The company has brought to our attention that it desires to expand into the Eastern Asian market where it is believed that the opportunity will be best and certainly more than double its profits by this venture. The Country of choice will be China; location is the city of Macau, which is an established trading center in Southeast Asia. B. Major Cross-Cultural Issues and Impacts: There are some marketing aspects to consider. Our approach must be culture sensitive to be successful. Insulting anyone in our business relations for work in China could end the deal or cause unnecessary delays. It is vital for all personnel involved in this venture to train with care in the marketing and cultural behaviors of the Chinese. Culture is a major issue and the company must be meticulous with training in order to be accepted. The Asian cultures are very careful about not losing face and this is critical. Keeping face goes back to Confucianism, which focuses on ones duty and loyalty, honor, sincerity, and keeping harmony with all those related to them through family, business, and social ties.
This is strictly followed with respect for age first in any of these relationships. One must never lose face with any of these ties for to lose face is to lose honor. The concept of face translates as honor, good reputation, and respect. There are four types of face. Face behavior is power-oriented behavior with the purpose of maintaining stability or control of one’s self. Diumianzi originates from the word mian and directly relates to one’s reputation or place in society. It is actions or deeds, which others have observed, and it is earned. Geimianzi is response to or giving of face to another through showing respect to the other person. Liumianzi is developed by avoiding mistakes and showing wisdom in making decisions. Jiangmianzi, when face is increased through others by another complementing one to a business partner or associate. Saving face or reputation is very strong in the Chinese culture. People are generally reserved, quiet, and refined.
No boisterous or loud behavior is acceptable and considered in poor taste. Another way to explain this is quiet dignity, always keeping control of one’s emotions. The personnel who are involved in this business venture will need to beware of the quiet reserved behaviors of the Chinese and adopt such behavior in respect and get to know well each Chinese in the business relationship. It is important to save face at all times and avoid blunders or mistakes of our Western culture, and never criticize the Chinese or any others involved in the business or personal relationship in Macau, China. This includes any associates whether foreign or domestic (China 2010). When greeting in China, the eldest is always greeted first and though a handshake is most common among Chinese with foreigners, sometimes with the elderly or government officials a slight bow will be given. During the greeting exchange, it is the practice by the Chinese to look at the ground when shaking hands or bowing along while addressing the individual with their honorific title and surname (China 2010). Visiting and eating also have special rules.
A guest always waits for the host to give direction for seating. Formal dinners have different rules on seating arrangements. The conversation at meals is light, no business, or personal talk. The host will always serve an abundance of food. The host will usually escort a guest outside their home a distance even down a street and the guest should politely resist with the special ritual of hospitality. It is customary to bring a wrapped gift presented with two hands when invited to the home of a Chinese. In China, they do not open a gift in front of the giver; this is to avoid embarrassment for gifts that are not needed. Both the giver and receiver will always use both hands for the gift. Another very important gesture is to refuse the gift three times before accepting it; this shows that one is not greedy.
Once the gift is accepted, it is important to express thanks to them for accepting the gift. If giving money gifts around New Years for personal friendship, the bills must be even bills and there should be an even number of bills, and given in a red envelope. Do not use white, black, blue, or the number 4 for anything because it is associated with death and funerals. This would be very embarrassing. Unacceptable gifts include clocks which symbolize time is running out, a handkerchief suggests a farewell greeting, shoes, especially straw sandals, suggest sad memories, and do not give ink pens with red ink which signifies death. Sharp objects like knives and scissors are not appropriate as it represents severing of relationships (Roberts 1998).
Dress is important, no bright colors or blue jeans are to be worn, and all colors should be neutral with business meetings or dinners. Women must wear modest heals, nothing sleeveless or sheer, modest necklines, even the jewelry should be modest and not flashy. Relationship is everything; to hurry would be a waste. The impact of our approach on Chinese business with regard to cultural differences is everything, the dress, the greeting, visiting, dinners, and showing of respect to all parties involved both Chinese, and U.S. will affect the stability of the relationship (King 1999). If the relationship is not sealed in the beginning with saving face or respect and trust with the Chinese, then the business deal may never take place or may be a very weak deal. The Chinese find friendship and trust to be far too important to rush through a business deal. Respect or face must be earned over time and never lost.
C. Cross-Cultural Communication:
Macau, China has a very strong economy with a GDP of 21.8 percent growth currently, is not expecting a recession anytime soon and has a steady growth rate of double digits up to 21 or more percent per year (Economy 2011). The humid weather and subtropical climate will be a great help in the special heat hardening process, which is necessary to extend the life of the engine components. It is important for us to pay close attention to detail and avoid using black, gold, yellow, red, or white on the engine components for any identification of parts used. Our company will need to use colors that are low key, perhaps silver, grey, brown, tan, or green, for any differentiation used to identify parts. Red is overused and is considered a New Year’s awareness. The black as mentioned earlier represents death and is not a good omen. Do not use black or red print on any of the parts or packaging, this represents evil and death and does not work in the Chinese market.
When promoting the product for selling, again, color is of utmost importance and it is important to be creative. No black borders and no black print can be used, it is considered to be a bad omen or evil. The same is true with red print, it is considered to be related to death of the person reading the red ink. White wrap signifies death of the person receiving the gift and is not a happy color. Yellow used in marketing generally relates to pornography, so it must not be used or it will damage the face of the new company and possibly be an embarrassment or cause it to fail. The colors purple for power and nobility, blue green, and some other colors can be used with marketing to promote our engine components, but red, yellow, gold, black, and white are best avoided entirely for marketing purposes (Gao 2011).
