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demand that companies which use the technology

pay them a license fee.

Because of the outcry, in 1994 the USA agreed

to bring its patent system in line with those of Japan

and Europe. Patent applications will be published

eighteen months after ﬁling.At the same time, based

on a GATT provision, the seventeen-year patent life

after granting was changed to a twenty-year term

from the ﬁling date. This change should partially

solve the problems of submarine patents.

The WTO has reached a unanimous agreement

to alter international trade rules so as to give poor

nations greater access to inexpensive life-saving

medicine. Poor countries will be able to import

generic versions of expensive patented medicines

by buying them from countries such as India and

Brazil without violating trade laws protecting patent

rights. African countries and their supporters in

nonproﬁt health groups have argued that moral and

political arguments outweigh commercial consider-

ations in the face of epidemics such as AIDS, malaria

and tuberculosis.This agreement could save millions

of lives.

COUNTERFEITING

Counterfeiting is the practice of unauthorized and

illegal copying of a product. In essence, it involves

an infringement on a patent or trademark or both.

According to the US Lanham Act, a counterfeit

trademark is a “spurious trademark which is identi-

cal with, or substantially indistinguishable from, a

registered trademark.” A true counterfeit product

uses the name and design of the original so as to look

exactly like the original. On the other hand, some

counterfeiters partially duplicate the original’s

design and/or trademark in order to mislead or con-

fuse buyers. Section 42 of the US Trademark Act

prohibits imports of counterfeit goods into the USA.

The extent of counterfeiting is great.Two out of

every ﬁve recordings sold worldwide are illegal

copies. In the case of pirated software as a percent-

age of the total market, the ﬁgures are as follows:

Ukraine (89 percent), Russia (88 percent), Bulgaria

(78 percent), and Romania (77 percent).

Counterfeiting is a serious business problem. In

addition to the direct monetary loss, companies

face indirect losses as well. Counterfeit goods injure

the reputation of companies whose brand names are

placed on low-quality products. In Ecuador, it is

easy to see why people earning a minimum wage of

$138 a month will have difﬁculty affording a $15

CD. Consequently, the pirates sold thirteen million

CDs in 2002, far eclipsing the 644,274 disks sold

legally. To make matters worse, the pirates have

entered the export business.

Products affected by counterfeiting cover a wide

range. At one end of the spectrum are prestigious

and highly advertised consumer products, such as

Hennessy brandy, Dior and Pierre Cardin fashion,

Samsonite luggage, Levi’s jeans, and Cartier and

Rolex watches.At the other end of the spectrum are

industrial products, such as Pﬁzer animal feed sup-

plement, medical vaccines, heart pacemakers, and

helicopter parts. Counterfeits include such fashion

products as Gucci and Louis Vuitton handbags, as

well as such mundane products as Fram oil ﬁlters

and Caterpillar tractor parts. Although fakes are

more likely to be premium-priced consumer prod-

ucts, low-unit-value products have not escaped

the attention of counterfeiters. Even Coke is not

always the “real” thing, as it is very easy for coun-

terfeiters in LDCs to put something else that looks

and tastes like Coke into genuine Coke bottles.

Fakes can come from anywhere, including industri-

alized countries. Italy may even be a bigger coun-

terfeit offender than some Asian countries.

Controlling the counterfeit trade is difﬁcult

in part because counterfeiting is a low-risk, high-

proﬁt venture. It is difﬁcult and time-consuming to

obtain a search warrant. Low prosecution rates and

minimal penalties in terms of jail terms and ﬁnes

do not offer a good deterrent. Walt Disney and

Microsoft, in winning two trademark-infringement

cases in China, were awarded only $91 and $2600

respectively. Moreover, there are many small-time

counterfeiters who could just pack up and go to a

new location to escape police.

Just as critical, if not more so, is the attitude of

law enforcement agencies and consumers. Many

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LEGAL ENVIRONMENT

consumers understand neither the seriousness of

the violation nor the need to respect trademark

rights. Law enforcement agencies often believe that

the crime does not warrant special effort. The

problem is severe in Taiwan, because so many local

manufacturers pay no attention to copyrights and

patents.The strong export potential for bogus mer-

chandise makes the government there look the

other way. In Mexico, one counterfeiter openly

operated several “Cartier” stores in American-

owned hotels. After many years in Mexican courts

and at least forty-nine legal decisions against the

retailer, Cartier was still unable to gain the cooper-

ation of Mexican ofﬁcials to close down the coun-

terfeiter.

