The Impact of Business Culture on Vietnam – Denmark Trade Relations

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In addition, meat and meat products from animals fed growth hormones are prohibited from being circulated on this market. Live poultry may also be prohibited from being imported into Denmark because the country has been declared free of Newcastle-disease (a disease that was discovered in Newcastle upon Tyne, England in 1926. The disease spreads rapidly, causing serious damage, up to 100% of the infected flock) 100 , so no importation is allowed.

98 new to denmark, dk (January 9, 2009), http://www.nyidanmark.dk/en- us/citizenship/citizen_in_denmark/11+health+and+sickness.htm

99 Export.gov :

http://web.ita.doc.gov/ticwebsite/euweb.nsf/9f119d26e3922385852566bb0071ceb6/3ed5161c889b15c58525 66580071adb3?OpenDocument

100 WIKIPEDIA : http://en.wikipedia.org/wiki/Newcastle_disease

any live poultry. Only poultry meat that has been cooked to a temperature of 70 ⁰ C or higher is allowed to be imported into the country.

Price issue

Price is often an important factor when consumers consider and choose goods, but low prices do not always attract them. Danish consumers tend to perceive price as proportional to the value of goods, meaning that the higher the price, the better the quality. 101

Distribution and sales channels

The distribution channels for goods in Denmark vary depending on the type of business. Production materials, goods and raw materials are mostly supplied by dealers who do not keep stock. Specialized products with a high technological content are often distributed by independent branches. Meanwhile, consumer goods are sold through dealers and importers, but increasingly they are imported directly by large retailers and private stores. The sale of non-food goods to consumers is dominated by retail chains. Currently, in the Danish food distribution sector, two large retail groups hold more than 50% of the retail food market: FDB and Dansk Supermarked. In addition, Denmark has about 30 other independent food importers. 102

Sales and customer service

In general, Danish importers highly appreciate the sales and after-sales service. Promptly respond to customer inquiries and suggestions.

101 Exporting to Scandinavia , published by The Danish Import Promotion Office DIPO, HSH – Norwegian Office of Import Promotion, The Swedish Chambers of Commerce, 2005.

http: www.hsh-org.no/dav/63a3a73a57.pdf

102 Export.gov :

http://web.ita.doc.gov/ticwebsite/euweb.nsf/9f119d26e3922385852566bb0071ceb6/e9421401a8499c488525 6b720059662b?OpenDocument

The customers are highly appreciated. Modern means of communication such as fax or e-mail are often used to contact customers. 103

Protect customer rights

In Denmark, consumers have rights to protect themselves against being deceived and cheated. For example, they are entitled to a replacement or repair of any goods that are defective or do not match the seller's description. All they have to do is contact the seller within 24 months of purchase and bring the receipt. Of course, consumers must also be able to prove that they did not cause the defect. In addition, consumers are entitled to information about the contents of the food they buy, its manufacturer and its use-by dates. There are various forms of food regulation and labeling. For example, warranties guarantee that a product has been produced ecologically or has been tested for safety for people with allergies. Thus, just like in the US, Danish consumers can rest assured that there is a strong legal system protecting their rights . 104

2.3.2. The influence of business culture on Vietnam - Denmark trade relations

In international trade, business culture has a multifaceted impact on commercial relationships between parties through its impact on business communication, contract negotiations and marketing activities.

2.3.2.1. The influence of business culture on the communication process

The business communication culture of Vietnam and Denmark has many differences, the first of which is the difference in language. Each country has its own language, which is not very popular and not easy to learn for the other side. Currently, the language used in communication is mainly English. However, the English proficiency of Vietnamese people is still low, so there may be

103 Export.gov : http://web.ita.doc.gov/ticwebsite/euweb.nsf/9f119d26e3922385852566bb0071ceb6/ba8fc18add5a1cb585256 d90006c97bb?OpenDocument

104 New to denmark, dk : http://www.nyidanmark.dk/vn- VN/Medborger_i_danmark_vn_vn/oekonomi_forbrug_vn_vn/oekonomi_og_forbrug_vn_vn.htm

many problems in communication. In addition, the communication style of Vietnamese and Danish people is also different. Danish businessmen are very straightforward in both language and behavior, while Vietnamese businessmen are quite reserved and often vague in their expressions. When talking outside of work, Vietnamese people often ask about personal life such as family or income. On the contrary, Danish people are very afraid of that. The topics they often talk about outside of work are culture, social events, hometown, country, etc. Thus, if Vietnamese businessmen still maintain their usual communication habits, it can make their partners unhappy and can even lead to the loss of business relationships, causing damage to their business.

