IntroductionInternational businesses sell products and services outside their home countries in other countries. The primary motive for businesses to go international is market growth and profit. Legal environments are also playing an important role, with trade agreements and reduced tariffs playing a role in encouraging international business (Iyer & Thruman, 2009). Companies are able to expand their sales by entering international markets. Companies also decide to compete internationally due to the increase in international competition and technological advancements (Hadjidakis & Katsioloudes & , 2007). Special problems in international business make international business strategies different than domestic ones.
These include legal, political, cultural, economics and difference in trade practices (Cherunilam, 2007). According to Anderson and Taylor (2005) race, class and gender age, nationality, sexual orientation, religion, residence regions, and various social factors are fundamental to understanding diversity and the management of diversity refers to the understanding of the international connections across borders. This section discusses the differences in the diverse environments in the world. Cultural, Political, Economic and Legal DiversityPrener states that knowledge, belief, art, morals customs and other habits which a person acquires from his surroundings constitute culture.
These components of culture vary from place to place and differ in terms what is acceptable or unacceptable behavior. He also highlights that the differences in culture vary from how individuals perceive responsibility, separation in terms of rank, gender roles and differences, high or low context cultures and biases such as ethnocentrism. Other factors include space, etiquettes and symbols. Variances in social, religious and material culture influence perceptions and buying behaviors (Doole & Lowe, 2007). People from different cultures display different behaviors. Culture directs the consumption patterns, lifestyles and priority of needs (Onkvisit & Shaw, 2004). Jason and Turner (2003) give the example of McDonald’s, which attempts to deliver the same products to customers everywhere, but even they need to modify their offering for some countries such and India, where for religious reasons beef is not a suitable ingredient.
In another example of the impact of cultural diversity on marketing they give the example of Wal-Mart in Japan. Despite its acquisition of two-thirds share in the fourth largest supermarket chain in Japan, the company was unable to implement its low-cost, high-bulk operations which were a success in the United States.
This was primarily due to the complex distribution networks and the distinct Japanese tastes and shopping culture. Language is another element of diverse cultures. Language includes the use of figures of speech, slang, dialects and translation among others. Language differences play a significant role in how a product is taken by the market, its brand name and how it is marketed (Doole & Lowe, 2007). An example presented by Doole and Lowe (2007) is the case of Coca-Cola in China where the company had to counter the problem with the pronunciation of the name.
The original pronunciation resembled ‘Kooke Koula’ which translated into ‘A thirsty mouthful of candle wax’. The company then had to introduce a new pronunciation of the brand name. Similarly, Ronald McDonalds the famous McDonald’s character was not received well in the Japanese market where his white face was interpreted as a death mask (Doole & Lowe, 2007).