Chinas Market Cultural Report Paper Example

In this report, I will be analyzing Chinas market Cultural Report. This report will examine what causes the success and failures of companies from the United States of America as they enter Chinese markets and possible risks that will arise in that particular market. It will also evaluate ways through which a firm may choose to join the trade. I will also study the differences and similarities of culture.

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Importance of understanding market culture

Nation culture refers to a unique set of norms, values, behaviors, assumptions, customs and beliefs held by members of a particular country or nation. It influences marketing decision and strategy. Professor Geert Hofstedes National culture structure is shown below:

Interpretation of the model:

It measurers the rate at which wealth and power are distributed among individuals. Inequalities among people in that country are accepted. A foreign member who joins board meeting for the first time has to greet the members in a hierarchical order and make the acquaintance of the CEO going down up to the workers and other subordinate staffs.

A society position on this dimension is reflected in whatever peoples self image is defined in terms of I (each individual makes his or her own choices, actions and interaction extent with the rest of the group) or we (communal, societal, educational and groups interest). Chinese are highly collectivists and think as an assembled crowd. They are a collective society because they believe team work is always the key to success whether at school, work, hospital or within the family.

Punctuality is thought to be a vital factor and not keeping time in coming to meetings, or any other function would be considered as a serious offense since it affects the entire group.

Femininity cultures value the quality of life and relationship while masculinity cultures represent a preference in society for achievement. China is mainly a masculine country ranking the community in general to be more competitive. The male occupies the top positions in power with the females being controlled by the men because they occupy the lowest ranks. They are highly facing challenges such as; rivalry, a superior accomplishment of ambitions and victory.

It refers to a mans search for truth and to what extent a culture programs its civilized people to have different feelings in unstructured situations. Strict laws are put across and safety measures are taken to prevent such conditions. People prefer to have a stable job and the employees to work within groups to avoid a higher risk taking. Unlike western countries where people believe that changing jobs quite often will give them more experience.

It is a national civilization trait that highlights the future thrift and determination. Chinese rely on long term relationship thats why they take too much time in during negotiation and in knowing your company before they build a permanent trust in you by using mediators thus, they will dedicate however much time is required to achieve their goals.

Indulgence societies provide every desire to members while Restraint creates limits by imposing harsh communal rules.

Identifying China Market

China has a total population of over 1.4 billion citizens and about 9.33 millions square kilometer land which is 2% more than the United States. The state is preferred as a sell abroad destination because it is fast growing consumer market due to increasing number of middle-income clients which is ensured by Governments monetary policy. Most of the western companies worldwide often find it easy to export their home made products to China because of its broad market for promoting distant manufactured items. It is believed that in years to come China will be among the leading in worlds economy.

Chinese Cultural Characteristics

Different religions such as Taoism, Catholicism, Islam, Protestantism and Buddhism are given mandate to worship by the constitution. Despite there being more than one religion in the state, majority of citizens are Taoists. Norms have been inherited from the past although there has been a slight change over the years due to frequent assimilation of western cultures. Large number of nationals in the state consists of the Han, the minority sections being made up of Hezhen, Tibetans, Naxi, Mongols and Manchu.

Spring festival which is considered to be the greatest celebrations falls between mid-January and February. It marks the start of a lunar calendar and is a time to adore the ancestors. During this period, foods to cleanse bodies such as mustard greens and rice Congee are to be set on the menu, dancers dress in a dragon suit, parades and fireworks are thrown into the sky to commemorate the day.

Chinese are always patient with customers and they like to negotiate showing no regard to time or the effort they use during negotiation process. They put customers needs and satisfaction first before theirs. Soft relationships tactics such as giving gifts is used to symbolize enthusiasm to maintain the friendship or to build a new one. As a foreign company joining the market, we have to be the ones who will first introduce ourselves to the people and master the art of Confucianism.

As foreign businesses still negotiate with buyers regarding the amount that they bought the product with, the quality, the texture, color, size and weight of the products, Chinese people negotiate relating to the whole product or service combining all those factors that are used to describe the product. On the basis of

Non verbal communication matters a lot. They mostly rely on posture, tonal variations and facial expressions to tell someones reaction or feeling unlike western countries where you make gestures with hands which, according to their culture, it would be seen as an offence or a sign of violence. Frowning when someone speaks in China is perceived to be a sign of disagreement or dissatisfaction. Foreign companies should not term the Chinese people as being shy or arrogant by looking down as they talk to them but instead, they should view it according to their culture a sign of obedience and solitude.

