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What social, cultural, political and practical difficulties do foreign firms face in trying to sell their products in Asia Pacific markets?The opening up of the Asia Pacific markets to foreign investment has been viewed by many as an opportunity not to be missed. The large and relatively unsophisticated domestic markets, low cost labour and resources and the incentives provided by many of the governments have attracted firms to set up camp in the Asia Pacific. Japan is the second largest economy in the world and has high levels of income, China is said to be the third largest economy in the world behind the US and Japan and is without doubt the world's most important emerging market and the Newly Industrialised and ASEAN economies hold great promise for the future.The realisation of the potential of the Asia Pacific as a market has led a large number of foreign firms to pour investment into the region but those firms that have done so have found the market more difficult to crack than first thought. The markets of the Asia Pacific differ greatly from those in the Western world and many firms have struggled to make a success of their ventures. With the huge domestic markets and relative lack of sophisticated co
Another such error occurred in China in the 1920s where Coca Cola marketed its soft drink using a name written in Chinese characters that when pronounced, sounded like Coca Cola, but whose translation meant "bite the wax tadpole"! Not quite what they intended! Foreign firms are also charged more for advertising in China than domestic firms and they have to pay in foreign currency. In order to do that the company is the major sponsor of the China Europe International Business School in Shanghai. * Consumers in the East tend to be risk averse and are therefore likely to stick with using a traditional product rather than risk trying a foreign product even if the foreign product is of a better quality. That is expected to happen immediately after Beijing's government will lower entry barriers and most likely the three existing companies will make up Unilever China when it is free to float. Corollary: Respect guanxi - connections, but do not stake your own business on it. * Consumers in the Asia Pacific are also keen to save money and are uncomfortable with credit. * As incomes rise, there is greater demand for a range of consumer durables such as electric heating shower equipment, kitchen fans, microwave ovens, food processors, etc. By doing so the company has more chances to impose their business strategies and develop them strong and only after that proceed with getting involved in partnerships and HRM investments. The Asia Pacific countries are known for their sticking to tradition and their strong cultural beliefs and these act as a barrier to the entry of foreign firms into the market. The ever changing regulations and the weak system of justice provides flexibility for those who can massage the system but by and large, the legal situation has led to some degree of lawlessness, making the enforcement of contracts, for example, almost impossible. For Western firms, this often requires much more intensive and extensive research than in other countries in the region. com/industry/consumer/NewsArchive/Secure/2000/may/C00052402.
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Acceptance Essays
