Claims of Exceptional Performance May Create Suspicion
A Dutch insurance company found it difficult to convince German customers to buy their life insurance, even though their product had done exceptionally well in recent years. In their advertising campaign they stated that their customers’ capital investment had grown as much as 20 percent annually. German customers were not convinced; such an exceptional increase in the price of shares could not be trusted to continue. To win over German customers, the Dutch company had to change their marketing strategy and promise a much lower return on investment.
Village Life and Inefficient Retailing
Japanese social life and consumption patterns are much more particularistic than in most western nations. Tokyo, for example, is a collection of “villages,” each with its shopping center. Because houses and refrigerators are small and fresh fish and vegetables are greatly prized, the Japanese shop daily. They go by bicycle or on foot, and shop in thousands of mostly small, mom and pop stores supplied by two tiers of wholesalers. Service is very personal and friendly, and the predilections of individual customers are well known.
Supermarkets and chain stores are hindered by the Large Scale Store Law and its application by local governments. Small shopkeepers are an important constituency and are protected. Quite a few used to work in companies that produce the goods they currently sell. They can exchange defective goods quickly, preventing unfavorable publicity for the company. But such a system is not without its costs. Supermarkets are fewer, standardization is less, and distribution costs are higher. Even successful foreign chains, like Kentucky Fried Chicken, employ twice as many people in Japan as they do in the States. The additional workers wrap the chicken carefully, bow, and smile. Japan spends on honorifics, people whose main task appears to be greeting and thanking customers.
The 24-hour economy has an impact on daily life in Japan. Convenience stores that are open late in the evening are now starting to boom.
The Dutch universalistic orientation is expressed in their preference for universal products: a limited variety, available in large quantities, with a reasonable quality and a low price. The success of Hema department stores, clothing retail company C&A, the Dutch-based wholesaling company Makro, and the company brands of food retailer Albert Heijn can be attributed to this preference. The Swedish furniture retail company IKEA has been extremely successful in the Netherlands by using a strategy that appeals to this preference for the universal product.
This preference might seem to be in contradiction with Dutch individualism. Although the Dutch want to express their individualism in their buying habits, they don’t do this by buying specialty products or famous brand names. They try to express their individualism by looking for what they consider to be creative variations and combinations of universal products.
Marketing for Particular Needs
Singaporeans are very particularistic about festive days. A festive day of any ethnic group is welcomed as a reason to celebrate and offer sales specials. Where, other than in Singapore, would you find a shop with a sign saying “Jesus is the reason for the season” to make people aware of the Christmas sales? Just before the Hindu Diwali festival, advertisements in the newspaper for cars, computers, and just about anything are labeled as “Diwali specials.”
Singapore has always been a very diverse society in which the need for marketing to different ethnic groups has been taken for granted. Since the beginning of the last century, Chinese Singaporeans have distinguished between “Chinatown business,” “ah so business” (Chinese business outside of Chinatown), and “ang moh companies” (western business). Because of rapid economic developments, different age groups in Singapore have very different consumer patterns as well, and it is extremely important to differentiate marketing for the different age groups.
Singaporean companies have a tradition of adapting to different market needs in a flexible way. A major Singaporean bank has this as its slogan for home loans: “The one thing we’re very rigid about is flexibility.”
The impact of the communitarian values of Chinese culture on the marketing of consumer goods is rather straightforward. Most goods are best positioned in a family or family-like collective environment. Family-like collectives frequently used in advertisements are colleagues, members of a sports team, or classmates at school. Within the collectives, the leading people are often given some special attention or a special role.
Celebrating the Family in Advertising
The communitarian orientation of the French reveals itself very clearly in some of its products and in the way they are advertised. Well known products are the Renault Espace (a family car) and family vacations organized by Club Med. After an initial rejection by the entire auto industry, Renault, the largest French manufacturer, showed persistence in the development and later very successful sales of the first compact family car. It was advertised as one that united families going on vacations. The enormous success of Club Med is also indicative of French communitarianism through family life. The whole business idea is to offer vacations for families, including grandparents, in a luxurious environment. This is very French indeed.
Until the early 1980s all television in Germany was public. It was financed by public television fees and advertisements were limited to short slots in the early evening. However after the introduction of private channels during the 80s, the amount of television advertising has increased quite significantly. Nonetheless, in comparison with other countries, it is still fairly limited; overall Germany is probably one of the countries with the least amount of TV advertising. Printed ads are much more common. In general, advertising expenditures in Germany are much lower than in most other countries. Compared to the United States, for example, the amount spent on advertising is significantly lower.
Comparative advertising, while common in some countries, is illegal in French in France. In the US this is a common practice; individualistic America has a tradition of overtly competing products. In contrast comparative advertising is seen as humiliating by the communitarian French. Under paragraph 1382 of the French civil code it is forbidden to compare products publicly, even in cases where there is only a slight bias or where the comparison is correct.
The Public Regulation of Distribution
In marketing products in German in German, companies have to deal with a set of public regulations that may often seem rather restrictive. First, there is a law against unfair competition (Gesetz gegen den unlauteren Wettbewerb). This prohibits some of the more aggressive strategies to gain market entry and increase market share and sprang out of the strong tradition of cartels and “interest communities” that were active in Germany up until the Second World War. These groups were set up to hinder cutthroat competition with its potentially negative effect on the economy as a whole.
Although cartels and similar practices are now prohibited and tightly watched by the monopoly commission in Berlin, the notion that competition should not be too fierce and the push to avoid destabilizing effects on the economy are still rather strong and permeate public regulation. In general, public regulation is geared to pursuing public goals and not to fostering the free working of market forces. Planning restrictions are often used to channel behavior towards such goals. It may, for example, be rather difficult for a company to get a planning permit for a large out-of-town retail development as authorities are trying to protect shopping facilities in city centers. Retailers often have a tough time dealing with these kinds of constraints in Germany. After unification, the situation was different for a while in East Germany, and planning permits were generously granted. However, the situation there is now becoming more like that in the former West Germany.
Another frequently discussed restriction in Germany concerns the relatively short official shopping hours. Recently, these restrictions have been somewhat liberalized as a result of increased pressure.
“Uneconomic” Levels of Service in Japan
In Japanese business, good service can be taken to what westerners sometimes consider “uneconomic” levels. For example, a woman asks for a shade of lipstick that is out of stock in a drugstore. She is invited to sit down, offered tea perhaps, and a dispatch rider is sent from the wholesaler with the particular color she wants. Western economists would tell you that such high levels of service are not economically justified; the cost of delivery would lose the druggist at least 500 yen.
A communitarian system calculates on a different basis. What is the customer’s continued loyal patronage worth? Might she not feel an obligation to that particular druggist and spend more money later? Communitarians ask what the relationship is worth, not the cost of the lipstick itself.