The US Trade Representative (USTR) annually

submits to Congress a National Trade Estimate

Report (NTE) on signiﬁcant foreign barriers to

trade. After submission of the report, the USTR is

required to review US trade expansion priorities

and identify priority foreign country practices in

the Super 301 Report. The Super 301 Report

identiﬁes foreign practices, if eliminated, that would

have the most signiﬁcant potential to increase US

exports. The Special 301 Report, on the other

hand, identiﬁes annually those countries that deny

adequate and effective protection of intellectual

property rights (IPR) or that deny fair and equitable

market access to Americans which rely on intellec-

tual property protection.

Many trade partners of

the USA have complained bitterly about the Super

301 and Special 301 reports because of their retal-

iatory implications. But as far the USA is concerned,

this US law has brought results.

Because of China’s failure to protect US intel-

lectual property, the USA imposed 100 percent

tariffs in 1995 on $108 billion of imports of Chinese

products, representing the largest retaliation ever

taken by the US government. Soon after that, China

signed the Intellectual Property Rights (IPR)

Enforcement Agreement and took action to curb

piracy. However, although pirated products are no

longer sold openly over the counter, the hidden

transactions are still common. In addition, while

China has done something about illegal retailing, it

has not done much about illegal manufacturing. In

fact, production of illegal compact disks has greatly

increased. The factories making counterfeit prod-

ucts are able to operate quite freely due to their

political connections.

It is not sufﬁcient for a company to ﬁght coun-

terfeiting only in its home country. The battle

must be carried to the counterfeiters’ own country

and to other major markets. Apple has ﬁled suits

against imitators in Taiwan, Hong Kong, and New

Zealand.The overall idea is to prevent bogus goods

from entering the industrialized nations that make

up the major markets. To make the tactic more

effective, it is necessary to go after the distributors

and importers in addition to the manufacturers of

counterfeit goods. Cartier, for example, has ﬁled

120 lawsuits against retailers in almost every major

city. Because it is difﬁcult and time-consuming to

shut down foreign counterfeiters in their home

countries, major middlemen must be targeted so

that they become aware of the risks in handling

fakes.

The cooperation a company receives from

foreign governments in reducing the amount of

counterfeiting varies greatly. Hong Kong has cus-

tomarily done a credible job of enforcing court

judgments against counterfeiters. Taiwan, in con-

trast, has been reluctant and unpredictable in going

after counterfeiters. It has ignored most criticism

because its economy depends signiﬁcantly on the

export of bogus goods. In a case such as this, the

injured ﬁrm should request that its own government

intervene by applying pressure on a country that

harbors counterfeiters. The US Tariff and Trade

Act, passed in 1984, is intended to deal with this

problem on an international basis. It allows the USA

to deny tariff preferences and duty-free imports to

LDCs that do not make a satisfactory attempt to

control a counterfeit problem originating in their

countries.

Finally, the company must invest in and establish

its own monitoring system. Its best defense is

to strike back rather than rely solely on govern-

ment enforcement. One computer ﬁrm in Taiwan

allows consumers to bring in fakes that it then

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exchanges for the purchase of genuine computers at

a discount. Chanel spends more than $1 million a

year on security. It goes after counterfeiters by using

a computer to keep track of protected names in

various countries, the names of suspected counter-

feiters, and the near names, such as Channel,

Chabel, or Replica No. 5.Another innovative tactic

has been employed by Cartier. It opened its own

store directly across the street from the store selling

fakes, forcing the retailer of the bogus merchandise

to stop selling forgeries in return for a sole local dis-

tributorship in Mexico.

When the cost of surveillance is high, it may

be more desirable to form an association for the

purpose of gathering information and evidence.

Apple, Lotus, Ashton-Tate, Microsoft, Autodesk,

and Word Perfect formed the Business Software

Association as an investigative team.The team was

successful in providing information to authorities

for the arrest of pirates.This strategy reduces costs

while increasing cooperation and effectiveness.

Although counterfeiting is a serious problem,

it seems strange that it may still beneﬁt a trade-

mark owner or a patent holder in some way. In

the case of software piracy, it provides the shadow

diffusion of a software parallel to the legal diffu-

sion in the marketplace, thus increasing the user

base in the process.This shadow software diffusion

may inﬂuence potential software users to adopt

the software, and some of them may become

new software buyers. Therefore, stopping the

shadow diffusion may also impede legal penetration.

