Strategy Planning of Telmarket - Report Example

Telmarket Table of Contents Telmarket Table of Contents 2 Introduction 3 The Destination and the Rationale Behind it 3 Impact of Cultural Environment on the Marketing Strategies: Historical Evidences 4 Analysis of Chinese Culture: Strategy Planning of Telmarket 6 Conclusion 9 Reference 10 Bibliography 13 Introduction This report looks into the impact of cultural differences on the strategic marketing planning of Telmarket. The company is a marketing planning and consultancy firm having its base in London. Over the last 6 years, with its successful operation the firm has been able to build up an extensive client base in United Kingdom. The main offering of Telmarket is in the arena of strategic marketing planning and customer care. However, it has been noticed that the companies are looking forward to expanding their businesses in other countries. Telmarket also wants to evaluate its opportunities in other countries and is looking towards it as a fine growth opportunity. A logical approach has been taken in this report to infer the conclusion from the analysis. It is expected that the report would be able to display the possible implications of the cultural differences on the strategic planning of Telmarket. The Destination and the Rationale Behind it The suggested destination country for business expansion is China. In the global arena, China is one of the emerging markets which contribute considerably in the global marketing growth for several decades to come (Welsh, “Special Considerations in Emerging Markets”). Since the year 1978, the country, with a GDP averaging around 9.5 %, has emerged as one of the fastest growing economy across the globe (Fengpu, “Why International Companies Locate Business in Shanghai”). China has a national wide public education system including primary schools, middle schools and universities. Minimum nine years of education is compulsory for all the Chinese students. Around 93 % of total population are educated (U.S. Department of State, “People”). Majority of the Chinese people are educated. Around 43 % of the total population live in the urban area (CIA, “People: China”). Chinese people mostly move in public transportation as the percentage of car owners is quite low in the country. There is an increasing demand of each product and service as the country is being viewed as significant growth market where there is an evolving pattern of Government directed economic reforms, lowering of restrictions on foreign investment and growing privatisation of state-owned monopolies (Doole & Lowe, “The Emerging Countries”). Shaghai has been experiencing a rapid growth attracting a large amount of foreign investment with a considerable amount of capital growth. Undoubtedly, the country will emerge as a significant business hub in the world. Looking at the business prospective of this country, it has been decided that Telmarket would extend its business in China. Moreover, China can emerge as the gateway to enter into the huge Asian market which includes emerging economies like China and India. Impact of Cultural Environment on the Marketing Strategies: Historical Evidences Difference in cultural and lingual environment can have significant impact on strategic marketing planning. Social and cultural influences on international marketing are enormous. “Differences in social conditions, religion and material culture all affect consumers’ perceptions and patterns of buying behaviour. It is this area that determines the extent to which consumers across the globe are either similar or different and so determines the potential for global branding and standardisation” (Doole & Lowe, “Social/ Cultural Environment”). As a consequence, socio cultural values have emerged as a major aspect of any firm’s environment. National culture has been a significant concept in the arena of international business literature. Culture in any nation is defined as a set of rooted values, which are quite common to the population in a nation and contribute to the shared norms, priorities and enriched values, a set of expected behaviours in the society (Ilheu, “The Importance of Cultural Environment in International Business Strategy”). There are a number of evidences to prove that it is very much significant to put the strategies straight in line with the cultural environment of the destination country. Branding has been always a challenge for the western firms. When Coca-Cola first entered the Chinese market in the year 1928, the company had to face intensified issues in there regarding its brand name (Alon, Littrell & Chan, “The China Branding Challenge”). In China Coca Cola is pronounced as ‘Kooke Koula’, the meaning of which is ‘A thirsty mouthful of candle wax’. Later