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SELLING & PROMOTING INTERNATIONALLY.

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Examines effectiveness of selling & promotion approaches for U.S. firms, focusing on China. Theory & examples.... More...
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Paper Abstract:
Examines effectiveness of selling & promotion approaches for U.S. firms, focusing on China. Theory & examples.

Paper Introduction:
PERSONAL SELLING AND PROMOTION ON AN INTERNATIONAL SCALE Several terms must be defined before this topic can be addressed in a meaningful way. The two most important terms are "selling" and "international." As used in this analysis, "selling" will be construed as meaning the act of one party presenting sufficient information about a product or service to a second party with the goal of persuading the second party to accept possession of the product or service in return for currency of value. "International" will be construed as being limited to an enterprise in one nation attempting to sell a good or service to a customer or customers in a second country. Both the concept of international expansion of a business and the concept of achieving that goal by personal selling and promotion have been ancillary economic issues since the 19th Centu

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Analyzing further, hostcountry- specific factors include country risks and location familiarity,while ownership-specific and internalization factors focus on the industry-specific and firm-specific variables. China was chosen for a variety of reasons, the most important beingthat it is a large commercial market in the midst of growth turmoil. She points to Krohne, the German manufacturer of flow meters and apartner in a 1985 JV. The "seller" couldbe one government and the "buyer" could be another government. Toward an eclectic theory ofinternational production: Some empirical tests, Journal of InternationalBusiness Studies, 9-31. Marshall had proposed that consumer demand was astatic situation that took no real notice of the importance ofinterpersonal effects on consumer choice. "While many scholars argue that ownership and internalization factorsshare some similarities with the transaction cost perspective, the thirdcomponent of Dunning's eclectic framework clearly emphasizes the value ofcountry-specific factors" (Tse, Pan & Au, 1997, 784). Vanhonacker(1997) points out a major problem in the many joint ventures formed in theearly 199 s. 1). However, as critics since thenhave pointed out, such an attitude takes no account of social factors, inparticular the desire for status, on purchase decisions. Tse, D.K.; Pan, Y.; Au, K.Y. (1995, Sept. The unbounded optimism of the earlyOpen Door years has given way to a steely realization of the many seeminglyintractable risks and problems confronting foreign business in China. Vanhonacker, W. 2). Much ofthat framework is still valid today when considering the larger picture ofcompanies using "personal selling and promotion" to expand into a foreignmarket. Interpersonal effects on consumer demandin economic theory and marketing thought, 189 -195 , Journal of EconomicIssues, 871-882. Dunning (1988) proposed a model framework for such communication thatblends several international business theories concerning cross-borderbusiness activities. Marshall ignoredthe concept of status-driven consumption, suggesting that the "theunwholesome desire for wealth as a means of display...was rooted inpersonal vanity and created envy in others" (Mason, 1995. The two most important terms are "selling" and"international." As used in this analysis, "selling" will be construed asmeaning the act of one party presenting sufficient information about aproduct or service to a second party with the goal of persuading thesecond party to accept possession of the product or service in return forcurrency of value. The Krohne executives, on the other hand, saw the penetration successas a challenge to competitors and urged their Chinese partner to step upinvestments to protect against the coming onslaught. References Dunning, J.H. (1997, Dec. Her research shows that many foreign companies find it hardto keep their Chinese partners motivated for a fight, "particularly whenthe partnership has attained a comfortable market position and level ofoperating profits" (Vanonhacker, 1997, 13 ). Marshall, however, ignored or denied the existence of the theorem thata part of the "value of any article varied in direct proportion not only toits supply and availability, but also to its consumption. As he saw it, itwas the act of a "seller" providing sufficient information to a "buyer" tocreate an environment where an exchange of value could take place. Mason, R. "Within five years, the EJV was responsible for 6 %of the installed flow meters in China and wasenjoying a significant operating profit. (1988, Nov.). Asobering analysis recently appeared in the China Business Review summed upthe situation of doing business in China. 1), Entering China: An unconventionalapproach, Harvard Business Review, 13 . As Stratton points out, "each of McDonald's Corp.'s 38restaurants in Beijing is reportedly subject to 31 miscellaneous fees, ofwhich only 2 are clearly spelled out in the legal code, according to theChina Economic Times. Testing this hypothesis of country-specific factors, the target nationof China will be examined as the "customer" and certain American companiesthat have not been sufficiently aware of these factors will be examined asthe "seller." The efficiency or inefficiency of their selling methods willbe analyzed in the remainder of this paper. How MNCs choose entrymodes and form alliances: the China experience, Journal of InternationalBusiness Studies, 779-8 6. (1997, Mar. 874). Dunning proposes that three factors influence cross-border business activities: host country-specific factors, ownership-specific factors, and internalization factors. "Few executives with experiencein the PRC would dispute that China is one of the most difficult countriesin the world in which to do business. Thevery Chinese term for anyone who is not Chinese is "yang gweidz" ("foreigndevils") or "yuan bin" ("round eyes.") In addition, the Chinese attitudes toward business and negotiation aremarkedly different than attitudes in American companies. Or the"seller" could be a multi national company that does business in manycountries. Part of the conflict between Chinese businesses and their foreignpartners is a distinct difference in attitude concerning business. Whether that is true or not, Marshall was among the first toacknowledge "selling" as a legitimate economic exercise. In fact, in the Chinese language, the word forbusiness is "mai mai" formed by joining the characters for "buy" and"sell." Such a pragmatic concept does not allow for subtleties of selling,such as persuasion, motivation, elucidation, and other tenets of"salesmanship" in the Western environment. "International" will be construed as being limited toan enterprise in one nation attempting to sell a good or service to acustomer or customers in a second country. Wereit not for the tantalizing potential of this vast country, it is certainthat far fewer companies would be waiting for smoother sailing" (Stratton,1998, 22). Both the concept of international expansion of a business and theconcept of achieving that goal by personal selling and promotion have beenancillary economic issues since the 19th Century when Alfred Marshall firstaddressed the issue. The first is that the "seller" (promoter)must be sufficiently aware of the socio-economic structure of the targetcountry to skillfully mold the information into a meaningful communicationfor the "buyer" to understand. The companies that have been the most successful in penetrating theChinese marketplace are those companies that adopt an equally pragmaticview of selling. There are several ways to consider this equation. If such bureaucratic devastation is being wroughtwith impunity on such a high-profile multinational company in the capitalcity, it is safe to assume that smaller foreign companies in other parts ofChina confront similar circumstances" (Stratton, 1998, 22). TheChinese business mentality can best be described as "order taking" asopposed to Western concepts of marketing, such as those first analyzed byMarshall. In effect, this quote could describe the Chinese attitude towardbuying and selling. Among the difficulties cited by Stratton are language difficulties,cultural barriers, discrimination, and innate distrust of outsiders. PERSONAL SELLING AND PROMOTION ON AN INTERNATIONAL SCALE Several terms must be defined before this topic can be addressed in ameaningful way. "...unable to come toan agreement about the best direction for the company, Krohne and itspartner are in legal negotiations" (Vanonhacker, 1997, 131). Individualdemand schedules were therefore interdependent and could not be arbitrarilycompounded toproduce aggregate demand" (Mason, 1995, 88 ). Regardless of the type of venture involved, there are safeassumptions that can be made. That market position delightedthe Chinese partner, which took it as a signal to relax" (Vanonhacker,1997, 13 ).

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