Marketing Across Cultures - Assignment Example

MARKETING ACROSS CULTURES Contents Contents 2 Answer 3 Expansion strategies that can be used by the company 3 Answer 2 5 Marketing strategy for thecompany 5 Answer 3 7 Ethical issue that the company faces 7 Answer 4 9 Cross cultural marketing recommendation for entry into Turkish Market 9 References 11 Answer 1 Expansion strategies that can be used by the company It is found that Mexico is a country that consists of the largest Spanish speaking people. It has a population of 120 million, 78% of whom live in the urban areas. It is also estimated that 10% of the population are wealthy and 45% of the population are considered as poor. It is considered that 45% of the population is middle class (US commercial service, 2014). There are several advantages that are provided by the country in the form of the fact that the country is characterised by a young population whose median age is 27. The per capita income is $15000 (US commercial service, 2014). If one looks at the culture of the country then it is found that it is a mix of western and Hispanic cultures. Other advantage of the country lies in the fact that it is a stable democracy and the market offers size and diversity that should be very much appreciated. However it is very difficult to find a single distributor or agent that can cover the huge market. Mexico is one of the two largest markets in the Latin America and is a market that is characterised by high growth potential on one hand but a risky economic and political environment. It is also found that the legal system in Mexico is very different from that exists in UK and it is also found that the culture of the country is also very different. It is also found that the external environment of the company plays an important role in the company deciding on the marketing strategy. In order for the company to expand in the Mexican market it is important for the company to develop and try to maintain close relationship with the customers and partners of the business. It is found that the Mexicans in general prefer to receive direct communication in the form of direct telephone calls and face to face meetings. It is also found that the companies in Mexico are extremely conscious of the price and also tend to seek financing activities and also desire exclusive agreements. It is also found that the businesses value service and flexibility. For entry into the market the company can either use equity modes or non equity modes. Equity modes that the company can use to enter into the market will be in the form of Joint ventures, or wholly owned subsidiaries (Peng, Wang, Jiang, 2008). Non equity modes of entry that the company can use will be in the form of exporting to the country and contractual agreements (Lévesque and Shepherd, 2004). Each of the modes that are said above has unique advantages and disadvantages associated with it (Sakarya, Eckman and Hyllegard, 2007). Figure 1Different modes of entry that can be used by the company (Peng, 2006) Another important factor that is to be noted is that while the entry mode that the company uses to enter into the market is important but choosing the perfect entry modes is not a guarantee of success. Recommendations Market entry strategy that the company can use is Joint Venture. This will be useful as the country is very risky in the form of political and economy risks that exists with Mexico. Figure 2 Comparison of different modes that can be used by the company (Lasserre, 2007) Answer 2 Marketing strategy for the company Other important points that are to be considered are the post entry strategies or in other words the growth strategies. The growth strategy that the company can use can be decided by the Ansoff Matrix. The growth matrix was designed by Ansoff in order to identify the strategy that the company can use to expand either through existing or new products, in the new or existing markets. Figure 3 Ansoff Matrix (Ovcina, 2010) Market penetration as a strategy refers to the fact that the company is selling more of their existing products to the customers in the existing markets. There are two methods in which the company can achieve this. One of the methods is to attract the customers from the competitors of the company and another approach is to convert the non customers into customers. The other strategies that the company can use are to develop new products that the company can introduce in the market or can enter new markets with the existing product range. Still another strategy that the company can use is to enter new markets with new product range. However there are researchers in this field like Kourdi who suggests that there are mainly 5 different routes that the company can use in order to grow and expand in a particular market that the company has entered into. The 5 different routes that have been suggested are: Organic growth that is expansion through green field investment, Expansion and growth through the process of mergers and acquisition, integration through the process of forming JV or strategic alliance, Specialization and diversification (Kourdi, 2009). There are two types of diversification strategies that the companies can use. The companies can either diversify their products or diversify geographically. In the diversification strategy that is based on product based diversification the company can either diversify through the process of product related diversification or can diversify through product unrelated diversification. Diversification through the process of product related strategy means that the company enters into new product markets or the business activities that are found to be related to the existing markets (Luo, 2001). The product unrelated diversification on the other means that the company enters into new markets or product areas that are not related to the existing ones. Recommendation The strategy that is recommended for the company is to follow product related diversification strategy. It is found that there is an increase in performance of the company when the company shifts from a single business strategy to product related diversification strategy. However it is found that the performance falls when the company shifts from product related diversification strategy to product unrelated diversification strategy. This is due to the fact that single business strategy is riskier for the company. In comparison to the single business strategy product related diversification strategy is less risky and is also found to increase synergy. Figure 4 Product performance related to diversification (Peng, 2006) Answer 3 Ethical issue that the company faces It is found that while deciding to enter into the Mexican market there are several ethical issues that the company has to face. The company essentially is involved in the marketing of food