Cultural Factors and Marketing Approach in China
China has become attractive market for foreign investors as a result of globalization characterized by open policies and economic reforms. Multinational firms have been experiencing better success in China as a result of a better relationship with the Chinese as well as china openness to western ideas. This country has of late experienced rapid economic growth, but for western investors it remains a difficult country to navigate (Boontanapibul, 2010). There are many obstacles that should be overcome success of a business venture in China. This company operation in China will face cross cultural management problems due to cultural differences between these two partners. A sensitivity analysis to cultural differences is ideal for international marketing.
Cross-Cultural Issues
China and USA differ in regard to political & economic systems, laws and social values as outlined herein. Some of the issues in regard to cultural differences include the difference in terms of consumption cultures. Americans culture has a high consumption pattern whereas Chinese do not have enough purchasing power to meet these high levels of consumption. Time perspective differences also exist between these two cultures. Americans are straight forward and aggressively aim to reign in their businesses. They come up confident and risk a lot in their pursuit for success caring less about rituals and social values. Greetings are another issue that should be addressed by the company’s marketing team as they make the first impression. Westerners pay more importance on personal freedom and privacy whereas the Chinese greet each other with personal questions symbolizing their concerns and personal considerations (Huang, 2003).
Uncertainty avoidance issues also differ between the two cultures. The Chinese are considered more risk-Averse than Americans and will not readily purchase Company A’s Heavy duty engines. Americans have a short-term orientation, unlike the Chinese long-term orientation (Boontanapibul, 2010). Gestures are a powerful communication channel used to convey different messages. This method of communication has a different meaning between these different cultures. Therefore, the marketing team needs to learn about the dos and dont’s. Another cross-cultural issue that requires attention is the meaning of numbers. For example, 4 is a number that differs in meaning between US and China. In China 4 is disliked as it means death and the company should avoid such numbers. China is a centralized power economy while America is relatively decentralized with high degrees of individualism. The company should expect low degree of freedom in China.
Company A should aim at developing a personal relationship with Chinese in order to build a long-term business contacts. In order to deal with authoritarian element in China, Company A should engage a negotiator who understands the Chinese decision making pattern, negotiation limitations and one who is ready for a traditional culture based power play. The company’s Marketers should apply keen understanding and patience to these cultural differences and management can re-train its workforce in issues relating to these cultural differences. Company A can deal with the difference in shopping behavior through reviewing its pricing strategy as Chinese have grown up in a culture that values price consciousness. The company should consider rebranding as the current label and numbers used may mean different to the consumer upon translation. In China time is not as essential and long delays are way too often experienced before any action. Negotiation styles an essential expertise in marketing also differ between Americans and the Chinese. For example, the Chinese Confucian ideas guide their negotiating skills.
Cross-Cultural Communication
Cultural factors operate as invisible barriers for international business communication and determine the profitability of firms. Examples of difference in cultural communication include Current and future trends, new forms of journalism, role of social media, online multimedia and use of mobile communication. Price consciousness should be understood and the differences between Chinese and Americans. For example, Chinese value bargaining and these differences will affect store pricing as the buyer is the king in China. China as a high context culture appeals for interdependence, popularity, emotions, luxury and symbolic associations whereas USA is an individualistic society that follows individuality and hedonism. China leading social network is Renren while Americans rely highly on Facebook. Therefore, company A should use Renren instead of Facebook if it adopts social network marketing strategy. Consumers also respond differently and appreciate marketing strategies that respect their cultural heritage (Solomon et.al, 2007). Chinese are known to have a high degree of taste and preferences for their local products, and proper marketing campaign is essential to convince them otherwise. If the Chinese market is slow in responding to these engines, it should be understood that perhaps cultural differences and preferences are the cause of communication problems.
It should be understood that most locations will be different, and the company should learn as much as possible about the location, culture and people before and after arrival. Cross cultural communications processes also differ between these cultures. For example, Americans tend to communicate to the Chinese in an outspoken way, whereas Chinese use a gentler approach and make appropriate adjustments. This significantly affect the marketing response of company A’s engines so should be addressed appropriately. For example, a marketer wishing to promote company A’s engines should use gentle communication method in the Chinese market. Arguably, Confucianism and manners strongly affect cross communication strategies and performance. It is helpful if the company can learn Chinese language for better contact and relationships. Intermediaries’ strategy is especially valuable in cross-cultural communication situations. Marketing in this situation requires an intermediary who can translate the nature and content of what is said. For example, some strong statements can be used in negotiations which are acceptable to Americans but offensive to the Chinese. Communication influences marketing strategy success through appropriate branding and promotion of products. For example, Coca cola entered Chinese marketing with a name sounding similar, but that meant “bite the wax tadpole”.
Impact of Cross-Cultural Ethical Differences
Business community needs to deal with ethical issues across cross-cultural setting as a result of globalization of markets. Every marketer should behave in a moral and ethical manner. These ethical considerations will affect how the company will behave. A’s marketing strategy should not deny anyone his or her right, be lawful, not harm the environment nor take unfair advantage (Yucel et al, 2009). In US giving business gifts is condemned but the Chinese embrace this policy so this will be a strategy to consider. For example, the Chinese practice gift giving and token gifts in events of spring festivals and birth of children thus company A should loosen policies on gift giving. Across different cultural backgrounds, marketers face different moral values. Nepotism and hiring on personal relations is prevalent in China than US. Although unacceptable for company A, it will affect hiring and marketing strategies. The Chinese also considers education while hiring their workers a fundamental ethical issue. They also rely heavily on Confucian notion of junzi a challenge in business. For Chinese, loyalty and respect for superiors is hierarchy so they will not voluntarily report unethical practices or misconducts unlike in American context. This affects company A in assessing performance and efficiency of its marketing team considering the Chinese find use of report hotlines unacceptable.
Discrimination against women in the workplace is popular in China and will affect Company A’s strategies if women hold senior positions. Migrant workers are also considered inferior than urban workers, and discrimination on ethnic lines also exists. Another ethical issue that offers a challenge to American firm seeking to enter Chinese market is corruption. Bribery is prevalent in most Chinese sectors unlike in the US. For example, a facilitation payment or ‘kick backs’ is common although there are efforts to eliminate it. This will affect the company A strategies such as donations and charitable activities as the Chinese probably expect them although the government has cautioned the public against these activities. Arguably, it will be hard for foreign companies to compete with state owned companies producing the same product. Company A should consider unique cultural characteristic and Confucian employee behavior in order to account for moral values in its strategies.
References
Boontanapibul, C. (2010). “Business in China: Cultural factors, Start-up concerns and Professional Development”, Executive Journal.
Huang, L. (2010). “Cross-Cultural Communication in Business Negotiations”, International Journal of Economics and Finance. Zhenjiang. China.
Solomon, M, R., et al. (2007). Consumer Behavior. Pearson NSW.
Yucel, R., Elibol, H., & Dagdelen, O. (2009). “Globalization and International Marketing Ethics Problems”. International Journal of Finance and Economics. V .26
