Global GLOBAL MARKETING ETHICS AND CULTURE TABLE OF CONTENTS

GLOBAL MARKETING ETHICS AND CULTURE TABLE OF CONTENTS EXECUTIVE SUMMARY3 INTRODUCTION || 3 ANALYSIS AND FINDINGS 3 Macro environmental factors in China 3 Micro environmental factors with Porter’s Five forces in China7 Analysis of culture in China 9 || Strategy for market selection 11 CONCLUSION 13 REFERENCES 15 EXECUTIVE SUMMARY Marketing ethics on a global basis consists of certain principles that have to be followed by organisations that want to grow and expand to different countries.

GLOBAL MARKETING
ETHICS AND CULTURE

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................3
ANALYSIS AND FINDINGS........................................................................................................3
Macro environmental factors in China...................................................................................3
Micro environmental factors with Porter’s Five forces in China...........................................7
Analysis of culture in China...................................................................................................9
Strategy for market selection................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

EXECUTIVE SUMMARY
Marketing ethics on a global basis consists of certain principles that have to be followed
by organisations that want to grow and expand to different countries. They have to abide to the
different types of ethics, so that promotions and advertisements are done in a systematic manner.
This assignment studies an SME in Malaysia and how it will enter into a host country. It has
analysed various factors which include macro and micro environmental factors, cultures, market
selection criteria and entry mode into another country.
INTRODUCTION
Global marketing is the process of creating plans through which products or services of
an organisation are promoted for the purpose of entering into new countries. This is done so that
businesses can expand and grow with the help of marketing tools and techniques, on a global
level. Marketing ethics refers to a concept of social responsibility that consists of principles &
standards that explain acceptable conduct in marketing. Further, it is defined as an international
arena that highlights an increasing concern for ethics in general. Also, they are considered vital
in marketing because it implementation will lead to fair practice standards in the company.
Moreover, culture is a crucial factor that determines buyer’s behaviour.
The Owl's Cafe is an SME in Malaysia, that provides services and products to customers
in their shop. They have a wide variety of coffee selection and is located in a famous area of
Kuala Lumpur. This assignment will analyse PESTLE analysis in China for the Cafe so that it
gets aware about the current macro factors affecting various organisations. Further, it will
demonstrate factors of micro environment that affects company diversely. It will assess their
culture and how people behave to different types of products and services. Moreover, report will
recommend strategies for selection of the market and how to target customer. It will also study
the market selection for The Owl's Cafe and the mode of entry that they will use for setting up
business in the host country of China.
ANALYSIS AND FINDINGS
Macro environmental factors in China
The Owl's Cafe can analyse the macro environment through PESTLE analysis of China,
so that they are able to determine certain opportunities and threats for their business.

Political The factors of china as per political are to be
considered as are-
 Stable political environment, it is
standardised (Leonidou and et.al.,
2018).
 Cheap labour cost, it is adapted in order
to bring improve manufacturing process
(Kim, Park and Lee, 2014).
 Improved infrastructure (Taormina and
Kin-Mei Lao, 2007)
Economical The factors as are-
 High inequality (Morgan and Pritchard,
2018)
 Rapid urbanisation, firm has started to
develop their operational activities at
some other place (Kim, Park and Lee,
2014).
 Environmental damages (Charter and
Polonsky, 2017)
Social factor Under, social following things are needed to be
considered as are-
 Changing taste of customers,
(Taormina and Kin-Mei Lao, 2007)
 Poverty alleviation and development,
it was adapting due to reduction in
the poverty (Etzioni, 1987).
 Increased customer spending. The
china is highly developed country so
that the customer is becoming the
aware about the product and services

(Joly, Milcu and Hättenschwiler,
2017).
Technological Under this, following factors as are-
 Labour intensive economy, it has been
adapted in order to bring systematic
economic conditions (Joplin and et.al.,
2003).
 High literacy rate in China, which has
been found to be 96.4% (Hennart,
Sheng and Pimenta, 2015.).
 Technical advancement is at a greater
pace in China ( Bivona, 2018).
Environmental factor China rapid economic development has
impacted on following key factors as are-
 Water and air pollution (ExCain and
et.al., 2018).
 Deforestation (Sharma, Pathak and
Sinha, 2017)
 Climate change (Leonidou and et.al.,
2017)
 Biodiversity losses etc (Leonidou and
et.al., 2018).
Legal In this, following things are need to be
considered-
 Labour standards (Bae, 2017)
 Employee remuneration, it will be
helpful in terms to bring systemic
business activities.
 Labour Disputes (ExCain and et.al.,
2018)

