Business/Marketing Hong Kong Telecom: Learning

Business/Marketing

Hong Kong Telecom:

Learning the Secrets of the American Market

What could be simpler? Produce a product that people need and people will buy it... right? Not so fast. Not every product is so easily appreciated by every people. Culture and society are powerful factors in determining which products sell, and which don't. National tastes create markets for some goods but not for others. Personal likes and dislikes vary from individual to individual, and also from country to country. Each ethnic group has its own way of doing things; its own version of what is acceptable behavior and what is not. Television commercials featuring Super Bowl winners drinking Coca Cola might boost coke sales... In America, but what about in Hong Kong? And what about that never seen - and never to be seen - American commercial showing an Asian Soccer star devouring quantities of rice? Would they really send Americans to the store in droves to buy that brand - or any brand - of Asia's most popular grain? Clearly, a multitude of cultural traits divides the people of Hong Kong from the people of America. If a company based in Hong Kong wishes to do business successfully in the United States that company must learn to conduct business in the American manner. That company's Hong Kong-based staff must learn the intricacies of a very alien marketing system. They must learn what turns on Americans, and what turns them off. This paper will examine the implications of "Marketing in America" from the point-of-view of a native of Hong Kong. This Hong Kong native will work as a consultant for Hong Kong Telecom. This consultant will confront head on, the likes and dislikes of two very different cultures linked together by common products - or are they actually linked together at all?

Any attempt on the part of Hong Kong Telecom to break into the American telecom market demands that Hong Kong Telecom understand the nature of that market. Employees of Hong Kong Telecom must familiarize themselves with the specific needs of potential customers in the United States of America. They must look for the similarities and the differences betweens residents of Hong Kong, and those of the United States. They must also learn what makes American telecom customers different from their counterparts in Asia.

Finally, the Hong Kong consultant needs to view the telecom industry as an American business, not as one based in Hong Kong. Different nations possess quite different corporate cultures and traditions. Successful sales and marketing depends at least as much on understanding a given area's business style as it does on understanding the people of that area, their needs and desires. A consultant who desires to do business in the United States must be able to conduct himself or herself in a manner that is acceptable to his or her potential customers and partners. The consultant must never forget that he or she has to please two distinct constituencies - the one at home, and the one abroad. Sales and marketing in a foreign country is a careful balancing act, and an exercise in economic and cultural diplomacy.

The industry/market/competitive structures and so on are another key data set. Gathering information about your competitors is always important, but in Asia this is made more complex by the number and variety of domestic competitors. Local competition in Asia can range from big conglomerates to a myriad of hole-in-the-wall operators who are ambitious to grow. Some of them will, so it is important to collect information on likely future competitors, especially those where the next U.S.-educated, MBA-trained generation is taking over.... Multinationals tend to know a great deal about their fellow Western rivals, but be less well informed about the big Asian players and local competitors and their latest moves....Who are they and how do they operate?

In such a volatile competitive environment, changes can happen quickly. (Backman & Butler, 2003, p. 9)

Good sales and marketing depends on knowledge. The more knowledge one possesses of one's competitors, the more likely it is that one's venture will be a success.

To begin with, the Consultant should not view his American competitors as so alien that their methods and ideas are beyond comprehension. The basic principles of marketing apply regardless of a company's theater of operation. In this particular case, the Consultant worked for Hong Kong Telecom for a period of just under four months. The Consultant's specific task was to develop a sales and marketing plan that could take advantage of the new opportunities presented by the deregulation of the American telecom market. Based in an office in Hong Kong, the Consultant would deal heavily with various American counterparts. The Consultant would interact with American telecom salespeople, developers, and managers via Internet and telephone. There would also be a significant amount of "in person" contact. Through the medium of the teleconference, the Consultant in Hong Kong would meet "face-to-face" with associates in the United States. During these teleconferences, appearance and demeanor would be extremely important. As well, nuances of language and gesture could make or break a deal, or lead to serious misunderstandings. The aim of the Consultant would be to understand the American way of doing business - and in particular how American handling of telecom sales and marketing differed from that of Hong Kong. More specific to the Consultant would be the considerable amount of new and useful experience and knowledge he hoped to gain. A Business Major, the Consultant would consider his time at Hong Kong Telecom as a hands-on training for the real world that would come after college.

The Consultant was part of a team of six employees. The team consisted of a Supervisor, his assistant, and four college interns. The Supervisor had been involved in the telecommunications industry for much of his working life - or twenty-two years to be exact. His assistant, had been employed by the company for more than eight years, and was considered one of their best workers. Having entered the field immediately after graduating from an American university, she had risen rapidly through the ranks to middle management. The Assistant's input on the team was considered to be particularly important when it came to "acclimatizing" the four Interns. After all, she had been a student in America less than a decade before. All four of the interns were Consultants. All four would begin their Junior Year of college in the fall. All were business majors with a particular concentration (they hoped) on international business. All six members of the team shared an interest in other cultures, and most of those on the team began with an attitude that was favorable to America. Two of the Interns differed, however; one preferred the idea of working in London, and the other in Tokyo. The Intern whom this paper calls the Consultant was one of the four "Americans" in the group.

