The Dynamics of the Chinese Marketplace Why Culture

The Dynamics of the Chinese Marketplace: Why Culture Matters Dr. Pan, Tianshu 潘天舒 School of Social Development and Public Policy, Fudan University

Professional Background EDUCATION Ph. D. in Anthropology, Harvard University (2002). A. M. in East Asian Studies, Harvard University (1995). B. A. in English Literature, Fudan University (1989). Junior Year at Leeds University, England (1988) l TEACHING POSITIONS HELD Professor, School of Social Development and Public Policy, Fudan University, China (2012 - ) Assistant Professor, Walsh School of Foreign Service and the Department of Sociology and Anthropology, Georgetown University, USA (2002 -2005). Adjunct Professor, School of Advanced International Studies, Johns Hopkins University,

My year in Leeds, N. England (1987 -1988) Texts Milton, Metaphysical Poets, D. H. Lawrence, Virginia Wolf, T. S Eliot, William Shakespeare l Contexts / Cultural Encounters Fish and Chips, Yorkshire accent, Odeon Theatre, Leeds United, Mince Pie, Lord of Rings, afternoon tea, Chinese take-away, Xmas holiday, corrupt Romanian officials, swear words, tabloids, pranks, cultural blunders, etc. l

Harvard GSAS (1993 -2002) l 1993 -95 (the entrepreneurial spirits of my RSEA classmates) l 1997 summer research in Shanghai (food rationing under socialism) l Spring of 1998, Non-traditional Workshop at HBS (Harvard Business School) l Working as head teaching fellow for two extremely popular anthropology professors - Ethnographies of consumerism, and the cultural dynamics of the global marketplace (East Asia)

James Watson

Ted Bestor

SFS and Sociology Dept (2002 -2005)

Reconfiguring Business Anthropology @Fudan l Attempt to reconfigure business anthropology as more than a subfield in applied anthropology and remodel the ethnography of business in the context of China’s social and economic transition. l The program of business anthropology will have the following components: economic anthropology; the anthropology of social organization and work; culture and consumption; globalization and local transformation.

Reconfiguring Business Anthropology at Fudan University (2006 -present) The Cultural Dynamics of the Chinese Marketplace Ex 1: Fudan-Intel Rural China ICT Research Ex 2: Fudan-Microsoft Project on Youth Culture @ Fudan University Ex 3: Redefining Mc. Jobs in Shanghai Ex 4: Ethnographic Aspects of World Expo 2010

Key terms used in this course l Anthropology (human) l Sociology (individual and society) l “sociological imagination” l Ethnography (writing, interpreting and analyzing “cultures”) l Culture l Globalization and local transformations

The Validity of “Soft Data” Key features of anthropology/sociology for business: 1) ethnography and observation as ways of obtaining data; 2) cross-cultural expertise; 3) focus on cultural diversity l Anthropological skills for the corporate world: - Characteristic observation in natural settings - Cross-cultural perspectives allow businesses that seek to know why other nations have higher/lower productivity - Better understanding of customer and find new products and markets that engineers might never have imagined. Ex. Market System vs. Marketplace l

Market System vs. Marketplace Market system (as an abstraction) Ideally, a market system is an institution with selfregulating prices that vary according to supply and demand on the part of both producers and consumers. Demand is determined by scarcity/abundance, price, and preferences; supply is determined by scarcity/abundance, price, and sensitivity to demand. l l Marketplace -specific and real locales where buyers and sellers engage in exchange transactions -marketplace/bazaar societies (marketplace as the only medium for transfer of goods & services) -local / operating on cycles / price negotiation

Seeing the Big Picture: the Promise of the Sociological Imagination How do we develop a sociological perspective & cultivate our sociological imagination (Mills 1959)? Requires us to think ourselves away from the familiar routines of our daily lives in order to look at them anew; see ourselves as products of socialization, as persons constrained by norms and mores, shaped by history and social events (Personal troubles vs. societal issues) No matter how private or personal our actions we can understand ourselves much better if we place ourselves within a larger framework How meanings are constructed in contexts Basic sociological insight: human behavior is largely shaped by the groups to which people belong and by the social interactions that takes place within those groups Examples: Sociology of Coffee; Tainted baby formula scare l

The sociological imagination… allows us to stand apart mentally from our own place in society and to see with a new clarity the link between personal and social events. l Our lives are shaped by historical & social forces they have little personal control. l When a society becomes industrialized, rural peasants become urban workers (migratory movement in postreform China), whether they like it or not. When a nation goes to war, spouses are widowed and children grow up as orphans for reasons that are beyond their personal power to control. When an economy sags, workers are thrown out of their jobs, no matter how efficiently they have performed them. l

From Wall Street to the street: A cabdriver's tale Analyzing the individual and social patterns that produce unemployment.

