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1 Table of contents 1. Introduction (Marie & Cecilie) Problem statement Method and theory Method Theory of Science Relevant theories Delimitations Thesis structure H&M as a multinational corporation: The history of H&M (Marie) The concepts and aims of H&M (Marie) H&M website (Cecilie) Culture (Marie): Fifty years of cultural understanding (Cecilie) Intercultural communication (Cecilie) Cultural studies (Cecilie) Cross-cultural and intercultural approaches (Marie) Our Approach to culture (Marie) Marketing strategies (Cecilie) Standardisation strategy (Cecilie) Adaptation Strategy (Marie) Subset (Marie & Cecilie) Object description (Cecilie) Website of H&M United Kingdom (Marie) Website of H&M Saudi Arabia (Cecilie) UK H&M women s online dress catalogue (Marie) Saudi Arabian women s online dress catalogue (Cecilie) Subset (Cecilie) Object analysis (Marie & Cecilie) Analysis of H&M UK website (Marie) Analysis of Saudi Arabian website (Cecilie) Side 1 af 48

2 6.3. Analysis of UK women s online dress catalogue (Marie) Analysis of Saudi Arabian women s online dress catalogue (Cecilie) Subset (Marie & Cecilie) Discussion (Marie & Cecilie) Conclusion (Marie & Cecilie) Reflections (Marie & Cecilie) Bibliography Online sources Introduction (Marie & Cecilie) 1.1. Problem statement Culture is a set of beliefs, standards and values shared by a group of people, which aids them in their decision making (Usunier & Lee 2005: 5). Culture is not limited to nation states but can be found in many forms of communication, for instance in the way people perceive images and symbols differently across cultures. However, no culture can be considered superior or inferior to others but differences and similarities can be observed. Nationality has previously been a tool for dividing and explaining cultures but in reality there are multiple sources such as sex, social class, religion and ethnicity (Usunier & Lee 2005: 9-11). Therefore, many businesses consider culture as an important factor when marketing products. Within cross-cultural marketing there are two main approaches; an adaption and a standardisation strategy. Using an adaption strategy the sender of the message considers and adapts the marketing strategy in accordance to the culture of the intended receiver. In the standardisation strategy the sender uses the same global marketing strategy on any culture (Usunier & Lee 2005: 248). This thesis aims to examine how a multinational corporation (MNC) such as H&M, implements marketing strategies in order to reach their target audience. This will be achieved by a comparative analysis of the H&M website and online women s dress catalogue directed at the United Kingdom (UK) and Saudi Arabia (SA). In relation to this, the following sub-questions are asked: What are the differences and similarities between the two websites and catalogues? How can these differences and similarities be seen on the websites and catalogues? Side 2 af 48

3 Can these differences and similarities be related to culture? 1.2. Method and theory Method The aim of this thesis is to do a comparative analysis of two websites and online catalogues. Therefore, the objects of analysis will be the H&M websites and online women s dress catalogue directed at the UK and SA. In order to achieve this we will use empirical data from the websites and supplement our findings with relevant theories. For this thesis, we have applied an inductive method in the way the analyses has been developed and this has been used to form the basis for our discussion. According to Langergaard (2006: 70) the inductive method is when the researcher is able to say something in general about the investigated phenomenon on the basis of experiments and observations. However, we have not had the chance to provide a large empirical set of data and, therefore, the validity of the thesis can be questioned since the inductive method only recognises theories which are built on a strong set of empirical data (Langergaard 2006: 71). A critical thought about the inductive method, which we agree with, is that not everything can be measured or put into sets of data because something, such as gravity, is not accessible for the senses (Langergaard 2006: 74). In our view, culture is a concept that is difficult to define via senses since most people experience culture differently Theory of Science In this thesis our point of view has to a large extent been that of social constructivism. Holm (2011: 82) explains this approach as an assumption that reality or the world cannot be understood outside of social and linguistic conventions. The interaction between people in these conventions shapes their communication. The way social constructivism has shaped our thesis is shown in our assumption about how culture might be reflected online. We assume that the communicative purpose of our research objects will tell us something about the users of these objects. Besides social constructivism, we have also been influenced by hermeneutics, which is a way of describing how we understand and interpret the world. It assumes that we gain a deeper understanding of the whole by looking at parts. The approach stresses the importance of past events and history in order to gain knowledge and cultural understanding (Holm 2011: 126). For this thesis, the approach is relevant because we wish to examine if and how marketing strategies Side 3 af 48

