Comparing Different Western Countries

By Matthew Harrison

Most of this paper has talked about Western companies in general, and aims to provide recommendations on how Westerners should seek to market and sell themselves to Chinese businesses. It is worth, however, considering how companies from different Western nations are considered. Figure 9 summarises the main strengths and weaknesses of companies from the four largest Western economies, as perceived by Chinese buyers and business owners.

Figure 9 – What Characteristics Do Chinese Buyers Associate With Suppliers From Different Western Countries?

France: Extremely friendly and well disposed towards the Chinese. Better than other Western nations at building up relationships with Chinese businesspeople. Serious in all professional matters including product/service quality. No strong weakness, but French companies attract some criticism for their lack of efficiency.

Germany: Serious, precise and methodical with a real emphasis on quality. Technology is seen as market-leading. German companies are also noted for their focus on worker welfare and environmental issues, and are seen as extremely trustworthy. German employees are viewed as harder working than many other Europeans. Key weakness is a tendency to be ‘hidebound’ by procedures in production and purchasing. This is in direct conflict with the Chinese requirement for flexibility on all aspects of the business relationship, and can make German companies seem unresponsive or even aloof.

United Kingdom: Good quality products, albeit perhaps less so than Germany or USA. Extremely proactive in terms of telephone calls, conference attendance, and generally following through on conversations. Thorough, professional and efficient, and at the same time quite flexible by Western standards. Key weakness is an apparent unwillingness to discuss business outside the workplace, which makes UK companies seem unfriendly and hinders relationship building.

United States: Extremely efficient and work at a fast pace. Serious about work, and product quality is very good. Mixed views about ability to deliver on time, particularly when it comes to aftersales. Some hold the view that American companies are more inclined than other Westerners to exaggerate their own capabilities.

How Do Chinese Companies Compare In Their Marketing and Sales Approach?

We have devoted a lot of time to critiquing Western companies’ ability to market to Chinese businesspeople. But how do Chinese companies compare? The answer is that, despite the experience they have of dealing with target clients in their own country, there is much room for refinement and improvement. Below is a summary of the key criticisms Chinese buyers level at their local suppliers:

- Inconsistent product quality
- General lack of professionalism
- Unsophisticated approach to marketing and promotion, with websites, brochures and other promotional materials seen as poorly presented and uninformative
- Disorganised approach to paperwork
- Surprisingly, Chinese companies are seen as not willing enough to attend conferences
- Written communications seen as vague rather than direct
- Specific mention made of some Chinese companies’ tendency to turn up at the customer’s office uninvited – this is often seen as extremely impolite and unprofessional.

The above criticisms highlight two key issues. Firstly, Chinese buyers and business owners assess suppliers on their merits, and are as willing and able to criticise Chinese companies as they are to criticise foreigners. Few Chinese buyers pretend that Chinese companies do not have room for improvement on a number of important issues. Secondly, it is clear that there remains, and will remain for a long time, an opportunity for good quality Western companies to enter Chinese markets, usually on the basis of a high value added, high price offering. Western companies must recognise, however, that their competitive advantage on quality and professionalism issues is eroding, and will continue to do so, making innovation and efficiency increasingly important requirements.

Why Do Western companies get it wrong?

Before moving on to discuss how companies should implement change in terms of their marketing and selling approaches, it is worth considering why Western companies often target the Chinese market in an inappropriate way. There are a number of reasons for Western companies’ apparent lack of understanding of how to market; many of these are self-evident and all of them stem from a lack of experience in the market.

Life cycle
Some of the ‘mistakes’ made by Western companies in terms of their marketing and sales approaches and messages can be explained by the fact that many of their Chinese activities are relatively new. Companies are providing solutions to needs which have only just emerged, and mutual understanding between buyers and suppliers is still developing.
There has been a strong tendency for Western companies to undervalue the importance of marketing in China, seeing it as something that takes place not at the beginning of the product life cycle, but once channel access and market penetration have been achieved. This is extremely surprising, given the sophistication of marketing techniques in the West, and may result from a lack of knowledge of the target market, as well as a lack of confidence that marketing techniques will be successful.

