Wednesday, October 9, 2019

Australian Biscuit Company (ABC): China export planning report


The culture distance between Australia and China is high with the language and values being significantly different. For instance, the language of use is predominantly Chinese as opposed to English which is the main language used in Australia.

The values and attitudes towards consumption where the Chinese culture largely emphasises thriftiness as opposed to the Australian culture which conforms largely to the Western model of materialism. These differences justify a customisation approach to be applied in exporting ABC biscuits to China. The market characteristics and explanations for the recommendations are as in the sections below.

Conforming to market preferences and characteristics is one of the keys to success in international business (White, 2013). An organisation seeking to expand internationally must engage in market research in order to understand how consumer preferences differ and the extent to which such differences are likely to impact their products. Where such differences are significant, organisations are encouraged to embrace customisation where the marketing mix is conformed to suit prevailing market characteristics (Allison, 2011). Customisation comes at a high cost to the organisation which is forced to implement different strategic and operational strategies in each market. However, it comes with the benefit of uniquely meeting consumer needs; hence facilitating strong financial performance (White, 2013). In the sections below, the socio-cultural characteristics of Chinese consumers have been compared to that of the Australian consumer with a view to establishing whether a customisation strategy would be appropriate.

In Australia, business practitioners are comfortable with the use of a homogenous English language that is applicable and understandable across the country (Dale, 2014). This commonality tends to be lacking in China where seven main dialects of the Chinese language are spoken. Even though most Chinese use the Mandarin which is the official national language; it is important to appreciate that there are strong regional preferences for each of the other dialects (Chinese Language, 2014). Nevertheless, the Han Chinese is the outright majority comprising of about 92% of the entire Chinese population (Chinese Language, 2014). They use Mandarin as their native language; hence removing the need for further language customisation in different parts of China. Few people in China speak in English with the language being a preserve of the elite and those that may have managed to obtain Western education. Even though many Chinese companies seeking internationalisation have been keen on encouraging mastery of the English language by their employees, this trend is yet to result into the language being understood by a significant part of the population (Gold, Guthrie and Wank, 2012). It is therefore imperative that any foreign company entering China be able to customise its marketing communication into the Chinese language.
Effective translation requires mastery of the verbal as well as the non-verbal language. Elements such as intonation, context and choice of medium of delivery are bound to impact how a message is received by the target audience (Buffington, 2011). This makes it imperative for brands to hire locals with a thorough understanding of the local culture to guide their marketing and business operation strategies. Some of the Chinese cultural values relevant to international businesses are highlighted in the sections below.



The Chinese society is strongly hierarchical in nature with the family being the most important social institution in the country (Gold, Guthrie and Wank, 2012). Most institutions at the private and public sector levels are modelled on the family structure in terms of decision making, interactions and inter-dependability. In essence, this culminates into the creation of a society in which interactions and social connectivity are of utmost importance. The society is therefore not strongly influenced by institutions but by the social networks that have been built informally over time. This knowledge is highly relevant to the marketing communication design where word-of-mouth and network-related marketing approaches are expected to bear more fruits than blanket messages targeted at the mass market (Yeoh, 2011).  The emphasis on a collectivist way of thinking and consumption implies the need to target certain groups within the society instead of appealing on the tendency of individual members to want to stand out in the society.


The Chinese consumption culture is characterised by thriftiness (Podoshen and Li, 2011). This is in line with the Confucian philosophy which is the predominant thinking across China. This philosophy emphasises on respect, hierarchy, and modesty in consumption. In other words, conspicuous consumption is frowned upon in the Chinese context. This value has been adopted even by government which has often used legal mechanisms to enforce it by even banning the advertisement of luxury products on television (Yeoh, 2011). The implication in this case is that the pricing of products need to be modest as the consumers have adopted a high level of price-sensitivity in line with the value of thriftiness and the need to save. Brands that are perceived to over-price their products are therefore viewed as exploiters to renegades out to distort the country’s cultural values. The implication for strategic marketing is that brands need to focus on the utility of the products and not on promoting conspicuous consumption (Podoshen and Li, 2011). This also has implications for the pricing of products.

