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
No comments:
Post a Comment