Cross Culture Marketing: First Computers Inc - Essay Example

Introduction In this 21st century, globalization has become inevitable in the business world, and so as cross-culturalization market. The world is increasingly becoming homogeneous; distinctions among national markets are gradually fading away. Thus, marketing has now become world encompassing aspect. Hofstede (1991) defines cross-cultural marketing as strategic practice of marketing between consumers who have a different culture that differ with that of the marketer, at least by one of major cultural issues, for example religion, language, education, living style and social values and norms. Cross- cultural marketing calls for markets to be conscious and sensitive to the differences in culture, and to respect the consumers' cultural rights in different cultures and in the marketing places. Marketers have to realize that consumer's deserve the right to their culture. Hofstede (2001) carried out studies in more than 100 countries and concluded that there are five basic value elements which are; individualism, uncertainty avoidance, masculinity/femininity, power distance and long term verses short term orientation that affects consumer's behavior. Thus, for the marketer to be conquerors in the cross-cultural marketing they have to create marketing mix which meets consumer's cultural values and norms. (Hofstede, 1991) This paper will deal with First Computers Inc. as a computer hardware and software company. The company manufactures, supports, develops and sells a wide variety of products and services including; PCs, data storage devices, network switches, software, computer peripherals etc. The paper will investigate the current business strategies used by the company to conquer cross- cultural business in two countries which are China and Germany examine cultural aspects in this two countries and analyze the ways the company is using to be succeed in its business. The rationale for such a launch Due to modernization and advancement in technology, most businesses are beginning to explore international markets for better profits and opportunities. Cullen & Boteeah (2005) notes that, in the recent past trading has become increasingly global in some way because of the need to gather and increase the company's financial bases. Advancement in technology including communication efficiency and better international relations has contributed to the promotion of the international trade. Competition has however become a great challenge to the success of international trade but most companies are rising to the challenge, to achieve greater investments and better market opportunities in the international market. Other rationale reasons for venturing in global market for the company are; The computer hardware manufacturing industry has become one of the industries that have grown tremendously over a very short period of time. Thus it is possible to have the products from this company sell quite easily in oversees market. As Cullen & Boteeah (2005) observers computers have become a major attraction for an improved social life and also in the communication and technology arena. Computers have also become one of the most sorts after kinds of machines among the world population and any other sector in the world today. Coupled with the fact that the Chinese and Germany population are one of the largest and most sophisticated in the world, it is possible to achieve a very huge market share for this company compared to other countries with somewhat lower population. A description of the product/service; This company offers a wide variety of products including the manufacture, assembly, and maintenance of computers and other computer devices. The company has risen from being a retailer of used computers to become one of the improved companies in the sector. The company has been for the past two years getting recognition and that it believes it has met the needs for the domestic market and now it needs to explore the international market to China and Germany. The distinctive cultural difference(s) of the China and Germany China; Socio-cultural forces Cross -cultural issue is a challenge for many international marketers because it is inherently nebulous and normally difficult to understand. It is possible that employees of a company can violate the cultural norms of the Chinese people without knowing hence the people in China becomes uncomfortable with the behavior. In china for example, there are many festivities that are strictly observed in addition to other religious believes such as the Xian Hum day. Chinese culture is the most elaborate and diverse in terms of religion, food, clothing and lifestyle. The company must therefore be able to adjust skillfully to the culture here depending on the marketing strategies to be applied by the company. (Lee and Carter, 2005) Hall(1969): formulated the theory of proxemics (personal space) he tries to describe the dimensions which surrounds individual and the distance the individuals tries to maintain from other people in accordance to their cultural values. In other works of Hall on culture he observes that individuals evolve through interacting with other aspects such as different cultures and technology, these aspects are termed as extension transference. Hall (1969 Attitudes and beliefs China is among one of the countries with unique culture and beliefs. The country is well known for its diverse but strict cultural understanding for food, religion, family beliefs, lifestyles etc. All these factors must be inherently taken care of by a detailed preliminary research on the specific cultures that must be incorporated. According to Schwartz (1987) individual's values can make the individual act in selflessly, in a situation where such behavior conflicts with the individual's interest. Schwartz (1987) also has done a lot of research on development and the consequences of different behaviors and orientation including political orientation religious beliefs social relations behavior of consumers and also conception of human values across different culture, and developed a concept of "universal content and structure of human values." Thus it will be a nice idea would be to employ as many of the locals as possible to be able to quickly the Chinese culture adequately. (Schwartz, 1987) Languages The main language of the Chinese people is the Mandarin language. Mandarin is the overall language