 Various administrative regulations
(Taormina and Kin-Mei Lao, 2007).
China is the one of the most powerful countries in the world. It is also 4th largest country
in the world by the land area. The china has stable political environment, cheap labour and
improved infrastructure. Thus, the lack of political freedom is an area of concern. Stable political
environment is favourable for The Owl’s Café in terms of operating with no need of changing or
modifying the policies again. Cheap labour cost is also an added benefit for the cited company to
allocate a minimal budget for making payments. Improved infrastructure is referred to be yet
another significant aspect to attract a large set of consumers. However, in china there is adaption
of cheap labour cost so that overall activities can be conducted effectively and efficiently. It will
helps to process the things effective and products can avail to customer at affordable manner.
There were standardisation in two term as stability in government and improved infrastructure.
Though the coffee industry can get affected by the number of political factors inclusive
government attitudes and trade relationship between the country that produce coffee and the area
in which that can be exported. The Owl cafe has planned to expand their business operation in
the china but is seems quite typical due to cheap labour to set fire in those kinds of countries.
Economical- Another factor is that it can affect the coffee industry in the huge context that is
spending power in the particular area affect the operation function of marketing (Shen and Bae,
2018). Thus, exchange rate of the country can also impact over the pricing strategies. The GDP
rate of china suggest that each citizen is adding more and more value to the society. The main
reason behind this expansion is that there is rapid urbanisation and it is helpful in terms to proper
conduct the all business activities. In addition to this, high inequality and environmental
damages can impact the working of the enterprise. Thus, it also enhancing the consumer
purchasing power. As per this factor, the Own cafe can expand their operations in China as there
is effective consumer purchasing power. High inequality is stated to be a major drawback for the
firm. Rapid urbanisation will also necessitate them to make accordant changes in their
infrastructure and other related things. Environmental damages is also suspicious factor to be
taken care by The Owl’s Café.
Social- In this, it can be said that social and culture aspect of the consumption of coffee is
consideration for the health. The coffee is high in caffeine and that can lead to sleep disorders,
irregular heartbeats and issue of migraine to some people. The demographical condition of the

country is constantly change as population growth and age distribution fluctuate. The china is
developed country and it is very much focus towards the technological implementation. In
addition to this, it can be said that the customer purchasing power is quite high as this will help
to set up the business function. In this, it can be said that in china baby boomer generation is
retiring and this can lead to spending by older consumer will decrease. Changing taste of
customers is both favourable and unfavourable for the entity where it will also give them an
opportunity to innovate along with a mandate clause of modifying their products and services, as
per the changing needs of the consumers. Increased customer spending is unfavourable for the
enterprise that will hinder one of their major concern of attracting large set of consumers.
Technological- The one of the major technological issue in china is that development of B 2
C does not have the safe and stable online payment system. In china, there was standardisation
in High inflation rate and good literacy rate. This both are the effective factor in terms to expand
the business operations in new area. Thus, firm is taking various initiative in order to develop
services so that things can be undertaken in the better manner. The owl cafe is in good position
to enjoy the beneficial aspect of emerging mobile wave. In addition to it, the internet is essential
to the customers (Gorgoglione, Petruzzelli and Panniello, 2018). The china is growing in the use
of emergence of innovative, biotechnological developments and development in agriculture.
China has a set vision to be global leader in the science and technology.
Environmental- The development in the coffee machines means the manufacturing
operations are not limited to larger companies. In this, there was adaption in the factors as are
deforestation, climate changes measure so that things can be conducted in the better and efficient
manner. This will be helpful in terms to sustaining the business activities in the well and proper
manner. The rapid economic development in china has impacted natural environment severely.
Thus, water, air, industrial waste, climate change and biodiversity are some of example of
environment changes facing china today. Thus, it can be said that firm quantity of the coffee
beans available can turn affects the supply of the coffee.
Legal- There are number of the laws and legislations than can affects the expansion of coffee
industry in china. Thus, china has adapted one law as labour standards so it will be helpful in
terms to provide the beneficial aspect so that all things can be conducted effectively. In addition
to this, employment remuneration, labour dispute and various administrative legislation will be
helpful in terms to run the all function effectively and efficiently. The coffee manufacture