4 are influenced by culture and we analyse this by looking at object analysis as well as taking cultural observations by researchers into consideration Relevant theories Our point of departure is Usunier & Lee s (2005) Marketing across cultures which has been used in order to describe the views regarding standardisation and adaptation marketing strategies. This book provides an in-depth understanding of the dilemmas surrounding the two strategies. In addition, Usunier & Lee (2005: 250) succeed in examining a vast array of researchers within the two stances and in this way provide valid arguments of the pros and cons of the two strategies. However, it is our opinion that Usunier & Lee (2005: 248) advocates a degree of adaptation which is seen in the message: standardize as much as feasible and customize as much as needed. Both Usunier & Lee (2005: 248) and de Mooij (1998: 26) argue that neither the standardisation nor the adaptation strategies are fully applied and that the marketing is often a mix of various degrees between the two. Additionally, theories from de Mooij (1998) and Kotler et al. (2009) have been applied in order to expand the views of standardisation and adaptation in cross-cultural marketing. To provide structure to our analysis we have chosen to apply a model for analysing the visual communication on websites by Lisbeth Thorlacius (2003). The model considers both the functional and the aesthetical aspects of a website (Thorlacius 2003: 1) and, thereby, becomes highly relevant for this thesis. Moreover, Thorlacius (2003: 2) has based the model on the communication theories by Roman Jakobsen who describes how a communicative action takes place. Additionally, the model incorporates theories from Barthes and Peirce in order to provide a further understanding of the connotative level of the aesthetic functions on a website Delimitations Due to the limited amount of pages we have chosen to focus on two H&M websites and catalogues directed at the UK and SA instead of having several objects for the comparative analysis. We find these specific websites and catalogues interesting and covering since they, in our minds, represent two distinctively different cultures. Additionally, we have limited our empirical data to the women s dress catalogue since the entire H&M catalogue contains too many pictures to make a thorough analysis. However, we have included the structure and some of the content of the websites in order to create a broader picture of the cultural differences and similarities used in H&M s marketing strategies. Furthermore, we have limited our account of the concept of culture to intercultural communication Side 4 af 48

5 and cultural studies. We are aware that culture consists of several scientific disciplines, nonetheless, the purpose of this thesis is to relate culture to marketing strategies which makes intercultural communication and cultural studies obvious points of departure Thesis structure In the first part of the thesis, we give an overview of H&M as a multinational corporation (MNC) and a description of their website. Additionally, we account for the concept of culture including a description of the cultural understandings within the last fifty years and our approach to the concept. Furthermore, to establish which marketing strategy H&M uses, we outline the elements of the standardisation strategy and the adaption strategy. This is done, in order to clarify in which situations each of the strategies are most favourable to use. In the second part of the thesis, we approach the analysis with a dialectical, cross-cultural point of view in order to analyse the H&M websites and women s online dress catalogues directed at the UK and SA. The analysis is based on Thorlacius (2003) model for analysing websites. Through the use of this model, we observe both differences and similarities on the two websites, particularly in the portraying of women. In the third part of the thesis, we discuss the influence of the UK and the Saudi Arabian cultures in terms of individualism and collectivism and how they affect the differences and similarities observed on the H&M websites and catalogues. Furthermore, we relate the cultural influences to H&M s choice of marketing strategies. 2. H&M as a multinational corporation: 2.1. The history of H&M (Marie) H&M is a multinational corporation with approximately stores in 50 countries (H&M Our Market) and more than 20 country offices worldwide (H&M Organisation). H&M started as Hennes, a women's warehouse in Sweden in years later, in 1964, H&M opened up the first store outside Sweden, situated in Norway. In 1968 the name was changed to Hennes & Mauritz after having bought Mauritz Widforss and making a line extension that included men s and children s clothing. From 1976, where the first store in London opened, to the 1990s, stores opened all over Europe. In the year 2000, H&M crossed the Atlantic and opened the first store in the US. Today H&M consists of multiple brands such as Weekday, Monki and Cheap Monday and has stores almost all over the world (H&M history). H&M has in less than seventy years become one of Side 5 af 48

6 the largest clothing companies in the world and is selling almost everything from baby outfits to mascara and bathroom curtains (H&M bathroom inspiration, Griffiths 2012) The concepts and aims of H&M (Marie) H&M works with the business concept: [ ] to give the customer unbeatable value by offering fashion and quality at the best price (H&M business concept). Quality and price are two concepts that repeatedly turn up on H&M s website. H&M aims to reach a growth target of percent a year and strives to place their stores at the best possible locations when opening new stores (H&M business concept). One of the ways H&M reaches this rapid growth is by expanding on the market, nationally and internationally. Moreover, because the organisation does not own any stores themselves but rents the space from local and international landlords, H&M has the flexibility to adapt and move their locations in a constant evolving market (H&M Global Expansion, H&M Business Concept). Furthermore, H&M outsources all production to independent suppliers through the local production offices with the aim of always getting the best quality and prices (H&M Business concept). However, before entering a new country or city, H&M carries out a careful analysis to determine whether it would be a suitable market for the company. Factors like demographic structure, purchasing power, economic growth, infrastructure and political risk are considered (H&M Global Expansion). Another way of reaching market growth is by evolving and improving online sales which H&M express when stating that: All brands will all continue to grow through more stores but also on digital platforms such as hm.com, mobile apps and social media (H&M Our Markets). In order to keep up with the development of the digital platforms: Investments will also continue within online sales. H&M plans to launch online sales in the US, the world s largest market for e-commerce (H&M Global Expansion) 2.3. H&M website (Cecilie) As mentioned, H&M has divisions all over the world. A place where this can be seen is through their online presence. When searching online for H&M, it is usually the national website that will show, but when clicking on the name of the country or the country flag in the upper right corner, the entrance of H&M shows instead. Every country in which the company has physical stores is listed on this page. This provides customers with the opportunity to choose their own country or check out the products in other countries (H&M Entrance). The page shows that there are a total of 50 countries spread over five continents. Side 6 af 48