In addition, the difference in gift-giving culture also often causes trouble for communication between Vietnamese and Danish businessmen. On the contrary, like many other Asian countries, Vietnamese businessmen love to receive and give gifts. 105 In fact, receiving and giving gifts is a tradition of Vietnamese people to show sincerity, hospitality or gratitude of the giver to the recipient. Meanwhile, in Denmark, gifts do not play any role in creating relationships, especially valuable things, which will be considered bribes. Therefore, if it is the first time doing business together, it is best for Vietnamese businessmen not to give gifts to Danish partners to avoid misunderstandings.

2.3.2.2. The influence of business culture on the negotiation process

The influence of Danish business culture on negotiations between Vietnamese and Danish enterprises is reflected in the following aspects:

- Time issue:

For Danes, time is money, so they are extremely punctual, especially in negotiations, and they always expect their partners to be on time. Being late will make them uncomfortable and leave a bad impression. Meanwhile, according to foreign traders, Vietnamese people are often late (about 20 - 30 minutes) in meetings as well as when delivering goods, but they do not accept this from European and American partners (because they think that Westerners must be punctual).

105 Dr.Nguyen Hoang Anh, Impacts of the culture on the business relationships between Vietnam – Denmark: Preliminary results .

- Language in negotiation:

The language used for negotiations between Denmark and Vietnam is English. However, while the Danes are fluent in English, many Vietnamese businessmen are not fluent in this language. This can cause misunderstandings when negotiating terms and the consequences can be very regrettable. In addition, according to the opinions of many foreign businessmen who have worked in Vietnam, Vietnamese negotiators often speak at length and rarely go directly to the point. 107 That is why instead of saying “ no ”, they often say “ we will consider this issue ” or “ we will contact you when there is a specific decision ”. Meanwhile, Danish businessmen are quite straightforward in both language and behavior. They frankly say “ no ” when they want to object or refuse, but Vietnamese people are not used to such direct reactions and may feel dissatisfied. However, that is their character and Vietnamese merchants who want to trade with the Danes must understand and accept that.

- Negotiation style :

It can be seen that Danish businessmen have a very straightforward and straightforward negotiation style. They expect to receive direct questions and are also willing to answer directly to the point. On the contrary, Vietnamese people have a habit of "going around in circles" so they may feel unfamiliar or uncomfortable with the attitude of the Danes. On the contrary, the Danes will also find it difficult to understand the behavior of the Vietnamese. This can make the negotiation atmosphere tense and negatively affect the negotiation results. In addition, Danish businessmen often try to end the negotiation quickly and do not like interruptions, so they are not willing to return to the terms that have been negotiated. This is very different from the style of Vietnamese businessmen, who are always careful.

106 Dr. Nguyen Hoang Anh (2004), The role of culture in international business and the issue of building business culture in Vietnam , PhD Thesis in Economics.

107 Dr. Nguyen Hoang Anh (2004), The role of culture in international business and the issue of building business culture in Vietnam , PhD Thesis in Economics.

important, quite slow and can renegotiate terms if not agreed by superiors. When negotiating trade, if Vietnamese businessmen do not change the above working methods, they will not achieve the expected negotiation results. Even their Danish partners may not want to continue cooperation.

- Price negotiation:

In fact, the first thing that Vietnamese traders care about in a contract is the price clause. According to foreign partners, Vietnamese people like to bargain and bargain hard, leading them to give a starting price that is far from their real intention so that they have room to retreat when bargaining. 108 On the contrary, Danes do not like haggling. They also do not set prices too high for their products. Therefore, the price negotiation stage in their negotiations often takes place quite quickly. This is a difference that has a negative impact, not only does it not lead to quick results, but also causes discomfort for the negotiating parties.