adopted nationally among the Chinese population. However, there are also other foreign languages that have been adopted such as English, Japanese and French. All these languages are international and it is possible for any company to find way in which it can communicate with the local people. (Alden, D. L. et al. 1993) Education The literacy levels according to the latest government estimates are estimated ton 89 % fro adults which is a good indication of how the Chinese market can be able to understand, critic and accept the products from the company. The computer hardware manufacturing sector requires that the consumers be adequately trained and educated in order to have them appreciate the products well. With an average of 89 % and 0.626 development index, the company is able to obtain proper and well trained personnel to enable it meet its targets ion the country. (Lee and Carter, 2005) Country analysis- Germany Germany is one of the most powerful countries in Europe boasting of a strong society, politics, traditions and economy. It has played a significant role in what Europe and the world at large is, today. Right from the inception of European integration, it has been a major contributor to the growth of the European Union and it is regarded as the pillar of the continent and the union at large. Germany is actively involved in almost every aspect of the EU, the most outstanding ones are; provision of political leadership, military relations, economies, diplomacy and policy making. Although Germany does not take explicit leadership in the European Union, it takes a centre stage as a 'gentle giant' in Europe. The most direct linkage in this view between the German economy and the European Union occurs in the context of the latter's monetary budget. (Cullen, & Boteeah, 2005) Good economy, stable exchange rates, flexible import duties, better trade tariffs are factors that promotes international marketing. Europeanization has directly affected the governments of the member states; this means that the developments that Germany has gained so far in culturally and domestically are linked to the European Union's progress. Cultural forces The socio-cultural forces in any country may completely affect the way business is conducted in one country. The social/cultural factors are problematic issues for many international marketers because they are inherently nebulous and normally difficult to understand. (Cullen, & Boteeah, 2005) Culture Culture is a problematic issue for many international marketers because it is inherently nebulous and normally difficult to understand. It is possible that employees of our company can violate the cultural norms of the Germans without knowing hence the people in Germany becomes uncomfortable with the behavior. The German people have also become skeptical about the way cheap labor is imported to the country at the expense of the locals. (Cullen, & Boteeah, 2005) Attitudes and beliefs Kluckholm and Strodtbeck (1961) observers that individuals feelings are founded on very few, steady values that they hold. They propose values orientation theory which argues that all human communities have to answer to a number of global problems. The theory further states that value based solutions have a limitation on global known solutions. However, various cultures have diverse preferences among them. Kluckholm and Strodtbeck (1961) Germany is among one of the countries with unique culture and beliefs. The country is well known for its diverse but strict cultural understanding for food, religion, family beliefs, and lifestyles among others. All these factors must be inherently taken care of by a detailed preliminary research on the specific cultures that must be incorporated. A nice idea would be to employ as many of the locals as possible to be able to quickly integrate the two cultures adequately. (Cullen, & Boteeah, 2005) Languages The main language of the German people is the German language. However, there are also other foreign languages that have been adopted such as English, Japanese and Spanish, French etc. it will be easy to operate in this country as there are a high number of English speaking people. (Cullen, & Boteeah, 2005) The market situation in China Ready market With an increase in the economic growth rate of the Chinese economy, most sectors will require computers to improve on its technology and service provision. The manufacturing sector in Chinese has grown bigger in the last few years demanding more usage of the computer software and hardware. The introduction of internet and other communication services such as the mobile phone sector, has taken the country by storm. With an increase in the need for internet access, comes an increase in the need for computer hardware and software. A study conducted by Coopers limited (UK) in China has shown a rise in the need for internet among the Chinese urban population especially the youth. (Cullen & Boteeah, 2005) Size of market The Chinese market is one of the largest in the world today. The main factors that contribute to the high ready market provided by the developing economy and the high population Due to this fact, more and more companies engaged in the computer hard ware manufacture are heading for the country and the larger Middle East region at large. This will be the main challenge for our company and depending with the marketing strategies and approaches, it is possible to get some of its market share. Most of the schools, institutions, organizations and private companies are able to purchase the computers. (Cullen & Boteeah, 2005) Market entry strategies for the Chinese market The following strategies have been developed in the past to enable companies intending to enter international markets. Product adoption strategy- making modifications to existing product Total adaptation and conformity strategy- usually a foreign producer gives a straight copy to his/her customers Low price strategy- a penetration price is necessary to allow more products to sell at first but when it catches up, other pricing strategies are adopted Availability and security strategy- countering perceived risks by overcoming transport risks Technical strategy- demonstration of superior products (Kotler, 1996) Joint ventures The joint ventures are forms of market entry that allows for technology sharing and joint product development. The main advantage of joint ventures is to get proper political connections