7 3. Culture (Marie): Many different suggestions have been given as to what culture is, how it can be perceived and understood along with how to interact based on the culture of whom the interaction is with. Scollon & Scollon (2001: 139) writes: In English there are two normal uses of this word: high culture and anthropological culture. Moreover, high culture is explained as: [a focus] on intellectual and artistic achievements which is mostly seen when referring to cities, exhibits or historical periods. Anthropological culture is, however, explained as: any of the customs, worldview, language, kinship system, social organization, and other taken-for-granted day-to-day practices of a people which set that group apart as a distinctive group (Scollon & Scollon 2001: 139). In this sense, the high culture approach is bound to material measures and events and the anthropological approach is to a larger degree used when dealing with people and societies. A society consists of a collection of individuals and Goodenough (1971, in Usunier & Lee 2005: 5) defines culture as: [a] set of beliefs or standards, shared by [a] group of people, which help the individual decide what is, what can be, how to feel, what to do and how to go about doing it.. This anthropological approach argues that culture is what individuals use to decode messages and is a guideline for their actions. Furthermore, it is argued that the individual is not bound to one culture but can: share different cultures with several different groups Goodenough defines this as operational culture (Usunier & Lee 2005: 5). In the following section we will give an account for cultural understanding throughout the last fifty years by stressing the development of relevant theories. In addition, we will define and distinguish two approaches to culturally based marketing; the intercultural approach and the cross cultural approach. Finally, we will clarify and argue for the approach we have chosen as the most relevant for working with this thesis Fifty years of cultural understanding (Cecilie) The concept of culture contains many aspects and in order to give an account of the different understandings and thoughts during the last half a century, we have chosen to take our point of departure in intercultural communication and cultural studies Intercultural communication (Cecilie) According to Martin & Nakayama (2006: 44), the focus on intercultural communication emerged as a response to the post-world War II era, where Americans working abroad did not understand the different cultures. In the 1960s and 1970s, culture was to a large extent understood in terms of Side 7 af 48

8 nationality and the basis was that of middle-class Americans, since most researchers where from the US (Martin & Nakayama 2006: 45). Even though intercultural communication is an interdisciplinary field of study, it has to a large extent been centred within the field of communication; however, it is still influenced by ideas from cultural studies, critical theory as well as anthropology and psychology (Martin & Nakayama 2006: 47). Another important aspect of intercultural communication is the position of the researcher since the findings and theories will be influenced by the researcher s worldview (Martin & Nakayama 2006: 49). As a consequence there are different approaches to intercultural communication. Martin & Nakayama (2006: 50) mentions the social science (or functionalistic), the interpretive and the critical approach. According to Martin & Nakayama (2006: 52), the first approach, social science, became widely popular in the 1980s and is based on the field of psychology. It aims to describe and predict behaviour through surveys and observations. Furthermore, researchers within the social science approach see communication as being influenced by culture (Martin & Nakayama 2006: 50) and assume that human behaviour can be measured with quantitative methods which can be used to reach the goal of a describable reality. The second approach, the interpretive, gained importance in the late 1980 s (Martin & Nakayama 2006: 56). The interpretive approach takes a point of departure in anthropology and sociolinguistics and assumes that human behaviour is creative and voluntary. Moreover, researchers view the reality as subjective and that culture is created and maintained through communication and, thereby, takes the context of the communication into consideration (Martin & Nakayama 2006: 50). Through qualitative methods such as field studies and observations, researchers aim to understand and describe human behaviour and the way people are able to construct reality. A way to understand the difference between the social science approach and the interpretive is to use the cross-cultural terms of etic and emic. As explained by Martin & Nakayama (2006: 57): Social science research usually searches for universal generalizations and studies cultures objectively, with an outsider s view; in this way, it is etic. In contrast, interpretive Side 8 af 48

