Cross Cultural Issues in International Marketing(Negotiation & Communication)

Introduction Culture Cross-cultural communication Cross-cultural negotiation How to deal with cross cultural issues Conclusion

Contents

With faster communication, transportation and financial flows, the world is rapidly shrinking.

Brands & products originating from one country –are finding enthusiastic acceptance in others.

International trade is booming. Since 1969, the number of multinational corporations in the world‘s 14 richest countries has more than tripled from 7,000 to 24,000.

Imports of goods and services now account for 24% of gross domestic product worldwide, double that of 40 years ago.

World trade now accounts for 29% of world GDP, a 10% increase since 1990.

Introduction

To secure a favorable position in the business world, executives have become growingly aware of the important roles of cross-cultural communications.

Cultural differences, which should be noted, can affect all entry strategy decisions, such as the choice of target country markets, the choice of a candidate product and its adaptation to foreign markets, the choice of an entry mode, the formation of a foreign marketing program and the control of entry operations, etc.

Cross- Culture

Age

Ethnicity

CountryGender

Values

Community

Aspects of Cross-CultureIntroduction

Culture is defined simply as the learned distinctive way of life of a society. The dimensions of culture include: - The social organization of society, - Religion, - Customs and rituals - Values and attitudes towards domestic and international life, - Education provision and literacy levels, - Political system, - Aesthetic systems (e.g. folklore, music, arts, literature) and language. Each country has its own traditions, cultural norms and taboos. When designing global marketing strategies, companies must understand how culture

affects consumer reactions in each of its international markets. In turn, they must also understand how their strategies affect culture.

Culture

Impact of culture The pace of business; Business protocol—how to physically and verbally meet and interact; Decision making and negotiating; Managing employees and projects; Propensity for risk taking; and Marketing, sales, and distribution.

Japanese colour TVs dominating Chinese market in 1980s China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with

animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity.

In 2005 France’s Catholic Church won a court injunction to ban a clothing advertisement based on Leonardo da Vinci’s Christ’s Last Supper.

Energy conservation and global climate change may create a change in consumer preference away from gas SUVs to environment friendly transportation

All communication is cultural -- it draws on ways we have learned to speak and give nonverbal messages

Any cultural ignorance or carelessness on the part of the executive might lead to communication blunder

Verbal & Non-verbal communication both are inter-related and decide the fate of a country/ region specific company business portfolio.

Many cultural communication variables that decides the course of successful business communication :

- Greetings - Negotiation styles - Attitudes to time - Meaning of numbers - Gift giving customs - Significance of gestures

The key to effective cross-cultural communication in business negotiation is active listening

Cross Cultural Communication

The most important reason to understand cross cultural communication is to improve relations with the diverse groups of people we encounter. If left ignored, communication differences will inevitably lead to

various types of miscommunication which may lead, in turn, to conflicts and cause uncertainty.

In some cultures, particularly those in East Asia, silence is acceptable and indeed desirable. The idea is that silence should only be broken when there is something important to say.

In many cultures it is not necessary to use ‘please’ and ‘thank you’ as often as we do in the UK. Examples In Japan, Diet Coke‘ was renamed Coke Light‘ after the firm learned that the term diet‘ carried an

embarrassing connotation North American companies have a long history of marketing blunders in the international marketplace.

The most famous example is GM‘s attempt to sell the Chevy Nova in Mexico despite the fact that ―no va‖ is Spanish for ―no go.

Baby food manufacturer Gerber has had problem in France as ―gerber can be translated from French as ―to vomit

Cross Cultural Communication

Negotiation is simply a process where two or more parties attempt to resolve perceived incompatible goals.

There are two types of negotiation: it may be transactional which deals with buying and selling of goods, or it may be geared towards conflict resolution.

To negotiate an international business transaction successfully, it isimportant that one appreciates and develops suitable responses, where required, to cultural attitudes and expectations. There are four cultural dimensions which are most likely to affect the negotiation process

• Individualism versus Collectivism• Hierarchical versus Egalitarianism• Indirect communication versus Direct communication• Monochromic or polychromic

Cross cultural Negotiation

The written contact expresses the relationship, the essence of the deal is the relationship itself.

For example in a survey of over 400 persons from twelve nationalities, reported fully in The Global Negotiator, It was found that 74 % of the Spanish respondents claimed their goal in a negotiation was a contract, only 33 % of the Indian executives had a similar view.

The difference in approach may explain why certain Asian negotiators, whose negotiating goal is often the creation of a relationship, tend to give more time and effort to negotiation preliminaries, while North Americans often want to rush through this first phase of deal making

Cross cultural Negotiation

Negotiating across cultures poses a great challenge to any negotiator.

The best approaches to deal such situations are through : Preparation Avoid Stereotypes Discover new ways to bridge cultural gaps Participate in active listening Promote healthy dialogue – Use agent/ interpreter for

communication clarity

How to deal with cross cultural issues

In cross cultural negotiation, one should always try to apply the method of principled negotiation.This requires separating people from the problem and focusing on their interests. This will help both parties achieve their goals easily

Conclusion

Video – 2min duration

Mistakes related to culture – Marketing blunders

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