Mainland Chinas Value System - Australian Biscuit Company - Case Study Example

International business report Student’s Name Name of Institution Executive Summary Every business is on the verge of increasing its profitability. Among the factors that enhance a company’s profitability is the ability to effectively and efficiently expand the business to other regions. Many organizations have a tendency of expanding to international regions. In this context, there is a prime need to be familiar with the culture of the people within the new regions. Culture is responsible for influencing customer behavior in particular and business performance in general. Australian Biscuit Company endeavours at expanding its business to China. Hence, there is a requisite to understand the Mainland Chinese market and buyer prior to the expansion. The major elements in understanding China’s market include language, social institutions, and values and attitudes. The leading business language in China is Mandarin. This is accompanies by business etiquettes that include handshake, formal meetings, and punctuality. Ultimately, the value system in China has modified immensely owing to the Cultural Revolution that took place within the country. Contents Executive Summary 2 Contents 3 Background information 5 Mainland China’s value system 6 Attitudes, values, and behaviors of consumers within Mainland China 7 Social institutions 8 Language 9 Conclusion 10 References 11 Introduction Over the past decades, the world has experienced an increase in the proportion of multinational businesses. The onward walk of globalization brings to light the requisite to understand both organizational behavior and organizational performance within export markets, which are requisite to establishment of multinational businesses (Zou, & Fu, 2011). Exporting a company’s products, even though a pleasant means of growing the company, entails numerous risks. As Keillor (2013) establishes, exporting in conventionally perceived as the best strategy for firms novel to the international operations to expand into the host market. Hence, to be successful, entrepreneurs seeking to venture into foreign markets ought to gather info, prepare export reports, line up essential financing, and make a sequence of core decisions. A firm marketing approach is a prerequisite toward reaching international markets. In opting for the appropriate marketing approach, many researchers establish that cultural diversities play a fundamental role because it is a substantial factor influencing shopping behavior and consumer market (Doole, & Lowe, 2008; Herrmann, & Heitmann, 2006; Subramanian, & Bala, 2001; Usunier, 2000). The cultural diversities among nations imply that marketing approaches do differ from those employed domestically. Hence, with the endeavor of venturing into foreign markets, it is critical for the company to have a lucid comprehension of the economic conditions, customs, and culture of the foreign country. Besides, the company can communicate with the potential buyers to learn everything pertaining to distribution channels, local rules, and competition. Background information It is emerging common that the leading businesses have embarked on expansion of their products within numerous nations, thus becoming large both economically and in size (Keegan, 1989). An interesting phenomenon and that which draws much attention is when companies aim at reaching novel markets away from their domestic markets. In this perspective, as Kimweli (1991) has found out, marketing managers are faced with a dilemma on whether to follow similar strategies as the ones they have used within the domestic market or to modify them to fit within the host nations. Accordingly, international marketing involves either standardization or customization or both. Doole and Lowe (2008) define standardization as the means of developing a marketing approach as if the entire globe was an inimitable market. It stipulates proposing a standard service or product within all regions and establishing similar marketing mix for each country. This requires offering standardized products, promotion campaigns, and prices as well as employing universal distribution channels within every market. Conversely, customization considers individual regions as specific, thus focusing on the regional, national, and cultural uniqueness (Kwelepeta, 1991). Accordingly, the business that aims at expanding into novel regions has a tendency to adapt to every market to meet the demands of the diverse regions. As elucidated, customization and standardization are the entry strategies representing the two ends, and businesses adapt marketing mix to explicit region and its culture (Doole, & Lowe, 2008). Taking into account the upshot of cultural diversities on a business’s entry strategies to novel markets, these diversities ought to be critical for the business’s marketing approach within foreign markets. This is predominantly vital when taking into consideration the buying behaviors of consumers that vary across cultures (Doole, & Lowe, 2008; Usunier, 2000). Mainland China’s value system For a company like Australian Biscuit Company, which endeavors at venturing into Mainland China, there is a requisite to make sense of the luxury industry within the country. Recently, China has become