Multinational Relationship Marketing: Chinese Experiences

Articles Main Themes

The globalization of the modern world is a given for the whole humanity today. The borders between countries become vaguer while the ties between the nations, and especially businesses, become closer. In this respect, it is necessary for any business entity to be aware of the cultural differences that a nation might have from others to succeed in its market (Point of Purchase, 2009). Understanding this necessity, Lee C. Simmons and Robert M. Schindler carried out the research of the cultural superstitions in China’s marketing and presented the results of their research in the article titled Cultural Superstitions and the Price Endings Used in Chinese Advertising. Accordingly, the main themes of the article concern the very cultural and religious peculiarities of the Chinese nation and the effect those peculiarities have upon marketing, advertising, and pricing in the market of the People’s Republic of China (PRC).

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First of all, the authors take into account the peculiarity of the Chinese relation to the nature and stress the close connection of people and nature in the Chinese outlook of the world. Based on this, Simmons and Schindler (2003) argue that the positively charged figure 8 in China will be overrepresented in the ending numbers of price advertisements, while the figure 4 having the negative image will be underrepresented.

The process of research goes father to examine “a total of 499 advertised prices: 93 from Shanghai, 200 from Hong Kong, and 206 from Taiwan” (Simmons and Schindler, 2003, p. 105). The results of this examination showed the great dominance of the 8 figure in the ending numbers of price advertisement over the 4 figure – 39.9% and 1.4% respectively (Simmons and Schindler, 2003, p. 106). Based on these results, the authors make the conclusion about the great force of superstitions and ancient beliefs for the life of the ordinary Chinese and for the development of business and pricing in the Chinese market.

Article Relevance

Drawing from the above consideration of the main themes touched upon in the article discussed, it is obvious that the relevance of this paper, and of the research it is designed to reflect, is critical. Again, the modern world is globalized and the interrelations between the countries and nations demands greater attention from the public (Erevelles et al., 2001, p. 175). Business, as an integral part of the social life, is also in the obvious need of the facilitation of the cross-cultural understanding (Rand, 2009). In other words, any company or a business entity needs at least preliminary general knowledge about the history and culture of the country, to whose market its goods are supposed to be launched.

Regarding the market of China, the above ideas are more than true. One of the largest countries in the world according to its territory, and the largest one by its population (the current figures come close to 2 billion people, which equals almost one quarter of the population of planet Earth), China has recently started displaying great economic potential (Rand, 2009).

The last three decades have passed under the sign of the Chinese dominance in the world economy, and the figures that Simmons and Schindler (2003) present prove that from 1990 to 1997, the Chinese economy showed the permanent growth of 10% annually (Simmons and Schindler, 2003, p. 101). Based on the aforesaid global importance of multinational marketing and the specific example of the Chinese market, the relevance of the article under consideration is doubtless.

Concepts and Theories Found in the Article

Needless to say as well, the article under consideration presents several fascinating theories on the impact of cultural differences on the development of business, pricing, and advertising in various regions of the world (Point of Purchase, 2009). The authors also stress the importance of the multinational relationship marketing upon the same issues. For example, examining the peculiarities of the traditionally Chinese outlook of the world, Simmons and Schindler (2003) address the theories by Kluckhohn and Strodtbeck (1961), Cho et al. (1999), Yau (1988), etc. to state that for the Chinese people “the perception of humans’ relation to nature” (Simmons and Schindler, 2003, p. 102) is crucial.

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Further on, considering the same topic Simmons and Schindler (2003) make use of the research by Emmons (1992), according to which “It has been observed in Chinese communities that traditional beliefs about feng shui (literally,

“wind and water”) affect people’s daily lives” (Simmons and Schindler, 2003, p. 102). The ideas by Leung (1996), Simmons and Much (1996), etc. are used to back the hypothesis of the research that the “pronounced role of superstition spills out from personal lives into the marketplace, and it affects both managers and consumers” (Simmons and Schindler, 2003, p. 102). Finally, the theory by Cho et al. (1999) is used to prove that “there is considerable evidence that advertisements reflecting

local cultural practices are more persuasive than are advertisements that ignore them” (Simmons and Schindler, 2003, p. 102). All these theories are contrasted to the research data showing that the US market is far less superstitious and the dominant figure managers use to place at the end of the price is 9 at it is the largest one and the US customers tend to ignore the ending figures in prices.

