Cultural Difference and Marketing Strategy - Essay Example

Running Head: MARKETING STRATEGY Cultural difference and marketing strategy The country I have chosen to be the focus of my article is “Taiwan” Following are some of the issues that Comp-any A might come across while conducting business in Taiwan. 1. Due to the culture of Taiwan, the companies in Taiwan can be termed as “benevolent dictatorship companies”. In such companies, the central family member anticipates and receives faithfulness and submission from the rest of the employees. They respect him not because of his work rather he is looked up to because of his position in the family. 2. Being a part of eastern culture, the companies here will have hierarchical structure. The employees here follow strict chain of command. 3. Since, there is a key decision maker here, so the employees don’t have much say in the matters. They expect supervision in every aspect. 4. Entry barriers to the market are lower than in other countries, that means the competitors can easily enter the market, thus lowering the profit of Company A. 5. The turn over ratio of employees is high here owing to the fact that many younger employees (non-family members) are happy to leave the company to start their own business, as the cost to enter the market is not very high. 6. Managers tend towards the authoritarian style of the Management, giving instructions to subordinates which they expect to be obeyed. 7. The manager expects to be shown the respect due to his position and this will mean that, from a Western perspective, an undue amount of deference may be shown. Respect is given for position held, but age is also worthy of respect. It is difficult, therefore, for older Taiwanese to accept being managed by younger expatriate managers. Equally, a younger western manager on a trade mission is likely to be less well received than a visibly older colleague. 8. It would be strange for an employee to openly question any decision taken by the Manager in respect of any matter 9. It is expected by the Manager to be asked and consulted before any decision is taken by the employees. This affects the innovation that might occur lower down the chain of the employees. 10. Taiwanese will make effective group members, they like working in an harmonious environment but they expect to be given directions by the senior team member, but when working with a Taiwanese team one has try to avoid incidents that may cast a member in bad light in front of other members of the group. 11. Language barrier is yet another obstacle. One has to understand Mandarin Chinese (the official language) or Taiwanese, a southern Fujian dialect to communicate with them. (World Business Culture) Impact of identified issues on the Company A approach: Company A is a US based Company, the culture usually followed there is “democratic management”. The opinions of all concerned parties are considered before the decision is taken unlike in the Taiwan management where dictatorial style is followed and it would not be considered proper if an employee intervenes in the management’s key decision. Therefore while operating there, the most important decision for the A company would be the hiring of the Manager. If a local manager is appointed, he shall have more knowledge of the local markets and will be able to communicate more properly. Company A has to focus its attention to create an environment where the employees will participate in the decision making process and the Manager has to learn to give importance to the ideas generated by the employees even in the lower chain of command. He has to learn to accept that he will gain respect with his abilities as a manager and not because of his position. Company A may also appoint a Manager who does not belong to that culture. For example, he may be transferred here because of his interactive managerial skills and analytical decision making. Such manager will already have an idea of the Company’s procedures but he may face difficulty in adjusting into the new culture. First is the communication barrier that will be a hindrance but it may be overcome by appointing a manager who knows the language. Secondly, he has to cultivate the concept of “idea-sharing” among the employees. This will result in innovation and creative ideas. Managers have to be cautious when handling any mistake made by any member of a group. As discussed earlier, highlighting their errors in front of the whole group will not result into anything effective therefore correction of errors should be done in a way that the employees do not feel embarrassed. Market barriers are lower here so the Company A has to develop an appropriate marketing strategy so that it gets a substantial market share and its cost should also be saved. C. Explain how cross-cultural communication affects marketing strategies with examples: Communication in Taiwan can be difficult if one does not speak Mandarin Chinese (the official language) or Taiwanese, a southern Fujian dialect which is widely spoken. Communication is a major part of business. Here communication does not only mean language. Business cannot become successful if it lacks in this area. Strong emphasis is placed on this aspect of business. Company A has to pay a lot attention to this area so that miscommunication does not occur at any hierarchical level within management. (World Business Culture) While making cross cultural communication, it is important to interpret the idea that you want to deliver in a way that it is interpreted in the same way by the other person. Marketing is the most effective way of communicating your ideas across any culture, but at the same time it is also a serious issue because of the cross cultural barriers that might disrupt the meaning of the message. Therefore it is important to understand the culture appropriately before devising any marketing strategy for that culture. Furthermore, for marketing purposes, the model of 7 Ps (Previously 4 Ps) can also be used. “A” Company has to pay attention to what marketing mix is it adopting. Marketing Mix varies from country to country or segment to segment. While setting the ‘promotion’ part of the 7 Ps, the management of A has to be cautious. Advertising, branding, sponsorships etc have to be adopted as per the culture. For example: If advertisement is chosen for promotion, it should reflect the culture. As already discussed in the above portions, Taiwanese are social people who don’t like disputes etc so the advertisements should also reflect this. Taiwanese people don’t believe in one God, where as in US, Christianity is followed by most. In US, advertisements that involve that idea may be used but adopting this strategy in Taiwan may turn into a disaster for the US Company. Manderian Chinese is spoken and understood at large in Taiwan. Therefore, any type of marketing like promotional campaigns, bill boards, prospectus etc should be printed in that language, so that the people can understand it. The Taiwanese economy is not very well developed therefore pricing should be done as per the purchasing power of the economy. If the company wants to sell expensive goods then niche marketing can be done. Bank of America, American Express Bank and Deutsche Bank have been working in Taiwan for many years and the reason for their success is that they have introduced pricing policies as per the customers. Products that are especially for “Taiwanese” is another strategy. There may be products that are more successful with some culture i.e. product differentiation. For example, when Kelloggs (US Company) entered Taiwan they introduced a new flavor there that was ‘black sesame’. This is another way of effective marketing. D. Evaluate the impact of cross-cultural ethical differences in marketing strategies: US culture tends to be based on a foundation of traditional Judeo-Christian and Western socio-theological laws and principles. Underlying this system is the belief in an intrinsic underlying truth. This belief is central to the biblical system of ethics and morality. Here, moral and ethical bases are provided through the decrees of a sovereign moral authority, God. As a sovereign, God declares right and wrong, providing a general moral and legal framework for organizing a society. That activity has led to the imposition of legal penalties as a result of a claim enforced under due process of law. Owing to this, USA has turned into a place where individuals rights and contracts given extreme importance. On the contrary, people in Taiwan are different with respect to religion they do not believe in one God but they believe in sages like the Chinese. This contrasts significantly with the US view of one God and the importance of organized religion in the country. Unlike US, no harsh penalties may be seen for unethical behaviors. While forming policy Company A has to ensure that the ethical standards followed by them should also be followed in Taiwan so that there should be consistency in overall business. (Pitta, D. A. Fung, H. & Isberg, S.) References World Business Culture. n.d. Taiwanese Management Style. Retrieved from http://www.worldbusinessculture.com/Taiwanese-Management-Style.html World Business Culture. n.d. Taiwanese Communication Styles. Retrieved from http://www.worldbusinessculture.com/Taiwanese-Business-Communication-Style.html Pitta, D. A. Fung, H. & Isberg, S. (1999). Ethical issues across cultures: managing the differing perspectives of China and the USA. Retrieved from http://home.ubalt.edu/ntsbpitt/ethics.pdf Read More