With increased globalization, businesses find opportunities to reach out to the global and international markets to enhance their performance. However, the need to serve several markets presents the challenge of having to deal with differences between the business orientation and the markets with cultural difference being among the most prevalent factors that requires critical consideration by marketers in order to enhance their operation’s success. In that consideration, this analysis seeks to demonstrate the challenges that cultural difference presents to businesses and the effective application of marketing strategies in addressing them. This has been done by analyzing Li-Ning’s prospects of entering Thailand market where the country’s cultural difference with the Chinese cultures are explained with an establishment of the two most effective market mix elements that can be applied in addressing the situation, The analysis then explains Li-Ning’s positioning in the market as well as the suitable strategies to address it. Finally the analysis explains the implications that cultural differences have on the select market mix elements.
- Cultural differences and marketing mix
Li-Ning is a Chinese based company and a world’s leading designer, researcher, marketer and producer of sports equipments in categories of accessories, apparel equipment and footwear for both leisure and sports use. The products are produced and marketed under the Li-Ning brand name which has a great recognition both locally and internationally. (Li-Ning, 2012)
With a population that comprise of 75% Thai, 14% Chinese and 11% being the other ethnic groups, Thailand boasts of a deep seated Thai oriented culture which has a great effect on business operations in terms of dictating customer’s nature, needs as well as their perspective of international brands and businesses. Thailand is the second largest of the ASEAN economies only be hide Indonesia and whose economy is mainly export based. By the year 2010, exports accounted for 70% of the country’s GDP. With a growing popularity of sports in the country including the badminton, the society is increasingly identifying and in demand of sporting apparel and accessories. (CIA, 2013)
In consideration of the organization and the new market’s nature, Li-Ning’s expansion of its market in Thailand would be suitable. However, business expansion into the global and international market is subject to various macro factors with cultural differences being one of them. In that respect, an evaluation of the cultural differences between the Thailand market and Li-Ning organization as well as its leadership is critical. (LuoSterinen & Gabrielson, 2002)
- Cultural differences
In this respect, organizational culture which shapes or is in-turn shaped by the leadership behaviors is crucial in establishing suitable business practices to enhance a business’s competitiveness in the face of such cultural diversities. On the other hand, having an origin in China, Li-Ning is highly inclined to the Chinese cultural ways which are different to those of Thailand. This is a result of the numerous differences between the two countries that include China being
- Medium Humane which means that there is a balance in the way Chinese view and seek to encourage fairness just and equality among the society as well as rewarding the traits.
- Medium individualistic defining the degree into which people are integrated into societal groups. Therefore the Chinese culture has a balanced nature of people reflecting individualism and some integration.
- Performance oriented society in which the system seeks to rewards and encourage group’s performance and excellence. (House et al, 2004)
Thailand has cultural traits like
- High power distance in that there is expectation of fairness in power distribution in the society and people’s as well as organizational practices.
- High uncertainty avoidance which favors transparency with uncertainty avoidance being defined by the extent of society’s dependency on procedure, social norms as well as the rules in seeking to address and alleviate future occurrences’ uncertainties (House et al, 2004)
- Suitable marketing mix
In view of the above differences between the two countries and with Chinese culture having had a great influence on the Li- Ning’s organizational culture hence its marketing activities and focus. Adoption of suitable marketing strategies is necessary in order to be able to address the cultural differences while enhancing the business’ performance in the market. (Porter, 1991)
Supply chain choice is a key success factor for any business that seeks to enhance its operations. Therefore with the Chinese Cultural orientation of the Li-Ning, there is a need to a change how the business reaches its customers focusing more on Thailand customers high power distance nature which requires a kind of fairness and just in systems hence a need to establish channels which seems to benefit and reflect value to both the seller and the customers. (Market Line, 2013)
- Market position and strategy in new Thailand market
Sporting activities continues to gain popularity globally with increased coverage on traditional and digital as well as social media. This is increasingly attracting people of all generations to sporting activities hence the continued growth of the sporting goods industry. In Thailand, the industry has not been left be hide with the economies total of 64 shipments to US in 2012 having sports goods in 96% of the shipments. (Panjiva, 2013)
- Li-Ning has well known and accepted brands which have the capacity to garner a significant market share through the competitive edge offered by its brand image and equity in other international markets. (Market line, 2012)
- Diversified revenue stream in terms of diverse geographical footprint provides the business a good market experience that enhances its capability to capture a significant market share in Thailand.
