Abstract
Trade today has been escalating globally considering its current position; this has been fostered by the new improved technology in transport and communication. This has enabled clients and other businesses to have access to high quality products from diverse parts of the world. This has also enhanced stiff competition between the various multinational companies that are seeking ways of expanding their consumer base and outputs, at the same time aiming for higher profit returns. This paper shall focus on Company A which is a major automobile manufacturer in the US. The company seeks to expand its international markets by setting up a subsidiary firm in China, Eastern Asia. The company’s objective will be to increase its overall profit margins. However, this will not just be an easy way for company A, because it faces major cross-cultural issues that might impede its expected growth. This paper will therefore endeavor to identify some of these cross-cultural issues and find out how they will impact company A’s approach to the Chinese market. It further attempts to explain how cross-cultural communication influences the adoption of marketing strategies in China. In conclusion, the paper probes to know how company A can ensure effective competitiveness in the broader Chinese market.
Key Words: multinational companies, cross-cultural issues, communication, marketing strategies.
Company A chooses China as the country where it will lay its anticipated ventures to serve the vast Eastern Asia market. The choice of China was influenced by various factors peculiar to it as an investment destination. Foremost is the good infrastructure that the country has which will facilitate smoothness of business operations. It was also found out that the country has a larger population of the educated middle class which presents a higher demand for automobiles which is in line with company A’s specialty. Another factor in choosing China is due to the availability of cheap labour from the huge Chinese population.
In the anthropological point of view all market behaviors are culturally-determined. The client’s actions and the business dealings to be performed are influenced to a great extent by the culture of the place. Cross-cultural marketing involves developing a marketing mix that is equivalent to the consumer inclinations, purchasing power and product utilization blueprint for the Chinese market in this case. This demands for an in depth market understanding of the Chinese market by the company’s marketers. Some of the cross-cultural concerns that may affect the marketing approach of company “A” are thoroughly outlined below, they include;
Management Approach- China has an unusual scrutiny on the concept of leadership compared to the US custom of management. The Chinese leaders are not used to paying attention to subordinates or assuming a team work model. Therefore, in China decisions are made by managers using their knowledge and experience in their work. Hence, it is accepted for the managers to determine the objectives of a company.
Communication System- the Chinese are very formal people, while Americans are extremely informal and laid-back. The Chinese show a lot of respect when communicating with other people, it should be wise to monitor the communication patterns when carrying out business with the Chinese (Jiang, 2000). There is a closer connection linking interpersonal communication and culture.
Gender Relationship- this emphasizes on how men and women relate to each other in way of doing business. The Chinese hold great honor and respect to each other such that men respect women and this also applies for women to the men. This is key in knowing how to deal with the different genders in the country.
Individualism Vs Collectivism- it is important to know that china is under a communist dictatorial rule, this asserts that the citizens of china form a society where people help each other communally and show unchanging loyalty to each other. This explains why they hold respect for one another. The US applies an individual approach where people do whatever they choose for themselves without necessarily involving others in the community.
Long Vs Short term Orientation- China is regarded as a long term orientation country while the US and other European countries are considered short term orientation countries. Long term societies involve perseverance, classifying relationships by status and having logic of shame while the short term societies exhibit individual calmness and firmness, high opinion for conventions, protecting one’s appearance and responding to greetings, favors and support. In China this ethical system was greatly influenced by Confucius and his disciples who advocated that all men are born unequal, everybody has to admit this truth, which yields to uneven high power detachment (Martinsons & Hempel, 1998).
These cross-cultural issues highlighted here have strong influence on the marketing approach to be adopted by company A. To begin with, the management style to be used will impact on the decision making process of the subsidiary company of A. The subsidiary company will be forced to apply an approach that does not emphasize on teamwork because this might lead to inaccuracy in decision making. This occurs since the subordinates might not give correct inferences due to their fear of the managers. Secondly, basing on the fact that company A is a short term orientation, the managers of this company might believe that they are very efficient and valuable than the Chinese managers; this can lead to a situation where the managers from US might not be capable of solving problems in the subsidiary company. This means they have to develop a different management and communication style in order to match their efforts with those of the Chinese counterpart (Jiang, 2000). The subsidiary company must also ensure that they articulate a more formal approach of communicating to the Chinese employees; this would help ensure that there is proper flow of information and consequently yield the expected outcome. The managers of company A should ensure they show lots of respect to their Chinese colleagues to facilitate for harmonious relationship, which would transform into better results in the future.
The subsidiary company must instill mechanisms to ensure that their managers can be in the same level with the Chinese in terms communal support and loyalty to each other, this will help in ensuring maximum cooperation at work (Jiang, 2000). All these issues signify that the subsidiary company should approach the Chinese more socially and take ample time to familiarize with one another. This way the Chinese managers will find it pertinent to work with the Americans hence they will put their efforts in ensuring the achievement of the set objectives.
The subsidiary company should also ensure that it respects the privileges of women in this society by ensuring that they maintain proper image of women. Company ads should not involve women dressed inappropriately because this would negatively alter the perception of the masses towards the company. The cross-cultural communication of the subsidiary with the Chinese will change the marketing strategies adopted by the subsidiary. The firm will be forced to follow an adaptation communication that caters for the needs of its foreign clients (Usunier & Lee, 2005). This will affect the functions of; advertising, sales promotion, personal selling, publicity and sponsorship strategies of marketing to be adopted by the subsidiary. The company in its advertisements may be forced to use people who will create a perception that is in accordance with the Chinese culture. For instance it would be important if the company used renowned personalities of China in its ads so as to build an attractive image for the company. The company can apply sponsorships in its marketing mix to develop the opinion of social welfare among the Chinese society, this would be appropriate in achieving the set marketing objectives. For example the company can sponsor the national football team of China. The company will also be compelled to adopt sales promotion as a strategy of ensuring that it captures a significant market size from the Chinese population. This can be achieved by formulation of a relevant sales promotion scheme.
For example, awarding the company’s client’s with loyalty points which can be use in purchasing certain products manufactured by the company. The cross-cultural ethical difference in the marketing strategies of the two countries would have a negative impact on the marketing performance of company A (Usunier & Lee, 2005). This will occur if the differences are not aligned to match the ethical preferences of the Chinese population. In conclusion, this indicates the essence of ensuring that the employees from US are familiar with the culture of the Chinese. This will enhance a faster transition into the new region of trade hence the achievement of the organizational goals will be practicable.
References
Jiang, W.Y. (2000). “The relationship between culture and language”. Oxford
Martinsons, M. and Hempel, P. (1998). “Chinese business process re-engineering”.
International Journal of Information Management, 18(6), pp. 393–407.
Usunier, J. and Lee, J. A. (2005). Marketing across cultures (4th edition). Pearson
Education Ltd., Edinburg Gate Harlow.
