When it comes to international products and services, organizations can choose to either adapt or standardize their promotional strategy and message. To increase sales, businesses should aim to meet the needs of their target market as suggested by basic marketing concepts. In international markets, it is important to consider factors such as cultural background, buying habits, and personal disposable income of consumers when creating a customized marketing mix program that caters to their needs.
The report will examine how cultural factors can impact the expansion of TK Maxx into Japan. With the increasing globalization of the world, consumers are now traveling more, watching television, communicating, and shopping internationally through the internet. This has resulted in the world feeling smaller. Global brands like Coca-Cola, MTV, Nike, and Levis have successfully implemented a standardized marketing approach and target similar consumer groups worldwide.
Due to the rapid and large-scale expansion of global business, companies often need to adjust their product and marketing mix strategy to cater to local needs, wants, and cultural factors that are unchangeable. This continuous assimilation and homogenization of the world also reveals its cultural diversity. Global corporations frequently encounter a variety of cultures, norms, and standards, both within and outside of their operations, leading to daily interactions. (Black & Mendenhall, 1990; Zonis et al., 2005; Collins, 2008).
Different cultures generate diverse socio-politico-economic systems and paradigms. Consequently, economic systems and policies, market mechanisms, financial institutions, corporate systems, and governance are intrinsically tied to culture. Therefore, comprehending diverse cultures is vital for understanding various systems. Presently, managers, shareholders, employees, business partners, and other corporate stakeholders base their decisions and choices on their distinctive cultural backgrounds and perspectives (Thomas & Ely, 1996; Adler, 2002; Gannon, 2004; Gitman & McDaniel, 2008).
The solutions for global business issues will be incomplete without an understanding of cultural diversity. Terpstran (1987) defines culture as the combined learned behavioural traits that are shared by members of society. According to this definition, culture is not inherited but acquired through learning. Thus, just like in any international product decisions, organizations have the option to either adapt or standardize their promotional strategy and message.
Traditional research in international business has primarily focused on economic and legal matters, as well as organizational structures. However, in recent years, the significance of national culture has gained increasing recognition. National culture encompasses values, beliefs, norms, and behavioral patterns exhibited by a specific country or group. This recognition has largely been influenced by the influential work of Hofstede (1980). Numerous studies have demonstrated that national culture has a profound impact on various business activities, ranging from capital structure (Chui et al., 2002) to group performance (Gibson, 1999). Hofstede (1980) argued that countries in Asia generally possess a low level of uncertainty avoidance, as visualized in Figure 1.
Therefore, it is a society that is less concerned about ambiguity and uncertainty and has more tolerance towards variety and experimentation. Such a society is less rule-orientated, readily accepts change, and is willing to take risks.
Figure 1: Cultural advantages can arise from different cultural values and ways of seeing the world. To realize competitive advantages from them, it is first necessary to try to understand them. For cultural differences to be lower, these should be managed. According to Hoecklin (1994), there are four strategies for managing cultural differences:
1) Building a strong corporate culture internationally
2) Developing a common technical or professional culture worldwide
According to Ball et al. (1996), successful business interactions with other cultures require adherence to certain guidelines. These guidelines, which are crucial when operating abroad, include: being prepared, slowing down, establishing trust, understanding the importance of language, respecting the culture, and comprehending the components of culture. A comparison between Japan and the UK, using an up-to-date Hofstede’s model from his official website, is shown in Figure 3. In Japanese society, there is a mild hierarchy where individuals are always aware of their social position and act accordingly. However, compared to other Asian cultures, the hierarchy in Japan is less pronounced. The slow decision-making process in Japan indicates that decisions are not made solely by a single top individual as in more hierarchical societies.
Japan is an example of a society with low power distance and individualism. The Japanese education system promotes the idea that everyone is equal and can achieve success through hard work. Despite showing some characteristics of collectivism, such as valuing group harmony and feeling shame for losing face, Japan is less collectivistic than its neighboring Asian countries (Hofstede, 2010, Online edition).
Japanese culture is known for its loyalty to companies, which is seen as an individualistic choice. In contrast, collectivistic cultures prioritize loyalty to one’s birth group, such as extended family and local community (VentreJapan, Doig 2003). Western standards perceive Japanese as collectivistic, while Asian standards view them as individualistic. Compared to other Asians, Japanese tend to be more private and reserved. In terms of Masculinity/Femininity (MAS), Japan is considered one of the most masculine societies globally.
In corporate Japan, employees are highly motivated when they work together as a successful team to compete against their rivals. The desire for excellence and perfection in the production of goods and services, like hotels and restaurants, as well as in presentation, such as gift wrapping and food arrangement, is seen as an embodiment of masculinity. This mindset applies to all aspects of life. The renowned Japanese workaholic culture also showcases this masculinity; however, the expectation for long and arduous work hours poses challenges for women aiming to advance within the corporate hierarchy in Japan.
