Consumer Behaviour

Thank you Shayne.  So what’s the mistake the ScanCRM made?  It’s the failure to appreciate the Chinese Business Culture. Buying behaviour are influence by factors like culture, social and psychological, however, in the case of ScanCRM, the organization failed to identify the buying behaviour in China as the management use a simplistic analysis approach, thus they misunderstood the vital point of the local culture.

Some of the alternative approaches that ScanCRM could consider adopting are Field Observation. They could procure a local Chinese consultant to conduct field observation by setting up a base in China, allowing the company to be involved and to interact with the environment while identifying the local behavior.

However, it must be noted that field observation is very costly and time consuming as it requires a base to be established and to hire high levelled experts and researchers in the relevant fields.

Next alternative strategies will be Microtargeting. It is especially crucial for marketers to understand the cultural differences before entering new markets ScanCRM could utilise both microtageting and niche marketing, there are however some challenges that should be well managed. An example would be test marketing and consumer analysis.

For an organisation to be successful in microtargeting, they should pay a listening ear to their customers. Listening also implies that they have to practice intensive surveys, content reviews and to welcome all positive and negative feedbacks from their customers. With the modern technology aid, it is easier to tailor and offer to a specific targeted market segment. Furthermore, microtargeting proves to be extremely effective to rival against existing organisations in China.

Moving on to the fundamentals of Chinese business culture, the four fundamentals are namely Guanxi, Face, Foreigness and Hierarchy.

 “Guanxi” is a chinese term used to describe relationship that may results in the exchange of favors “beneficial” for the parties involved which can be for both personal and business purposes. Good “Guanxi” can be the key in doing businesses in China and must be properly maintained to ensure proper positioning for future businesses (World Learner Chinese 2015). Inviting or hosting dinner for prospective business partners as well as exchanging favors such as “inside information” are some of the ways to establish good relationship in China.

In China and many parts of Asia, “Face’ represents a person’s reputation within multiple spheres and it plays a vital part as the Chinese emphasizes a lot on rank and hierarchy. The three main components that forms the concept of “Face’ that determine the success of business in China are “Saving Face”, “Losing Face” and “Giving Face” (Upton-McLaughlin 2013).

Foreignness means that an organization is unknown or have too little knowledge about a country’s business culture. For organizations to be successful, they must understand the business system that works in China and overcome this “Liability of Foreignness” (INSEAD Knowledge 2013).