on, the company ended up a new pronunciation ‘Kee Kou Keele’; this means ‘joyful tastes and happiness’ (Doole & Lowe, “Cultural Factors”). This has been an example of successful branding in other country. A failure to understand the social and cultural value may result in trembled situation for the company. When McDonald extended its base to India, it had to deal with a country where 40 % of the population are vegetarian. The company had to experience an aversion to beef and pork and hostility to the frozen fish and meat, even among the non-vegetarians. Moreover, Indians demand an increasing amount of spices in food. As a result, McDonald had to discover burgers with the required taste (Mujtaba & Patel, “Global Growth and Success Strategies”). Even the customers, purchasing the vegetarian burgers, want to ensure that these were cooked at a separate area using separate utensils and required spices. So, McDonald had to introduce innovations and modify its strategies to meet the requirements of the Indian population. McMasala and McImli were introduced to satisfy the Indian taste for spice. These examples are put forward to establish the fact that how cultural differences can put an impact on the strategy management of any company. The strategies must be framed in alignment with the cultural environment of the foreign country to fetch success for the company. Analysis of Chinese Culture: Strategy Planning of Telmarket “To do effective business in China you must be willing to adjust to Chinese style commerce, rather than waiting for the Chinese to suddenly adopt western practices just because we think they should” (Engholm, p.32) . Chinese language is quite different from that of English. In history, there are a number of incidences where the companies had to face a number of issues regarding pronunciation of brand names in local language. So, brand name can be a problem in the Chinese market. Telmarket must consider this fact with importance to avoid any such undesirable incidence. Faulty language translations and errors in message development made by the multinational companies can be looked upon as insensitivity to the cultural values and beliefs (Ricks, Arpan & Fu, p.47; Ricks, p.20-21; Valenica, p.19-25). Chinese values are driven by tradition, rather than by religion. The Chinese do not have any official religion. The Chinese people are mostly led by Taoism, Islamism, Buddhism, Catholicism and Protestantism. These religions influence the personal behaviour of Chinese people. Chinese people are mostly concerned with the means or process itself rather than the ultimate goal. The cultural model of China displays value orientation where modesty and self effacement are of highest priority (Graham & Lam, p.84-86). Chinese have always been respectful for the traditional heroes and warriors. In the year 2004, a Nike television commercial was banned as it showed US basketball star LeBron James in a battle with animated cartoon Kung Fu masters and two dragons. China banned that advertisement as that insults the national dignity of the country. Family structures in China and other Asian countries are very much different from that of UK. Family considerations get priority in the decision making in most of the aspects. Older people command respect and have a considerable amount of influence which made them the logical target audience. Another significant factor, which has been important while dealing with China, is the avoidance of ‘loss of face’. Social reputation and individual respect have been the foundation of the business culture of Chinese people. The embarrassing message or messages putting social issues on unease are not welcomed in this business environment. In UK certain casual message can be provided through the advertisements; however, in China that may result into undesirable consequences. Telmarket must ensure that its services and advertisements must not display or communicate offensive, unlawful and distasteful message to the local people. China has different years named by different animals. The year 2007 was considered to be the year of pig. In China, in that year, all promotional activities, which include the pictures of pigs, were banned. This was done to keep harmony with the Muslim population of the country. Few of the banned advertisements include pictures of sausage containing pork and an animated carton of pigs (Marketing Teacher, “Religion”). In most of the cases, Chinese people do not enforce them. They are quite shy in nature and they do not want to show off by high profile exposure. “Living always under autarchic systems they know by ancestrally experience that the best way to avoid problems is that nobody notice them” (Ilheu, “Consequences of Chinese Cultural Characteristics in Business