Lonely Planet's Best in Travel 2014 - top 10 cities The buzz about Shanghai is electric: welcome to the city everyone wants to see (and be seen in). If China is the world’s industrial motor, Shanghai is China’s highperformance V 8. The metro system – which ran to a modest three lines in 2000 – will open the 59 km-long, highspeed line 16 by 2014; it’s now the third-longest network in the world. Upon completion, the twisting 121 -storey Shanghai Tower will be the tallest building in China, the second-tallest in the world and the jewel in the Lujiazui crown. It will house the highest hotel in the world, a coveted trophy Shanghai has held twice over the past 15 years. To cap it all, Shanghai recently expanded its visafree transit quota to 72 hours for citizens of 45 nations, so if you’re heading on somewhere else and don’t have a Chinese visa, you can still get a three-day look in.

Ex: anti-smoking campaign vs. cigarette consumption

What does it MEAN to be tanned?

The sociological imagination…

Coffee in Sociological Imagination Is drinking a cup of coffee an uninteresting piece of behavior? 1) Coffee is not just a refreshment. It has symbolic value as part of our routine social activities (coffee meeting). 2) Coffee as “drug” food. 3) an individual who drinks a cup of coffee is caught up in a complicated set of social and economic relationships stretching across the world. The production, transport, and distribution of coffee requires continuous global transactions between people thousands of miles away… l

Why Culture Matters l l l Human adaptation and CULTURE In ordinary speech (both ENG & CHN), the word “culture” is used to refer to sophisticated tastes in art, literature, or music. But the sociological/ anthropological use of the term is much WIDER and implies that anyone participates in society is “cultured. ” Culture includes EVERYTHING that a human society produces and shares Culture (way of life, “codes or blue prints” of societies) vs society (people who shares a culture) Cultures cannot exist without societies. Culture isn’t one “thing” but an elaborate system of mental and physical “things. ”

Defining “culture” scientifically… “Culture (or civilization) … is that complex whole which includes knowledge, belief, arts, morals, law, custom, and any other capabilities and habits acquired by man as a member of society” (E. B. Tylor 1871: 1) - Culture is learned, shared, and symbolic - ‘soft’ data

Culture is LEARNED l Why is cultural learning (“enculturation”) unique to human beings? l 19 th century evolutionists’ notion of the “psychic unity of man” : ALL HUMAN POPULATIONS SHARE THE SAME CAPACITY FOR CULTURE l NOTE: “cultural / social learning” in anthropology means much more than “文 化 ”/literacy

Culture is SHARED l The transmission of culture unifies groups of people with common experiences l Cases in point: Touching, Affection, Love, and Sex. Even such things as apparently "natural" as emotions and sex can be culturally constructed! North Americans do not clearly differentiate among physical expressions of affection as opposed to sex, while Brazilians do.

Culture Is SYMBOLIC The uniquely human ability to use symbols is the basis of culture (Leslie White 1959) “It is impossible for a dog, horse, or even an ape to have any understanding of the meaning of the sign of the cross to a Christian, or of the fact that black (white among the Chinese is the color of mourning. l The ARBITARY relationship between the signifier and the signified l

The arbitrary relationship between the signifier and the signified l

“saturated symbols”

Globalism and Local Cultures

Culture and Biology l How basic “natural” demands of human life are met in different ways because of CULTURALLY DEFINED VARIATIONS EX. universal human functions we must perform in order to stay alive: EATING, DRINKING, SLEEPING, ELIMINATION

Culture and Nature /Biology l The cultural construction of the “natural” /biological. EX. Variety of ways in which different societies satisfy basic biological drives such as hunger. Human ability to digest many types of plants and animals for nutrition AND the different eating behaviors and food preferences throughout the world Food labeling in the US: edible or inedible Eating insects and insect larvae (a regional delicacy in China and many other countries); horse and dogs as pets in the US vs. the consumption of horsemeat & dog meat. In other words, biology and culture contribute to particular forms of human behavior.

