Lani Final Project

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Aware or unaware, people do business in their lifetime. People, who aware do business in their life, understand the reason why they do it and what their wish to gain is. They might try to reach their successful target and enjoy the luxury of life. However, the unaware people might do not understand what activity which presents the business is. Business is an economic term and in general, it means a financial activity (Mahajan, 2014). Based on a book entitled Business Essentials (7 th edition), business is an organization that provides goods or services in order to earn profit (Ebert & Griffin, 2008). It can be concluded like a cycle: businessmen produce their product, sell it to other people, gain money, and then use that money to produce more products to sell to more people to gain more money. Nowadays, businessmen try to develop their business to go international. Their motive is simple: to gain more profit from consumers in other countries. However, companies must know that they need to do some research before they promote their product to consumers in other countries. The research goal is to know the country’s culture, because each country has its own tradition, cultural norms and taboos. Culture reflected in one’s life, includes the values, beliefs, customs, languages, and traditions, and concluded as the way we think, act, and interact in the society (New Nouveau Brunswick Canada). Therefore, after know the local culture of the country, businessmen can avoid any misunderstandings, offensive messages, and blunders when they promote their products. There are examples for blunders that some companies did before they know the local culture. First, baby food manufacturer Gerber has had problem in France as “gerber” can be translated from French as “to vomit” (Wilton & Brunetti, 2004). Another example is from Pepsodent. Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it “whitens your teeth” and then they realize that the local natives chew betel nuts to blacken their teeth

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Intercultural business

Transcript of Lani Final Project

Page 1: Lani Final Project

Aware or unaware, people do business in their lifetime. People, who aware do business in their life, understand the reason why they do it and what their wish to gain is. They might try to reach their successful target and enjoy the luxury of life. However, the unaware people might do not understand what activity which presents the business is. Business is an economic term and in general, it means a financial activity (Mahajan, 2014). Based on a book entitled Business Essentials (7th edition), business is an organization that provides goods or services in order to earn profit (Ebert & Griffin, 2008). It can be concluded like a cycle: businessmen produce their product, sell it to other people, gain money, and then use that money to produce more products to sell to more people to gain more money.

Nowadays, businessmen try to develop their business to go international. Their motive is simple: to gain more profit from consumers in other countries. However, companies must know that they need to do some research before they promote their product to consumers in other countries. The research goal is to know the country’s culture, because each country has its own tradition, cultural norms and taboos.

Culture reflected in one’s life, includes the values, beliefs, customs, languages, and traditions, and concluded as the way we think, act, and interact in the society (New Nouveau BrunswickCanada). Therefore, after know the local culture of the country, businessmen can avoid any misunderstandings, offensive messages, and blunders when they promote their products. There are examples for blunders that some companies did before they know the local culture. First, baby food manufacturer Gerber has had problem in France as “gerber” can be translated from French as “to vomit” (Wilton & Brunetti, 2004). Another example is from Pepsodent. Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it “whitens your teeth” and then they realize that the local natives chew betel nuts to blacken their teeth which they find attractive (Arnold, 2009). Foreign companies and businessmen which want to expand their market to Indonesia also need to understand the culture of Indonesia and adapt their promotion with the local culture.

Indonesia location is strategic: in the equator line, between 2 oceans, Pacific and Indian Ocean, and 2 continents, Asia and Australia (Location of Indonesia). Therefore, the weather in Indonesia is tropical and Indonesian people experience a hot and humid climate throughout the year (Location of Indonesia). Indonesia is a rich country and known as an agrarian country for years. From its land, we can get many resources for industries production, for example metal and mineral (tin, nickel, timber, bauxite, copper, gold, silver, and many more), plants (grains, herbs, cocoa, coffee bean, and so on), oil, natural gas, petroleum, and many more (index mundi, 2015).