9 research usually focuses on understanding phenomena subjectively, from within a particular cultural community or context; in this way, it is emic. Consequently, interpretive researchers are not particularly interested in comparing cross-cultural behaviour, but deal with the cultural behaviour in one community at a time. However, a critical aspect of this approach is the emic method of studying cultural communication. Martin & Nakayama (2006: 60) mention that the basis of interpretive intercultural communication is the beliefs and values of the people in the community, however, most scholars have their origin in European or American cultures and their beliefs and values might therefore not be compatible with the cultural groups they are researching. The third approach, the critical, combines several research disciplines and aims to change behaviour. This is achieved through textual analysis of media since culture is viewed as... a site of power struggles and intercultural interactions are influenced by political and economic forces (Martin & Nakayama 2006: 50). Critical researchers assume that reality is subjective and material and that human behaviour is changeable. Furthermore, a point of view that distinguishes the critical approach from the two previous mentioned, is the incorporation of the historical context of the communication (Martin & Nakayama 2006: 63). They believe that if the intercultural communication, in terms of the political and economic battle for power, is analysed and made public, people will become mindful of what is going on and be able to change their behaviour accordingly. As a consequence, Martin & Nakayama (2006) suggests combining all three approaches in a fourth, the dialectical approach. The dialectical approach seeks to apply most of the strengths of the previous point of views and, thereby: [emphasise] the processual, relational, and contradictory nature of intercultural communication, which encompasses many different kinds of intercultural knowledge (Martin & Nakayama 2006: 69). The processual nature is used in order to underline that both cultures and individuals change. The relational nature stresses that the different aspects of intercultural communication should be viewed as a whole and that focus should not be on isolated parts. The last aspect, the contradictory nature, emphasises that ideas which seem opposite should be considered simultaneously (Martin & Nakayama 2006: 69-70). Side 9 af 48

10 Cultural studies (Cecilie) According to Barker (2012), the study of culture has no origin, however, the discipline of cultural studies can be used to describe the concept of culture, because: Cultural studies is a discursive formation, this is, a cluster (or formation) of ideas, images and practices, which provide ways of talking about, forms of knowledge and conduct associated with, a particular topic, social activity or institutional site in society. (Hall 1997; in Barker 2012: 5). In this sense, the different understandings of culture can be seen in the history of cultural studies. As mentioned above, cultural studies combine many disciplines which have resulted in a wide range of foci depending on the stance of the researcher or scholar. Some of the most influential theories, which have affected the changing paradigms within cultural studies include: Marxism, culturalism, structuralism, poststructuralism, psychoanalysis and politics of difference (Barker 2012: 12). However, we have chosen to take our point of departure in structuralism and some of the theories that follow, since these are theories which we believe have influenced the marketing debate. According to Barker (2012: 15), structuralism evolved from Marxism and culturalism. Structuralists hold the belief that the acts of a person in a cultural and social setting follow systematic structures in the society. In this lies the assumption that the individual is not mindful in his or her choice to follow these structures or not. As explained in Barker (2012: 15): A structuralist understanding of culture is concerned with the systems of relations of an underlying structure (usually language) or the grammar that makes meaning possible. Following this thought, language, as a way of structuralising culture, becomes essential for the theory and in particular, the works of Ferdinand de Saussure. His thinking about langue/parole and signifier/signified meant that culture, language and interactions could be viewed in terms of signs. Saussure believes that these signs can be perceived as a part of a structuralised system (Barker 2012: 16). Following the structuralistic theory, came the notion of post-structuralism, which both used the previous ideas but also criticised them and, thereby, evolved. Barker (2012: 18) describes poststructuralism as a theory that:... rejects the idea of an underlying stable structure that founds meaning through fixed binary pairs (black-white; good-bad). Post-structuralism has to a large extent been influenced by the works of Derrida and Foucault, whom, even though they hold two separate views of the theory, both argue that structuralism is Side 10 af 48