Managerial Implications of Article’s Findings

Accordingly, the article by Simmons and Schindler (2003) presents several valuable implications for marketing managers from both the Western culture and the mysterious Asian one. First of all, both categories of managers mentioned should be aware of the fact that the international superstitions and cultural differences exist and do affect the marketplaces of various countries. Concerning the price ending figures, the article under consideration shows that each culture has its preferences but the reasons to their formation are different (Erevelles et al., 2001, p. 178).

Thus, if the Chinese prefer figure 8 to figure 4 according to their religious beliefs and traditions of feng shui, the American domination of figure 9 in price endings is purely profit-conditioned, while the traditionally frightening figure 13 displays no signs of underrepresentation in the US market (Simmons and Schindler, 2003, p. 102). Such data show that the managers adjusted to one cultural reality are to be aware of another one and consider the peculiarities of the latter for the greater chances of the success of their enterprises.

Further on, the authors of the article present a number of significant examples of the traditional Chinese business practices to exemplify the differences in managerial styles that can be observed between the Western and the Chinese cultures: “For example, many Chinese entrepreneurs chose August 8, 1988 (the Chinese do not name months, so the date is represented as 8/8/88), as the date to start their new businesses” (Simmons and Schindler, 2003, p. 102). What a western manager can take from the examples of the kind is that for the Chinese culture figures play a significant role and conducting business in China the pricing should be carried out in accordance with the local preferences.

Limitations of the Article

Needless to say, however, that the article under consideration possesses certain limitations of its research basis and theoretical framework. First of all, the mere calculation of the various kinds of prices found in the above mentioned number of the Chinese, Taiwanese, and Hong King printed media cannot serve as the credible evidence of the significant cultural difference of the Chinese people from the Western world. In other words, if a certain number of prices end in one figure (let us say 8) and the other, smaller, group of prices ends in another one (4), it is not the proof of the cultural difference of superstitious attitude towards prices. Such prices can be dictated by purely economic motives that are unknown to the authors of the research under discussion.

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Further on, the authors themselves admit the limitations of their study saying that there is no evidence in the article to support their hypothesis about the less frequent use of the figure 4 in high-priced goods because of the higher risks connected with them:

… our study gives no indication of whether the apparently less significant role of superstition in more expensive products is due to the greater perceived risk of these products or to the beliefs and values of the more affluent segments of the Chinese market (Simmons and Schindler, 2003, p. 109).

Based on these data, it is evident that the scope of the research by Simmons and Schindler (2003) is rather limited in the opportunities to generalize its findings and the specific support of the latter. Therefore, further research is necessary in the field of multinational relationships marketing to fill in this gap.

Future Research Directions

As for the specific directions of the further research, whose need even Simmons and Schindler (2003) see as the obvious one, it can be carried out in the areas that cannot be explained by their study:

For example, in the present study, we found that the digit 5 is overrepresented and the digit 1 is underrepresented among the price endings used in Chinese advertisements. These are both phenomena that are also present in U.S. price advertising (Simmons and Schindler, 2003, p. 109).

Having stated this, the authors admit their study being limited but also detect the direction for the further research. Thus, having come across the mentioned trends in the use of figures 5 and 1 in prices, Simmons and Schindler (2003) seem to be unable to explain the latter due to the narrow scope and precisely outlined hypotheses of their research.

Nevertheless, failing to explain the phenomenon, Simmons and Schindler (2003) try to suggest some ways of solving the issue assuming that “the phenomena [discussed above] derive from basic human mental processes” (Simmons and Schindler, 2003, p. 109). Thus, concluding their article and Schindler (2003) state the fact that there are certain universals in the area of multinational marketing, the number of which can be observed in the field of pricing and marketing management (Erevelles et al., 2001, p. 182). By this, the authors give another direction to the further research, which might focus on these universals. For example, scholars might study the national or cultural preferences in using certain figures in prices and busy themselves with finding out which figures are preferred in a certain area and why are they preferred.

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Works Cited

Erevelles, Sunil, Abhik Roy, and Leslie S.C. Yip. “The Universality of the Signal Theory for Products and Services,” Journal of Business Research, 52.2 (2001): 175-87.

Point of Purchase. “Multinational Marketing.” All Business. 2009. A D&B Company. Web.

Rand, M. “China’s “Plan B” Social Media Strategy; Integration after Connection.” Littleredbook. 2009. China SNS. Web.

Simmons, Lee C. and Robert M. Schindler. “Cultural Superstitions and the Price Endings Used in Chinese Advertising.” Journal of International Marketing 11.2 (2003): 101 – 111.

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