that will allow for favors to be achieved. It is usually suitable when; the market power, resources and size of the partner is small compared to the industry leaders. Our company can merge or have a joint venture with the other company which is still it will be able to meet the demands in that particular region. The main issues that will be sorted out during the discussions for joint venture are; agreement periods, pricing methods, ownership and control, local firm capabilities and technology transfer. This method will work very well wit with the Chinese consumers because they like dealing with the local companies directly as opposed to foreign companies. The market situation in Germany Ready Germany Germany currently is among countries which are highly developed and which are using technology extensively, with high population in Germany the market for computers remains high. The need for computers in Germany is predicted to increase as more people and organizations continue to improve and upgrade their systems. Competition in the industry The computer industry market is termed to be broad as there are many consumers of computer products in Germany. The market is said to be that of perfect competition because all participants are allowed to sell their products to a wide range of customers as they wish. Our company and our partner will utilize our wide financial base and explores new technology that is suitable to the local community to have a competitive advantage over our competitors. Indirect exporting Under indirect exporting an exporter can access foreign market free from risks of doing it directly. It involves the use of independent organizations within the exporter's domestic markets. (Usunier, 1996) It can be done through various ways, for example, a domestic based export merchants, who take the title of the goods and sells them in those countries abroad, domestic based export agents who sell and market the goods on behalf of the exporter and co-operative organizations who act on behalf of the producers. This approach might be cumbersome to undertake because the cost of getting links with agents thus taking long time to establish a market. (Usunier, 1996) Strategic alliance Strategic alliance method of entry can also be employed under relationship based partnership in going international which involves formal partnership between two or more parties to undertake a common business with the view of attaining same objective but the parties involved always remains independent to each other. Business resources to be shared may include common distribution, channel, knowledge, products or expertise. This method has the following advantages; there are low research and development costs, getting access to partner's capital, new markets for the products of the company and quick time in marketing the products, there is sharing of distribution channels and tapping the other partners advanced technology and intellectual property among others. An example here is the organization reaching an agreement with any producers of computer devices to market and distribute our products on our behalf. (Usunier, 1996) After careful considerations of the cultural aspects of the Germany people, I recommend that the company uses the strategic alliance and indirect marketing methods since they are cost effective and will involve the company employing fewer financial resources in entering the market. The method also is very cultural sensitive as it employees mostly employed are those from the country who understand the culture of that country and the customers'. Conclusion Culture plays an important role in modern business, globalization has made international trade to increase and so has cross-cultural aspects have become more significant. For any business company to succeed in a foreign country it must understand the most fundamental cultural aspects of the local community, these aspects are language, religion, education, social beliefs among others. different marketing entry strategies can be undertaken by a company when entering new markets, but it is important that this marketing be responsive to cultural aspects o those people for the company to succeed. However, differences that exist among regions, nations and ethnic communities in pertaining cultural aspects remain obvious. Mooij (1998) observes that the claim for "a right to culture" put forward by nations in the recent past is an important aspect for marketing policy making. Such a proposal will affect the public policies in these states and also affect international trading rules. As marketers it is important to comprehend that as globalization increases, cultural challenges become imperative. Marketers have to be aware of how cross-cultural aspects to be successful in this 21st century business world. Reference: Alden, D. L. et al. (1993): Identifying Global and Culture-Specific Dimensions in Humor in Advertising: A Multinational Analysis; Journal of Marketing 57(2): 64-75. Belk, R. W. and R. W. Pollay (1985): Materialism and Status Appeals in Japanese and U.S. Print Advertising: A Historical and Cross-Cultural Content Analysis." International Marketing Review 2(12): Cullen, J.B & Boteeah, K. (2005): Multinational Management: A strategic Approach, third ed., Mason; Thomson South-Western Hall T.E (1976): The hidden dimensions; Doubleday, New York Hofstede, G. H. (1991): Cultures and organizations: software of the mind; London; New York, McGraw-Hill. Hofstede, G. (2001): Culture's Consequences: Comparing values, behaviors, institutions and organizations across nations Beverly Hills, Calif.: Sage. Kluckhohn, F.R. & Strodtbeck, F.L. (1961): Variations in Value Orientations. Evanston, Ill.: Row, Peterson Lee, K and Carter, S., (2005), Global Marketing: Changes, New Challenges and Strategies. 1st Edition, Oxford, Levitt, T. (1983): The Globalization of Markets. Harvard Business Review 61(May/June) Mooij, M. K. d. (1998): Global marketing and advertising: understanding cultural paradoxes. Thousand Oaks, Calif., Sage Publications. Trompenaars, F. and C. Hampden-Turner (1997): Riding the waves of culture: understanding cultural diversity in business. London, Nicholas Brearley. Usunier, J.-C. (1996): Marketing across cultures, London; New York, Prentice Hall. Schwartz, S. H. and Bilsky, W. (1987): Toward a universal psychological structure of human values', Journal of Personality and Social Psychology, 53, pp. 550-562. Read More