11 insufficient to describe society. Derrida operates with how language and meaning cannot be determined since words can have several meanings depending on the context (Barker 2012: 18). Foucault s thinking deals with discourses and how they function in different settings. Additionally: Foucault attempts to identify the historical conditions and determining rules of the formation of regulated ways of speaking about objects, that is, discursive practices and discursive formations. (Barker 2012: 19). Thereby, society and human acts are affected by the overall thoughts, beliefs and language as well as historical contexts that exist within the particular culture. A way of thought that has been especially important for post-structuralism in cultural studies is anti-essentialism, which holds the position that there are no natural universals, but that truth and identity are: productions of culture in specific times and places (Barker 2012:. 21). Some of the ideas from post-structuralism are shared with postmodernism. However, the latter is to a large extent concerned with socio-historical contexts, whereas post-structuralism mostly focuses on intertextuality (Barker 2012: 18; 182). According to Williams (in Barker 2012: 204), postmodernism is not necessarily the same as the historical period of postmodernity, but instead it signals a: structure of feelings... and a set of cultural practices. In this sense, postmodernism describes a different way of thinking about economics, social and cultural patterns and how these influence the world (Barker 2012: 203). One of the most influential postmodern thinkers is Wittgenstein with his philosophical stance that: language is directly implicated in human forms of life. Therein lies the assumption that a word is unstable on its own, but gains meaning in the context that it is spoken (Barker 2012: 101). Moreover, other well-known postmodern thinkers, such as Richard Rorty and Jean-Franҫois Lyotard, have found inspiration from Wittgenstein s theories and further developed the understanding of postmodernism. Another influential postmodernist is Jean Baudrillard, who advocates that the postmodern culture has become a hyperreality in which media and social life are converging and underlines that TV-shows are good examples of this convergence (Barker 2012: 211). Furthermore, he believes that:... use value itself [for an object] is determined through exchange. (Barker 2012: 154) and that perceived values are what consumers buy and use to create their lifestyle. Following this line of thought, however with modifications, Hall argues in Barker (2012: 231) that this new reality gives way for people to constitute multiple positions and identities. With this in mind, we believe that the notion of purchasing clothes and styling yourself to fit a Side 11 af 48

12 particular image becomes relevant in the way businesses are doing marketing since they can play on these images in order to sell their products. In recent years postmodern culture has gained an extra dimension with the globalisation of digital media, which came to evolve largely due to the economic and technical developments in the world. Furthermore, the global culture has been influenced by culture mix which has been made possible through globalisation processes (Barker 2012: 159). In this sense, people from all over the world are able to communicate and thereby influence each other s cultures. As a consequence, some scholars claim that cultural diversity and local specifics disappear because of the apparent homogenisation in global consumer culture (Barker 2012: 161). Nevertheless, others point to evidence that it is not a matter of homogenisation or heterogenisation, but rather a question of world glocalisation where both global and local considerations are taken (Barker, 2012, p. 164) Cross-cultural and intercultural approaches (Marie) Usunier & Lee (2005) argue that when using culture to approach marketing as we do in the later sections, there are mainly two approaches which can be applied: the cross-cultural approach and the intercultural approach. Gudykunst (2003: 8) explains that cross-cultural theories are used to explain the differences and similarities in the communication across national cultures. This is done as a way of dealing with culture as a theoretical variable. In order to get a better understanding of how the cross cultural approach can be applied, Gudykunst (2003: 8) gives the following example: Culture x and culture y serve to operationally define a characteristic a, which the two cultures exhibit to different degrees. In this sense, the main purpose of using the cross-cultural approach is to make comparisons between different national cultures. In a marketing context, the cross-cultural approach is most often applied in the process of deciding on marketing strategies and in the phase of implementing them in different national contexts. This approach aims to identify and emphasize what is country specific and what is universal through a comparison, for instance of national marketing systems and local commercial customs in different countries (Usunier & Lee 2005: xv). This approach is, therefore, often applied when an organisation or a company is expanding their market/marketing abroad. Side 12 af 48

13 The intercultural approach focuses more on the interpersonal level, studying communication within speech patterns, textual and symbolic gestures or characteristics when people with different national-cultural backgrounds interact (Gudykunst 2003: viii). In a marketing context, the intercultural approach is often used when the main focus is on interaction between business people, for instance buyers and sellers with different national or cultural background. The intercultural approach can also be used in the identification and study of the interaction between products from one nation-bound culture and a consumer/receiver interaction from a different nation-bound culture. Products, in this sense, are not limited to the physical items but also the message(s) surrounding them (Usunier & Lee 2005: xv). Gudykunst (2003: 1) gives a clear definition of the two terms when stating that: Cross-cultural involves comparisons of communication across cultures Intercultural communication involves communication between people from different cultures. However, Gudykunst (2003: vii) also explains that: Understanding cross-cultural communication is a prerequisite to understanding intercultural communication. Hence, to understand and use the intercultural approach, a comparison of the cultures in question has occurred. To sum up, the main difference of the two approaches is that the process of the cross-cultural approach is to compare the marketing system and customs in order to find similarities and differences between countries. In contrast, the intercultural approach studies the interaction between individuals and/or products from different nations. Both approaches are based on an assumption that culture varies and effects the individuals perceptions and behaviour, as explained above, which thereby, influence the choice of marketing strategy. However, according to Usunier & Lee 2005: xv, both approaches can be used when dealing with intercultural situations in international marketing Our Approach to culture (Marie) In order to make an analysis that will effectively help us answer our problem statement we will determine whether the differences and similarities that may occur on the two websites and in the two catalogues are caused by any cultural or national differences and similarities. The results found in the analysis are used to make a comparison and finally determine which market strategies are used. Side 13 af 48