Marketers need to consider whether software

protection strategies may be more harmful to them

than piracy.

Business Software Alliance’s recent study shows

that countries reducing piracy have experienced

faster economic growth.

Its explanation is that

reduction in piracy spurs sales, leading to more jobs

and tax revenues. For example, Egypt reduced its

piracy rate by 30 percent and saw its software sector

grow by 160 percent. Critics of the study, however,

countered that it could not be determined whether

a country’s economic growth was a result of piracy

reduction.

CONCLUSION

This chapter has examined the various legal issues

related to the conduct of international business

activities.Because of the variety of legal systems and

the different interpretations and enforcement

mechanisms, the discussion must, of necessity, be

somewhat general. Based on the same rationale, it

is impossible for the top management and legal staff

at corporate headquarters to completely master the

knowledge of foreign law on their own.

To appreciate the problem and subtlety of foreign

law, it is clearly necessary to consult local attorneys

to ﬁnd out how a company’s operation may be con-

strained by particular laws. To deal with problems

related to bribery, incorporation, counterfeiting,

and infringement, the services of local attorneys are

essential. Just as essential is the cooperation of the

governments of both the host and home countries.

The legal environment is complex and dynamic,

with different countries claiming jurisdiction (or a

lack of jurisdiction) over business operations. The

interaction among domestic, foreign, and inter-

national legal environments creates new obstacles as

well as new opportunities. A host country may use

an MNC’s subsidiary in its country as a method of

inﬂuencing the MNC and subsequently its home

country’s policies. Likewise, the home country may

instruct the parent company to dictate its foreign

subsidiary’s activities. It is thus not uncommon to

ﬁnd a situation in which the ﬁrm is being pressured

in opposing directions by two governments.

However, the MNC can use its global network to

counter such a threat by shifting or threatening to

shift the affected operations to other countries, thus

lessening the governments’ inﬂuence on its behav-

ior. It is this countervailing power that allows the

company a great deal of freedom in adjusting its

marketing mix strategies.

It is important to keep in mind that legal con-

tracts and agreements can only be as good as the

parties who create them and the countries that

enforce them.Therefore, a contract cannot be used

as a substitute for trust and understanding between

parties or careful screening of business partners.

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LEGAL ENVIRONMENT

CASE 5.1 INTERNATIONAL AUTO SAFETY AND PATENTS

Peter Spang Goodrich, Providence College

Mercedes-Benz has long been an international industry leader in automobile safety. In 1951, Mercedes-Benz

engineer Béla Barényi patented the occupant safety cell. In 1953, the crumple zone premiered with the Mercedes-

Benz 180. In 1957, Mercedes installed seat belts, originally used in airplanes.

In 1959, the Mercedes 220 had

both the rigid passenger cage and integrated crumple zone for cars.The 1981 Mercedes S-Class world premiered

the airbag.

Mercedes no doubt had enormous marketing advantages from this corporate image and goodwill; yet Mercedes

displayed a high ethical consciousness in its inventiveness. In the early 1950s, Mercedes was the leading team on

the Formula 1 auto racing circuit. Mercedes removed its team from participation from racing for over twenty

years after a horriﬁc sportscar accident at Le Mans, in which one of its cars careened into the audience killing

numerous spectators.

On 23 January 1951, Daimler-Benz AG applied for patent number DBP 854.157, using the unadorned descrip-

tion of “Motor vehicles especially for the transportation of people”. Behind this was concealed no less than the

invention of the crumple zone. A patent which in the following decades revolutionised the entire automotive indus-

try and became the decisive factor in “passive safety”. In more recent times, it has even been applied in railway

locomotive and car design.

The ingenious mastermind of the idea was Béla Barényi for whom the maxim of the time – “a safe car must

not yield but be stable” – was completely inappropriate. He was the ﬁrst to discover that in a collision, kinetic

energy must be absorbed through deformation in order for the occupants to be protected. He logically split the

car body into three “boxes”: a soft front section, a rigid passenger cell and a soft rear section. The patent was

granted on 28 August 1952.

Patent law allows a company to retain full control over its inventions for seventeen years.Yet Mercedes chose

not to enforce its patent rights on the crumple zone so that its competitors could also adopt the technology. As

a result, tens of thousands of lives were saved globally.

