LESSONS FROM WAL-MART
Wal-Mart's recent problems in Germany and the subsequent analysis
uncovers some of the pitfalls that face market leaders when they choose
to cross cultural borders. The common theme is that if you do not
already possess an iconic brand - Starbucks or Apple are the common
examples - you must adapt to the indigenous culture. And this applies
across the board from your business model, marketing strategy and
product mix to choosing to follow HR practices from your home culture
or local culture. While none would like to acknowledge that their brand
may not be considered as iconic as Starbucks' or Apple's, here are 5
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
recently, 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 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 possiblities.
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 sight because they were ugly. AT&T
executives were dumbfounded after all, how 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. Similarly, Wal-Mart found in Germany that the Germans did not
value the 'smiling' as a courtesy, but misunderstood it as flirtation.
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 mechanisation has raised the price
of handicrafts, whereas in highly populous less industrialised nations,
handicrafts are the staple of the underprivileged.
3. Playing follow the leader
Looking
at how one foreign company has achieved success in the market you are
targeting 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 particular strategy was successful for your brand in
one market, or even a region, similar to that of your target, 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
both similar (Asda in the UK) and differing (German or Korean) cultures
demonstrates.
4. Making assumptions
This point may feel redundant yet needs to be made we often realise that there are
assumptions
we may be making while shaping a brand or communication strategy for a
different market. Being mindful of this 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 (Nova,
Pajero) to a choice of tagline. In today's
world, global brands
cannot afford to work with monocultural 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 bottomline as well as
reputation.
5. Ineffectual leadership
Whether
it is selecting the right local partners or vendors to work with or the
employee in charge of the project, the quality of the individuals can
often make or break a new market entry strategy. Your brand manager may
not have any exposure to the new market or its culture, or may be too
inexperienced to question the agency's decisions. Remember that a large
agency may have an international presence but this does not guarantee
that their local offices have influence in shaping the strategy of the
brand in their market. Think first about who is working on your project
and review their approach are they arrogant? are they culturally
sensitive? All of these and more are highly relevant to finding the
appropriate person or partner for a very different market.
And
finally, don't be in a hurry to see results. While market forces may
require quarterly sales figures be 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.
About the article
Reprinted with permission from Rebrand100.com
About Niti Bhan
Niti Bhan is a global nomad who calls Singapore, India and the United
States home. Based in San Francisco, she creates strategies for
entering new markets, identifying new revenue and growth opportunities
for her clients. She also is the Editor of the Core77/BusinessWeek
Design Directory, whose focus is to maximize the ROI in design. Her
articles have been published in BusinessWeek's Innovation and Design
section, Core77, New Design Magazine, UK and FORTUNE's
BusinessInnovation blog.
About Manuel Toscano
Manuel Toscano focuses on design strategies for Emerging Markets, NGOs
and Fortune 500 corporations. He is also the principal of Zago LLC,
established in 1996, a European-influenced corporate identity firm that
works closely with their clients to co-create contextual and structured
brand stories. Zago has offices in New York City and Rio de Janeiro,
Brazil. In addition, Manuel volunteers as the Communications
Director
for Emergency USA, an NGO that works directly with civilian victims in
war torn countries. Zago LLC, 394 Broadway FL. 5, NYC 10013, PH. 212
219 1060