Social/cultural differences in doing business HARRIET BENNETT

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  • Social/cultural differences in doing business 3.3.4
    • Language
      • effective & accurate communica-tion is vital to avoid misunder-standings
      • Businesses need bilingual people who can advise them on how to avoid the pitfalls that may be a factor in unfamiliar markets
    • Business meetings
      • its important to understand the culture of your potential business colleagues
      • some cultures believe in directness rather than diplomacy but others put diplomacy before directness (JAPAN)
      • some are more emotional whilst others are more reserved
      • some are very literal whilst others are more likely to use coded language
      • Failure to appreciate these differences can lead to poor relationships when one side gets the wrong impression
    • An appropriate marketing mix
      • the marketing mix - 4Ps - may need adapting for different countries
      • its important to get all elements of the marketing mix in place when entering a new market & this is important for overseas markets
    • Pricing strategies for different countries
      • Product
        • adapting food/drink products is necessary to suit countries with different dietary requirements.Mcdon. & other fast food chains are good at adapting their products to local tastes
        • technical or safety regulation may be different
        • products like cars may need to be adapted; in very hot countries air conditioning must be able to operate under much hotter conditions than in cooler areas
        • Clothing manufacturer need to consider sizing; many Asian consumers are a smaller size than their Western counterparts
      • Promotion
        • great care has to be taken when promoting. some promotions will cross boarder but other have a narrow appeal
        • Language has to be accurately translated. (PEPSI slogan)
        • Images have to be suitable as well & not be offensive to religious, social & cultural norms
        • Time & effort are needed to find the most effective promotional messages in a new market
      • Place
        • in emerging economies many potential consumers are isolated & distant from shops & other methods must be found
        • in some countries internet use in much lower & reduces the scope for online retailing
        • Distribution of perishable goods can be a problem in hot countries with poor infrastructure
        • poor infrastructure can mean supply chains are unreliable
        • new markets may have very different methods of distribution. In mexico, most beer is sold through 'mom & pop' affairs that are little more than private houses with a kiosk on the side or a cubby hole  where customers knock for services
      • Joint ventures
        • getting the marketing mix right means learning about local cultures & preferences
        • its essential to recruit skilled people who know the markets that the business wants to break into.
        • Joint ventures are a popular way to know the market, particularly in emerging markets where to foreign firm may be unfamiliar with the language & culture
        • Domestic businesses usually gains from having access to the expertise & knowledge of the foreign firm, combined with its brands & products
        • the foreign firm usually gains from local knowledge of the market & culture along with perhaps established supply chains & outlets
      • price & pricing strategies are important when entering emerging markets, as disposable income levels are lower than in developed markets
      • Mcdon. has several lower priced items on the indian menu along with standard offerings
      • Tata launched a Nano car to hit a distinctive low price point for the indian market
      • it can be misleading to think low prices are key to expanding in emerging markets
        • Consumers think cheap= poor quality
        • there are some very rich people in emerging economies (india, china & brazil) who value buying premium proced luxury goods as it brings status
          • in such cases prices need to be kept high for the product to sell.

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