Table of Contents:
2.1 Theories About Culture:
2.2 Hofstede Cultural Dimension:
3. Marketing Strategies:
3.1 Overview Of “4P” Marketing Model:
3.2 Decentralization Of Marketing Strategies:
4. FMCG Market:
4.1 FMCG Market Analysis in Germany & India:
4.2 Effect Of Culture on FMCG Marketing Approach in Germany & India :
5. Conclusion & Reflection:
In today’s scenario the society and the culture plays an important role to drive the taste of the consumers. Thus it is very much evident that the people of two different polarities would perceive their requirement in two different manners. Nevertheless the requirement can be the same but with a different specification. It is required in marketing to understand and imbibe the changes so to effectively sell the product in that zone. In this paper we would like to analyze the variations in the FMCG marketing strategies, by the use of marketing model, in German and Indian market. We aim to examine and present the major differences in the approach towards these two markets and how culture plays an indispensible role to drive these changes. Therefore, our research statement would be:
“How culture affects the FMCG marketing approaches in both the German and the Indian Market?”
The process to decide and implement common market strategy is very difficult across the globe. The difference in the demographics and values, of a number of nations, poses a challenge for the multinational companies to follow a uniform market policy. It is the basic reason why companies decentralized their marketing policies to market their products. If the companies operate as multinational, they can gain from both the existing and the emerging markets. Furthermore, the companies realize that they can earn potentially from the overseas market, once their home markets mature. This tends to force them to widen their policies and acquire consumers throughout the globe. Cultural dimension is a significant tool that the marketers use efficiently to establish their consumer segment. Additionally, it is remarkable to use this tool correctly since it can lead to deteriorate the brand image within the consumers. Now let us understand a bit more about the the link between culture and market approach with some practical examples of this combination.
2.1 THEORIES ABOUT CULTURE:
Culture and its intricacies play a very important role to form and define the marketing techniques. To start with, what is culture? According to Schiff man and Kanuk (2007), culture is “The sum total of learned beliefs, values and customs that serve to regulate the consumer behavior of members of a particular society”. Here under is a theoretical model of cultures’ influence on behavior.
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Source: Consumer Behavior (Ninth Edition), Schiffman & Kanuk, Chapter 12
We would like to discuss about “CULTURE” in a little detail. Culture is an overview of the thought, behavior and action of an individual. The factors such as living patterns, the daily activities and the customs of the people involved are its major ingredients. The culture is also a result of the beliefs and values of the people that they think are relevant. Finally it is also true that culture is acquired i.e. it is passed from one generation to the other and is not inherent.
Lutz (1985) classified the cultural system as below:
(1) Ecology: Ecology is the way in which the society is adapted to the environment. This phenomenon is defined mainly by the technology that distributes these resources.
(2) Social structure: Social structure is the manner in which the social life of the society is structured. For instance, types of family such as nuclear or joint family etc.
(3) Ideology: It is the people’s peculiar approach, which they use to relate to the society’s environment. The ideology generally represents the myths and the notions of the people who constitute that society. On a broader perspective, this ideology takes the form of a culture of that social group.
2.2 HOFSTEDE’S CULTURAL DIMENSION:
Hofstede (1980) and Milner et al. (2002) broadly classified the culture under six dimensions as mentioned below:
(A) Power Distance Index (PDI): This dimension reflects the inequalities and the system of hierarchy that is present in some cultures. It represents the authoritative relations both in the family and in the organization. The countries like United States, Germany stress much on flatter organizations whereas countries like India, Brazil believes in taller organization and more supervision.
(B) Uncertainty Avoidance Index (UAI): This dimension shows the level to which the people in the society believe to regulate the future than to let it happen. In other words, uncertainty avoidance is greater for countries like Germany, France, Greece where people avoid risk and follow pre set rules and regulations. This is in contrast to the countries such as India, Denmark, and Sweden etc where people are prone to take risk.
(C) Masculinity/ Femininity Index (MAS): This dimension exhibits the extent to which the gender roles and values are important both in the family and in the organization. In a masculine society such as United Kingdom, Germany etc. male features like aggression and success is held in high esteem as compared to the feminine societies. Thus, we can say that career, achievement, ego and money are some of the features of masculine society.
(D) Individualism/Collectivism Index (IDV): This dimension demonstrates the individualistic nature of the people and the society both in personal and professional field. The people tend to focus more on their personal achievement, their interest and their freedom. As compared to the collective society where people believe in teamwork, concern for others and sacrifice for the sake of other people. Individualism is high in countries like United States, Great Britain, Germany, and Netherlands etc. as opposite to India, Venezuela, and Columbia etc.
(E) Long Term Orientation (LTO): This dimension focuses on the society that believes less in traditions, norms and tends to take a more practical approach on issues. They attach more value to the future, more persistent and have the capacity to adapt. In contrast, the low rank societies have the values related to the past and present, have more respect for tradition and have social obligations. Long-term countries are Germany, United States and Great Britain etc where as the short term societies are China, Hong Kong, Brazil and India etc.
(F) Indulgence versus Restraint (IND): This dimension explains as extent to which the people give importance to leisure, fun, expression of speech and need. The countries such as USA, Australia, and Netherlands etc rank high on this parameter as compared to countries like India, China, and Japan etc.
The chart below shows the percentage comparison between India and Germany based on the dimensions established by Hofstede. I would mention the terminologies on the axis as below:
1) Masculinity Index.(MAS)
2) Individualism Index(IDV)
3) Power Distance Index(PDI)
4) Uncertainty Avoidance Index(UAI)
5) Long Term Orientation.(LTO)
6) Indulgence versus Restraint.(IND)
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Source: The Hofstede Centre, http://geert-hofstede.com/countries.html
These cultural dimesions as mentioned above and described by Hofstede plays a major role to determine market strategy and drive the consumer behaviour in different cultures. We would take our understanding further by disucssing the marketing models and strategies.
3.0 MARKETING STRATEGIES:
Today, we have a number of marketing theories which are used by the marketers to maximize their market share and to reach out to a wider audience. These are mainly 4P’s, 8P’s, 7C’s and many others. These models are interconnected in some way or is an extension of the other. However the oldest and the most reliable is the “4P” theory which was coined by E. Jerome McCarthy some 50 years back.
4P theory lays the foundation as to how we can approach a new market. It tells us the parametres to compare between the products of the same type and what best can be improvised in our approach to capture the market. We would discuss about the “4P” model in much detail.