The world has indeed turned into a global market. This change has affected all aspects of life and opened up limitless business opportunities. Yet, globalisation and international, trans-border trade also bring numerous challenges arising from different languages and cultures.
What Is Culture In the Context of International Trade?
Culture is a complex phenomenon, functioning on different levels and with many subtle nuances. There are 4 broad levels of culture:
National culture
When you do business in a foreign country, your negotiations depend on the national culture as well as the local laws and regulations.
Industry culture
Each industry also has its own behavioural norms and practices in the context of national culture. Yet, these norms often outgrow national borders and are defined more by the industry than their place of origin.
Company culture
We can also talk about culture at a company level. Companies have their own sets of values, morals, opinions, and beliefs. Even different departments within a company can have separate dress codes, standards of communication, norms and expectations.
Individual behaviour
Finally, people who work for a company are influenced by all the above levels and have their personal expression of different norms.
In an age where companies and people worldwide are brought closer together than ever before, we all must understand and respect the cultures and beliefs of others. Especially if we want to do business with them.
The Influence of Cultural Differences on Export
The scale, frequency and speed of international trade today is incomparable to what it was just a few decades ago. If you learn how to capitalise on cross cultural communication, your business will be one step ahead in the export game.
Language in Export
Language is critical to export business success. Written language is used in materials such as leaflets, manuals and websites, while spoken language is crucial for communication with international clients.
If you aspire to operate in foreign markets, you need to present your product or service in different languages. A translated business card, brochure, or leaflet will be a sign of respect and it will make a greater impression on the receiver.
The chances of a successful business deal increase significantly if there is a common language. Company staff, ideally the main people in charge, should either know or learn the language.
Cultural Awareness in Export
The international business environment includes people and businesses from culturally diverse backgrounds. Therefore, cultural awareness or cultural intelligence is becoming a critical skill for clear and effective communication.
The lack of cultural awareness can cause cultural faux pas and unintentional upset with negative consequences in the business world. Simple gestures such as the thumbs up sign, or a kiss on the cheek can lead to serious misunderstandings and multimillion dollar losses for companies.
The key areas any exporter should be aware of are: meeting and greeting, the use of names, body language, building relationships, giving presentations, negotiating and entertaining. With these insights into other cultures, you can tailor your approach, maximise your potential, and become more effective in doing business abroad.
Simply put, if you are preparing to negotiate a business deal with a Chinese company for example, you must look beyond presentations, showing concrete statistics or future projections. If you don’t have knowledge of how business is done in Chinese business culture, you are decreasing your chances of success.
Selling to Different Cultures
Culture impacts the sales process in different ways. We’ll go over the most important aspects of selling across cultures:
Lead Generation
Having plenty of leads is crucial for sales, and culture impacts lead generation as well.
For example, some cultures prefer the more direct approach. This means a cold call or a direct LinkedIn message to a buyer without any prior context or link.
In other cultures, however, this direct approach wouldn’t work well, because it’s not the norm and it’s not considered acceptable. Here, an indirect approach is a much better strategy, meaning contacting potential buyers via personal recommendations and professional introductions.
Qualifying Opportunities
After the conversion is done, and a potential buyer turns into an opportunity, a salesperson must ensure that opportunities are not a waste of time. For this, you need to ask for and assess information effectively, and that’s where your communication skills and cultural awareness become essential. In some cultures, you can expect an open and honest approach, while in other cultures, that’s not the case.
Cross-Cultural Negotiation
Closing a business deal includes negotiating on the terms, prices and legalities. Yet, what is considered normal negotiating practice in the UK, or the USA, might be very different in China or India.
Approach to pricing is one of the common cultural differences business people are faced with when operating internationally. In some cultures it is preferable to discuss pricing at the very start of any negotiation. Pricing models are expected to be transparent and fixed, based on a clear structure. In other cultures it’s very different. Pricing can be left for the end, and subject to change. Bargaining and haggling are a norm, as well as changes to contracts and terms.
Consult an Expert
If you’re in doubt about the specific cultural norms in your target market, it is best to seek cross-cultural consulting. Attune Consulting can help you understand cultural behaviors and patterns, enhance your business models, strategy, marketing efforts and get closer to the market.
ITnnov is your all-in-one solution for entering the UK market. Our innovative approach to market entry and export marketing operations will help your business expand, develop, and grow in the UK market. For more information, contact us at info@itnnov.com.
Takeaway
As the world is getting smaller, cultural differences are gaining more importance. This can be a challenge or an opportunity. If you play your cards right, you can use cultural awareness as a substantial advantage for your business.
For more interesting topics, follow ITnnov blog.
Sources:
https://www.commisceo-global.com/blog/cross-cultural-solutions-for-exporters
https://www.commisceo-global.com/blog/selling-across-cultures-how-to-win-at-cross-cultural-sales