Nevertheless, it is important to acknowledge that the Chinese values have been evolving and rapidly adapting to Western materialistic ideologies. This is especially a common trend among young consumers in urban centres whose dynamics resemble the typical cosmopolitan environments in Western countries (Podoshen and Li, 2011). It is also a growing trend among an increasingly rich carder of Chinese citizens; many of whom hail from business-oriented families or are heirs of vast amounts of wealth. In spite of this development, the shift is gradual and is not sufficient to hold that there exists a consumption culture in China that is similar to that in the Western countries. This forms the rationale for customisation of the marketing mix for ABC biscuits as recommended below.

Organisations expanding internationally have two strategic options to make: standardisation or localisation of their products and the entire marketing mix (Abrahamsson and Isaksson, 2012). While standardisation may help in containing operational costs, it tends to yield poor results if applied in a cultural context that is significantly different from the original context. Standardisation is only practical in markets where there is relative cultural homogeneity. Where differences exist as is the case between Chinese and Australian markets, customisation is advised.

The extent to which customisation is done is dependent on the cultural differences existing. For instance, China speaks the Chinese language (Largely the Mandarin dialect); while Australia uses English. This automatically leads to the need for the company to translate its marketing communication; including product labels, advertising, and other marketing communications. The level of customisation needs to go beyond simple translation into redesign of the marketing message. If translation is limited to the language, there’s the risk of the wrong message being sent or the communication being ineffective (Buffington, 2011). This means that customisation must be overhauled to reflect on the prevailing cultural values. For instance, where ABC may have been able to advertise the biscuits as a reflector of lifestyle and conspicuous consumption in Australia; such a focus would have to be changed to reflect on the utility and rationale for thrifty consumers using the biscuits.

In addition to marketing communication, customisation should also incorporate other elements of the marketing mix including price, place, and product (Allison, 2011). Product modification can include the product sizes or even the packaging used- including the language on product instructions. Product modification can also go as far as aligning the product characteristics to the market preferences where flavours can be altered. This is closely related to the concept of pricing. If the organisation is not in a position to alter the pricing significantly, a packaging approach can be used where fewer items are packed together and priced in accordance with the prices that consumers would be willing to pay (White, 2013). Other elements of customisation can include the distribution approach with emphasis on distribution points that are closest to the target customers.
Nevertheless, customisation needs to be limited to the extent that it must not lead to the loss of brand identity. The underlying themes in marketing messages should be consistent with the brand identity. The same applies to the choice of other marketing mix elements to be implemented in the new market. A minimalist approach to customisation is therefore recommended where the organisation studies the culture and only engages in customisation where it is necessary- without adversely impacting the brand identity of the organisation. 


Abrahamsson, S. and Isaksson, R. (2012). Implementing Lean: Discussing Standardization Versus Customization with Focus on National Cultural Dimensions, Management and Production Engineering Review, 3(4), 4-17
Allison, W. (2011). Barriers to Enterprise Standardization, EDUCAUSE Review, 46(5), 12-18
Buffington, J. (2011). Comparison of mass customization and generative customization in mass markets, Industrial Management & Data Systems, 111(1), 41 - 62
Chinese Language, (2014). The Chinese Language, (Online) Available at: http://www.chinalanguage.com (Accessed 24 October 2014)
Dale, A. (2014). Beyond the North-South Culture Wars: Reconciling Northern Australia's Recent Past With Its Future, Springer Verlag
Gold, T., Guthrie, D. and Wank, D. (2012). Social Connections in China Institutions, Culture, and the Changing Nature of Guanxi, (Online) Available at: http://catdir.loc.gov/catdir/samples/cam031/2001037922.pdf (Accessed 24 October 2014)
Podoshen, J. and Li, L. (2011). Materialism and conspicuous consumption in China: a cross-cultural examination, International journal of consumer studies, 35(1), 17 – 25
White, H. (2013). Thinking customization? Proceed with caution, Behavioral healthcare, 33(5), 36-38
Yeoh, E.K. (2011). Stratification, Social Action and Morphogenesis: Structures and Agents in Contemporary China's Social Transformation, International Journal of China Studies, 2(2), 407-415

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