Foreign people see Indonesia as a country of big numbers and big opportunity because Indonesia has growing middle class, strong domestic consumption, and largest economy in south East Asia. Furthermore, Indonesian market strengths are: population increasing by 4,5 million a year, high proportion of working age people, abundance of natural resources, political stability following transition to democracy in 1998 (GOV.UK). Therefore, they are exporting products to Indonesia.

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Even though Indonesia land is rich with agriculture, mine, and work aged-people, Indonesia also agree to import things from the foreign countries. Middle class in Indonesia is demanding for modern retail and consumer goods, healthcare, education and professional qualifications, ICT, transport, construction, manufacturing (GOV.UK). For example, Indonesia imports cars like Honda and Suzuki from Japan. Indonesia is also importing things to fulfill the citizen need, such as food, agricultural, oil, and so on. For example, Indonesian imports of agri-food and seafood products are most prominently from Australia (19%), the United States (17.7%), China (10.4%), Thailand (7.3%), Argentina (6.4%) and Brazil (5.6%) (Market Analysis Report, 2011).

However, foreign companies must know the Indonesian culture to avoid any problems which might happen during the business processes. Based on Kwintessential.com, Indonesia has an official language known as ‘Bahasa Indonesian’. Then, it also says hierarchy plays a great role in Indonesians daily life, therefore respect shown to those with status, power, position, and age. Indonesian people are very careful how they interact and speak because they avoid the cause of shame (“malu”) and also because they believe one should never ridicule, shout at or offend anyone. They also believe time does not bring money, good relations and harmony do, therefore they usually arrive at the meeting not on time (Indonesia-Language, Culture, Customs andBusiness Etiqutte). Furthermore, Indonesian people also known as religious people because everyone in Indonesia have their own belief and all of them believe in God(s) (Religion inIndonesia).

Foreign companies use Indonesian identity to reach Indonesian people market to sell their products. For example, in holy Ramadhan moment, which is a religious moment for Muslim in Indonesia, foreign companies such as McDonald’s and Oreo try to attract local consumer to buy their products. First example, McDonald's put in Curry Beef Delight into one of their main menu which contain a burger with curry sauces, shaker fries, and green apple fizz with a short message “Saatnya Berbagi Nikmat Ramadhan” and they also made a program called Bukaan untuk Teman (McDonald's, 2015). Then, Mondelez Indonesia as one of prominent snack company, release Oreo Selection in market to create happy moment during Ramadhan. They also made a campaign named ‘Kembali Bersama’ to motivate Indonesia people to live together and share love and happiness with each other (Indopos.co.id, 2015).

Unfortunately, one characteristic from customer in Indonesia is also trust foreign brands more than local product. Indonesian people believe price is equal to quality, the higher the price the better its quality. Ego and prestige also became the important thing to think before they buy a product (Tiara, 2012). Therefore, Sophie Martin included area name after its original brand: Paris to raise their sales rate in Indonesia (Erin, 2012).

Local cosmetics products also find it hard to sell its products to local citizen. It is happening because people in Indonesia demand more cosmetics from other countries (Agustine & Rahman,2015), such as Maybelline from New York, L'Oréal from Paris, Etude from Korea and many more. Cosmetics companies from other countries use their beautiful and famous local celebrity

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as a model for their products which make Indonesian people think that they can be famous and beautiful like the model if they use that cosmetics product.

Not only cosmetics, there are similar cases when Indonesian people want to buy furniture products. Some Indonesian people are proud when they have IKEA furniture in their house because it is imported from America. However, American people do not proud to have IKEA. They only bought IKEA because the price is far cheaper than the other brand. Furthermore, they have to read the manual books to install their IKEA product themselves (Yogeswary, 2014).