Strategy in China”). Chinese people try to get things through negotiation. As a result, they have developed notable negotiation skills. There has been a common notion that Chinese are always ready for any kind of negotiation; they deal this with ability, patience and slyness. All these have made the long negotiations as a significant part of daily business arrangements. This has resulted in an impression that the Chinese people do not bother about time and efforts given. Another significant fact about them is that they prefer to resolve disputes and disagreements using personal contacts and negotiations, rather than using judiciary systems (Ho, p.80). Chinese are very much prone to use soft relationship tactics, such as socializing, personal appeals, offering gifts, informal engagement and exchanging. However, that means they do not reject assertive strategies as coalition and upward appeal. The Chinese people encourage the sympathy of foreigners’ negotiations for their own benefits and at the same time, they manipulate the personal and professional relationships. Chinese people are very much suspicious about the foreigners; this has been a result of the country’s long and brutal history. The pride and tradition of China play a significant role in today’s business environment. The way westerners do their business is of little concern for a major chunk of the Chinese people. In most of cases Chinese customers are more prone to respond to the reference group leaders such as family elders, enterprise leaders and political leaders rather than the advertisements. Online marketing has also been a big influence in Chinese business (Chow, Product marketing strategy in China: Case study). A research study have found that “China has little experience with brand building and brand identity while the mostly manufacturing based economy has given rise to firms whose main interest is in channel management and supply chain effectiveness. Cost reduction has been a significant key to most organizations in China (Morgan, Lawley & Spinks, “Results and Discussion”). This is the basis of both the local competitive advantage and their profile in the international market. All these information must be considered with importance while entering into the Chinese market. Promotional activities including leaders and enriched with traditional morale are supposed to gain more popularity in the market. It is better to take Chinese people on board as they are less adaptive to the foreign cultures. Telmarket is required to provide quality service at a competitive price to establish itself into the market (Neves, “Strategic Pricing Movements”). Moreover, the company must respect the Chinese values and tradition to enjoy a loyal customer base. Even, the offering of Telmarket is supposed to change according to the cultural dimension of China. The strategy must be in line with soft relationships and strong negotiations. Establishing trust can be a significant stepping stone to operate successfully in the Chinese market. Moreover, marketing managers are expected to adapt network building and utilisations strategies to the local business environments, which considerably vary across the regions in China (Sheng, Zhou & Li, “Managerial Implications”). Conclusion With a large number of population and growing economy China has become one of the attractive business destinations for the global companies. However, cultural differences can be constraint for the foreign companies to effectively operate in the country. Chinese are quite distrustful for the foreign companies and prefer to keep distance from the same. Although, they welcome the foreign companies; but at the same time they try to keep their interests high with proper negotiation and required relationship skills. In most of the cases, tradition and individual values have emerged as significant factors in Chinese business environment. Reference Alon, I., Littrell, F. R. & Chan, A. No Date. Branding in China: Global Product strategy Alternatives. December 14, 2010. . Chow, S. June 10, 2010. Product marketing strategy in China: Case study. December 14, 2010. . CIA. 2010. China. December 14, 2010. < https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html>. Doole, I. & Lowe, R. International Marketing Strategy. UK: South Western Cengage Learning, 2008. Engholm, C. Doing Business in Asia’s Booming: China Triangle. New Jersey: Prentice Hall, Inc, 1994. Fengpu. 2007. China Industrial Park Zone. December 14, 2010. < http://industrial-zone.fengpu.com/industrial-park-zone/how-invest-park/invest-shanghai.html>. Graham, L. & Lam, N. The Chinese Negotiation. Harvard Business School, 2003. Ho, Suk-Ching. “Executive Insights: Growing Consumer power in China”. 