Chapter 1: Marketing in a Multicultural and Changing World

OVERVIEW

Today's world is changing ever more rapidly . Four hundred years ago Nostradamus described events (Cen V, Quatrain 57) in which 9/11 can be recognized and, more specifically , the resurgence of fundamentalism (Cen IV, Quatrain 32). Whilst we are not concerned with such futurology or prediction, or with whatever views might be expressed as to whether the march of Islam is for better or worse , we are all going to have to live with it and the market changes that result. In addition, for the foreseeable future, terrorist threats are here to stay.

On the other hand, national economies have become increasingly deregulated and have opened up opportunities for international trade and competition. It has become the norm for organizations to compete for market share not only with their national competitors but also with international ones. Globalization has implications for stakeholders, workers, suppliers, customers, and local communities. Contemporary marketing is the link between this spread of production, transferability of finance, the mobility of labor, and the free flow of information across the borderless world. Technology is driving further profound changes as people on the other side of the globe can be reached in seconds, and for the cost of a local call.

In Anglo-Saxon economics, the traditional theory of consumer choice encompasses four elements about the buyer and the market:

• The buyer's marginal disposable income.

• The price at which the goods or services can be purchased.

• The values (tastes and preferences) of the consumer.

• The belief that consumers behave rationally and do the best for themselves .

No previous generations have had so many options for earning , buying, selling, and living as today. The axiomatic economic models, whereby the purchaser makes what appear to be consistent and logical buying decisions, are breaking down. They have to be replaced by models which explain how and why a new generation of buyers , with different and frequently changing value systems from changing cultures, think and act.

As a consequence, reality today is more complex as international trade becomes more and more part of daily life. Marginal incomes vary significantly across cultures and within cultures. Prices are not solely driven by market forces and elasticity of price - demand does not follow simple marginal analysis theory. Tastes and preferences are not only different in different cultures, but change rapidly as fads come and go. In many ways consumers are more discerning (complaining more frequently about poor service and their "rights") but are also "illogical," borrowing heavily on their credit cards although much less expensive sources of finance are available.

Since any country's imports are another country's exports, eventually they must be balanced and governments often intervene to achieve this by tariffs and barriers - or are required to do so by international monetary systems. Whilst balance-of-payments accounts may be balanced at settlement time, inequalities across the world are increasing. For example, in some countries a drought means that cars can't be washed, whereas in other places people may die and crops fail.

So now the British and Dutch drink French wine, Americans drive Japanese cars, and Russians eat American burgers and wheat. Nevertheless, we should recall that the basis for international trade is exchange. Uni-directional selling is not sustainable. Cultural and other international differences, such as the availability of labor and materials, lead to differences in costs and prices. Through international marketing effort and then trade, countries supply the world with commodities they can offer cheaply in exchange for other goods which are available cheaply elsewhere. Traditionally goods made by labor-intensive methods were likely to cost more relative to goods produced by capital- intensive methods in the west. However world trade has grown faster than world income, and many less-developed countries complain that industrialized countries are exploiting them by buying raw materials at low cost, then sending them back as finished goods at a much higher cost. Many industrialized countries are now exporting jobs to lower labor cost areas, as can be seen with the devlopoment of telephone call centers in India.

Customer loyalty can no longer be taken for granted in cultures where it has previously existed. In contrast it may be expressed in different ways in new destination markets, in a different culture, because of the different meaning that relationships play in the buyer-seller interface. But commercial success has to depend more on finding a new understanding of market dynamics than short- term , fleeting success through lucky accidents of matching or hitting a fashion trend.

Fed by the growing accessibility of information, money, and goods across borders, all of these changes present a constant series of challenges to marketers as well as governments. For most societies in the free world, the livelihoods, pensions, and future security of their citizens depends on the renewal, transformation, and survival of organizations, institutions, and relationships to prevent a "melt-down into collective confusion, insecurity and chaos" (Crainer, 1998). Leadership of these new organizations will require support to progress individual and social as well as corporate transformation. Future corporate success will only result from successful marketing identifying, creating, and satisfying customer needs so that the organization can deliver service and value to customers in this new environment.