1. People – Understanding Customer Behavior in a Different World
The people you are marketing to and the product that you are marketing go hand in hand. However, we’re leading off with the people because if you don’t first and foremost understand who you are marketing to, you may end up trying to sell them a product they don’t want and probably will never buy.
For example, Best Buy has not found much international success, especially in Europe. While their products were something that their target market wanted overseas, the way in which it was distributed was not well executed based on the way consumers shop in Europe.
Instead of tailoring their stores to fit the preferred mold of Europeans — which is smaller shops as opposed to large box stores — Best Buy opened up brick and mortars that were much bigger than what Europeans were used to. We’ll get more into how important the ‘place’ is in which you sell your product internationally in a bit.
In this example, had Best Buy done more research to understand their intended target audience, they would have seen that their product offering — tech gadgets in an extremely large one-stop-shop — would not have fared well. Instead, they could have opened up smaller stores to accommodate cultural preference.
So, when it comes to taking a product or service abroad, you first have to see if there is even a market for your offering.
2. Product – Altering to Fit the Needs of Your New Market
If you notice that the current offering of your product now won’t play in the new market you want to enter then you can do one of two things:
A.) Decide not to sell in that market
B.) Change your offering to meet the local demand
The classic example of this is McDonald’s.
The fast-food empire has an astounding 34,480 restaurants in 119 countries. In order to be successful, they had to alter their menu for just about every one of those countries — which led to some pretty interesting entrees.
McDonald’s put in the work to understand the people they were about to serve and altered their offering to fit their palate.
Overall, this decision is an excellent one to learn from for those looking to branch out to foreign markets.
3. Prices – Choosing a Premium or Economy Pricing Strategy
For the most part, if you already have a product or service that is successful in one area of the world, the price point you use won’t very much in comparison to the competition in that area.
If you have a premium product, it’s likely premium elsewhere.
If you have a more affordable, economically-friendly product, it’ll be the same in your new market.
This is for the sake of consistency. It’s difficult to pull off being associated as a more expensive, premium product in one country, and the complete opposite in another. You may even risk bringing down your brand image as a result.
Imagine if Omega was entering the Swiss market for the first time and because they knew Rolex already had a definitive hold on the premium watch market, they decided to pivot to a more economy pricing strategy. While a move like this might help them sell more watches in the short term, the long term effects could make people outside of Switzerland associate them with cheaper products, which is not could negatively impact sales in other regions.
But what if they created an entirely new, separate brand to sell in a different country? This tends to be a strategy that is often used in international product marketing.
For example, Procter & Gamble has many, many brands. Some are premium products while others are more economically-friendly. They own both Dawn and Joy, which are dishwashing liquid brands.
In the 1990s, Procter & Gamble introduced Joy, the more affordable option, to the Japanese market and found success — quickly becoming one of the market leaders.
Obviously, this is an extreme example due to Procter & Gamble’s diverse selection of brands. Therefore, they have the flexibility and size to own brands with a wide range of pricing options as opposed to exclusively premium or exclusively affordable offerings.
Going back to the Omega and Rolex example, it is not inconceivable to think Omega could enter the Swiss market with an affordable watch under a different name if they truly wanted to target that segment of the watch market.
It wouldn’t be so different than Birkenstock, which offers their premium sandals in addition to their economic option, which is made from EVA foam. The key is to articulate that the economic option is for those who want the look, but don’t want to pay the price.
No harm, no foul.
4. Promotion – Choosing Strategies That Work in This New Environment
Figuring out the most effective methods for marketing your product or service abroad is not that much different than doing it domestically.
Even if you live where you’re promoting your product, you still have to do some additional research to find out where your target audience is and which mediums they frequent.
Take Brazil, China, Japan, Russia, Poland, South Korea, and Vietnam for example. In these countries — at least as of 2011 — Facebook is not the most popular social media site.
Instead, Twitter or Orkut and other regional platforms reign supreme.