14 Hence, the approach we use when dealing with this form of international marketing is cultural. When using the cultural approach we adopt Goodenoughs definition of culture as a set of beliefs and standards, shared by a group of people, which help the individual decide what is, what can be, how to feel, what to do and how to go about doing it. (Goodenough 1971, in Usunier and Lee 2005: 5). We, therefore, regard culture as important when dealing with consumer behaviour and international marketing. Moreover, when making our analysis we, as researchers, adopt the dialectical approach to understanding culture and communication. We acknowledge that cultures as well as individuals change. Furthermore, we recognise that historical events as well as current situations and future prospects, such as political advocates and that technical evolution influences the beliefs, standards and behaviour of the individuals and the society within they interact (Martin & Nakayama 2006: 69). However, our main focus will be a comparison of observations made externally (etic) and the material will be that of text and images presented in the media (H&M s website and catalogue), which places our analysis and study high on the scale of social science and critical approach and low on the interpretive approach to intercultural and cross cultural communication (Martin & Nakayama 2006: 50). When analysing the effect of the communication H&M transmits to the receivers of their website, we will be using an intercultural approach to culture, seeing that we will be studying the interaction between both the sender, H&M, along with their products and the receiver or consumer of the products (Usunier & Lee 2005: xv). However, for the comparative analysis we will be using a cross-cultural approach where we will be studying the culture, customs and national marketing systems of both the UK and Saudi Arabian websites with the purpose of determining which marketing strategy H&M is using. 4. Marketing strategies (Cecilie) According to Kotler et al. (2009: 865) marketing is: [a] process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals. Marketing is an integrated part of the business that helps understand consumer needs in order to gain a profit from the services or products of the company (Kotler et al. 2009: 4). In the twentieth century the business market has increasingly been influenced by globalisation which has given companies an opportunity to spread throughout the world and, thereby, interact with other countries Side 14 af 48

15 and their cultures (Kotler et al. 2009: 15). As a consequence, MNCs have to decide how to tackle these new dimensions of international business which, according to Usunier & Lee (2005: 248), can be done either by implementing a standardised marketing strategy or an adaptation marketing strategy. However, it should be noted that standardisation and adaptation marketing are two extremities and that each business works separately within this scope (Kotler et al. 2009: 66-67) The following paragraphs will elaborate and provide an overview of the pros and cons of the two strategies Standardisation strategy (Cecilie) Some of the most important business aspects for MNCs are to reduce costs and to make profit of their services and goods. Advocates for a standardised marketing strategy argue that internationally managed multinational brands have the potential to make the marketing efforts more effective (de Mooij 1998: 25). According to de Mooij (1998: 25): The ultimate form of standardization means offering identical products worldwide at identical prices via identical distribution channels, supported by identical sales and promotion programs. In this sense it is standardised marketing when an international business does not take nationalities, languages or cultures into consideration. Thereby, the company is able to build an image or brand which is advertised globally and consequently reduce its expenses for marketing and advertisements (de Mooij 1998: 25). One of the strongest and most cited advocates for standardisation is Theodore Levitt, who, in 1983, mentioned several successful brands that had adopted this strategy, including McDonald s, Coca- Cola and Sony Television (de Mooij 1998: 25). In the case of McDonald s, Ritzer (1993; in Usunier & Lee 2005: 124) applied the term McDonaldization to describe the emerging global consumer culture. McDonaldization has strong similarities with standardisation as it is: (1) the same for everybody; (2) the same everywhere in the world; (3) the same for all time (Ritzer 1993; in Usunier & Lee 2005: 124). An example of this is noticed in the expansion of McDonald s on the French market. Traditionally, the French oppose fast food as a matter of national pride, however, McDonald s restaurants are shooting up in the country and people are increasingly eating their burgers, which are no different from the ones sold in the United States (Usunier & Lee 2005: 133). The concept of standardisation was initially addressed by Elinder in 1961 in connection to advertising and since then, marketers have discussed whether to apply an overall global strategy or to customise to local markets (Subhash 1989: 70). The increasing number of MNCs (Barker 2012: Side 15 af 48