Points to consider

1 Did Daimler-Benz relinquish its ﬁduciary responsibilities to its shareholders by failing to maximize proﬁts

from its safety innovations?

2 Did Daimler-Benz enhance its marketing strength by its failure to enforce the crumple zone patent rights?

3 What is the difference between Mercedes-Benz’s crumple-zone patent protection actions in the 1950s and

the current pharmaceutical industry’s pricing policies on AIDS drugs to Africa? What would you recom-

mend?

4 Are there certain “intellectual property rights” (patents and copyright) which are so vital to the health and

safety of consumers that they should not be allowed to be patented or copyrighted?

Notes

a In the horriﬁc Mercedes Paris crash which nearly demolished the car and killed Princess Diana, her friend,

and the driver, the bodyguard, the only passenger wearing a seat belt, survived.

b http://www.whnet.com/4x4/crashes.html (accessed May 21, 2003).

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c “Patent No. DBP 854.157, Life-saver of thousands.” Friday, July 19, 2002. http://forums.benzworld.org/

news/news.asp?id=33 (accessed May 21, 2003).

CASE 5.2 BRIBERY: A MATTER OF NATIONAL PERSPECTIVE

Jeffrey A. Fadiman, San José State University

US executives may feel unsure, for example, of how to cope with foreign payoffs, especially when requests for

“gifts” take on a form that most Americans consider bribes. Although payoffs obviously exist in the United States,

they are detested in our culture. In consequence, this type of solicitation may suggest to even the most overseas-

oriented executives that US business values are morally superior to those used abroad.

This conviction, if sensed by foreign colleagues, can shatter the most carefully planned commercial venture.

My own initial experience with Third World forms of bribery may serve as an example. It occurred in East Africa

during the 1970s and began with this request: “Oh, and, Bwana, I would like [a sum of currency was speciﬁed]

as Zawadi, my gift. And, as we are now friends, for Chai, my tea, an eight band radio, to bring to my home when

you visit.”

Both

Chai

(tea) and

Zawadi

(gift) can be Swahili terms for “bribe.” These particular suggestions were deliv-

ered in tones of respect. They came almost as an afterthought, at the conclusion of negotiations in which details

of a projected business venture had been settled one by one. I had looked forward to buying my counterpart a

ﬁnal drink, to symbolically complete the deal in American fashion. Instead, after every commercial aspect had

been settled, he expected money.

The amount he suggested seemed huge at the time, but it was his speciﬁc request for a radio that angered me.

Somehow, it added insult to my injury. Outwardly, I simply kept smiling. Inside, my stomach boiled. I was being

asked for a bribe, a request my own culture would condemn. I didn’t do it and didn’t expect it of others. Beyond

that, like most Americans, I expect all monetary discussion to precede the signing of contracts. In this instance,

although negotiations were complete, I had been asked to pay once more? Once? How often? What were the rules?

Where would it stop? My reaction took only moments to formulate. “I’m American,” I declared. “I don’t pay

bribes.” Then, I walked away.

That walk was not the longest in my life. It was, however, one of the least commercially productive. For in

deciding to conduct international business by American rules, I terminated more than a commercial venture. I

also closed a gate that opened into a foreign culture. Beyond it lay the opportunity to do business in a wholly

local fashion, as well as an interpersonal relationship that could have anchored my commercial prospects in that

region for years to come.

Points to consider

1 Do you agree with the author’s rejection of the request for “gifts”?

2 If you were in a similar situation, how would you handle the situation while considering your own business

needs?

QUESTIONS

1 Describe the multiplicity of legal environments.

2 Distinguish between common law and statute law systems.

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LEGAL ENVIRONMENT

3 Cite examples of products that cannot be imported into the USA.

4 Explain how the legal environment can have an impact on an MNC’s marketing mix.

5 What is the extraterritorial application of law?

6 Why do MNCs prefer to use corporate subsidiaries in foreign markets?

7 Distinguish among patent, trademark, copyright, and infringement.

8 Distinguish between priority in use and priority in registration.

DISCUSSION ASSIGNMENTS AND MINICASES

1 Why is it so difﬁcult for an MNC to deal with bribery?

2 What can trademark owners do to minimize counterfeiting?

3 As an owner of a software product, what form of legal protection will you try to obtain: patent, copyright,

or trademark?