- Higher research capabilities and design undertakings by the company also enhance its ability to effectively compete with the other sporting goods providers by enhancing its brands value delivery to the unique market through innovation. (Li-Ning, 2013)
The most appropriate and suitable marketing strategy for Li-Ning to apply in Thailand is combining its multi-brand development strategy with target market focus that seeks to identify niche markets whose needs can be served by each of its unique brand. This will entail more of a differentiation strategy where tailoring the value chain and products to suit the cultural values and differences of the society should be the focus. (Luosterinen & Gabrielson, 2002)
In addressing just service delivery to the society that values fairness in terms of costs, the business can apply distribution strategies by using online platforms and retails which avails convenience to customers while lowering costs both to customers and the business. In addressing the need for transparency, the business should present its brands as fairly as possible in respect to the value that they deliver to customers. With these strategies, the business would position its products as trusted brands that customers could trust and seek to identify with. This would in-turn have the effect of earning significant customer loyalty hence create a significant brand equity in the market through the suitable positioning that is culture sensitive. (RajaGopal, 2007)
- Marketing mix elements ‘cultural implications
Cultural differences have diverse implications ranging from organizational, managerial as well as national or geographical. These effects in-turn have a great effect on the effectiveness of the marketing mix elements applied by an organization since the application is highly guided by the organizations leadership and management with their perspective of what suitable marketing is for different markets relative to the market situation and cultural their orientation. However, the cultural effect can be either positive in developing more effective and desirable management and leadership behaviors or negative behaviors which in turn can have significant negative implications on the marketing operations. (Parker, 1998)
Managerial implications have effects on leadership on various aspects including the humane aspect where modesty and humane orientation defines the ability of collectivism to enhance and reward behaviors of trust, fairness, generosity, caring and kindness to others. The cultural factor also has an effect on the leadership’s autonomy with creation of autonomous, independent, individualistic and unique behaviors. (House et al, 2004)
Further, cultural differences have different impacts on leaderships integrity and charisma which in turn determines the traits of trustworthiness, just, fairness, foresight and honest as well as planning ahead. Therefore, a close scrutiny of the effects of the cultural factors clearly demonstrates their possible implications on the marketing mix elements pf promotion and place in that they would have to reflect the organization and leadership’s orientation either towards, fairness, trustworthiness, foresight as well as the elements focus of individualism. (Kotler, 1991)
In addition, the cultural factor has implications on marketing mix elements through the following
- Communication and decision making.
Promotion entails much of communication which is meant to enhance decision making regarding a product. Through cultural orientation and the ability of Li-Ning to appeal to Thailand’s customers’ culture through appropriate communication, the customers will make decisions that determine the effectiveness of the elements application. (Hollenson, 2010)
- External adaptation
Through effective marketing, the business can change the customers’ mindset to adopt the culture that the brand represents. The ability of the marketing mix element to achieve this is highly dependent on how the local Thailand culture is deep sited on the customers’ minds and values. (House et al, 2004)
- Internal integration
For the most deep sited cultural values, Li-Ning would have to adopt the suitable marketing mix elements that reflect its internal integration into Thailand’s culture in order for its brands to appeal to the market. This would entail tailoring elements like promotion and place to suit the local market. (Hollenson, 2010)
The analysis demonstrates the significant cultural differences between the Thailand as the new market and China as the origin country of the brand Li-Ning. With Chinese organizations representing more on the Chinese high performance orientation and medium humane as well as medium individualism, the brand needs to adjust its marketing practice to suit the more different Thailand market that is marked by high power distance as well as high uncertainty avoidance that seeks transparency. Thus this requires tailoring marketing mix elements including promotion and place to suit the market. In addition, the strong and well recognized LI-Ning brand places the business in a more competitive position to compete for a significant share of Thailand market. Finally, the cultural factors and orientation is demonstrated to have a great effect on marketing mix through its possible effect on organizations, management as well as leadership as well as through its effects of external adaptation, internal integration as well as through its effects on communication and decision making.
- CIA. 2013. WorldFact Book: Thailand, retrieved 16 April 2013,