chapter  9
13 Pages

Marketing, finance, labor relations, operational management, and internationalization

Marketing The components of what constitutes “marketing” appear to be growing and at times appear to encompass the entirety of business practices. Pride, Hughes, and Kapoor (2008: 414) include buying, selling, transporting, financing, standardizing, grading, risk taking, and gathering market information as some of the business functions conducted under the term “marketing.” However, a more limited definition may be more useful. For our purposes, the definition of “marketing” will be restricted to sales, positioning, and promotional strategies. Consumer purchasing habits and preferences differ along cultural lines, and therefore universal marketing practices are rarely seen. Suh and Kwon (2002) found local differences in many consumer tastes and spending patterns were not swayed to any great extent by the marketing efforts of large multinationals. Therefore, tactical marketing decisions have to take into account the variation of languages and cultural values found in different locations. This is aligned with Hipsher’s (2007) contention that tactical marketing business practices, such as promotional practices, will be mostly influenced by the social-cultural environment, while the positioning strategies would be considered strategic decisions; and while the principles of positioning are more or less universal, the actual practices will differ considerably from location to location primarily based on economic conditions. For example, McDonalds is positioned as a low-cost “fastfood” in the United States where purchasing power is high; however, in Thailand and other developing areas of the world, McDonalds is positioned to appeal to the higher income portions of the population and going to McDonalds is often thought of as a special treat to be savored over a considerable period of time. Same product but different positioning strategies based on the different local economic conditions. It would appear there are substantial differences between marketing practices in developing countries as opposed to more economically developed economies. There are fewer large corporations in developing economies and more SMEs. Sengupta and Chattopadhyay (2006) reported that SMEs, regardless of environment, can not follow conventional marketing practices as advocated in textbooks due to limitations caused by the lack of availability of resources. The authors

also found the majority of the promotional activities of the bakery chains found in Kolkata, India took place at the shops as opposed to firms doing media advertising. This may be explained by firms in developing economies having fewer opportunities to establish impersonal exchanges with potential customers through the media and other sources than would be possible in more developed economies, as suggested by Bang and Joshi (2008). Abimbola (2006) found branding was used to only a very limited extent by African firms, and firms from developing economies have generally not been able to generate value through the use of branding, at least not to the same extent as large multinationals headquartered in developed economies. However, large multinationals do conduct more or less conventional marketing campaigns in Thailand. Fam and Grohs (2007) found young Thai adults had very similar reactions to different types of advertisements as did young adults in other Asian countries from both South and East Asia. This may suggest that shared Asian cultural features, such as collectivism and high tolerance for power distances using Hofstede’s (1980, 1983) dimensions, may best explain responses to advertising in the Theravada Buddhist countries of Southeast Asia. It has often been noticed that consumers in the region are very much influenced by belonging to a group and prefer to stick with “popular,” which are often foreign, brands; Venkatraman and Nelson (2008) found a similar phenomenon in China, where young people would go to Starbucks due to a variety of reasons, including being part of the fusion of Eastern and Western cultures found in the local branches and the overall “special” atmosphere, even through many of the customers did not especially enjoy drinking coffee. Group dynamics seem to play a large part in brand selection. The collectivist nature of Asian society along with the hierarchical nature of society may often result in a “follow the leader” mentality making it difficult for firms to find brand niches that appeal to a minority of the population. Vallaster and Hasenohrl (2006) found urban consumers in Thailand were fairly open to purchasing new products or brands, especially when the products had already been proven to be successful in more economically developed regions. Sangkhawasi and Johri (2007) also reported on the strong pull that status brands had in Thailand. Therefore, it appears the trendsetters in Thailand often take their cue from the international environment, while the rest of the population takes its cues from the local trendsetters. However, outside of the large urban areas, the informal and small scale nature of much of the businesses in the region often makes marketing more of a personal affair with face-to-face interactions with customers being more important than impersonal advertising in attracting and retaining business. It is common to see many restaurants and other small businesses operating throughout the region without any signs indicating the actual name of the business. Instead of relying on name recognition, these small businesses rely on personal interactions with customers as their primary marketing tool. Also, when selling in the business-tobusiness market, a lot of the marketing that takes place is done by creating personal connections and trust between buyers and sellers, which is illustrated by the report of Petison and Johri (2008) of the supplier-manufacturer relationships

in the automotive industry in Thailand. Johnsen (2007: 142) found developing and maintaining relationships were important in business-to-business marketing in her study of the silk industry and noted that in Thailand personal relationships were often more important in a contractual relationship than the words written in a legal contract.