ideal for developing countries like China, Brazil, India, Russia and so on.

Furthermore, Wal-Mart’s promotion strategy was also changed related to consumer tastes. In UK and Canada company used proved methods of Internet advertising, e-mail communication and direct marketing. In developing countries they used TV-commercials, billboards, printed ads. The reason is obvious new technologies are not so much spread in these countries. For example, in Latin America or China a lot of potential consumers live in countryside and do not have access to information in World Web.

Thereby, Wal-Mart marketing mix was changed in a number of countries and it gave company a good chance to acquire its profit.

2.5. Cross-cultural comparison

Now Wal-Mart is making a lot to win developing countries markets. Its goals are China, India, Brazil, Russia and South Africa. All together they are BRICS. Further these countries will be analyzed according to Hall concept and Hofstede 4 indexes. As a conclusion, there will be given some recommendations about future growth in these regions.

At first a little bit theory. E.T. Hall made the concept of high and low context as a way of understanding different cultural orientations. In a low-context culture messages are explicit and specific, every word carries most of the communication power. It has clear communication modes. The interpretation of messages in high-context culture rests heavily on contextual cues (1).

However, the most useful for understanding cultural differences and their influence on consumer behavior and marketing growth strategies comes from research of Geert Hofstede. 4 dimensions are as follows: the Individualism/Collective Index (IDV), which focuses on self-orientation; the Power Distance Index (PDI), which focuses on authority orientation; the Uncertainty Avoidance Index (UAI), which focuses on risk orientation; and the Masculinity/Femininity Index (MAS), which focuses on assertiveness and achievement (1).

Characteristics of BRICS:

China - high-context culture, low IDV, high PDI, average UAI, high MAS;

India - high-context culture, low IDV, high PDI, low UAI, high MAS;

It means that company should be accurate in translation and in using non-verbal communication. Citizens pay attention at the fact that organization care about rules, their traditions and habits. Culture is collectivistic, so they like to be a part of different clubs and teams. Distance level is high and it will pertinently to tell more about company’s top-management. They need respect and some distance. They respect people who made fortune as well. Use of Wal-Mart team images is appropriate. Asian’s prefer to make big purchases, like huge packages.

Brazil – average context, low IDV, high PDI, high UAI, high MAS;

South Africa – average context, low IDV, high PDI, high UAI, high MAS;

In these countries consumers are ready to go shopping to big out-of-city stores, because of low price. They need to buy a lot of stuff for the whole family with the lowest price. Consumers are not very open to innovations, so entry should be gradual. They appreciate hierarchy and order in everything. For them it is not easy to change their consumer behavior and, for example, become a costumer of new store chain. Adaptation is gone to take a lot of time. Indian’s are proud of their culture and history, use of historic images during the promotion can be also positive. Club system attracts them as well.

Russia - high-context culture, low IDV, average PDI, low UAI, average MAS;

Consumers are fond of risk – they would like to try everything new. Communication should be careful, because language is very difficult and polysemantic. People pay attention to gestures and manners. In commercials prefer to see much humor and creativity, than useful information. Consumers will pay more for foreign products, because of the high level of «anti-ethnocentrism». It is a huge difference between way of life and also consumer behavior and presences in big towns and countryside. In cities-millionaires people used to buy food for the whole week during the weekend, in small not (go shopping every 1-2 days to the local store). Prefer stores warehouses with not only food stuff, but clothes and technique (that’s why Metro stores are very popular). Consumers are not really loyal and can change preferences because of price policy advantages or convenient location of supermarket. Pay a lot of attention to TV-commercials with «stars». Buy a lot, but in small packages «for one dinner», prefer diversity in food.