Culture and Nature (the raw & the cooked)

Is EATING simply a biological process? l - - Culture shapes what one eats, how one eats, and when one eats, and affects ideas of eating. Meat eating is a not a necessity for survival (vegetarianism vs. meat hunger) Preferences about what “tastes good” - Chinese and French attitudes toward cheese) - “freshness” of food Difficulty of categorizing basic types of tastes (sweet, sour, bitter, salty, pungent, tart …. . ) RULES about eating (ex. Use of hand in India)

Ex. An Anthropological/Sociological Approach to Obesity is a Western problem and that in many non. Western cultures, fat symbolizes beauty and fertility 2) The slender, youthful-looking figure is NOW desired by women of all ages. 3) Although slenderness becomes a symbol of social status, the food of the wealthy is still rich and plentiful…a sign of conspicuous consumption 4) …cultural factors such as the knowledge of nutrition and of the relationship of obesity to disease and longevity and the popularization of the knowledge, our cult of youthfulness (female), our class stereotypes all tend to keep people away from taking advantage of the opportunities to gorge on food… 1)

Culture and Body Image

Drinking The cultural elaboration of drinking is just as complex as for eating. Every culture defines the appropriate substances to drink, when to drink, and with whom. - French consumption of table wine with meals; Water consumption during meals in the US (vs. drinking water after dinner in India); different categories of people (gender/age/class) drink different beverages (“sparkling water from France”); “social drinking” (coffee, tea, beer, or vodka) creates & reinforces bonds. Example: Red Bull TV commercials (USA & China) l

Sleeping l Cultural aspects to sleep (including question of who sleeps with whom) Ex. Rules about where infants/children should sleep (with parents or in a separate room) l Culture shapes the amount of time a person sleeps Ex. Women in rural India (and China) sleep fewer hours than men; “A-type” males in corporate North America sleep few hours and are proud of the fact…

Co-sleeping” vs. the separation of mother and infant Increases the length of the infant’s crying bouts - “crib death” - Benefits of frequent nursing (breast-feeding vs. bottle feeding) -

Elimination l How does culture affect the elimination process? Ex. Ideas of toilet training / bedwetting vary; where to eliminate (gender/age); practice in rural India (vs. “western” practice) Cultural attitudes toward products of elimination (urine and feces): - “dirty” “polluting” “disgusting” - Medicinal & symbolic values

Elimination l How does culture affect the elimination process? Ex. Ideas of toilet training / bedwetting vary; where to eliminate (gender/age); practice in rural India (vs. “western” practice) Cultural attitudes toward products of elimination (urine and feces): - “dirty” “polluting” “disgusting” - Medicinal & symbolic values

Cultural differences in preferences to SMELL TYPES l Do cultural preferences influence fragrance / deodorant marketing?

Food as a “cultural construction”

The Fortune Cookie Chronicles (Jennifer Lee 8)

Globalization and Local Transformations: MECHANISM OF CULTURE CHANGE l Diffusion (“cultural borrowing”)

“Cultural borrowing”

The Culture of “Faking” in the East

In THE KNOCKOFF ECONOMY (Oxford University Press, September 2012), law professors Kal Raustiala and Christopher Sprigman reveal the hidden inner workings of disciplines ranging from fashion to finance to font design, provocatively concluding that the freedom to copy and bring knockoffs to market benefits creators and consumers alike

www. theknockoffeconomy. com

Investigating “Knock-offs”/Copy cats l Observations l l l Elegant, spacious setting Exclusive Location (compared to fake) Customers: Wealthy Chinese people Hard to tell difference between fake A++ and real Trained and well-dressed staff

Benchmark Analysis FAKE

Yi-Chieh Lin reveals how the entrepreneurial energy of emerging markets, such as China, includes the opportunity to profit from fake stuff, that is counterfeit goods that rely on our fascination with brand names. Students will discover how the names and logos embroidered and printed on their own clothes carry their own price tag above and beyond the use value of the products themselves. The book provides a wonderful introduction for students to global markets and their role in determining how they function.

