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Understanding Cultural Differences and Market Dynamics in Australia and China

Explore key characteristics and business behaviors in Australia and China for effective market research and product positioning. Learn consumer behavior, language nuances, and regional specifics impacting market strategies.

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Understanding Cultural Differences and Market Dynamics in Australia and China

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  1. Chapter 17 Asia Pacific

  2. Regional Characteristics • Third of the world’s population • Increasing education and industrialization • Advancement in technology

  3. Culture • Each country has unique culture and history • There are differences in visual perceptions • Although each country is unique, the followings general • issues can be applied: • In most Asian cultures, trying to solicit an immediate response from a potential consumer is contrary to traditional buying habits • Many Asians put their family name before their given names • Name/Brand recognition is paramount • Asians are more conservative than Westerners

  4. Culture (contd) • Seasonality and Holidays • Language and Translation Issues • The Mailing List Environment • Secondary Sources of Information • - National Technical Information Service • - Computerized Information

  5. Australia

  6. Country characteristics • Population: 18,438,824 (July 1997 est) • Land Area: 7,617,930 sq. km • Languages: English (though several indigenous • Aboriginal languages exist) • Literacy Rate: 99% • Religion: Anglican (26%) and Roman Catholic (26%) • GDP: Purchasing power parity: $430.5 billion (1996 est.) • GDP per capita: Purchasing power parity: $23,600 (1996 est) • GDP real growth rate: 3.6% (1996 est.) • Inflation rate: Consumer Price Index: 3.1 % (1996 est.)

  7. Business characteristics • While Australians tend to be friendly and easy going, this behavior does not carry over to business relations. • A code of etiquette with emphasis on the verbal as well as non-verbal aspects is expected. • It is customary to shake hands when greeting, as it is at the conclusion of a meeting. • It is also acceptable for people to introduce themselves without waiting to be introduced.

  8. Market Research in Australia • Australian market is highly urbanized (85% live in cities, majority live in the southern region in the cities of Sydney, Melbourne and Canberra) • Market Research is most effective through telephone and mail. • Media research is available for all media sources and this includes meter measurement of TV audiences. • High news awareness ( Although TV and Radio penetration is not as high as in the US, Newspaper keep the masses well informed) • A limitation of conducting research here would be mail as a mode of data collection (postal questionnaires are not popular) • Random Sampling is considered most suitable since there is immense cultural diversity in the Australian market.

  9. China

  10. Country Characteristics • Population: 1,221,591,778 (July 1997 est) • Land Area: 9,326,410 sq. km • Languages: Chinese or Mandarin, Cantonese, Shanghainese, Fuzhou, Hokkien-Taiwanese, Xiang, Gan, Hakka dailects • Literacy Rate: 81.5% • Religion: Taosim, Buddhism, Muslim, Christianity, officially atheist, but traditionally pragmatic and eclectic • GDP: Purchasing power parity: $3.39 trillion (1996 est.) • GDP per capita: Purchasing power parity: $2,800 (1996 ) • GDP real growth rate: 9.7% (1996 est.) • Inflation rate: Consumer Price Index: 10 % (1996 est.)

  11. Marketing and Consumer Behavior • Potentially, the world’s largest consumer market • They have a fascination for all things western( western styled department stores and food courts, designer labels) • Bargaining is a very common selling tactic in smaller shop. • Most Chinese tend to assume that foreigners have money and hence vendors at tourist spots target foreigners and have compunctions about overcharging them. • Most Chinese women have adopted western wear • Many supermarkets carry international brands • English is becoming a popular language and many Chinese are making a conscious effort to learn it.

  12. Business Characteristics • Companies should be aware of extreme political sensitivity and should take great care to avoid stirring political controversies • Chinese value time and most meeting start punctually • They place a lot of emphasis on precision and detail when designing contracts • They pay close attention to long standing relationships • Dealing with legal aspects and negotiations may be time consuming • It is important that the Chinese counterpart be convinced of the company’s prowess or the manager’s technical expertise • Most Chinese prefer to work on a one-to one basis to prevent “loss of face” • Most meetings are devoted to pleasantries in order to wait for the most opportune moment to discuss formal aspects of the contract

  13. Product Positioning • A common concern for western sellers in China is product pricing and positioning • Chinese consumers are becoming increasingly sophisticated and are interested in both quality and value • It is important to produce goods that combine Western quality and Chinese price level • It is difficult to find a nationwide distribution system • There are no set legalities surrounding product liability or return policy