NOTES

1 “German Court Rules Against Wal-Mart,”

San José Mercury News

, November 13, 2002.

2 Sarah L. Croft and Beatrice Harichaux de Tourdonnet,“France and England:The European Product Liability

Directive in Practice,”

For the Defense

(February 2000): 8–13.

3 “Offsetting the Costs of Employment Protection?”

IMF Survey

, June 30, 2003, 197–8.

4 Vincenzo Sinisi and Thomas M. Federman,“Commercial Aspects of Italian Law,”

Business America

, October

5, 1992, 12–14.

5 Stephen D. McCreary, “International Arbitration in Latin America,”

Business America

, February 11, 1991,

17–18.

6 “Mexican Nationals Want Tire Suits Heard in US,”

San José Mercury News

, August 24, 2001.

7 “Universal Injustice,”

San José Mercury News

, May 16, 2002.

8 “Editorial:World Crime Court Deserves Better Than Denunciation,”

San José Mercury News

, May 16, 2002.

9 “Making a Federal Case Out of Overseas Abuses,”

Business Week

, November 25, 2002, 78; “Citing Nazis,

Lawyers Say Unocal Should Be Tried,”

Bangkok Post

, June 19, 2003.

10 Stephen J. Kobrin, “Territoriality and the Governance of Cyberspace,”

Journal of International Business

Studies

32 (fourth quarter, 2001): 687–704.

11 “One CEO’s Nightmare, Bhopal Ghosts (Still) Haunt Union Carbide,”

FORTUNE

, April 3, 2000, 46. “Union

Carbide’s Former Chief Refusing to Face Bhopal Suit,”

San José Mercury News

, March 5, 2000.

12 “Lawlessness and Economics,”

IMF Survey

, May 19, 2003, 145–7.

13 “Non-Litigious Japan Faces Critical Shortage of Lawyers,”

San José Mercury News

, September 11, 2000;

“More Business in Japan?”

Collections and Credit Risk

, May 2000, 10; “Don’t Kill All the Lawyers – Send

Them to Japan,

Business Week

, June 14, 1999, 66.

14 “Dispute Avoidance and Dispute Resolution in China,”

Export America

(June 2001): 14.

15 Sak Onkvisit and John J. Shaw, “International Corporate Bribery: Some Legal, Cultural, Economic, Ethical-

Philosophical, and Marketing Consideration,”

Journal of Global Marketing

4 (No. 2, 1991): 5–20.

16 Bodo B. Schlegelmilch and Diana C. Robertson, “The Inﬂuence of Country and Industry on Ethical

Perceptions of Senior Executives in the US and Europe,”

Journal of International Business Studies

26 (No.

4, 1995): 859–81.

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17 Anusorn Singhapakdi

et al

., “How Important Are Ethics and Social Responsibility? – A Multinational Study

of Marketing Professions,”

European Journal of Marketing

35 (No. 1, 2001): 133–53; Kiran Karande, C.P.

Rao, and Anusorn Singhapakdi, “Moral Philosophies of Marketing Managers: A Comparison of American,

Australian, and Malaysian Cultures,”

European Journal of Marketing

36 (No. 7, 2002): 768–91.

18 Robert Klitgaard, “Subverting Corruption,”

Finance & Development

(June 2000): 2–5.

19 Robert L. Ostergard, Jr., “The Measurement of Intellectual Property Rights Protection,”

Journal of

International Business Studies

31 (second quarter, 2000): 349–60.

20 “Mickey Mouse Goes to War,”

San José Mercury News

, October 4, 2002.

21 “Supreme Court Extends Copyright Protections,”

San José Mercury News

, January 16, 2003; “Ruling a

Ripoff of Consumers,”

San José Mercury News

, January 16, 2003.

22 “Copyrights Expiring in Europe,”

San José Mercury News

, January 3, 2003.

23 “Huge Backlog at Patent Ofﬁce,”

San José Mercury News

, April 18, 2003.

24 “Patently Absurd,”

The New York Times Magazine

, March 12, 2000, 44–9.

25 “IBM Tops Patents Again,”

San José Mercury News

, January 13, 2003.

26 “Sanders’ Note Is No Threat to Its Secret Recipe, KFC Says,”

San José Mercury News

, January 30, 2001.

27 “Intel Settles Chip-Set Battles,”

San José Mercury News

, April 8, 2003.