Culture as the “Soft Data” Language Ideas Norms & values Material Culture Soft Data Information in raw or unorganized form (such as alphabets, numbers, or symbols) that refer to, or represent, conditions, ideas, or objects. 。 www. businessdictionary. com

Moon Cakes

Moon cakes and other Asian delicacies as targets for food inspectors in L. A. (LA Times)

Ethnography & Fieldwork

BRONIALAW MALINOWSKI (1884 -1942) l “participant observation” immersing oneself in the local community (longterm residence) - working through the native language Argonauts of the Western Pacific (1922) the goal of ethnographic fieldwork is to “grasp the native point of view, his relation to life, to realize his vision of his world” (1922: 25) -

FIELDWORK l Gain specialist knowledge by going to live in the society of their choice l Go for a year or more & try to live as far as possible as the people they are interested l Find out exactly what it is like to be a member of the society in question l Learn the language of the people concerned (working with interpreters gives a wholly inadequate view) NOTE: Social closeness distinguishes sociologists / anthropologists from other social scientists

Ethnographic Research: A Key to Strategy (March 2009 Harvard Business Review) l Ken Anderson - Corporate ethnography isn’t just for innovation anymore. It’s central to gaining a full understanding of your customers and the business itself. The ethnographic work at my company, Intel, and other firms now informs functions such as strategy and long-range planning. - Our goal is to see people’s behavior on their terms, not ours. While this observational method may appear inefficient, it enlightens us about the context in which customers would use a new product and the meaning that product might hold in their lives.

Anthropology Inc. (March 2013 The Atlantic ) l Re. D’s entry into consulting represents an attempt to match the results of these titans without relying heavily on math and spreadsheets, and instead focusing on what anthropologists call “participant observation. ” This method consists, generally, of living among one’s research subjects, at least briefly. Such immersive experiences lead not only to greater intimacy and trust, but also to a slowly emerging picture of the subjects’ everyday lives and thoughts, complete with truths about them that they themselves might not know.

How does ethnography complement traditional qualitative research ? Study the fish ‘Classical’ qualitative research Hang out with the fish Ethnographic ‘immersion’ Both approaches are valid, but they uncover different things

P ro d u c t From the time they wake up in the morning, consumer are taking actions to keep mosquitoes away, mostly are non-product actions! “I use broken coil to have short duration prevention” Time access Non -Product “I inspect the room, plug in 1 -2 hrs prior sending kids to bed”. “I closed door & window and spray aerosol around “My kids apply OFF personal the corners” repellent before going to school” “I use electric racket when I saw it flying around” Cleaning School time Fumigation Morning Afternoon ………………………. . . Family time Evening ……… Bedtime Night……………… “I turn on the fan to keep the mosquitoes away” “I wipe the floor with bleach to repel the insects. ” “I wipe the furniture with vinegar to repel mosquitoes” “Cleaning is part of my pest control routine. ” “I dress my kids with long pants to decrease the opportunity of getting bites in school”. “I have to close the door& windows to keep mosquitoes outside before sunset” “I pull down mosquitoes net, check through the net” “I put on long sleeve pajama / cover the kids with bed sheet to keep mosquitoes away” Leverage non-product actions into product usage design to address touch points needs

Gathering, Integrating, Synthesizing and Analyzing Data § Example: Disney increases viewership § Disney hired a team of anthropologists to help it rejuvenate its appeal to a stagnating audience: 6 -14 year old boys. § Boys tend to be less open than girls in regular surveys, making anthropological methods better for understanding their interests. § The result? Disney created a new television channel, Disney XD, tailored toward the interests of boys. Disney has also seen a 10% increase in male viewership. 76 Anthropology for Businesses • 17 March 2018

Ethnographic perspectives l Social sensitivity l Observation l Accuracy in interpreting behavior and information (soft data) l Contextualizing l Challenging assumptions (common sense & biases) l Problem-solving

An ability to get along well with people. An awareness of cultural differences. Open mindedness. Tolerance of foreign cultures. Adaptability to new cultures, ideas, and challenges. An ability to adjust quickly to new conditions. An interest in facts, not blind assumptions. Previous business experience. Previous experience with foreign cultures. An ability to learn foreign languages.