There are many regional and international brands that are crossing boarders and international waters to spread their wings into other countries and continents. Along with their products and services, they are also bringing with them a number of interesting market entry dilemmas. Wal-Mart is one such global brand that has created many headlines in all the countries that it has entered and it offers good lessons on ‘how not to’ enter other markets , for those companies that are contemplating new market entry.
Wal-Mart’s recent problems in South Africa and their history of issues relating to entry into other countries uncovers the pitfalls that face companies when they choose to cross economic and cultural borders. Here are five common mistakes companies make when structuring a global brand strategy.
1. Interpret; don’t translate
Translating your message into the local language is not enough to ensure your intent will be understood or interpreted correctly. This applies to business models and HR practices, as Wal-Mart discovered in Germany not so long ago, or your branding and marketing message, as Match.com found when they decided to go global. Their tagline “Love is complicated. Match.com is simple.” didn’t communicate their intent to customers from Portugal to Peru until they instructed their copywriters to look for the meaning behind the words. Their intent, they discovered, was that Match.com opens a door to a myriad of possibilities. Therefore, they changed their international tagline to “Millions of possibilities. Match.com” on many of their global sites.
2. Value is contextual
The quality of your implementation has always been important in maintaining a certain brand image. However, when crossing cultural boundaries, the nuances of what denotes quality become less predictable and thus extremely important to decode.
Value is contextual across cultures, as AT&T discovered when they fulfilled an order to supply cables to NTT in Japan. While the cables met all the specifications laid down, the Japanese rejected them on site because they were ugly. AT&T executives were dumbfounded-after all, does it matter that the cables were ugly? They were intended to be buried underground anyway. The reason turned out to be that in Japanese culture, aesthetics are very closely connected to quality, and ultimately to soul. To them the ugliness of the cables implied that the product had “no soul” or no quality.
Even mundane elements such as the quality of paper used for your corporate brochure may not indicate the same level of quality as that in your home culture. Handmade paper is far more highly valued in cultures where mass production and mechanization has raised the price of handicrafts, whereas in highly populous less industrialized nations, handicrafts are the staple of the underprivileged.
3. Playing follow the leader
Looking at how a foreign company has achieved success in one target market is not an indication that you should do the same. Since each industry or service has its own local conditions and customers, you cannot assume that a set of customers for a particular product or service will act the same as the one you are targeting. Nor should you assume that if a strategy similar to yours was successful for your brand in one market or region, it can be replicated as is. The smallest product and service differences can mean a great difference in a market you are not wholly familiar with as Wal-Mart’s unsuccessful attempts to replicate their winning strategy in Asda in the UK, backed fired in German and Korea.
4. Making assumptions
This point may feel redundant yet needs to be made. We often realize that there are assumptions we may be making while shaping a brand or communication strategy for a different market. Being mindful of these assumptions can often mean the difference between success and failure. There are a plethora of case studies and anecdotes that illustrate this point from choice of brand name (for example, the Mitsubishi Pajero) to a choice of tagline.
In today’s world, if you want your company to become a global brand, you cannot afford to work with mono-cultural teams. Diversity of cultural and social perspective is imperative. Assumptions made in marketing communications can also lead to perceptions of arrogance and insensitivity, something that can impact your bottom line as well as reputation.
5. Ineffectual leadership
Whether it is selecting the right local partners or suppliers to work with or the MD in charge of the project, the quality of the individuals can often make or break a new market entry strategy. You need to think carefully about who is going to head your new venture. Think about who is working on your project and review their approach to interacting with staff, suppliers, government and other stakeholders. Are they arrogant? Are they culturally sensitive? How do they treat the staff? All of these and more are highly relevant to finding the appropriate person or partner for a very different market. If you do not get the right leader for your new venture, you may find mass staff resignations, labour relations issues and bad media coverage being the order of the day.
Don’t be in a hurry to see results. While market forces may require that quarterly sales figures are constantly monitored, entering a new market-particularly one very different from your own is a matter of respect, patience and perseverance. Witness Toyota’s successful application of these very qualities in the world today.