imports his raw material and other stuffs or exports coffee to another country then they must
regulate the imports and exports. The Owl industry can be affected with the issue as introduction
of stricter and trade regulations and licensing terms as per the industry.
Hence, it can be said that there are number of the factors that can impact the working of the
enterprise in China. Thus, the most of the external environmental factors are can impact the
working of enterprise in huge context.
Micro environmental factors with Porter’s Five forces in China
Micro environment refers to those factors that are inside the organisation that affects
company's performances & decision-making process. The basic forces of micro environment are
described below:
Threat to Competitors [High rivalry] Competition is high when:
 Players are of same size (Wei, Dai and
Costin, 2018).
 They have comparable strategies
(Demil, Lecocq and Zott, 2015)
Bargaining power of Customers [Moderate]  They procure larger volume, need to
adapt in new market.
 Switching product is easy with
substitute, and the cafe already
experience it (Pham, Nguyen and
Tang, 2017).
 Price responsiveness, need to adapt in
new market (Yuan, Wang and Dong,
2017).
Bargaining power of Suppliers [Moderate]  Market is conquered by themselves,
standardised fact (Fredendall,
Letmathe and Uebe-Emden, 2016).
 No alternative goods are available, new
in the market of China (Fabbri and
Klapper, 2016).

Threat to new entrant [High]  Brand loyalty, standardised (Feng, Li
and Swenson, 2017).
 Cost benefit of existing players,
standardised (Yusoff, Fauziah and
Ramin, 2015)
 Access to raw material is controlled by
existing companies, adaptive (Joly,
Milcu and Hättenschwiler, 2017).
Threats of substitute products [Low]  Brand dependability, adaptive in China
(Yunna and Yisheng, 2014)
 Switching cost for customers,
standardised (Zhao, Zuo and Zillante,
2016.).
In China the competitive environment includes some basic things that every company has
to concern about. Competition under micro factor occur when other firms sells similar products
or services as The Owl's Cafe does then it is company's competitor. However, the cafe has
already experienced some facts in the country where it currently operates i.e. competitors are of
same in size. Therefore, the Cafe needs to be aware of its competitor's other facts which it needs
to adapt in China in order to stay in the market for longer period (O'Grady and Morgan, 2017).
Consumers are considered as a vital part of any business organisation as they seek for
them to increase their sales. There are various types of buyers such as; local, international, B2B,
etc. If The Owl's Cafe wants be successful and want to expand in China, must identify buyers for
its products and services. Although, it has been observed that customers obtaining larger volume
and switching product is easy with substitute are those factors which are the standardised one for
the cafe. Other one i.e. price responsiveness of buyers is a factor which it will face in global
market. Moreover, they must also understand that the sale of the product depends on level of
customer satisfaction.
It has been observed that success of the business is under suppliers’ control when they
hold the power. Further, the suppliers are supposed to have power when they are the only
supplier of the company's goods and market is conquered by themselves is a factor that is

considered standardised for the Cafe. Therefore, The Owl's Cafe need to maintain a strong
relationship between its suppliers and itself in order to avoid any disruption in the business and
to adapt to new changes like no availability of alternative product.
In China, barriers to new entry is little high and Cafe is already experiencing brand
loyalty and cost benefit of existing players in the current market. Also, in China barriers to new
entry is little high as new business can hardly enter into the marketplace. However, when barriers
to new entrance are low than new business can take advantage of it. Therefore, The Owl's Cafe
must be aware of the situation like access to raw material is controlled by existing companies,
which I will face in global market.
There are chances for The Owl's Cafe that there may another company in China selling
similar products and services as of Owl' cafe, then customer may choose those with lower prices.
Analysis of culture in China
Power distance  Authority is distributed
Uncertainty avoidance  Private domestic, adaptive (Bellis,
Hildebrand and Herrmann, 2015)
 State-owned enterprise and,
standardised (Atchley, Shi and
Yamamoto, 2014).
 Foreign invested entities, adaptive
(Zhang and Zhou, 2014)
Masculinity vs. Femininity  Structural and, (Zheng and Zheng,
2016)
 Legal reforms efforts, (Schösler, Boer
and Aiking, 2015)
Individualism vs. Collectivism  Company who seek to meet
organisational goals (Triandis, 2018.)
Long vs. Short term orientation  Reduces tariff on imported products,
adaptive (Lahmiri, S., 2015)
 Removes limitation on foreign
investment ,standardised (Tao, Lin, Jin

