International markets expansion, challenges and solutions

Of what Importance are the Knowledge of Culture and Language when Evaluating Potential Export Markets?

Growth and success in today's global economy depend on being able to trade internationally. However, although the larger multinationals of the world have little or no trouble doing so, SMEs experience cultural barriers as well as language barriers among others when operating across borders.

 

Some of the most important foreign environmental information to know about a target export market are the political atmosphere, the economic stability, infrastructure, market potential, legal

considerations and the culture around exports. The success or failure of an export to a foreign market relies to a great extend on its cultural environment. The business world is littered with cultural gaffes that have had negative consequences. Having an insight into how another culture thinks and behaves allows one to tailor their approach and hence maximise their potential. Studies have shown that this aspect of export is heavily neglected when export managers are deciding on which markets to enter.

 

The enormous growth and potential profits in overseas markets as well as the desire to survive global competition motivates business executives to deal with global markets. In order to succeed in this, studies should be made on information concerning the subtleties of a specific export market. This includes insights into the similarities and differences of a market’s culture relative to one’s home market. In this case, a focus is laid upon knowledge concerning the various cultural groupings (along with their demographic, psychographic lifestyle and value profiles).

 

Communication is the fundamental starting point for any business relationship or transaction. The chances of any successful business occurring is slim if a common language does not exist. Some company personnel try to learn the language needed which is not evident. When you want to market your business at the international level there is also the need for translations in the necessary languages which means more work. An alternative solution is having staff who can speak to foreign clients on the phone or via email in their own language and who can take care of the translations for you. Companies which place the greatest stress on language skills within their organisation have both the greatest turnover and the strongest growth on returns from exports. A significant amount of small and medium sized business is being lost as a result of lack of language skills. SMEs that develop a language strategy, appoint native speakers, recruit staff with language skills and use translators/interpreters are calculated to achieve an export sale higher than a company without such investments.

It is argued that the opportunity to sell into foreign markets increases the returns to investment in innovation, thereby motivating an increase in such investment. If you are exporting to a new market, you need to be aware of cultural differences between yourself and your international business partners for this will improve your chance of success. In some cultures gestures or actions you would not give a second thought to may cause misunderstandings or even offence like pointing, the ‘OK’ sign and the ‘thumbs up’ sign. Also think about colours and imagery you use on your promotional materials. For example, in Japanese and Thai culture the colour white signifies purity, while in China it signifies funerals and mourning and should be avoided. The impact of foreign language use too must be viewed in the context of SMEs trade performance.

Smaller SMEs may lack the resource necessary to make forward investments in cultural environment and language skills. Outsourcing to a company with the necessary workforce can be a solution to this. DMBeti for example is a company which offers digital marketing and export and import related outsourced services among others.  DMBeti takes care of the known needs related to having an efficient presence in a foreign market; including if you want to have people travelling to customer sites within the country or you want a virtual office to handle support calls as well or if you are after getting sales and providing a service out of this office.

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