Foreign Culture and International Business - Research Paper Example

Foreign Culture and International Business Businesses which operate domestically, but have found a need to expand their products or services internationally, need to be aware of different cultural beliefs and lifestyle values of consumers in foreign markets prior to launching an expansion project. In domestic markets, a product-focused company might have found considerable marketing success by developing advertising and other promotions which cater to the unique needs of local consumer markets.

Using positioning strategies, a marketing function, domestic businesses may link a specific product with a user lifestyle aspect, therefore making the product seem more valuable to target audiences. However, when launching this same product in a foreign country, domestic marketing efforts may not be nearly as effective when dealing with a diverse group of different markets with unique preferences and lifestyle expectations. “In order to work effectively with local people, we need to examine their values and norms, beliefs and attitudes, relationships, mental processes and many other cultural patterns” (Shakerin, 2008, p.1). This is why international businesses invest so much time and finances into conducting foreign consumer research to fully understand what method would be best for positioning their products in foreign market territories.

Conducting preliminary focus groups, surveys and consumer interviews prior to new market entry into an international environment provides this information and allows strategists to make informed and qualified decisions regarding marketing strategy. For example, McDonald’s is an international brand which uses advertising and promotion which is custom-tailored to international audiences. In some countries, McDonald’s does not sell beef as a response to respecting religious beliefs and values for its consumers, but offers different products which fit the lifestyles of these consumers.

However, domestically, failure to put beef products on the menu would, at the strategic level, create consumer unrest and would rapidly deplete profit expectations when consumers defect to a beef-carrying brand. The success of foreign ventures also relies on identifying key stakeholders to involve in various strategic partnerships and alliances in foreign countries. At the cultural level, investors may prefer a no-nonsense business contract which clearly outlines responsible party activities and benefits with little socialization desired by the second party.

However, in the domestic operations, socialization and recreation might be a big part of what drives success in strategic alliances and partnerships and brings much value to the long-term business-to-business relationship. This is another reason why preliminary cultural research is of such significant value to international businesses looking to expand into foreign markets as it will identify the business-to-business preferences of investors and allow the company leadership to develop a new alliance or partnership model when dealing with foreign business entities.

A business which has developed “a world-class brand with a game plan calling for international growth will not be cost effective or reliable if the right markets and partners are not researched” (Solomon, 2009, p.11). A recent study conducting by an international marketing firm highlighted how one particular product brand was perceived by customers in both the United States and in Mexico. The U.S. consumers found emotional attachment to the brand while Mexican consumers were largely disinterested by the promotion and advertising they were shown in the study (Guzman and Paswan, 2009).

The advertising used in this study consisted of American-domestic promotion which was developed using lifestyle principles for this market. In the Mexican consumer environment, the advertising was essentially meaningless at the cultural level and would not have provided strong sales growth in Mexico unless the advertising was changed to fit Mexican values and preferences. This study involving Mexican and U.S. consumer groups was important to, again, reflect the importance of understanding what drives different cultural beliefs in one foreign region prior to entering this market.

Without studies such as these which measure these cultural variances, it is likely that most international marketers would be providing ineffective advertising and promotion to a group of consumers with radically-different cultural values than domestic audiences. International businesses also tend to forget the importance of word-of-mouth advertising, especially in close-knit, family-oriented communities. In countries such as South Korea and Brazil, as two relevant examples, the culture is much more collectivist than in the United States, meaning that individual accomplishments are not considered as important as group affiliation and community opinion (Mathis and Jackson, 2005).

When entering developing markets such as these, community relationships drive much of the product purchasing behavior and consumers genuinely value the opinion and emotions of colleagues and family. In this type of environment where collectivism makes up the foundation of social beliefs, word-of-mouth would be much more important to business success than in domestic markets where individualism drives buying behavior. If one consumer has a bad experience with a product or service from an international business, it is likely that in collectivist cultures word-of-mouth advertising can quickly spread throughout the community and ruin the company’s long-term reputation in this market.

Again, understanding whether the culture is collectivist or individualistic will determine which marketing strategy is best to ensure quality word-of-mouth between collectivist market groups. “The spread of positive word-of-mouth and the lack of negative WOM about the product or brand is critical to the product’s successful diffusion in a population” (Lam, Lee and Mizerski, 2009, p.55). At the international level, there are also differences in how people perform work and their views on the importance of providing superior contribution and performance to meeting organizational goals.

When launching a new product or business in foreign markets, the company will, at some point, have to consider hiring foreign talent and working with foreign business partners. In some cultures, such as Japan, work ethics are extremely high and the career is considered integral to self-identity (Mathis and Jackson). If entering the Japanese business environment, knowledge of this cultural aspect will likely provide the ability to build more effective coaching and development programs since workers are self-motivated and dedicated to quality performance and contribution.

However, if the business were entering the French market, they would find a more casual viewpoint about careers and job performance with a more risk-taking cultural belief (Mathis and Jackson). This marketplace might have employees who demand more days off, ask for more family-oriented benefits, or they simply do not find self-identity with job roles. Preliminary research and ongoing research into foreign employee motivations and job-related values is crucial to finding talent which fits the business’ long-term goals.

Issues of supply chain, also, can be affected by different cultural beliefs related to work ethics. Companies like Zara, a fast-fashion retailer operating in Europe, owns most of its supply chain components, therefore it is not impacted by poor job performance from suppliers (Capell, 2008). Other companies who outsource supply chain functions, in foreign countries, might encounter workers with less work ethic and without cultural beliefs on the value of time efficiency. Therefore, prior to entering a new international market, worker values and motivations must be considered in relation to how the supply chain will be impacted and whether potential disruptions can occur because of foreign work ethic; or lack thereof.

It is clear that understanding culture is vital to finding success in international business environment, as culture impacts the company at the employee level, sales and consumer level, and profitability level. The goal of a business expanding into international regions is to build more market opportunities, expand their brand’s image and reputation, and strengthen the firm’s competitive position. However, without accurate and real-time information into what drives lifestyle preferences and buying behavior in these foreign markets, it is likely that an international strategy will fail.

Culture is a strong driver of business activities in foreign markets and any business looking to expand must invest the time and labor required to research foreign market beliefs and values in order to emerge an international business success. Works Cited Capell, Kerry. “Zara thrives by breaking all the rules”. Business Week, 2008. Iss. 4104, p.66. Guzman, F. and A. Paswan. “Cultural brands from emerging markets: Brand image across host and home countries”. Journal of International Marketing, 2009. Vol. 17, Iss. 3, p.71. Lam, D., A.

Lee and R. Mizerski. “The Effects of Cultural Values in Word-of-Mouth Communication”. Journal of International Marketing, 2009. Vol. 17, Iss.3, p.55. Mathis, R. and J. Jackson. Human Resource Management, 10th ed. Thomson-South Western, 2005. Shakerin, M.S. “Integration of local culture and perception in promotion and marketing of solar cookers”, 2008. San Joaquin Delta College, California. Accessed 14 Nov 2009 at http://images3.wikia.nocookie.net/solarcooking/images/b/b6/Granada06_Mahnaz_Saremi.

pdf Solomon, David. “International marketing: Identifying allies, competitors”. Franchising World, Washington, 2009. Vol. 41, Iss. 10, pp.11-13.