products. It is found that several ingredients that the company uses in making the food products of the company are opposed by different religious groups that exist in Mexico. Food products are one of the most important things and the customers normally give greatest care when they chose a particular food product over other. So it is essential for the company to encounter any ethical issue that is faced by the company at the earliest in order to ensure the fact that the image of the company is held high amongst the customers of the company. In maintaining the ethical issues that is associated with a food company it is essential that the company takes good care not only of the manufacturing process of the company but also of the raw materials and ingredients that is used in the process. Along with the food ingredients that are used in the process and the manufacturing process that is used to prepare the foods that the company wishes to sell the company should also take care of the way it is affecting the ecology and environment that surrounds the company. In short the company should be aware of the ways in which it is affecting the lives of various stakeholders of the company. The different ethical issues that are faced by the particular food products company are related to employee relations, food safety issues, supplier standards and public health issues. The employee relations of the company are related to the amount of wages that are paid by the company. Food safety issues are related to the fact about whether the company is taking good care of the hygiene issues that the company has to take care. The company may be tempted to use unhygienic practices in order to earn good amount of profit. However this may cause a health issue of the customers and might result in the damage of the image of the company. The supplier issue or the quality checking or raw materials that are supplied by the suppliers of the company is also an important parameter that should be kept in control. It is also important for the company to take note of the public health issues that are associated with the company. Recommendations It is recommended that in order to tackle the issues that are associated with the company in terms of the ethical issue that the company faces it is required that the company should indulge in the advertisement that goes on the advertise the ethical ways in which the company manufactures or produces its products. It will be better if the company is open to the suggestion and feedback that it might receive from the customers or other influential stakeholders that the company serves. Answer 4 Cross cultural marketing recommendation for entry into Turkish Market Figure 5 Comparison of UK and Turkey (The hofstede centre, 2015) Turkey as a country and the dimensions of culture in the country are much different from that which exists in the United Kingdom. The above figure shows the comparison of United Kingdom and Turkey on six different dimensions of culture. There are few dimensions that are used as base to compare the culture of these two different countries. For instance the model shows that where as United Kingdom scores 35 on the dimension of power distance the score of Turkey is 66. What thus implies is that UK as a country does not accept the social order. There is an internal conflict that goes on the order or class as determined by birth and the extent which an individual can develop based on his ability. On the other hand it is seen that Turkey scores highly in this aspect and it is due to the fact that in The Turkish culture the power is often centralised and people follow the orders of the hierarchy. At the family level it is seen that the father acts as the patriarch of the family and all other members of the family submit to the orders given by the father. It is found that the UK culture is an individualist culture and on the other hand the culture of Turkey is a culture that is collectivist in nature. It is also found that the culture of Turkey as compared to the UK culture symbolizes feminine characteristics. The characteristics of the Turkish culture will be related to the facts like levelling with others of the society, sympathy and compassion for others of the society. Turkish people also do not like uncertainty and like to avoid the same. It is therefore found that the people of Turkey like to avoid risks as compared to the people in UK. In terms of long term orientation of the people it is found that the people of both the cultures are similar with a similar score. Recommendations It is found through the overall comparison of the cultures of the countries that people of Turkey are more oriented towards the family and members of the family. It is also seen that father is the head of the family and makes all the decisions regarding the family. The company should keep in mind these issues while deciding on the marketing strategies that are to be used in the country. While the company decides on the marketing and the advertisement strategy that the company intends to use it should keep in mind that the advertisements and the products of the company should uphold the cultural values. That is to say that the marketing strategy of the company should be in line with the culture of the country and should leverage it instead of countering the same. References Kourdi, J. 2009. Business Strategy: A Guide to Taking Your Business Forward. John Wiley & Sons. UK. Lasserre, P., 2007. Global Strategic Management. New York: Palgrave Macmillan. Lévesque, M. and Shepherd, D.A. 2004. Entrepreneurs’ choice of entry strategy in emerging and developed markets. Journal of Business Venturing. 2004, Vol. 19, pp. 29–54. Luo, Y., 2001. Determinants of entry in an emerging economy: a multilevel approach. Journal of Management Studies, Vol. 38, No. 3, pp.444-472. Ovcina, D., 2010. The dynamics of market entry and expansion strategy in emerging markets: the case of wal-mart in latin America. [Online]. Available at < http://www.sagepub.com/ridley/Examples%20of%20literature%20reviews/Dino%20Ovcina%20literature%20review.pdf > [Accessed 18 June 2015]. Peng, M.W. 2006. Global Strategy. Cincinnati : OH: South-Western Thomson. Peng, M.W., Wang, D.Y. and Jiang, Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies. 2008, Vol.39, pp. 920-936 Sakarya, S., Eckman, M. and Hyllegard, K.H. 2007. Market selection for international expansion: Assessing opportunities in emerging markets. International Marketing Review. 2007, Vol. 24(2), pp. 208-238. The hofstede centre., 2015. United Kingdom in comparison with Turkey. [Online]. Available at < http://geert-hofstede.com/united-kingdom.html > [Accessed 18 June 2015]. US commercial service., 2014. Doing business in Mexico. [Online]. Available at < http://www.export.gov/mexico/static/CCGFINAL2014_Latest_eg_mx_076936.pdf > [Accessed 18 June 2015]. Read More