A summary for the course 'Import & Export' in theme 8, given by Mr. Broekema during the course Industrial Engineering & Management at the Hanzehogeschool in Groningen. I would also like to thank him for his contribution to this summary. The summary is written in English.
Export is a practical guide / International Strategy
International Strategy
Export a practical guide - Chapter 3
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Technische Bedrijfskunde
Import & Export
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Import & Export
Chapter 6 Export and culture
6.1.1 Cultural variables
Styles of doing business overseas vary from country to country. Conducting business
can be complicated enough between individuals or groups from the same nation.
Lack of understanding of cultural variables can prevent companies from
accomplishing their objectives.
Some common things like measurement systems can be different in different
cultures. For instance, countries like Australia and New Zealand, Canada and the
USA use a combination of the metric system (liters) and the British (imperial gallons)
system, which can confuse the unwary traveler.
You might think you can overcome cultural differences by hiring a local agent or
partner who understands the local culture. In most cases, this is a misconception.
Who you really need is someone who understands both cultures, domestic and
export, and can tell you how to deal with differences. This is why research into what
foreign customers want, as well as information on the country itself, becomes crucial.
6.1.2 Local behavior
Areas of possible concern include business manners and methods, punctuality and
courtesy, religious customs, dietary practices and dress code.
The following points are strongly related to local behavior. Try to understand them for
your own culture first and keep in mind that differences can be extreme. Factors that
can affect cross-cultural business include:
- Who speaks first
- Attitude to religion and nature
- Decision-making
- Time
- Thought patterns
- Personal space
- Material possessions
- Family relationships
- Risk avoidance
- Competitiveness
- Short and long-term planning
- Social behavior
,6.2 Cultural adaptions
You may have to consider making adjustments to your product in order to meet local
regulations, geographic and climatic conditions, buyer preferences, or standards of
living. Inevitably you will need to modify one or more elements of the marketing mix
(product, promotion, price, distribution and personnel) to make your product suitable
for export.
6.2.1 Adapting the product
With food products for example, conducting market test panels will give you
worthwhile insights into local taste preference. Chances are you’ll also need to
modify your product to facilitate shipment or to compensate for possible differences
in engineering and design standards. Always check that the name, packaging, and
colors of your product are compatible with the culture of your target market before
starting production
6.2.2 Adapting promotion
Selling is a people business. Whether you company can sell to a foreign buyer half
depends on things like price, quality and other technical aspects. The other half
depends on the human factor. People who dislike or mistrust each other cannot do
successful business. Once you have lost trust you will never regain it in the
international world of business.
Ideally, you should to be able to communicate abroad as easily as you do at home,
albeit the other country may emphasize other themes and may have different values.
It costs a lot of time and money to take care of promotion in foreign markets. You can
outsource this activity to a local advertising agency. Such an agency will know the
local culture and you can safely place the responsibility for communication on their
hands.
For mailings abroad it is important to understand the local market, legal regulations,
and culture. Besides making sure your promotion material uses correct languages it
is also vital to be aware of hidden meanings in local languages.
6.2.3 Adapting the price and distribution
An essential in one culture may be a luxury in another. You can find strong local
brands all around you. Abroad this is often not the case. Product segmentation is
more specific. In many countries the segment in which you sell your product will
determine the price it can carry.
6.2.4 The human factors
Exporters who send their staff abroad to visit potential clients should be sensitive to
cultural differences. Embassies and the Chamber of Commerce will be able to inform
you about local habits and customs.
,6.3 Using the local language
There are many benefits to speaking a foreign language:
- It creates a positive rapport with major customers, leading to better
communications and the preventions of misunderstandings
- It shows evidence of long-term commitment to the customer’s market, creating
a positive image and gaining respect
- It enhances increases the flow of market information and facilitates customer
feedbacks
- It creates an international culture and philosophy within your company or
organization thus giving you competitive edge
- It increases your self-esteem, confidence, and self-reliance when traveling
abroad and, incidentally, may enhance personal job prospects
, Chapter 7 Export marketing mix
7.1 Market segmentation, target group, and positioning
Companies focusing on foreign markets often apply market segmentation. This divides the
market into smaller groups or submarkets. These submarkets consist of customers with the
same needs, wants and response to the marketing mix.
You can divide the market according to:
- Geography: customers in various countries have different needs
- Demographics: age, social class, sex, religion, income etc.
- Psychology: characteristics depending on the personality and life style of customers
- Behavior: brand loyalty, eagerness to purchase and use of a product
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