2001 Some Lessons for Managers, Journal of International Marketing. December 14, 2010. Ilheu, M. No Date. Chinese Cultural Characteristics and Effective Business in China. December 14, 2010. < http://www.iseg.utl.pt/cege/publicacoes/chinalogus/Ilheu2009a.pdf>. Marketing Teacher. 2010. International Marketing and Culture. December 14, 2010. . Morgan, J. M., Lawley, M. & Spinks, W. No Date. E-marketing strategy: An exploratory investigation into Chinese business use of the Internet. December 14, 2010. < http://eprints.usq.edu.au/3303/1/Johnson_Morgan_Lawley_Spinks.pdf>. Mujtaba, G. B. & Patel, B. 2007. Mcdonald’s Success Strategy And Global Expansion Through Customer And Brand Loyalty. December 14, 2010. < http://www.cluteinstitute-onlinejournals.com/PDFs/115.pdf>. Neves, F. M. 2010. What is creative pricing strategy. December 14, 2010. < http://www.chinadaily.com.cn/thinktank/2010-08/27/content_11213594.htm>. Ricks, D. A. Blunders in International Business. Cambridge, MA: Blackwell Business, 1993. Ricks, D. A., Arpan, J. S., & Fu, M. Y. 1974. “Pitfalls in advertising overseas”. Journal of Advertising Research,14(6). Sheng, S., Zhou, K. & Li, J. 2010. The Effects of Business and Political Ties on Firm Performance: Evidence from China. December 14, 2010. < http://www.marketingpower.com/AboutAMA/Documents/JM_Forthcoming/effects_of_business_and_political_ties.pdf>. U.S. Department of State. 2010. Background Note: China. December 14, 2010. < http://www.state.gov/r/pa/ei/bgn/18902.htm>. Valenica, H. 1989. “Hispanics and Blacks in televisions commercials”. Journal of Advertising 18(1). Welsh, A. R. 2005. How Cultural Differences Affect Your Global Marketing Message. December 14, 2010. < http://www.rawpowerwriting.com/article.asp?id=9>. Bibliography Anwar, Syrid, T. “Overseas Chinese Buisness Networks in Asia”. 1996. Journal of International Business Studies. Bradley, F. International Marketing Strategy. London: Prentice Hall, 1991. Bradley, F. International Marketing Strategy 4th . FT Prentice Hall, 2002. Chan, A.K.K., & Huang, Y.Y. 2001. “ brand naming: A linguistic analysis of the names of ten product categories”. Journal of Product and Brand Management, 10(2). China Internet Network Information Center. January, 2006. 17th Statistical Survey Report on the Internet Development in China. December 14, 2010. . De Mooij, M. K. Global marketing and advertising: Understanding cultural Paradoxes. Thousand Oaks, CA: Sage Publications, 1998. Dicken, P. Global shift-mapping the changing contours of the world economy. Sage, 2007. El-Kahal, S. Introduction to international business. Mc-Graw Hill, 2006. Fukuyama, F. Trust. New York: Free Press, 1995. Francis, J. N. P., Lam, J. P. Y., &,Walls, J. 2002. “Executive insight: The impact of linguistic differences on international brand name standardization: A comparison of English and Chinese brand names of Fortune-500 companies”. Journal of International Marketing, 10(1). Guo, L. 2005. Surveying Internet Usage and Impact in Five Chinese Cities. Research Center for Social Development. December 14, 2010. . Hall, E. T. Beyond Culture. Garden City. NY: Doubleday, 1976. Hamel, G. & Prahalad, C. K. Competing for the future. Harvard Business School Press, 1996. Hosferd, G. Cultures, Organizations: Software of the Mind. London: McGraw Hill, 1991. Kao, J. The Worlwide Web of Chinese Business. Harvard Busines Review, 1993. Klink, R. R. 2000. “Creating Brand Names with Meaning: The Use of Sound Symbolism”. Marketing Letters, 11 (1). Lee, R. Globalization, Language, and Culture. Philadelphia: Chelsea House Publishers, 2006. Li, F., & Shooshtari, N. H. 2003. “Brand naming in China: Sociolinguistic implications”. The Multinational Business Review, 11(3). Li, F., & Shooshtari, N. H. 2007. “Multinational Corporations’ Controversial Ad Campaigns in China”. December 14, 2010. Advertising & Society Review. December 14, 2010. . Moore, R .2005. Generation KU: individualism and China’s millennial youth, Ethnology. December 14, 2010. . Naisbit, J. Megatrends Asia: The Eight Asian Megatrends That Are Changing the World. London: Nicholars Brealey Publishing Limited, 2001. Quelch, J. & Deshpande, R. The global market: developing a strategy to manage across borders. Wiley and Sons, 2004. Redding, G. The Spirit of Chinese Capitalism. New York: Walter de Gruyter, 1990. Rugimbana, R. and Nwankwo, S. Cross cultural marketing. Thomson Learning, 2003. Sarathy, R., Terpstra, V. and Russow, L.C. International marketing. Dryden Press, 2006. Seagrave, S. Lords of the Rim: The Invisible Empire of the Overseas Chinese. London: Bantam Press, 1995. Wilson, R. and Gilligan, C. Strategic marketing management: planning implementation and control. Butterworth-Heinemann, 2003. Yau, O. Consumer Behavior in China, Customer Satisfaction and Cultural Values. Routledge, 1994. Read More