To What Extent Do You Believe It Is Important That International Marketing Managers Fully Appreciate Cultural Differences Both Between and Within Counties?

...

5

Talent localization, which refers to transnational corporation subsidiary companies abroad intelligently use the local human resources, is critical to gain successful and sustainable advantage in the global market (Chan, Ye & Xu, 2016). There are two representative examples of this strategy and first one is Haier, which built up the Overseas Promotion Department in 1999 and aggressively seeks to export and overseas manufacture in Asia, the U.S. and the Middle East (Deresky, 2016). Even though Haier has achieved the success that integrated a wide range of various products into local organizations and created a dominant management system, it is still confronted with the challenge of international expansion and managing across cultural distances. To solve this problem, Haier searched for and selected experienced local employees to manage its foreign businesses at the beginning as they hold that hiring local people can increase the sales and develop the distribution channels for ensuring the proximity to the local consumers.

The other example is the management of international luxury hotels in China. Although MNCs persist in establishing business relationships with China, most of them failed to achieve what they truly expected due to cultural differences, language barriers, and stereotyping (Yuan, 2010). International hotel brands especially luxury brands, mainly originated from Western countries and promote their business management style to the Chinese market. As a part of service industry where ‘people’ plays a core role, the international hotels

6

always confronted with complicated interpersonal relationship in operation and management. For example, communications between western managers and local employees might be difficult and cultural clashes occur regularly (Yu, 2006). Besides, affected by the Confucian thought and culture, there was a greater power distance in Chinese society, which may cause authoritarian leadership and bureaucratic management in majority of enterprises (Gu, 2009).

To summarize, it is important to be knowledgeable about the local market and cultural as it can better match the local consumers’ needs and enhance the local employees’ confidence and loyalty. Further, the leadership teams should learn local culture and values for better implementing and developing international marketing strategies.

From the product’s perspective, the tradition is one of the most significant factors of culture differences in the aspects of foodstuffs and beverages (Hill 2014). For example, McDonald standardized its hamburgers through most global market but not all of areas. However, some religions and cultures refuse to consume the beef, hence McDonald provides substitutes such as lamb or chicken in its burgers for some specific markets (Cavusgil, Knight & Riesenberger, 2012). Equally, the pork and alcoholic drink are also not forbidden in some areas of China such as Ningxia Hui Autonomous Region and Gansu Province. Thus, the company must adapt their products and

[pic 1]

7

marketing activities to satisfy the local culture needs. According to Griffin & Pustay (2013), one adaptations is changing company name or product labeling on the package into the first language of the host country. For example, Carrefour entered to the Chinese supermarket in 1995 and its name had been translated into Mandarin “家乐福” (Jia le fu) which means “family, happiness and good fortune” to increase its familiarity and attraction to the local consumers (Hudson & Moore-Mangin, 2014). Moreover, in some cases a foreign language might stands for quality. For instance, after the decline of communism, Procter & Gamble added German text to the labels of soap and detergent brands sold in the Czech Republic. Market managers had determined that the packing of products labeled in both English and German were seen by Czechs Browning as being of higher quality than those product merely labeled in English (Browning, 1992). Another example is Pepsi’s Frito-Lay department, which also has altered its snack foods for better catering to local customers, providing, such as, shrimp-flavored chips to Koreans and paprika-flavored chips to Hungarians and Poles (Vranica, 1995).

In addition to these, culture may influence product policy to some extent. For example, foreign carmakers have learned that Japanese customers pursue extremely quality consciousness. For most of Japanese the automobile is more like a status symbol not simply a kind of transportation—the average automobile in Japan is driven only 5 kilometers annually, approximately

[pic 2]

8

one-third the United States average (Reitman & Stern, 1995). Consequently, Japanese consumers care more about what their cars look like instead of the way it drives. Conversely, the majority of German consumers have a strongly environmental awareness. Therefore, companies need to redesign the products they sell in Germany for safe disposal and recycling. In a similar vein, both Adidas and Nike had experimented in this way of combining local culture to make their standard “Americanized” products easier access to foreign markets. For instance, each product has been launched with standard designs in China wound blend with local cultural characteristics, to manifests its unique glamour (Canaves, 2008).

In regarding to the culture difference the last thing an international marketers has to concern about is corporate brand, since a main outcome of culture is its impact on consumption patterns for individuals and organizations. In terms of the potential cultural philosophy, sometimes consumers would follow fixed consumption patterns. Hence, some successful brands have been able to gain brand preferences by customers over competitors and underlying entrants. According to Ormeño (2007), corporate brand was defined as a core corporate asset that basically relies on heritage, corporate identity, stakeholder interactions and a long run strategic plan. Furthermore, it is one of the primary criteria of competitive advantage of a company, which is valuable to enhance the reputation and gain brand leadership (Aaker, 2012). Yet, cultural

9

differences might be a main barrier to build global accepted brands and communicate with international consumers, particularly those who live in developing nations with traditional views. To handle such conflicts, it is important to discover a right way to learn about both inherent similarities and differences of a nation