According to Luostarinen (1979, 146) language, level of economic development, and level of education in both the home and the host country, and the differences between the two are the key points to look at when evaluating cultural distance between the countries. The case company’s language is English. In England there is a “non-statutory explanatory note in the programme of study indicating that the study of languages may include major European and world languages such as Arabic, French, German, Italian, Japanese, Mandarin, Russian, Spanish and Urdu” (Department for Education 2012). This statement and experience from working in the company office prove that there is no knowledge of Scandinavian languages among the staff of Turquoise Holiday Company in general. The very most of the staff are English people exception being two Finnish members of staff having skills on Scandinavian languages Finnish and Swedish. The other of them is Product Manager of Indian Ocean and Caribbean who is on maternity leave at the moment, coming back in the early 2013. The other one is I but at the moment (December 2012) I only work part time remotely. In conclusion, the company’s language is English and there’s a lack of Scandinavian language skills. However, it is good to remember the potential of the two members of staff who are able to work in Finnish or Swedish.
On the other hand, language skills of the host country population are another thing to look at. Eurobarometer survey 2012 on “European and their languages” reveals information about Scandinavian people’s skills in English. According to the survey (Eurobarometer 2012), 70% of Finnish people are able to speak English well enough in order to have a conversation in that language. Among Swedish population the number is 86%. Norway is not a European Union member so Eurobarometer numbers are not available. Number for Denmark is 86% so with this information it should be possible to assume that number for Norway is around 70-86%. In conclusion, English-speaking skills are good among Scandinavian population and most of people have the skills.
It is widely acknowledged among researchers that consumer participation in service is in great importance. This is built on the assumption that interaction and effortless communication between consumer and service personnel is possible. Flawless communication demands ability to communicate in a language that both the service personnel and the consumer are able to use. Outcome of a service encounter is largely determined by the way the consumer and the service personnel communicate. (Holmqvist & Grönroos 2012, 430.)
According to Parasuraman et al. (1985, 47) “communication means keeping customers informed in language they can understand”. Even consumers fluent in second language show an emotional attachment to their native language. Because of this, marketers should not assume that all consumers with strong skills in second language are willing or pleased to communicate in that second language. It is suggested that consumers prefer and select companies that are willing to serve them in their native language compared to ones that are not doing so. (Holmqvist & Grönroos 2012, 437.)
In an effort to evaluate the level of economic development of a country, examining real gross domestic product (GDP) per capita of the country is a tool. “GDP per capita is gross domestic product divided by midyear population”. GDP per capita is widely used for cross-country comparisons. Regardless of country, it assigns the same value to any commodity or service. (Khan 2009, 11; The World Bank 2012.)
The World Bank has GDP per capita statistics of several countries. The following table includes information of the numbers of the three Scandinavian countries and United Kingdom.
Table 6. GDP per capita (US dollars) 2007 2009 2011 United Kingdom 46,123 35,129 38,818 Finland 46,538 44,890 49,391 Sweden 50,558 43,640 56,927 Norway 83,556 77,610 98,102
Source: The World Bank 2012.
As the table shows, the home country of the case company has the lowest level of economy in terms of GDP per capita when comparing to any of the possible host countries. As stated earlier, the market pull force for the company entering the market is the bigger the greater is the economic distance in favour of the host country (Luostarinen 1979, 136). From this point of view there is market potential in those countries.
Level of education is the last point to look at when evaluating cultural differences between the countries. One way to evaluate that is by looking at people’s years of education and to make a comparison of those numbers between countries. According to Khan (2009, 13), years of education can be converted into level of human capital by using returns to schooling. It is assumed that people with higher levels of human capital have higher wages. This is because of their better productivity in their jobs, which results their being more valuable to their employer. As a conclusion, level of education of the population is connected with the level of economic development, which in turn has direct effect at people’s purchase power.
The following table tells about the level of education in the UK and in the three Scandinavian countries. In addition to information of years of schooling between the ages of 5 and 39 years the table gives information about equivalent of a high school degree. Table 7. Level of education in the countries of the research
High School Degree 25-64 yrs
High School Degree 25-34 yrs Years of education between 5-39 yrs United Kingdom 74% 82% 16 Finland 82% 90% 20 Sweden 86% 91% 19 Norway 81% 84% 18 Source: OECD 2011
Numbers of the level of education in the research countries are consistent with GDP per capita values on the former table. Level of education in the case company’s home country seems to be slightly lower compared to three Scandinavian countries. Differences are relatively small though.