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"Saving Face"- Key Theme in China Business Dealings
(Marketing Memo, October, 2008)
During a recent trip to China we spotted foreign firms in most cities.
I asked two China experts for some advice on conducting business in
THERE IS NO "ONE CHINA" - MARKETING IN CHINA
Merrill Weingrod, principal of China Strategies, business advisors
to companies wishing to enter the Chinese market (www.china-strategies.com),
provided these insights:
- Marketers need to understand China's diversity to make intelligent
decisions. China consists of many diverse regions with different
cultures and economies. A mass market does not exist. China includes
56 different ethnic groups and many dialects. In China the range in
individual incomes is greater than in the US.
- What constitutes "brand value" may be different in China.
"The Chinese urban consumer is complex… and very well informed. Industrial
and consumer goods companies should survey Chinese consumers/buyers
to see "what drives the consumers/buyers."
- Successful marketing requires access to China's "complex, multi-tiered
distribution networks." Unlike the US, China does not have a single
- Obtaining reliable, "complete" market data is difficult, but
not impossible. "With diligence and a reasonable investment, companies
can develop a strategic understanding of the market sectors they want
to penetrate and build low risk market entry plans."
- Chinese regulations require foreigners to complete a detailed
business application process before directly distributing goods in
China. Or, "a US company can sell products to a Chinese company,
which can pay for the goods in US dollars. [Then,] it is the responsibility
of the Chinese company to import the goods into China."
- Successful marketing requires "significant cultural navigation
skills." US business people may fail if they assume that business
etiquette is the same in China as in the US.
BEHAVIOR IS AS IMPORTANT AS DEALS - NAVIGATING THE CULTURAL DIVIDE
Wayne K. Johnson, Dean of Corporate and Community Education, Mass
Bay Community College, commented on important cultural differences
- Learn about differences in etiquette and behavior that can make
or break deals. For instance, the Chinese value humility, not
boastfulness. "Maybe" and "perhaps" may be code for "no" in China.
Moreover, the Chinese sometimes try to renegotiate "done" deals.
- Remember that "the collectivist way of thinking still prevails….
Responsibility for all decisions rests with the Communist party and
assorted government bureaucrats."
- Note that "a person's reputation and social standing rest on…
saving face…. Causing embarrassment or loss of composure…can interrupt
- Build relationships as strong relationships play more of
a role in negotiations than effective use of facts and arguments.
Finally, seek advice. Ask the East Asia & Pacific office of
the U.S. Department of Commerce to help identify contacts, and make
appointments with Chinese business and government officials. Engage
a public relations firm to help with business negotiations, says Johnson.
Before our trip I consulted http://www.vayama.com/china-etiquette
for etiquette tips.
Copyright © Ruth Winett. All rights reserved.
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