- Decision making process:

According to Geert Hofstede, Denmark is a country that values ​​individuality, while Vietnam belongs to the group of countries that are highly collectivistic. The decision-making process of Vietnamese people is quite slow and often takes a long time because they are both shy, cautious and have to " report " and consult their superiors, who are not present, to make the final decision. Meanwhile, Danes can make their own decisions, value time very much and often negotiate at a fairly fast and decisive pace. The above difference can make Vietnamese businessmen lose the sympathy of their partners and thus can lead to bad negotiation results. However, in Vietnamese private companies today, individuals have also begun to get used to making their own decisions and this process is also shortened because power is concentrated in the hands of one person. This also helps speed up the negotiation progress of Vietnamese businessmen.

Despite their differences, both Vietnamese and Danish businessmen are generally easy-going, open-minded, easy-going and friendly. In the event of disagreement, both sides tend to “keep the peace” and express their views indirectly, avoiding direct confrontation. Anger or

108 Dr. Nguyen Hoang Anh (2004), The role of culture in international business and the issue of building culture

Impatience is often considered rude and awkward behavior in both Vietnam and Denmark. This similarity is a favorable factor for both sides to reduce differences and reach common commitments in a unified manner. Therefore, trading between the two sides can also become somewhat easier.

2.3.2.3. The impact of business culture on marketing activities of Vietnamese export enterprises

In this regard, the author would like to stand on the position of a Vietnamese exporter to analyze the characteristics of Danish consumer culture and from there give some points to note if one wants to successfully penetrate this market.

Select export items

Choosing products to export to Denmark requires careful attention because their consumer needs are not the same as those of the Vietnamese. Although the living standards of Vietnamese people have improved significantly recently, they are still generally low (with an average income per capita of only 1,024 USD/person in 2008), 109 especially in rural areas. Therefore, the majority of people still have the mentality of " eating well and dressing well ", preferring products that are not of high quality but are cheap. The requirements for product design are not too sophisticated. Therefore, Vietnamese manufacturers also follow this trend to meet the needs of the people. Meanwhile, Denmark is a country with a very high standard of living. The people of this country enjoy a prosperous life.

The Danish market is among the world's top and therefore has very high requirements for quality and design of goods. Therefore, businesses that produce simple products with low quality will certainly not be able to gain a foothold in the Danish market. To export to this market, Vietnamese businesses need to choose suitable export products along with improving designs to suit the consumer tastes of the people here.

 Select distribution channel :

109 H.Giang – T.Hang – L.Anh (January 1, 2009), “Average income over 1,000 USD/person but still poor”, Tuoi Tre online : http://www.baomoi.com/Home/KinhTe/www.tuoitre.com.vn/Thu-nhap-binh-quan-tren-1000- USDnguoi-nhung-van-ngheo/2324315.epi.

In Denmark, there are many distribution channels corresponding to different types of goods. Therefore, Vietnamese enterprises need to clearly understand the distribution channels suitable for their types of goods in this market. For consumer goods in particular, distribution still mainly relies on agents and distribution intermediaries. However, in the future, there will be a trend of distribution without intermediaries, but retailers will import goods directly from manufacturers to reduce intermediary costs. Therefore, it is necessary for Vietnamese enterprises to learn about and establish relationships with trusted retailers. However, this is not a simple matter. Because they are directly responsible for the quality of goods to consumers, retailers often choose to buy long-standing reputable goods with stable quality. Therefore, the challenge for Vietnamese enterprises is very large.

Trade promotion policy

Danish consumers attach great importance to after-sales service and customer support. They will immediately respond to customer inquiries and suggestions directly or via modern means of communication such as fax or e-mail. These activities will create long-term trust in the product and the company. Meanwhile, Vietnamese enterprises only focus on product quality and pay little attention to after-sales service. This creates a driving force for Vietnamese enterprises to innovate and improve service quality when they want to penetrate the Danish market.

Thus, Danish business culture has many differences compared to Vietnamese business culture. And this difference will have a significant impact on the trade process between the two countries. For Vietnamese businesses, if they want to have more opportunities to succeed in trade transactions with Danish partners, they need to take measures to further improve their understanding of this country's business culture.