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ABSTRACT
Many researches have sought to explain how different customers' behavior might be different across cultures. One way that customer always exercise to maximize the benefits in an offer is by negotiation. Understanding how customers would negotiate will help organizations having appropriate pricing strategies to retain profit businesses in the context of globalization. This research using my own primary data examines negotiation skills of American and Vietnamese customers. Two samples, taken separately from the U.S. and Vietnam, were used to test several hypotheses. The results confirmed that cultural differences lead to different negotiation styles and perception. Consequently, theoretical and practical implications of the finding about global pricing strategies as well as directions for future research are discussed.
Key Words: customers' behavior, cultures, negotiation, pricing strategies
JEL Codes: GO, M, M3, M20
I. INTRODUCTION
With the tremendous growth in international market during the last few decades, managers are gradually trying to enter to foreign markets. Theory suggests that price sensitivity and shopping practices differ substantially between cultures (Ackerman & Tellis, 2001). Negotiation is one shopping practice that people normally use to create and maximize opportunities in business, at the market, and with others (Levison, Smith & Wilson, 2000). Global pricing as one in marketing mix still has to take into account how customers in different cultures evaluate high and low prices (Johansson, 2006). Understanding a foreign customer's own style, characteristics, prejudices, and how he or she could negotiate for the best deal is the key factor for a successful global manager when setting up the appropriate prices.
Studies about negotiation skills across cultures have been done for years to help managers effectively respond in foreign markets (Graham & Sano, 1984). However, few studies have been conducted in the Vietnamese market. Vietnam is a developing country in the Southeast Asian region which attracts masses of foreign direct investments (FDI). US-related FDI actually increased significantly in 2003, two years after implementing the Bilateral Trade Agreement in year 2001 (Prasso, 2005). Especially, since Vietnam became a member of the World Trade Organization in 2007, FDI has increased steadily. In 2008, the amount of actually disbursed capital soared to US$11.5 billion; up 43.2 percent compared with 2007 (The China Post, 2008). This shows the importance of understanding how...