and Li,2016 )
It has been determined that in cultures with low power distance, organisations expect that
authority is distributed instead equally which will be a new factor for the cafe to expand in
China. It has been observed that, the China market offers range of opportunities for growth &
development of new companies that expand to China and also existing companies.
It refers to a deficiency of tolerance for ambiguity & a requirement for formal rules &
policies. Both economic & market reforms in China have helped and given rise to organisations
with 3 distinct types of ownership; private domestic which cafe need to adapt in China, state-
owned enterprise is a standardised factor and foreign invested entities will also be new to it.
Additionally, the country offers a technological environment with important transfers of
information from overseas.
Apart from this, it has been discovered that its structural and legal reforms efforts are
considered well and also will be adaptive facts for the Cafe to expand in China, it is predicted a
positive future for China. This is only possible when it maintains a successful balance of Golden
Straight-jacket with its cultural (Hennart, Sheng and Pimenta, 2015).
Under this individualistic cultures states that organisations are supposed to show
themselves as a company who seek to meet organisational goals and this factor is already applied
on Owl's Cafe in the current market. Culture refers to a collection of accepted values, behaviour
patterns, shared similar experiences and belief. It has been determined that, culture is considered
extremely vital from a business point of view because it gives shape to employee behaviours &
expectations. Further, the country's culture is identified on 2500-year-old Confucius teachings of
“the importance of society, hierarchical relationship, and group within a society”. China further
is making the private sector the key source for its economic growth, maintaining a lower
inflation rate and price stability.
Apart from this, China is also maintaining as balanced budget as possible and if it is not
as surplus, then reduces tariff on imported products which cafe needs to adapt in new market,
removes limitation on foreign investment which the company experiences already in the current
market and so on. Therefore, all these changes are considered as of great advantage for
expectations. The Owl's Cafe to expand its business in China. Also, it is important to know that
as the country evolves, there is a 2500-year-old culture that will possibly stay a vital factor of the

business environment (Kim, Park and Lee, 2014). Long term orientation states that, company
may take time to achieve their goal.
Strategy for market selection
With the increasing growth of China economy, the country is playing a key role in world's
economy (Bhasin, 2018). The Owl's Cafe wants to segment for its products and services as this
will lead to develop a long-term competitive advantage by effectively aligning customers with its
products. China Below is the strategy for The Owl's Cafe for market selection in China:
 Demographic segmentation strategy to target Chinese customers: - this strategy of
segmentation divides customers in different groups with similar features. The factors of
division include; age, gender, income, education, etc. It has been observed that in China
this strategy is greatly implemented when companies want to target based on this factor.
The Owl's Cafe can make use of this strategy in order to segment its customers for it
Cafe. The organisation can create group on the basis on age and gender, also it can attract
young aged people to its cafe (Stone, and Vaillancourt, 2016).
 Geographic segmentation: - it divides consumers on the basis of location. For example;
The Owl's Cafe can segment customers into tier-1, tier-2, or tier-3. On the other hand, it
can be coastal area i.e. is highly developed.
 Behavioural segmentation: - Under this strategy, division is done on the basis of
consumers buying behaviour i.e. consumption, purchasing, usage, etc. For example,
younger consumers may tent to have fast food at The Owl's Cafe while older may prefer
healthier meal. Psychological: - This strategy considers the psychological aspects of buyer’s behaviour
by segmenting markets on the basis of lifestyle, value, opinion, etc. However, this
strategy is not much useful for The Owl's Cafe (Laufs, and Schwens, 2014).
Entry mode for The Owl's Cafe in China
Foreign market entry modes are different based on the degree of risk they present, the
requirement of resources, and the return on investment. Further, the modes are divided into two
main parts i.e. equity and non-equity. Equity modes consists of joint venture and entirely owned
subsidy, whereas non-equity involves exports. Entry mode for The Owl's Cafe in China is:
Type of entry Advantages

Exporting :- this entry mode is considered as the
easiest way to enter an international market &
therefore many firms begin their expansion using
this method.
Fast entry and low risk
Licensing :- It has been discovered that, an
international licensing agreement enables foreign
organisations, either exclusively or non-
exclusively to produce an owner's product for a
fixed term in a particular market. A company is
get permitted in the target country with the help of
licensing to make use of the property of licensor
(Tseng, Wu and Chen, 2015).
Fast entry low cost and low risk.
Partnering :- this is another way of expansion
which states that company can expand their
business internationally by local partnering.
Investment gets shared and cost reduces.
Acquisition :- refers to a transaction in which a
firm gains control of another firm by buying its
stock.
Fast entry
Greenfield Venture (wholly new company) :- this
is the process of acquiring fully owned
organisation which is often complex & costly.
Gain local market knowledge
The best entry mode for Owl's cafe will be :-
Mode Condition in favour Why it is best for Entry
mode.
Partnership :- this is another
way of entering the
international market.
Cafe must value its partners to
expand successfully in the new
country i.e. China (Zeng and
Greenfield, 2015).
This is the best way of entry
mode because partnering with
local organisation is best as
they understand the local