16 158) has led to more and more companies facing decisions concerning their international marketing strategy. In this relation, globalisation, as mentioned in 4, has had an enormous impact, since: The central paradox of globalization is the encounter between companies that are increasingly global and consumers who remain largely local (Usunier & Lee 2005: 118). Moreover, Usunier & Lee (2005: 118) points to three aspects of globalisation, namely globalisation of demand, of supply and completion and lastly globalisation of products and market offerings. For the purpose of this section about standardisation, it will mostly be the aspect of globalisation of demand which will be applied, since this aspect deals with consumer behaviour and marketing environments. Furthermore, within the aspect of globalisation of demand lays the assumption that consumption demands are homogenising, which is used as an argument for standardisation in international marketing strategies (Usunier & Lee 2005: 118). This point of view is further elaborated by Kragh (2000: 2), who explains two lines of reasoning within international marketing: outside-in strategy and inside-out strategy. The outside-in strategy advocates markets that are similar or becoming so, and the inside-out strategy argues that companies can homogenise market conditions through standardised production, marketing and organisation. An example of outside-in strategy is when a business markets a global brand to an already existing market, while inside-out strategy is when the market becomes standardised as a consequence of being exposed to global brands, for instance if there is just one brand on that market. However, Kragh (2000: 3) elaborates on the opinion held by proponents that for either of the strategies:...the outcome of the two variants will be standardization of the activities of the company and homogenization of demand patterns. This argument is largely provided by Levitt, who believes that consumers do not know what they want and will go for the product with the lowest price, regardless of local preferences and since MNCs are able to produce large quantities of similar products, these standardised ones will often be cheapest (Kragh 2000: 4). According to Usunier & Lee (2005: ) the decision whether to standardise or not has to take the elements of the product into account and, thereby, think of the physical, service and symbolic attributes of the product. However, Usunier & Lee ( , 251) mentions that the degree of effectiveness depends on both the industry s potential for standardisation as well as specific product elements. Additionally, de Mooij (1998: 27) argues that there is a tendency to view products as either culture-free or culture-bound, where culture-free products (such as cigarettes, computers and fashion) are easier to market on an international basis than culture-bound products like food. Side 16 af 48

17 The previous view has mostly been from the position of international marketers. However, Kragh (2000: 5) argues that standardisation is also found in sociological and developmental literature where: sociologists of globalization look at the companies and markets from the outside of the companies, identifying with people, cultures and society. Kragh (2000: 6) mentions an example in which households worldwide strive for a standard package that contains a house, a car and travels. Even though sociologists recognise the global homogenisation in consumption they regard the development with scepticism and even negativism. Sociologists... see western-style consumer behaviour as a kind of alienation away from the authentic, local way of life and its social harmony, norms and traditions (Kragh 2000: 6). To sum up, there are two different views of global homogenisation and standardisation, where one is positive and one is negative, nonetheless, both parties agree on the development and that MNCs should address this in their international marketing strategy Adaptation Strategy (Marie) Over the last 40 to 50 years the choice and effectiveness of standardisation and adaptation strategies has been widely discussed (Ryans et al. 2003: 592). The most important argument for advocates of standardisation is, as explained above, that it is cost efficient. Advocates for adaptation argue that implementing an adaptation strategy is mainly a long term strategy, where initial costs may be higher, but needed in order to get ground hold on the market (Usunier & Lee 2005: ). De Mooij (1998: 34) supports this when arguing that money spent on localising is money saved on grappling with the problem that occurs when standardisation fails, as a study shows that it often will. The study shows that:... in 1976 as many as 70% of a sample of manufacturers ran fully standardized campaigns. By 1987, this proportion had come down to 10%. The reduction in the use of uniform campaigns is good presumptive evidence of failure, and the cost is obviously large (de Mooij 1998: 34). More recent scholars within marketing, such as Kotler et al. (2009: 468), correspondingly agree that adaption should be integrated in the marketing mix: in order to be successful globally, marketing managers must act locally in the different markets they choose to enter.. MNCs use the adaptation strategy in the attempt to reach acceptance of their marketing, products and service on a foreign market by adaption factors such as size, symbolic meanings and Side 17 af 48

18 terminology to fit the culture of the consumer (Usunier & Lee 2005: 249). Whereas, standardisation uses the same strategies on a global market, Usunier & Lee (2005: ) argues that the adaptation strategy aims to take any difference in perception, use and experience into consideration when presenting a product or service to a foreign market. Adaptation can be implemented on different levels, one of which is compulsory adaptation, where companies such as Apple and other technical producers need to adapt the shape of the plugs to fit the outlet - or Red Bull having to minimise the level of caffeine in their products to fit European laws. Another type of adaptation is customisation, where employees in a telemarketing company only call regions where their own dialect is spoken, or when Nike offers customers the option of designing their own shoes (Usunier & Lee 2005: , NIKEid). Compulsory adaptation and customisation are two opposites on a scale of adaptation (Usunier & Lee 2005: ). The adaptation strategy can originate from internal operational measures or external constraints such as market characteristics, environmental factors and consumer behaviours (Usunier & Lee 2005: 250). According to Kotler et al. (2009: 469) most companies and organisations adapt their product or services to some extent when entering new markets internationally. An example is the use of language. When purchasing a product or a service or when entering a website of a MNC, instructions are very often available in the national language, even though the MNCs origin might be foreign. This is due to the adaption of product to local product usage (Usunier & Lee 2005: 252, Kotler et al 2009: 469). The product may not have any value to the user if he or she does not know how to use or read it, which would result in failure of global implementation and acceptance. As a consequence, this could be both embarrassing and expensive to the MNC (Kotler et al. 2009: 469). Additionally, Kotler et al. (2009: ) suggests seven variables which are argued to be more or less important to a marketing mix. These variables are considered with the purpose of adapting to the market culture in order to successfully enter the global market. The seven variables are an adaption of product, service, distribution, promotion/communications, service process, physical evidence and people/staff. Advocates also emphasise the need of adaption of symbols and language when entering a new market. The connotations of symbols are culture-based and may therefore mean something completely different when directly transferred into a new culture (Usunier & Lee 2005: 249). Furthermore, Kotler et al. (2009: 472) supports this argument and stresses: what is acceptable for one culture may not be acceptable for another. Side 18 af 48