  14. Conducting Market Research • Chinese language tends to impede a consistent transposing of strategies ( important to have good translators) • Very little Market Research data available for China • One of the main problems of conducting research is the size of the market • High level of bureaucracy is encountered • Focus groups and semi-structured/in-depth interviewing are the popular qualitative research methods • Probability sampling and quota sampling using face-to-face interviews, central location study and in-home placement study are popular quantitative methods. • Most commonly used sampling method is random probability sampling

  15. Conducting Market Research (contd.) • Respondents are usually co-operative and open and eager to try new products. • Respondents are very candid in their feedback • There exists a very good procedure for quality control • Telecommunication penetration is small ( about 7% vs. 95% in the US ) • Chinese do not immediately respond to questionnaires

  16. India

  17. Country characteristics • Population: 966,783,171 (July 1997 est) • Land Area: 2,973,190 sq. km • Languages: English ( for national, political and commercial communication) Hindi is the national language (30% speak it) There are several other major languages • Literacy Rate: 52% • Religion: Hindu(80%),Muslim (14%), Christian(2.4%), Buddhist (0.7%) Jain (0.5%) , other (0.4%) • GDP: Purchasing power parity: $1.538 trillion (1996 est.) • GDP per capita: Purchasing power parity: $1,600 (1996 est. ) • GDP real growth rate: 6.5% (1996 est.) • Inflation rate: Consumer Price Index: 10.3 % (1996 est.)

  18. Business characteristics • Hinduism dominates every aspect of Indian life, and often seeps into relationships and culture • Use of first name for address should be avoided • Attitude towards time is lax, with most people being complacent about the the provision of service • Bargaining is part of the business culture • It is appropriate to chart the dimensions of the contractual agreement in order to have a document to refer to over extended periods of time. • Business and personal lives are kept separate

  19. Conducting Marketing Research in India • The biggest problem is that of accuracy and reliability, which are lacking in marketing research studies. • The role of market research as a tool in determining the feasibility of product innovations and applications has been on an increase. • The problem with telephone is that the infrastructure is not adequate and expensive to construct or develop. • The problem with mail surveys is the size of the population and the lack of good consumer databases. • The development of the internet as a tool in market research has not significantly impacted India.

  20. Resistance to Marketing Research • The Indian market is a sellers market, hence it is difficult to • conduct market research • Businesses in India does not recognize the integral role of of • market research and believe that it is a cost best not undertaken. • The emphasis on secondary data collected by trade associations is • considered to be adequate.This shows a degree of complacence on • the part of companies. • Some executives perceive marketing research to be the answer to • the firm’s problems.

  21. Japan

  22. Country characteristics • Population: 125,732,794 (July 1997 est) • Land Area: 374,744 sq. km • Languages: Japanese • Literacy Rate: 99% • Religion: Shinto and Buddhism(84%), other (17% - including Christian 0.6%) • GDP: Purchasing power parity: $2.85 trillion (1996 est.) • GDP per capita: Purchasing power parity: $22,700 (1996 ) • GDP real growth rate: 3.6% (1996 est.) • Inflation rate: Consumer Price Index: 0.3 % (1996 est.)

  23. Cultural Characteristics • The Japanese’s purchasing behavior is centered on the vendors selling the product than the product in itself. • Product purchase is dictated by the association to the company rather than for usage of the actual product • Price-quality association is prevalent • Despite being competitive, the Japanese believe that inter-company dealings are advantageous and often relate to competition on a personal basis.

  24. Business Characteristics • The role or the purchaser is important and the retail industry should be able to cater to this need. • One should never be too direct with a Japanese • Japanese society and workplace are both very collectivistic • The Japanese perceive uncertainty to be part of their business culture • The concept of time to the Japanese extends tot the number of years they spend in a company. • The construction of contracts are not based on written agreements, rather on verbal agreements.

  25. Conducting Marketing Research in Japan • Door-to-door interview is a major data collection method in • Japan although the use of telephone and internet is increasing. • Sometimes mangers are unwilling to discuss their company or • their employees because of the space constraint in Japanese • offices which forces them to work in cubicles. • Several Japanese companies are looking at cost efficiency as a • main prerogative in determining the kind of survey research • method to employ. • There is a growing reliance on qualitative means of • measurement versus the quantitative aspect would mean that • companies rely on the provision of value-added services by • marketing research firms.

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