The Consultant initially greeted the experience as a chance to test out his own knowledge of American conditions. While some of his preconceptions about doing business in America were confirmed, others were challenged. One thing that was particularly surprising to the Consultant was the discovery that there was a lot more to the American method than met the eye. Like many Asians (and Europeans too) he had assumed that American businessmen would be very informal i.e. there would be a lot of backslapping and kidding around. Among things that the Consultant learned early on, was that there were many different "Americas" regardless of the specific industry. Though he and his group dealt exclusively with the Telecom Community, they did have interactions with companies that were located in widely differing parts of America. It was an important lesson: Americans are not homogenous. They cannot be stereotyped. The same is true of all "others," whether one labels them "alien," "foreign," or whatever. One thing that did hold true for all Americans with whom he dealt, was the importance of modern communications to everyday life in the United States. The telecom network made the huge country possible, and played a key role in its spectacular economic success:

By 1990, the information industries -- those that supply not only telecommunications but also entertainment, publishing, and information services to businesses and individual consumers -- accounted for 15.7% of Gross Domestic Product, up from 10.1% a decade earlier. To put it differently, America's information industries were, by 1990, generating nearly $900 billion in annual revenues and were on a trend line to quickly cross the $1 trillion mark. (Read & Youtie, 1996, p. 5)

And these figures come from the period before the great telecom boom.

One of the Consultant's most amazing discoveries was the realization that many Americans were just as concerned to understand conditions in Hong Kong as Hong Kong businessmen were to comprehend their American counterparts. The change in status from British Crown Colony to Chinese Territory was unsettling for many foreigners. Hong Kong had always been a special case - a partly-Chinese land that was especially favorable to almost any capitalistic enterprise.

Confidence in Hong Kong's legal system is a direct result of its links with the rest of the world. if, in our haste to use Chinese, we change the standard and the meaning of the law, and non-Chinese speakers get pushed out of practice, then we risk losing those links.' The traditional Chinese structure has focused on mediation for civil and commercial cases, with lawyers widely viewed as troublemakers, and on executive punishment for criminal cases; there has been no history of justice through an adversarial process. As the Asian Wall Street Journal warned, "A drift into linguistic balkanization -- part English and part Cantonese, plus jargon grafted from the Chinese mainland -- could unmoor Hong Kong from the international business community." (Callick, 1998, p. 84)

Part of doing business with a foreign county is seeing how they see you. It was essential to impress upon the American companies with which we dealt, that Hong Kong remained "open for business."

In a less broad context, the Consultant found out that the particulars of the Telecom Industry are both similar and different when Hong Kong is compared to the United States. Today, both markets possess powerful, innovative, and aggressive leaders. In the United States, telecommunications was once a special case - a monopoly of one gigantic company. Since the 1980s, deregulation has made it possible for many companies to enter the market and to compete. It is because of this opening up of the market to competition that Hong Kong companies now have the freedom to enter the world of American telecom. Furthermore, the World Trade Organization has made telecommunication a more global business than ever before. The Chinese Government has been especially active in its attempts to assert Chinese dominance in the field of telecommunications. Hong Kong is the primary weapon in this war, as it is the only part of China that has ever found itself fully integrated into the Western - and now the global - economy. Li Kashing, the wealthiest man in Hong Kong, was propelled into the project of global telecom dominance by the People's Republic of China working in cooperation with the International Monetary Fund. Li Kashing financed an enormous venture for his son Richard Li:

Richard, posturing as "patriotic" to woo Chinese leadership, was given access to Chinese state capital through partnership with president Jiang Zemin's son Jiang Mianheng, a vice-president of the Chinese Academy of Sciences, whose goal it has been to break the West's "monopoly on information resources and related industries." The two illustrious sons cooperated in a number of ventures, including a joint design of computer web and video programming, and the development of an English-Chinese bilingual browser designed to "grab back the browser market from western domination...." In August 2000 Richard Li's Pacific Century CyberWorks (PCCW) bought Cable and Wireless Hong Kong Telecom for a blockbuster U.S.$38.1 billion (the biggest telecom merger in Asia) in a bid to monopolize the delivery of video programming and the Internet over the world's largest broadband network... It was clear to all that he was backed by the Chinese government, whose Ministry of Information and Industry had held significant shares of the company. He was also awarded, without a competitive bid, the right to develop Cyberport -- a multi-billion dollar high-tech industrial park from the Hong Kong government, a deal that included substantial subsidies and land rights for the entire complex that was to become Chinese Silicon Valley.