second in providing the globe’s leading market for luxury products. Further approximates suppose that China will emerge the principal upscale consumer products market within the globe. In reviewing how China has emerged the upbeat socialist economy, it is vital to elucidate the country’s numerous social, psychological, economic, and cultural histories. The record of China’s luxurious consumption is one of the oldest. It is profoundly ingrained into China’s sociological and cultural landscape and has consequently influences auxiliary Asian nations, such as Malaysia, Singapore, Thailand, Vietnam, Japan, and Korea. On the contrary, during the Cultural Revolution in the country, China lost her tradition and cultural heritage, which was viewed pessimistically as divisive, worthless, and boring. Cultural Revolution did create a cultural emptiness, generating the lost generation. However, currently, a variety of the associates of the lost generation have acquired novel wealth. They do partake in procuring luxury products, and frequently lack subtleness. Nevertheless, the fundamental theme is Mainland China’s aspiration to mimic the Western culture power emblems. Presently, Mainland China’s value system comprises of three outstanding segments namely the conventional Chinese, the Western, and the Socialist Chinese value systems. A greater part of Mainland Chinese seeks to follow the values represented by the West, which pursues modern values, advanced technology, and super powers. As Power and Mont (2010) alleges, purchasing behaviors and decisions are influenced by numerous factors, including government regulations, economic influences, marketing strategies, and technological innovations. Accordingly, the quest of the Western values is having an entrenched influence on the consumer value structure of the Chinese. The modernized value system of Socialist Chinese, which resulted from Deng’s reform as well as opening policy, conveys wealth, success, achievement, and modernity, as the Western values convey post-modernism, modernity, success, achievement, and person al liberty. Mutually, the 21st Century value system of China is an absolute melting point, comprising of dominant values of success, wealth, and modernity. In this context, the pursuit of these values remains core in exploring the magnificent consumer behavior within Mainland China. Attitudes, values, and behaviors of consumers within Mainland China China is renowned for evolving from the agrarian economy to the contemporary society typified by international influences and technological advances. Chinese consumers are developing new tastes, thus demanding more global foodstuff. Consumers within China are both discerning and savvy, however, they are susceptible to exhibit behaviors and preferences ingrained within China’s past cultural traditions. The values, attitudes, and behaviors are shaped by the consumers’ health and lifestyle (McGuiness, & Little, 1981). Chinese consumers have become more affluent, thus influencing both diet and lifestyle in China. The rapidly increasing extent of affluence endows consumers with the desire as well as means to purchase a broader variety of foodstuff and consumer goods. This is contrary to the past when the government controlled the supply and availability of foodstuff. The broadening of consumer culture in china is highly fostered by the manifestation of strong consumer interests as part of the urban culture and secular outlook that was there prior to commencement of the 19th Century (Stearns, 2006). The appeal of modernity, which promises release from conventional constraints and hierarchies, has fostered the significant development of consumer culture. A vast majority of the populace in China has moved from poverty owing to china’s adoption of economic reforms. Accordingly, the attributes of consumer culture has modified, resulting in novel consumption practices within China (Davila, 2001). The novel diversities and disjunctures for the Chinese populace, predominantly women, enable them to express individual tastes, values, and ideals (Erbaugh, 2000). Chinese embrace various cultural practices in their businesses. In greeting a crowd, round of applause is common in China. Chinese expect the same in return. In the context of introductions, they must be formal. Formal titles are usually used. However, Chinese can opt to use nicknames to aid the Westerners. Prior to doing any business in china, appointments are compulsory. Being late for the appointments or any business meeting is a breach of the Chinese culture. Formal contacts must be made prior to making any business trip to the country. Besides, the Western business affiliates are supposed to bring along various copies of written business documents during the meetings. Social institutions In China, the food service encompasses of restaurants, hotels, hospitals, and airlines. Owing to expansion of tourism, demand for quality foodstuff is anticipated to rise at high-end restaurants and five-star hotels. Furthermore, there is a growing emergence of non-Chinese bistros, including casual dining bistros, fast food, Japanese food, and snack outlets. The principal driving forces for Chinese food trends in the hospital and airline institutions encompass health consciousness, busy lifestyles, shifting demographics, and food