Foreign company who does not know and ignore the local culture of Indonesian might face problems and it might impact on their sales rate or their own safety. For example, there was a problem in Indonesia because an Indonesian felt offended by their foreigner superior. Based on Kwintessential.com, the story began with an American oil rig supervisor in Indonesia shouted at an employee to take a boat to shore in a rather aggressive manner. Since it is no one berates an Indonesian in public, a mob of outraged workers chased the supervisor with axes (Results ofPoor Cross Cultural Awareness). Another example of blunders ads in Indonesia is a TV commercial of Nutrilon Royal which entitled “Life Start Here”. Because of two children with different gender kissed each other, the Nutrilon Royal TVC got a warning from KPI—Komisi Penyiaran Indonesia. KPI assumed it as an inappropriate activity with a reason kissed mouth on mouth is taboo in Indonesia. However, it actually expresses love in foreign country (kabarnesia.com, 2012).

To sum up, Indonesian people is a potential market for international products. Therefore, foreign companies try to put in their products into Indonesia. They use several ways, such as adapt their adverts with Indonesian culture, celebrity endorsement, or sale and annual promotion. However, it is good to know for Indonesian people to be proud about local products and prefer to use it because Indonesian products are also have good quality and international standard.

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Bibliography(n.d.). Retrieved from New Nouveau Brunswick Canada:

http://www2.gnb.ca/content/gnb/en/departments/thc/culture/content/cpr/matter.html

(n.d.). Retrieved from Indonesia Point: http://www.indonesiapoint.com/location-of-indonesia.html

(n.d.). Retrieved from GOV.UK: https://www.gov.uk/government/publications/exporting-to-indonesia/exporting-to-indonesia

(n.d.). Retrieved from Kwintessential: http://www.kwintessential.co.uk/resources/global-etiquette/indonesia.html

(n.d.). Retrieved from INDONESIA-INVESTMENTS: http://www.indonesia-investments.com/culture/religion/item69

(n.d.). Retrieved from Kwintessential: http://www.kwintessential.co.uk/cultural-services/articles/resuslts-of-poor-cross-cultural-awareness.html

(2011, January). Retrieved from Agriculture and Agri-Food Canada: http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/southeast-asia/the-indonesia-consumer-behaviour-attitudes-and-perceptions-toward-food-products/?id=1410083148749

(2012, April 26). Retrieved from kabarnesia.com: http://kabarnesia.com/579/iklan-nutrilon-royal-di-tegur-kpi/

(2015, June 30). Retrieved from index mundi: http://www.indexmundi.com/indonesia/natural_resources.html

(2015, July 1). Retrieved from Indopos.co.id: http://www.indopos.co.id/2015/07/mondelez-indonesia-hadirkan-keceriaan-selama-bulan-ramadhan-melalui-oreo.html

Agustine, F. P., & Rahman, R. (2015, March 30). Retrieved from BERITASATU.COM: http://www.beritasatu.com/gaya-hidup/261416-kosmetik-impor-bermerek-kini-makin-dicari-di-instagram.html

Arnold, D. (2009, September 15). Retrieved from Articlebase: http://www.articlebase.com/marketing-articles/top-20-global-marketing-communications-mistakes-1234051.html#ixzz1M7iZrloO

Ebert, R. J., & Griffin, R. W. (2008). Business Essentials, 7th Edition.

Erin. (2012, November 5). Retrieved from http://sharingdisini.com/2012/11/05/21-brand-indonesia-yang-disangka-brand-produk-luar-negeri/

Mahajan, M. (2014, September 21). Retrieved from Tectrick: http://tectrick.org/definition-of-business/

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McDonald's. (2015, June 20). Retrieved from Facebook: https://m.facebook.com/McDonaldsID?refsrc=https%3A%2F%2Fid-id.facebook.com%2FMcDonaldsID

Tiara, I. (2012, October 16). Retrieved from Kompasiana: http://www.kompasiana.com/inatiara/10-karakteristik-konsumen-indonesia-beli-indonesia_551889f4a33311ae07b6656c

Wilton, D., & Brunetti, I. (2004). New York: Oxford University Press. Word myths: Debunking linguistic urban legends.

Yogeswary, A. (2014, October 25). Retrieved from http://kucinghitamjalanjalan.blogspot.com/2014/10/ikea-kfc-dan-budaya-makan-brand-orang.html?m=1