In business culture, neutral or subdued colors are the norm while bright colors are considered to be inappropriate in terms of dressing code .Preferred footwear for females are flats. High heels are only accepted at formal receptions which are hosted by foreign firms or diplomats. Restriction on the dressing code is however not limited only to colors and official wear, jeans is also accepted as a casual dressing code for both genders on the last day of coming to work to break the monotony of being official daily. When doing exercise or during sports, shorts are highly accepted. See

Greetings are done in a formal way with the youngest people being the last and the oldest people being the first. The major form of greeting for foreigners is the handshake, and they address the person by his or he professional title and the last name.

Communication is official, especially when dealing with someone from the top position. Face - to face contact is preferred rather than telephone or written document. The main reason is that they clearly understand nonverbal communication and so it would be difficult for them to understand information delivered through telephone or a written document since there would be no one to interpret for them.

Chinese fear working with foreign companies, so having an intermediary is an essential factor in working with them. An intermediary could be an individual or a firm who can introduce the company to them. Intermediaries who have a better understanding of local threats and trends are suitable since necessary information concerning the upcoming industry can be acquired and a long lasting trust built with the business. Its only through the intermediaries that the company will be recognized and it will thrive at a faster rate.

Modes of Entry

Method of entry into an industry is a crucial decision as it determines the problems that the company will face while entering the renowned market. They include the following;

Export: To transport commodities to other countries for exchange or sale.

Alliance: a formal agreement between two or more nations to cooperate, in this case, for trade purposes.

License and Franchise: Refers to authority given to someone to operate a business using ordinary operating support system and in return providing payments of ongoing fees.

Joint ventures: A commerce agreement in which various parties agree to pull their capital for the purpose of accomplishing a particular task.

Direct investment: Investment in business by an investor from another country for which foreign investor has control over the company purchased.

Our firm will first use the pragmatic rule and thus use exporting entry mode since it will be our first attempt to join an international business.

Risk of entering a new market

Various types of risks include; economical, political or financial. The main financial and economic risk is inflation (a constant rise in the general level of prices of goods and services). Political risks include imposing high taxes by the government to businesses, high import duty and coming up with rules that do not favor the traders and business people. Western corporations should, therefore, take note of the risks before deciding to penetrate into a new market.

Conclusion

In conclusion, we have learnt that as a foreign company, we have to acquire first - hand information that we consider necessary to be helpful in conducting business in the Asian territory. Stepping into worldly recognized traders is not that easy decision to make because we believe in exploring different dimensions of industries and being ready to fall and rise again.

Communicating with Asian fraternity can be motivating and easy if we are well conversant with the non-verbal type of communication and if we know how to use them in an appropriate way. It is, therefore, important to pay attention more to the sign language more than the sound when talking to them.

Socializing is a key aspect to consider when entering the market. Chinese concepts such as Guanxi (relationships between people), Li (being polite and courteous) and Keqi (behavior towards guests) should be clear to visitors since it is part and parcel of socializing process in China.

Recommendations

From the wide range of research that we have conducted from various dimensions of China and numerous results that we have collected from the research, we would with no doubt provide proper advice to any company willing to join Chinese market the possible ways to conduct business efficiently in China with minimum risks. Some of the recommendations include the following:

Avoid direct eye contact and use of hand gestures because their culture views it differently from western markets.

Select the most suitable entry mode into the Chinese market depending on your firms size, number of employees and other substantial elements.

Do research to get a better understanding of its frequency of changing and its consistency.

Work as a team or group having in mind that steadiness required at work and it cannot be possible without a team.

Be of time conscious to avoid unnecessary misunderstanding and disagreement. Chinese consider time management as an important factor in every aspect, because lateness will not only affect you personally but the groups as well.

Be aware of Hofstedes Cultural Dimension and how it is working in the selected cultural organization to effectively operate there.

Be aware of the differences in your cultures and that of Chinese by accepting their existence and finding ways on how to deal with the...