28 Dean Matlack, “Protecting Intellectual Property Rights Abroad: Resources for US Exporters,”

Export

America

, June 2002; “The Advantages of Using the Patent Cooperation Treaty,”

Export America

, January

2002.

29 Masaaki Kotabe, “A Comparative Study of US and Japanese Patent Systems,”

Journal of International

Business Studies

23 (No. 1, 1992): 147–68.

30 “Poor Nations Win More Access to Drugs,”

San José Mercury News

, August 31, 2003.

31 “Study Shows Costs of Software Piracy,”

Asian Wall Street Journal

, June 26, 2001.

32 “Pirated-Music Sales Flourish in Ecuador,”

San José Mercury News

, February 27, 2003.

33 Katherine Wiehagen, “Section 301 Reports,”

Export America

(May 2000): 12.

34 Moshe Givon, Vijay Mahajan, and Eitan Muller, “Software Piracy: Estimation of Lost Sales and the Impact

on Software Diffusion,”

Journal of Marketing

59 (January 1995): 29–37.

35 “New Study Reveals Signiﬁcant Decline in World Software Piracy Since 1994,” Press release, June 3, 2003.

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People are tyrannized by their culture.

Edward T. Hall, anthropologist

CHAPTER OUTLINE

■ Culture and its characteristics

■ Inﬂuence of culture on consumption

■ Inﬂuence of culture on thinking processes

■ Inﬂuence of culture on communication processes

■ Cultural universals

■ Cultural similarities: an illusion

■ Communication through verbal language

 Language acquisition

 Translation

 The world’s best language

 Marketing and languages

■ Communication through nonverbal language

 Language of time

 Language of space

 Language of agreement

 Language of friendship

 Language of negotiation

 Language of religion

 Language of superstition

 Language of color

 Language of gifts

■ Subculture

■ Conclusion

■ Case 6.1 Cross-cultural marketing: a classroom simulation

Culture

Chapter 6

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CULTURE

PURPOSE OF CHAPTER

A worldwide business success requires a respect for local customs. International marketers need to recog-

nize and appreciate varying cultures. Culture plays a signiﬁcant role in inﬂuencing consumer perception,

which in turn inﬂuences preference and purchase. A good marketing plan can easily go awry when it clashes

with tradition. A marketing mix can be effective only as long as it is relevant to a given culture. One should

expect that a product may have to be modiﬁed, that a new distribution may have to be found, or that a

new promotional strategy may have to be considered.

What is more surprising than the blunders which can occur are the underlying causes for these mis-

takes.The most fundamental problem appears to be the indifferent attitude of many American ﬁrms toward

international markets.The ﬁrms often enter foreign markets with a complete disregard for the customs and

traditions there – something they would never do at home. In marked contrast, many Japanese ﬁrms have

been highly successful in the USA and elsewhere because of their keen awareness and understanding of the

local culture.

In order to develop an appreciation for the role of culture in society as well as the marketing implica-

tions of culture, this chapter will explore the following: (1) what culture is, (2) what its characteristics are,

and (3) how culture affects consumer behavior. The varying methods of developing cross-cultural commu-

nication, verbally and otherwise, are discussed. To lend an understanding of how cultures vary, the chapter

will compare a number of cultures. Finally, because population homogeneity within a country is an excep-

tion rather than a rule, it is necessary to examine the relevance and bases of subcultural groups.

When marketing products overseas, businesses should

be sensitive to local conditions. The countries of the

Middle East and North Africa are not a monolith,

and there are signiﬁcant differences among them.

Suggestive advertisements may be deemed offensive

in Islamic countries, given their more traditional stan-

dards of dress and behavior, particularly for women.

Advertisements featuring alcohol or pork products

are also likely to be poorly received. Arabic and

Hebrew script should be used with care to avoid sit-

uations like that which befell a company that printed

an Arabic phrase on bath towels, not realizing that

the phrase had religious connotations.

Regarding greetings and hospitality, handshakes

are a typical greeting in the Middle East and are used

not only during the ﬁrst introduction, but may be used

each time two people meet, even numerous times in a

single day.The common practice in Saudi Arabia is to

shake hands at ﬁrst meeting and again upon leaving.