The advertising name should involve only two perhaps three syllables with the last syllable having inflection upwards with intonation of voice. The Chinese consider this necessary for a favorable impression and for recognition of a product or service. Chinese words are often very direct and it would be best to use such words to gain trust and immediate understanding, and to portray quality and enjoyment of the vehicle because of using Company A’s engine components. Another aspect to show purity and trust is a picture of a mountain in relation to televised advertising or media advertising on the internet, and in our promotional brochure (Lehman 1992). Manufacturing companies like Sinotruck Group, Qingdao Seize The Future Automobile Co. Ltd., and Special Truck Company China National Heavy Duty Truck Co., to name a few major manufactures for heavy-duty trucks, to market the engine components produced by Company A would be our target audience for this market (Brighter 2011).
China is expecting an increase in unit freight mileage leading to long distance transportation implying a demand for high-end trucks in the next few years. China is an excellent market for our truck engine components and this is good timing with China’s economic growth and increased investment in the trucking industry (Intelligence 2011). Currently, in China, the demand for trucks ranked first and automobiles ranked second (Intelligence 2011). Pricing of the engine components is based on production and the shipping costs for China. Choosing to build a manufacturing plant in Macau, China would prove to be financially prudent and help to keep prices in line with other competing engine makers in the truck industry for China.
To protect competition in China, the prices would need to be equal in revenue as that of other countries in which these engine components are sold. To distribute these engine components in China it is necessary to have distribution partners for acceptance in the different market areas. Company A will have to build a network of distributers among locals where face-to-face relationships can grow. It will be prudent to train local mechanics for problems with the engine components that may occur after the sale. It is important to have connections with individuals in all areas of the business for trust and friendliness to the Chinese country. They see life as a group connection in all associations.
D. Cross-Cultural Ethical Differences:
Introducing ourselves into the Chinese market is crucial and must be done through an intermediary, someone who will give face favorably about Company A’s reputation. Chinese do not like to do business with strangers. The meetings need to be requested in writing preferably one or two months in advance by someone that they know and trust who connects for Company A. Plan to arrive a bit early, do not be late as the Chinese perceive this as an insult and it could cause negative problems for the business relationship. Punctuality is considered a virtue in China. It is important not to wear bright colors for meetings; men should wear dark colored conservative business suits. Women should wear a conservative business suit or dress with a high neckline and flat shoes or not much of a heel. There is no gender bias in China.
About the introductions, when greeting the Chinese, the highest official or eldest will start the introductions and will either bow slightly while looking to the ground or shake hands while looking to the ground, do not look them in the eye during the introductions but do state their honorific title and then surname. Example, “It is an honor to meet with you, President Chen.” They have a great sense of humor and like to laugh if they are comfortable. If it is appropriate on your behalf at any time, be sure to laugh at yourself. The names of all who will be at the meeting and their titles, of course, would be important to have in each member’s portfolio. Once the introductions have been made and you have been given the invitation, provide information about Company A and what is desired to be accomplished. If offered a business card always accept with both hands and look at it with interest on both sides and then place on the table in the front of the place setting or in a suit pocket or briefcase, never in the back pocket. When giving a business card use two hands and place Chinese side up to the Chinese officer.
Only the eldest officer from each business will hold the conversation for negotiation. All others will listen. Posture and facial expression is very important to the Chinese and persons attending the meetings must watch carefully and be aware of their posture and facial expressions to remain neutral. There should not be any staring into another’s eyes only concentration on what is being said and careful glancing to notice expressions. Tone of voice is of great importance and should be closely noted. Relationship cultivation is first, no agreement will be made at this meeting. When the meeting concludes the Chinese will say they will think about it, accept that answer just as they say, thinking about it (Ltd. 2004) and be patient for the deal to close at another time. It may take several meetings to finish the business deal. When the Chinese diplomat in charge invites the visiting company to a banquet, this is a signal that they are ready to give their final answer. They use a banquet to celebrate (Ltd. 2004). Our company needs to be patient and ready. In China, it is not customary to give gifts; it is considered bribery and illegal.
It is only acceptable to bring a wrapped gift for the most senior officer in the company after the business deal is complete and state that the gift is from your company and that it is wished for the senior officer to accept it on behalf of their company. If there are wrapped gifts for more than one individual in a group, all gifts must be different and monetarily representative of the status for each individual. It is disrespectful to give the same gift choice to several individuals, the gifts must be different, and the value spent commensurate with the associate receiving the gift. If meeting over dinner our members must remember to wait until the host shows them to their personal seat, and recognize that the executive who called the dinner will be paying for all, no one is going “Dutch.”
Remember to talk about whatever interests them and the food. Generally, light talk is expected. No business will be discussed while dining. The seating behavior is much like it is in formal dining with the United States. Unlike the U.S., though take time with dining and eat all you can or at least make it appear that time is not important. Eating is a very social event with the Chinese, never a rush. They may not hurry to be at a dinner or meal for a certain time, but may be slightly late.
Timeliness is not crucial as is expected for a business meeting. It is rare to be invited to a Chinese home. If this occurs, be on time, take a gift and offer it three times but do not expect them to open it in front of you. Take off your shoes and do not pay attention to slurping or belching noises, this is the Chinese way to show enjoyment with the food. All business personnel must learn to eat with chopsticks (Ltd. 2004). These culture differences are very important though strange to what our customs are here in America. All Chinese customs must be followed carefully to have a successful business relationship in China.
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