Obviously, this doesn’t mean you shouldn’t be advertising on Facebook, but this information does suggest that perhaps focusing more effort on the leading site in those geographical locations — like Twitter, may be more effective. Especially if that’s where your demographic is hanging out.
Just like cities across the U.S. that vary in terms of which mediums are most effective, cities across the world tend to have their own unique preferences on channels and messaging.
But, as previously stated, it will take a lot of research to figure these things out.
Are certain markets susceptible to buy-one-get-one messages in retail stores? Is the country I’m planning on operating in using email? Does my new target market like coupons? Should I be advertising on television in this part of the world, or is YouTube be more appropriate?
These are just a few of the many questions you should ask yourself prior to starting any big marketing campaigns anywhere in the world.
5. Place – Finding the Sales Avenue That Your Consumers Use
Defining where you’ll be advertising and marketing your product or service is one thing. But finding the right place to actually sell your offering is another.
One of the bigger questions you should look to answer is whether or not you’ll be able to sell your product online.
Did you know that there are many European countries where their people prefer to shop in person as opposed to online?
Depending on the country, the reason varies. Some people prefer to shop in person and see and touch a product. Or, they just have loyalty to that shop. Fifty-two percent of Montenegrins prefer to shop in person, the most of any European country. Romania (48%), Cyprus (40%), and Bulgaria (39%) are the next three in the list.
Meanwhile, the U.S, U.K, Sweden, and France are on the other side of that spectrum, as they are the top 4 countries in terms of average e-commerce revenue per online shopper.
Just like with Best Buy in Europe, the size and layout of your store may need to be altered to fit your consumers. But in addition to that, deciding how much effort to put into online stores — or any effort at all — is another big decision that must be made.
6. Packaging – Finding the Right Look
The way you package your product or service may vary a lot from country to country.
When you determine how to package your offering, color is an important choice. One reason for this is because different areas of the world associate specific meanings to certain colors.
For example, in Eastern and Asian cultures, red is a color that is synonymous with happiness, joy, and celebration.
But in the Middle East, red is considered a warning and brings forth feelings of danger. Some also consider it to be the color of evil.
As you can see, doing research on the psychological effects of color within each culture you’re operating in is extremely important for choosing the right packaging colors for your product.
In addition to the design, the copy on the packaging is also important. As we saw earlier, with KFC and Coca-Cola, translation errors are fairly common.
When working on your packaging and label design, these key questions can help:
- Are international brand names important to promote and distinguish a product? Are the colors used on labels and packages offensive or attractive to the foreign buyer?
- Can labels and instructions be produced in official or customary languages if required by law or practice?
- Does information on product content and country of origin have to be provided?
- Are weights and measures stated in the local unit?
- Does each item have to be labeled individually? What is the language to be used on the label?
- Are local tastes and knowledge considered?
7. Positioning – Determining Which Messages Will Resonate With the Market
Positioning is absolutely critical when entering a new market.
If your initial positioning fails, an attempt to reposition your product can be costly and is not guaranteed to be successful. This is why it’s important to get it right the first time.
A significant part of your positioning will be evident in the messages you relay in marketing campaigns. The messaging should be derived from your unique value proposition (UVP), which should be made up of the following:
- Relevancy — how your product solves customers’ problems or improve their lives
- Value — what are the specific benefits
- Differentiation — why your ideal customers should choose your product over the competition.
Let’s say you are a toothpaste company that is attempting to enter the market in Brazil. Because you did your research, you discovered that there is an opportunity in the Brazil market for a toothpaste that helps reduce sensitivity. You create a toothpaste that does just that and name it Sense Paste (not the best name, I know).
So, your UVP would look something along the lines of this: SensePaste is a toothpaste that helps improve the strength of your teeth and gums so you don’t experience the negative symptoms of sensitive teeth.
By using specific ingredients in our toothpaste, SensePaste is able to prevent your teeth from hurting in addition to keeping them clean.
Unlike other toothpaste in the market that just clean teeth, SensePaste will keep your mouth healthy and pain-free.
As you can see, your UVP will then influence your global marketing strategy.