Typically, people throughout the Middle East main-

tain closer physical proximity while talking, and con-

versations often involve more physical contact than is

common in the USA. Backing off to increase personal

space may feel natural to an American, but will likely

be seen as impolite or rude by an Arab or Israeli

partner. However, when speaking with a person of the

opposite sex, a respectful distance is best. Also, avoid

sitting or crossing your legs in such a way that the bot-

tom of your foot faces anyone.This is considered rude.

When a guest in an Arab person’s home, avoid

making gifts of food or drink. Such gifts imply that the

host is inadequate. Gifts of liquor should deﬁnitely be

avoided in Islamic countries as alcohol is prohibited

by the Muslim faith.In Israel,gifts of food or drink are

acceptable, but one should ensure that the items

are kosher, particularly in the case of Orthodox Jews.

Source:

Abridged from Maria Mussler, “Doing Business in

the Middle East,”

Export America

(December 2002).

MARKETING ILLUSTRATION INNOCENT ABROAD

CULTURE AND ITS CHARACTERISTICS

Culture, an inclusive term, may be conceptualized

in many different ways. Not surprisingly, the

concept is often accompanied by numerous deﬁni-

tions. In any case, a good basic deﬁnition of the

concept is that culture is a set of traditional beliefs

and values that are transmitted and shared in a given

society. Culture is also the total way of life and

thinking patterns that are passed from generation to

generation. Culture means many things to many

people because the concept encompasses norms,

values, customs, art, and mores.

Culture is prescriptive. It prescribes the kinds

of behavior considered acceptable in a society. As a

result, culture provides guidance for decision

making. For example, principles enjoining compro-

mise are more salient in East Asian cultures than in

North American culture. As conﬁrmed by one

study, Hong Kong decision makers are more likely

than their American counterparts to compromise.

The prescriptive characteristic of culture simpli-

ﬁes a consumer’s decision-making process by limit-

ing product choices to those which are socially

acceptable. This same characteristic creates prob-

lems for those products not in tune with the con-

sumer’s cultural beliefs. Smoking, for instance, was

once socially acceptable behavior, but recently it has

become more and more undesirable – both socially

and medically.

Culture is socially shared. Culture, out of

necessity, must be based on social interaction and

creation. It cannot exist by itself. It must be shared

by members of a society, thus acting to reinforce

culture’s prescriptive nature. For example, at one

time Chinese parents shared the preference of

wanting their girl children to have small feet. Large

feet, viewed as characteristic of peasants and low-

class people,were scorned.As a result, parents from

the upper class bound a daughter’s feet tightly so

that her feet would not grow large. It did not matter

to the parents that the daughter would grow up

having difﬁculty walking about with distortedly

small feet.

Culture facilitates communication. One

useful function provided by culture is to facilitate

communication. Culture usually imposes common

habits of thought and feeling among people.

Thus, within a given group, culture makes it easier

for people to communicate with one another.

Yet culture may also impede communication across

groups due to a lack of shared common cultural

values.This is one reason why a standardized adver-

tisement may have difﬁculty communicating its

message to consumers in foreign countries.

Culture is learned. Culture is not inherited

genetically – it must be learned and acquired.

Socialization or enculturation occurs when a

person absorbs or learns the culture in which he or

she is raised. In contrast, if a person learns the

culture of a society other than the one in which he

or she was raised, the process of acculturation

occurs. The ability to learn culture makes it possi-

ble for people to absorb new cultural trends. Asian

countries have complained, sometimes bitterly,

about how their cultures are being contaminated

by rock music and Western sexual and social

permissiveness – foreign elements they consider

undesirable and harmful. South Korea has been

unsuccessful in banning rock music, as was the

former Soviet Union.

Culture is subjective. People in different cul-

tures often have different ideas about the same

object. What is acceptable in one culture may not

necessarily be so in another. In this regard, culture

is both unique and arbitrary. As a result, the same

phenomenon appearing in different cultures may be

interpreted in very different ways. It is customary

in many cultures for a bridegroom’s family to offer

a dowry to a bride’s family, either for the bride’s

future security or to compensate her family for

raising her. In India, an entirely different set of

cultural rules applies. A woman there is viewed as

a burden to both her own family and her husband-

to-be. When she marries, her family must offer a

dowry to the bridegroom. Some men have been so

unhappy with what they perceive as an inadequate

dowry that they have set their new wives on ﬁre.

Those husbands and in-laws who were angry over

small dowry payments killed almost 7000 women

in 2001. Although India outlawed dowry payments

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