safety. Some of the considerable upcoming foodstuff consumption trends within these institutions are functional food, organic food, convenience food, and snack food. Hence, opportunities for food exports are envisaged to merge around nutritional, healthy, safe, and convenient food. In this context, China is presently experiencing an increase in convenience foods consumption, predominantly convenience foods portraying Western style (Veeck, & Veeck, 2000). These foods include pre-packaged foodstuff for home consumption. Accordingly, there is immense potential for foodstuff packaged in smaller portions, predominantly those endowing consumers with satisfaction. Indeed, the rapid rise in growth of supermarkets and convenience stores in China is highly attributable to airline and hospital consumers’ aspiration for convenience as well as the escalating preference to quality as opposed to quantity. Department stores, convenience stores, specialty stores, traditional markets, and supermarket chains portray the leading foodstuff retail channels within China. In spite of the challenges emerging from the major supermarkets bargaining power, specialty stores and supermarket chains offer the most effective distribution channel for the imported foodstuffs. Language Chinese is an integration of closely allied but mutually incoherent languages. The languages are Chinese dialects, familiar, regional languages, and Chinese varieties. However, all varieties are known to belong to the Sino-Tibetan, which is an integration of languages, each with distinct. Sub-dialects and dialects In China, language plays a key role in business (Erbaugh, 2000). Even though English portrays the global business language, Mandarin is the official language in China. Hence, speaking the language can grant business affiliates a great advantage of doing business within China. Learning Mandarin endows an individual with the knowledge, personal connections, and flexibility that can create a difference in the effectiveness and speed of any business negotiations. To do business in China, one has to learn and familiarize with this Chinese business language. The Chinese business associates tend to love their business partners who are eager to familiarize with the Chinese language. Moreover, on top of the business language, business affiliates in China ought to familiarize with the Chinese culture that accompanies the language. Nodding and bowing is considered the general greeting. However, a handshake may prove vital. In this context, the Chinese business affiliates have the privilege of offering their hand first. Conclusion The flourishing Chinese foodstuff sector portrays that globalizing is responsible for the swift spread of cultural diversities. The launch of the Chinese society enhanced the cultivation of a populace that is curious about external values, cultures, and ideas. However, the savor for overseas lifestyle cannot be confused for cultural submission. As the consumers in China learn to be modern, globalization has nurtured a group of outward-exploring entrepreneurs. These entrepreneurs do extract constituents of Chinese culture and amalgamate them with the contemporary business management with the aim of remaining competitive within the global economy. References Davila, A. (2001). The Marketing and making of a people. Berkeley: University of California Press. Doole, L., Lowe, R. (2008). International Marketing Strategy (5th edition). London: South-Western Cengage Learning. Erbaugh, M. S. (2000). Greeting cards in china: mixed language of connections and affections. Berkeley: University of California Press. Herrmann, A., & Heitmann, M. (2006). Providing more or providing less? Accounting for cultural differences in cons. International Marketing Review, 23 (1), 7-25. Keegan, W. (1989). Global Marketing Management. Sussex: Prentice Hall International Edition. Keillor, B.D. (2013). Understanding the global market: navigating the international business environment. California: ABC-CLIO. Kimweli P. (1991). Exporting of Horticultural Produce in Kenya. In S Carter, ed. Marketing Management in the Horticultural Industry. Network and Centre for Agricultural Marketing in Eastern and Southern Africa, FAO, 2, 131 -151. Kwelepeta, S. (1991). Legal Aspects of Foreign Trade. In S. Carter (ed.). Export Procedures. Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa, 2, 78 - 85. McGuiness, N., & Little, B. (1981). The influence of product characteristics on the export performance of new industrial products. Journal of Marketing, 5, 110-122. Power, K., & Mont, O. (2010). The role of formal and informal forces in shaping consumption and implications for sustainable society: part II. Sustainability, 2, 2573-2592. Stearns, P. (2006). Consumerism in world history: the global transformation of consumer desire. New York: Routledge. Subramanian, A., & Bala, S. (2001). Culture Based Product Classification in Global Marketing for Competitive Advantage. Global Competitiveness, 9(1), 419-428. Usunier, J.C. (2000). Marketing across cultures. Sussex: Prentice Hall. Veeck, A., & Veeck, G. (2000). Consumer segmentation and changing food purchase patterns in Nanjing, PRC. World Development, 28(3), 457-471. Zou, S. & Fu, H. (2011). International Marketing: Emerging Markets. 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