Cross Cultural Barriers in China

THE 4 P’S EXPLAINED

EGT1, Task 4

Each of the 4 P’s can be addressed with “hypothetical” or “real” products/services. You

are welcome to use the same product/service for all 4 P’s, or you can use different

products/services for each of the 4 P’s. Let’s get down to it! What are the 4 P’s?

1- Product

2- Price

3- Promotion

4- Place (distribution)

My experience with Asia is almost exclusively with Southeast Asia, primarily Cambodia.

Accordingly, I am going to select an Asian country that I know little about in order to

show an example of approaching the topic empty-handed. I will select Nepal.

To start with, I should become familiar with the country a bit. Briefly searching on Google I discovered the following

sites:

https://www.cia.gov/library/publications/the-world-factbook/geos/np.html

http://travel.state.gov/travel/cis_pa_tw/cis/cis_980.html

Here I found information about specific to geography, the people, government, transportation, military, transnational

issues, criminal penalties, road conditions data, and children’s issues. A brief read through some of this information

really helps to give insight and perspective on the country; and people living there.

NOTE: when you are looking through sites, gathering data – be cautious in considering

what constitutes a “credible” source. It is generally considered reliable if it comes from a

government site (such as CIA). Many of the countries throughout Asia operate with

“ministries” so searching for ministries with your selected countries is recommended.

When I search in Google for “ministries” and “Nepal”, I quickly find the way in which

ministries are divided within this country. For countries that are a part of larger “global”

initiatives (such as being a part of the United Nations), statistics about the country are

reported annually as a general practice. You can find these statistics within the ministry

that governs the numbers you are interested in.

Okay, so now I have my bearings on a few details about Nepal – what next? Well, it is time to start considering the 4 P’s.

The 1 st

P: Product. Here it is always a good idea to consider product demand. Remember you are comparing a product

that is successfully marketed in the United States – with intention of expanding into Asia; here I’m considering

expanding into Nepal. While you can consider myriad of things listed in the Task Guide – there are thousands of

examples to pick from when just considering “demand” arguments for any country in Asia. Accordingly, I will limit the

depth of this analysis to product demand.

Imagine that you have been successful in the United States regarding a specific product/service. Now that I am

expanding into Nepal, what might I want to consider? I would start with some basics: what relevant distinctions exist in

regards to geography, climate, religion, technology, or the provision of various services? In looking at the CIA website I

listed above, I noticed that the religions of Nepal list Hindu (81%), Buddhist (11%), Muslim, Kirant, etc. Less than 1% of

people in this country are classified in the “other” category; some of which might belong to Christianity. So what? Well,

suppose the business I operated in the United States specialized in producing Christian jewelry. There would likely not

be sufficient “product demand” to warrant the expansion of my business in Nepal.

I also noticed that health expenditures only comprise 5.5% of GDP in Nepal (2010). The United States on the other hand

averages closer to 18% of GDP within the “health” category. Accordingly, chiropractic services or the sale of doTERRA

are not likely possibilities in Nepal.

Any of the aforementioned examples would satisfy the requirement for the first P: Product. When discovering this that

qualify for your country remember that you don’t have to find an example wherein a product demand would not exist,

but rather you could note that the product demand would be less. The extreme example is not necessary, I just select it

to enunciate the point. Also, keep in mind that you do not need to stick with the same product for all 4 P’s.

Next P: Price. In the “economy” section of the CIA website listed I discovered that GDP per capita was $1,300 – and that

Nepal is among the poorest and least developed countries in the world. I also discovered that in Nepal 75% of the

workforce operates in the agrarian sector, but agriculture only accounts for 38% of the GDP. On the flip side, 18% of the

work force is involved in “services”, and these services account for nearly half (47%) of GDP. Also in Nepal, the major

exports include clothing, carpets and textiles – whereas imports involve machinery and equipment, electrical goods and

petroleum products. This information is all very important when considering business expansion into the country.

What does all this information tell me? First, I should say that the GDP per capita indicates that most people in this

country are not able to afford much. Given the world ranking of poverty and the inequality index for Nepal – it is safe to

say that the majority of people in this country would purchase more food, clothing, and perhaps education with more

money. Price will be very critical to people living in Nepal. Whereas paying a high price in some countries comes with

“bragging rights”, people live too close to the threshold of distinctions at $1,300 a year to put their pride on the line.

Accordingly, any product that I would sell here would need to be priced “extremely low” in order to have a demand at

all. More precisely, selling watches priced at $200 would not be successful. However, perhaps water purification units

priced at $5 or less, would have significant demand and be affordable.

On to the 3 rd

P: Promotion. I quickly searched in Google using key terms “Nepal” and “Product Advertisement” and

found several interesting sites; one of which is the following:

http://www.thehimalayantimes.com/fullNews.php?headline=

Nepali+advertisements+&NewsID=271212

Here in the Himalayan, a 2010 article titled “Originality Must

be Prime Focus” highlights several issues that could be used to

elaborate on the “promotion” concept. The article indicates

that as many as 80% of advertisements on FM stations or

television are a “dubbed version of an Indian advert”.

Voiceover is commonplace, and most ads indicate products

that are “successfully” sold in India. Accordingly, the people of Nepal are accustomed to associating consumer products

with the markets of India. Given this information, it would be wise to align any marketing campaign of a product sold in

Nepal with “Indian” undertones. This is obviously only one example, but for the purposes of this Task it would suffice. I

could go further and consider the style/approach of promotion between the United States and Nepal. For example, is

negative advertising practiced in Nepal? Is it okay to degrade or demean political figures? Is it acceptable to use sex-

based advertising in this country? These are all things that could be considered.

Finally the last of the P’s: Place, or distribution. Here, I could potentially consider many things. As was noted in the CIA

site listed above, Nepal is landlocked. This means that any product I want to bring into Nepal needs to either be flown in

or cross through another country first. This is likely to complicate the process when compared to crossing state

boundaries in the United States. If a product is to make it to Nepal by sea, it will likely need to cross through Bangladesh,

India, and maybe even China before entering the country. If product transport by air is utilized instead, this will come at

considerable cost – given the additional expense of air-travel relative to shipping by boat. In addition to the problem of

getting product to Nepal, consider distribution within the country. Note the following link:

http://www.tradingeconomics.com/nepal/roads-total-network-km-wb-data.html

Here you can see that only 3 people per 1,000 have passenger cars, and only 5 people per 1,000 have any form of

motorized vehicle. The quality of port infrastructure ranks a 3 (on a scale from 1 to 7 where 1 represents extremely

underdeveloped and 7 indicates efficient by international standards). In addition to this, keep in mind that Nepal gets

cold – and quite a bit of snow. All of this makes it likely that distribution of any product to Nepal would be costly.

Okay, so now I’ve considered all 4 P’s for Nepal using various products and giving a few examples. This should give you a

good idea of the approach to take for the Task. MY CONCLUSION: Nepal seems like a nice enough country – but I think I

will stick to hot days in Cambodia….

Hope this helps.

Cheers,

Wade Roberts (CM)