19 To sum up, many scholars highly recommend that MNCs use an adapted marketing strategy to some extend in their marketing mix. An example of the change of strategy is the MNC, McDonald s, which has been used as the ultimate example of standardisation. However, even McDonald s has now started to adapt their product and marketing to the global market by: [adding] beer to its product range in Germany, wine in France, mutton pies in Australia (Kotler et al. 2009: 468). Moreover, this could be an example of the change from a marketer space to consumer space. Solomon (2003: 2) explains that the focus in a marketer space lies on the sender, the MNC, whereas the focus in consumer space lies on the consumer and his or her values. This change of focus is seen more and more often within global marketing and advocates recommend almost all MNCs to at least consider the culture and especially the values of their differentiated target audience. According to de Mooij (1998: 38): what makes advertising effective is the match between the values in the advertising message and the values of the receiver. Hence, culture should be considered and the marketing strategy adapted to the culture of the receiver because values are culture-bound. Solomon (2003: 246) goes as far as saying: You re either in the train or under it! However, one thing that must be considered when choosing an adapted marketing strategy is stereotyping. When trying to identify a culture in order to adapt the marketing strategy, it is sometimes seen that companies make a broad generalisation. These generalisations are based on subjective conceptions of a stereotypical native instead of making an emic analysis of the culture in question (Usunier & Lee 2005: , de Mooij 1998: 50) 4.3. Subset (Marie & Cecilie) We have established H&M as a MNC with not only stores, but also offices outside Sweden. In addition, H&M uses local recourses in terms of store location and production subsidiaries. Furthermore, we have confirmed that H&M has a large digital platform which is available in 50 different countries. H&M s marketing efforts and products are continuously expanding as part of their overall business concept. Additionally, we have given account for the understanding of intercultural communication over the last 50 years. This includes an explanation of Martin & Nakayama (2006) s social science, interpretive, critical and dialectical approach to culture along with the position of the researcher in all four approaches. We argue that the social science approach coincides to the study of culture in Side 19 af 48

20 structuralism on the basis of the examination of the understandings of culture. Both approaches put intercultural communications and interaction into systems, which make the results measurable. Furthermore, the individuals are not mindful of how culture or the structures within their culture influence their actions. Moreover, the interpretive approach coincides to the post-structural study of culture in the way that both approaches take context into consideration and underline the importance of historical conditions. They are, however, different in the sense that the interpretive approach is more concerned with interpersonal interaction and the independence of the individual than the post-structural approach. Finally, the critical approach coincides to the postmodern study of culture in the sense that both approaches emphasise intertextuality and the influence of media in the formation of identity. In the section concerning culture we also clarify that the cross-cultural approach is when a comparison of national-cultural differences and similarities is made. In addition, the intercultural approach is when a study of interaction between people from different cultures is made. This information is presented to give an account of how we will be using the term culture throughout this assignment, along with the process of how we came to the understanding of this. In the section on marketing strategies we have made a clear distinction between standardisation and adaptation. Standardisation is a marketing strategy that uses the same marketing and products on a global scale. On the contrary, the adaptation strategy seeks to adapt products and marketing to the target culture. Both strategies are opposites on a scale and are argued both for and against by various scholars. Scholars, both within cultural studies and marketing, advocate that this combination of global and local marketing, so called glocal marketing, should be applied when marketing internationally (Barker 2012: 164, Kotler et al :467). There are two main ways of implementing a glocal marketing strategy. One way is by adapting the product to a local market, but using global advertising. Another way is using global products, but adapting the advertising strategies to fit the target culture (de Mooij 1998: 24). However, the strategies are two extremes and can be regulated and combined in order to reach the most optimal contextual strategy. The main influence of this new marketing view comes from globalisation. As explained in section 3.1., globalisation has influenced digital media in a way that has brought people from all over the world closer together. This concept has become central in the 21 st century s understanding of Side 20 af 48