8. Physical Evidence – Getting the Ambiance and Mood Right
If you’re looking to enter a new market abroad with a service, listen up because this one is especially for you.
Because services are — for the most part — considered intangible when it comes to marketing. So, if there is no product that can be altered or changed to fit the needs and wants of a new market, then you have to pay attention to the physical evidence in the setting where people will receive your service.
The physical evidence can be broken into three separate areas.
The physical environment is the physical space that surrounds the consumer during the service or experience. So, if you’re selling food, then the restaurant is the physical environment.
you can look at the ambiance as a subsidiary of the physical environment, it is about the mood and feeling inside the physical space. Colors, music, and lighting are little details that can make a big difference when it comes to how your service is perceived by your consumers.
To further illustrate the significance of the actual layout of the space where your service is offered, let’s consider a karaoke bar. In the U.S, karaoke bars typically set up the karaoke machine in an open space, where anyone can see the person performing.
However, in Japan, karaoke bars are much different — the majority of them feature private rooms (karaoke bars) for groups of people to rent for a specific amount of time. So, as opposed to belting out the lyrics to “I Feel like a Woman” in public, people in Japan prefer to be in a more private space for such occasions.
Once again, the Best Buy example fits this bill as well, where their consumers in Europe found their large stores overwhelming because of how big they were.
9. Local Teams – Don’t Overlook Them
As this Harvard Business Review article written by Nataly Kelly and titled “The Most Common Mistakes Companies Make with Global Marketing” points out, one of the top global marketing mistakes a company will make is not listening to their local teams.
“One of the most disappointing mistakes that I’ve seen companies make is that they hire highly competent, intelligent local people to serve their overseas markets, but then fail to consider their input when making strategic decisions,” says Kelly in the article.
As a global consultant, Kelly has faced many marketing executives who just don’t seem to understand the importance of the local teams they established. When asked why they aren’t succeeding in a certain country, she often answers with, “Ask your local teams.”
Not only do you have to make sure local teams are incorporated into your global marketing strategy, but you should also use them as a helpful resource.
“Leverage your existing relationships, and make sure to give their feedback extra weight. They are by far your most credible advisors,” Kelly finishes.
One of the most disappointing mistakes that I’ve seen companies make is that they hire highly competent, intelligent local people to serve their overseas markets, but then fail to consider their input when making strategic decisions.
-Nataly Kelly, Harvard Business Review, “The Most Common Mistakes Companies Make with Global Marketing”
10. Understanding – Making a Positive Influence on Your New Community
At the basis of all of these principles, there is a common theme of understanding your consumers.
You should constantly be asking what are their needs, wants, pain points, and desires.
What is important to them? What do they truly care about? What are they missing in their lives? What can you offer to them that no one else can?
Answering all of these questions and incorporating them into your global marketing strategy will help you find success with sales.
However, focusing solely on short-term profits is not a sustainable, long-term strategy.
When you’re entering a new market, especially in a new country, ensuring that the environment you’re operating in will be prosperous long-term is essential.
Simply put, brands that utilize the triple bottom line — people, planet, and profit — tend to have more success as a global company.
Kerry Sullivan, president of the Bank of American Charitable Foundation, explains the importance of ensuring that the communities around you share in your success.
“We’re looking at long-term solutions, not just Band-Aids,” Sullivan says. “If we can help create strong, sustainable communities, it will ultimately strengthen our business too.”
Bank of America works towards strengthening low-income communities through numerous nonprofit partnerships, as well as improving financial literacy skills, which in turn leads to a healthier business climate.
Giving back to the community creates a more sustainable community for your business and the people within it to thrive.
This includes your employees as well, who value working for companies that give back. Two-thirds of Millennials and nearly 60% of Gen Xers say they want to work for businesses that make an effort to give back to society.
So, when you’re expanding to a new country, a good question to ask yourself is, do you have a plan in place for bettering the community?
Many companies incorporate charity and volunteering into their business strategy. Ultimately, this is something you should be doing in every community you operate in.