In Japan, the general rule for working hours is a maximum of 40 hours per week or eight hours per day, excluding breaks. However, certain businesses in Japan allow employees to work up to 44 hours per week, with a maximum of eight hours per day. This contrasts with the UK’s limit of 48 hours per week stated on direct.gov.uk. Additionally, Japan has a high level of Uncertainty Avoidance (UAI) at 92, making it one of the most uncertainty avoiding countries globally. This high UAI is often associated with the constant threat of natural disasters such as earthquakes, tsunamis (known internationally by its Japanese name), typhoons, and volcano eruptions.
TK Maxx must prioritize the development of a strategy to tackle both natural disasters and societal factors. In Japan, thorough research is carried out to determine feasibility and assess risks before embarking on any project. Managers in Japan require comprehensive data in order to make informed decisions, which makes implementing changes more complex (Hofstede ,1980). Figure 2 illustrates the various cultural elements that greatly impact TK Maxx’s business expansion.
Figure 2: Cultural Factors Affecting Business Technology & Material Culture Before entering a foreign market, it is crucial to evaluate the material culture, including transportation, power, communications, etc. Input-output tables can be helpful in this assessment. Material culture influences all aspects of marketing, such as power sources for products, media availability, and distribution (Rome, 1997). Japan is a prominent market for mobile phones globally, and TK Maxx could capitalize on this opportunity by utilizing mobile apps and internet marketing. Language reflects society’s nature and values.
Language can pose communication challenges, particularly in media and written materials. Therefore, it is advisable to either learn the language or seek assistance from someone proficient in it. According to Tayeb (1998), language plays a crucial role during negotiations with trade partners from different cultural backgrounds. In Japan, the official language is Japanese and it has a comprehensive grammatical structure that facilitates the expression of politeness and formality. Furthermore, the Japanese language enables the communication of various social positions, which are influenced by factors such as employment, age, experience, and even psychological state (Rome, 1997).
The advertising messages in Japan may need to be adjusted due to language barriers, and the current message used in the national market could be offensive to people overseas. It’s also important to consider the use of specific colors, such as white, which is associated with mourning in Japan. TK Maxx might want to consider hiring a research firm to assess the messages in various international settings. In terms of religion, Shinto, which means “the way of the gods,” is the native religion of Japan and is followed by approximately 83% of the population. Buddhism is the second most popular religion in Japan (www).
According to Japan-Guide.com, religion can have diverse effects on marketing. TK Maxx should take into account various aspects related to religion: religious holidays, consumption patterns, the economic role of women, the institution of Shinto Shrines and Buddhist temples, market segments, and sensitivity towards religious differences. Attitudes and values also play a significant role as values often have a religious foundation and attitudes are linked to economic activities. Hence, it is crucial to comprehend the attitudes towards marketing activities that contribute to wealth or material gain, even if they may not be relevant in Buddhist society.
Despite the economic downturn of the 1990s, the Japanese company continues to hold a significant position and exert influence within Japan’s social structure. This is primarily attributed to the enduring concept of ‘lifetime employment’ that is deeply ingrained in Japanese business culture. In this context, it is expected that a young individual entering a major corporation such as NEC at age 22 will remain employed by the same company until reaching 65 years old. Ultimately, cultural competence involves understanding the cultural dynamics of international interactions and adapting corporate practices and management styles accordingly.
Businesses will need to adopt a multifaceted, balanced approach to navigate interacting cultures until the world is unified with a single universal culture. Therefore, it is important for today’s business education to equip future corporate managers with cultural competence. In the case of TK Maxx entering Japan, which has a distinct culture, various factors will impact its entry into the market. It should be noted that cultural institutions and behavior patterns cannot be easily or swiftly reformed despite each culture having its own strengths and weaknesses.
Cultures, philosophies, and value systems take a significant amount of time to form, accumulate, change, evolve, and develop. This means that economic success or failure cannot be solely attributed to culture. Instead, it is generally related to a society’s capacity to build upon the strengths found within their culture.
The Strategic Importance of International Marketing is explained by the difference between domestic marketing and marketing on an international scale. This difference lies in the multidimensionality and complexity of the many foreign country markets that a company may operate in (Isobel Doole, Robin Lowe, 2008).
According to the CIA world fact book in 2010, Japan’s total international trade was $1,404.3 billion. Over the past three decades, Japan has undergone a remarkable transformation from an underdeveloped nation to a dominant player in the global economy. The country has excelled in various sectors like electronics, automobiles, steel, and shipbuilding. With its emergence as a strong competitor in international markets, Japan now possesses the second largest economy worldwide. Consequently, TK Maxx views the Japanese market as highly appealing for expansion purposes. Figure 1.1 showcases the environmental factors that impact TK Maxx’s international marketing strategies.
According to Coe (1990, p. 10), the Japanese have adopted a “market share or die” approach, indicating their aggressive pursuit of long-term market dominance. To maintain competitiveness and establish a strong market position rapidly, the company will need to develop a robust marketing strategy. Globalization can present opportunities for companies to lower costs by concentrating production in areas where they excel, as well as reducing marketing expenses through the promotion of a product under a global brand.