Focus on product, channels and price, rather than promotion
If Chinese companies tend to regard promotion as the only aspect of marketing, there is an opposing tendency for Western companies in China not to pay promotion enough attention. Western companies entering the market have frequently conducted some kind of channel (place) research, as well as an examination of the likely prices the market will bear. They have usually given a good level of consideration as to which products will appeal, albeit with insufficient thought to how these will need refining. However, analysis of the market assessment research being conducted by market research agencies in China will tell you that the 4th ‘P’, promotion, has often been completely ignored. Company resources have been thrown into understanding the size and nature of the market opportunity, with much less emphasis placed on how that opportunity should be communicated directly with the target market.

“We know best”
A valid criticism made by Chinese businesses of their Western counterparts is that they sometimes appear hard-wired in thinking that everything they do is automatically superior to the local competition. Essentially, Western companies forget that marketing is about the profitable satisfaction of needs, and that if a need is different in China to the West, then the value proposition must also be different. Westerners tend to try to ‘re-educate’ Chinese buyers, rather than simply providing a value proposition that meets the market’s existing needs.

“Marketing is a ‘Western’ discipline – it’s less important in China”
Some Western companies, many of them guided by Western market entry consultants, tend to overstate the importance of relationship building in China, in that they see it as a substitute to marketing effort, rather than a complement. Good salespeople are sometimes left stranded alone in a small representative office, with no marketing capability to complement or assist them.

Communication problems
It cannot be denied that there remains a significant language barrier between Chinese and Western companies, albeit one that is closing as huge numbers of Chinese businesspeople learn English and increasing numbers of Westerners learn Chinese. Once companies need to interact at an operational rather than strategic level, mutual linguistic understanding can often be lacking.

Tips For Successful Selling In China

So, based on our own experience of selling in China, and in particular the experience of our clients and survey respondents, are there any ‘golden rules’ that can be used by foreign companies looking to market and sell in Chinese business-to-business markets? The answer is, of course, that there are differences by industry, geography and a host of other factors. We would argue that it is perfectly achievable for a Western company to succeed in the Chinese market, so long as it remembers the basics of marketing, and is prepared to adapt these to the local environment:

Remember the marketing basics – Product, price, place and promotion are all important. All should be researched before and after market entry, in order to ensure that the value proposition meets and continues to meet the target market’s needs.

Patience – Patience is required when applying the marketing basics to the local market. In particular, the sales process is longer and more complex than in Western markets, and local buyers will take time to be convinced that a Western company has the ‘local’ credentials to meet their needs.

Listen – Only by listening will you be able to understand and therefore meet the local market needs. Chinese companies do not want to buy a product or service that has come straight off a shelf in the West.

Relationships – Focus, but do not over-focus on relationships. Any salesperson must be prepared to be ‘friends’ with a potential supplier. However, this is as well as, not instead of, the 4 Ps of the marketing mix.

Be confident in your quality – Western companies start from a strong position, in that they are usually assumed to have excellent quality. Focus on the value you add, and be prepared to explain why you can add value in China specifically.

Be methodical, but flexible – One of the qualities that defines Western businesses is their methodical approach to doing business. It is clear that when this turns into a dogma about how business should be done, Chinese companies quickly lose interest in your offering. However, do not be afraid to highlight the methodical nature of your offering, as this is something that is valued by Chinese businesspeople and seen to be lacking in some Chinese businesses.

Be prepared for plenty of negotiation – The Chinese approach to completing deals relies heavily on many rounds of negotiation, and this is something that any potential supplier must be aware of. It is almost inconceivable that your first proposal (particularly your first price) will be accepted. Companies wishing to do business in China should consider the price they are willing to accept for their offering, but never open negotiations at this level.

Avoid exaggeration – Focusing on the credentials you have, rather than exaggerating to make up for perceived deficiencies, is to be recommended. Chinese companies want above all to trust their suppliers.

Matthew Harrison, Director of B2B International and B2B International China. B2B International is a business-to-business agency headquartered in Manchester, UK.  The company has a subsidiary office – B2B International China – in Beijing and an American office in New York.

This is the fourth and final part of the B2B international article Marketing and Selling to Chinese Businesses. Here you can find the full article and part 1, part 2 and part 3