culture, market and ways better
than outside firm.
CONCLUSION
Based on the above report it can be concluded that global marketing involves
planning, placing, promoting business products in the worldwide market. The present report has
based on the business activities of the Owl cafe of the Malaysia and this firm is planning to
expand its business operations in China. Thus, report has covered the various things as are Macro
environmental, micro, Analysis of culture in china, strategy for market selection and entry mode
for owl cafe in the China. With help of Pestle and Porter five forces analysis the operational
function of the enterprise can be identified effectively.
Recommendations on Marketing strategy as per Owl cafe-
From assessment, it has found that country specific advantages theories, related to
international marketing theoretical framework, will prove to be more fruitful for Owl café. This
in turn enables firm to get benefits in terms of high economies of scale and produces as well as
sell products at cost effective prices. Through this, Owl café would become able to get
competitive advantage over others. Along with this, owner of café will consider the aspects of
standardization and adaptation in accordance with the theory of globalization. On the basis of
such theory marketing mix is enumerated below:
The marketing strategies will be helpful in terms to create customer awareness regarding
services offered to customers. It is helpful in terms to develop the customer base, work towards
building customer loyalty etc. In addition to this, it has been defined with the help of following
marketing strategies as are-
 Product- In order to expand the operation of Owl cafe in the china, the firm should take
initiatives in terms to identify the preferences of the customers. This will help to the
entity to bring effective operational functions. In addition to this, it can be said that the
diverse demand for product and services in the era of globalisation is mind blowing.
Thus, the presence of industrialized and emerging market, presence of industrialized will
be helpful in terms to process the things effectively. The customer at the global level
think to purchase the quality product at the most affordable price. Furthermore, the
enterprise needs to take number of initiatives in terms to produce innovative products that

attract customers (Chintagunta, Qin and Vitorino, 2018). The cafe should take various
initiatives in terms to bring modification in the commodities. The positive innovation will
be helpful in order to grab attention of the customers.
 Pricing- The price of the products is needed to be decided by seeing the conditions of the
market. Thus, effective quality to customer must be provided within the affordable price
rates. In order to get the successful expansion, the firm need to adopt suitable pricing
(Giannotti, 2018). The Owl's cafe should adopt penetration pricing strategy to attract the
customers as per the concerned international marketing framework. Moreover, in Chinas,
customers or visitors prefer to get food products or services at lower or affordable price.
The effective services are needed to be provide within the affordable cost. In this, it can
be said that the intense and uncontrolled can be the huge obstacle in manner to expand
the business activities in the internation market. In addition to this, pricing techniques
plays the critical role in order to penetrate into the market and expand its operations. In
this, proper consideration should be made in terms of pricing as this is effective way in
terms to charged in the different countries. Furthermore, it can be said that this is one of
the effective way in terms of deciding the global prices.
 Place- The firm as Owl cafe, Malaysia is looking forward to expanding its business
operation in the China. In this way, the coffee shops need to open their operation at the
area in which number of tourist attraction places and office establishment are placed. In
this, the standardisation is relates with the free standing but with help of providing the
facilities as Home delivery and Swiss rail system dining cars will attract the global
markets. This will be effective in terms to earn long term profitability and productivity
(Turner, Shah and Jain, 2018). It is one of the core elements as it helps to enhance brand
image of the product. Thus, it can be stated that it will help to attract a greater number of
the customers. Standardized format will be followed by the business entity of Owl café
for the new establishment. Promotion- The most effective successful advertising strategies are needed to be
adopted. In this, the Owl cafe must take number of initiatives in order to promote thing in
the effective and efficient mode (Obeidat, Hammoudeh and Alomary, 2018.). With help
of promoting the product with number of the combo offers and discounted rate the
enterprise can able to get attracted. The media decision are vary in differed countries. The

global marketer must find the attractive media channels. In this term, they adopt the
communication channel as sales events direct events, sponsorship and others. The Owl's
cafe should adopt the effective promotional strategies and with help of it firm can able to
promote their products in better manner. Owner of Owl café will promote services by
using both traditional and non-traditional modes. In China, both firms and customers are
using social media platforms with the very high pace. Thus, by placing advertisements on
Weibo, We chat and Tieba café or bar services will be promoted by the business entity.
Along with this, advertisements will also be given by the business entity on newspaper,
television for attracting more customers.
The pitfalls in Marketing strategies as per 4P's-
 An effective place is need to be chosen so that firm can able to perform its activities ion
better manner.
 The Modification are needed to bring in terms to bringing innovation so that competitive
advantage can be built in new country.
 Effective pricing strategies are needed to be adopted so that customer can get more
attraction with the good and service.

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