Failure Communication In International Markets

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Marketing to an international market is a very crucial step when you are entering a new country with different culture. Localization to that new market should be done carefully otherwise you might offend the target market. We learned from Disneyland Hong Kong how their lack of localization and the inability to understand the Chinese consumer offended the people which lead to a lot of people outside the park on the Chinese new year’s day with a valid tickets.

A study done on Fortune 500 companies found that those who do localization such as translation to the target international market are twice as likely to see increased profits and 1.25 times more likely to generate increased earnings per share.

Here are some of the failed attempts company did in international markets:

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  • KFC introduced their “Finger-Lickin Good” in China which was a failed marketing attempt because people did not understand it and it was translated in a funny way “Eat Your Fingers off”.

  • When Coca-Cola entered the China Market, they named their product something that when pronounced, sounded like, “Coca-Cola”. But the problem was that when they wrote it with the chinese charcters it meant “Bite the Wax Tadpole” which they change after they found out to “Happiness in the Mouth”

  • In Italy, a campaign for Schwepps Tonic Water translated the name into “Schwepped Toilet Water”

  • In Spain, Coors Brewing Company translated their slogan “Turn it loose” to “Suffer from diarrhea”

  • Fiat released an ad in Italy with actor Richard Gere driving one of Fiat new cars, Richard Gere is hated in China because he support the Dalai Lama. People reacted to this commercial in China.

  • Garber, the baby food company, when they started selling food in Africa, they used the same label with the cute baby as the one in the US. In Africa companies usually put pictures of whats inside the package since not everyone can read which people was confused on what it is.

  • When Pepsi introduce their drinks in China, they launched a slogan that says “Pepsi brings you back to life” but they found out that it translates into ” Pepsi brings your ancestors back from the grave”.

 

 

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Consideration when Doing Business in China

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China is a country of tremendous opportunities, and at the same time it’s a country of equal challenges. China has the second largest economy in the world. The implications of that would be by designing products to match that market. Aspects of the design of products should be designed not by the needs of Americans or British but by Chinese needs. The larger the market the larger the standards, and that’s a big issue. I disagree with the statement that  “China is a market of 1.3 billion consumers”.

China is huge country however in terms of its market consumers this number may be lower. When we measure customers in markets the main aspect is for them are to be qualified and have a certain level of income. China is a very unequal society; purchasing consumer products are concentrated in the coastal city areas.

China is a single country, but the question is does it function like a single market? In theory yes, but in reality it doesn’t.  It is very important to understand people habits from different areas in China since it is a huge country and then design products that match these differences. As an example: in the case of Yum china, KFC company opened the same restaurant around the whole country, but had to localize some flavors to match people’s liking based on their preferences and since consumer tastes differ in each area. It is also important to understand the purchasing power in each of these areas. Five major cities have the highest GDP per capita that are not in the same tier or horizon that I believe companies should enter this markets since they will have a bigger opportunity to grab a bigger market share. The cities are:

1- Shenzhen (Horizon 2): GDP per Capita 51.1

2- Shanghai (Horizon 3): GDP per Capita 45.2

3- Beijing (Horizon 2): GDP per Capita 39.4

4- Xiamen (Horizon 2): GDP per Capita 38.2

5- Changsha (Horizon 2): GDP per Capita 31.4

From the numbers above we can see that the largest GDP per capita is among the cities located in horizon 2. Which means consumer consumption would be more attractive in those areas.

One of the main challenges that China will need to resolve is the Intellectual property protection, and non-innovative labor. When there is no property protection and non-innovation, this creates a big issue. Any product can be copied and anything can be added to the technology of that product. As an example: the iPhone, you can easily find an iPhone knockoff with a different software. This issue is not new to the world, the US and British went through this stage, in the textile industry. The Chinese market is different, it is very price competitive, and with the non-protection of intellectual property the problem increases.

 

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Coca-Cola’s Creative International Marketing Approach

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Coca-Cola has been successful in building a global empire that surpasses all other brands in the beverage industry. When marketing your business internationally, you need to think out of the box. In this post we will be discussing some of the marketing strategies that we can learn from Coca-Cola’s international marketing experience.

Localize!

It’s a wonder how Coca-Cola makes sales in over 200 countries across the globe with a 94% recognition rate. They do this by personalizing their products. To sell your product internationally, you have to localize the product for the targeted audience.

A genius interactive advertising by Coke in Australia added 150 of the most popular names to the phrase “Share a Coke with…….” on branded t-shirts. This led people to share happiness by searching for people wearing t-shirts with their names or a friend’s name while walking on the streets or in shopping malls.

Not only does Coke personalize stuff quite literally, but they also run programs around the globe to lend a hand to the needy in society. In its Global Sustainability Report (2011-2012), Coca-Cola stated that it sponsored nearly 300 nutrition and physical activity programs in 115 nations worldwide.

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Create a global brand:

Coca-Cola realized the one thing that everyone wants, regardless of their age, religion and origin. They realized we all look for Happiness! Coke markets itself as a distributor of happiness. Their consistent brand strategy relates well with all its consumers worldwide. Slogans like “Enjoy” & “Open Happiness” are easy to sell globally and endure a lifetime.

Maximize on Internationally recognized activities and holidays:

Coca-Cola has also realized that people have a sense of togetherness and friendliness during international celebrations. These act as a perfect platform to advertise and engrave Coke’s products as an essential part of family, togetherness and oneness. Coca-Cola never misses to splash billions of dollars in advertisements during Christmas and the Football World Cup.

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The promise of a better tomorrow:

What do we all aspire for? A better tomorrow of course! This is one more reality that Coca-Cola capitalizes on to put a spell on all of us. Coke’s Egyptian TV advertisement “Make Tomorrow Better”  is based on Coke’s classical marketing strategy of the promise of a brighter future that has been associated with many of its previous commercials for decades. The ad is relevant to the famous Arab uprisings. In this Egyptian setting, the commercial shows a gloomy and gray Tahrir Square. The citizens literally open up the clouds and make the sun shine once more. The Coke brand creates a promise of happiness and optimism.

Though we all don’t have the same resources as Coca Cola to accomplish all this, we learn that research, creativity and sticking to one’s brand will make a positive impact on our businesses.

 

 

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Major International Marketing Communication Decisions

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In order to successfully market a business internationally, some decisions have to be well thought out. Various markets respond differently to the same marketing strategy, and this affects the bottom line of any company. Below are the important points that need to be considered when developing an effective marketing communication.

Identify the target audience:

Sometimes, the same product might appeal to different audiences in different markets. For example, certain consumer goods that are used by all classes of people including the low-income population in developed countries may only be used by the high-income population in developing countries. A good example is bicycles that are used as a basic means of transportation in developing countries like India and some African countries. In some developed nations, bicycles are mainly used for leisure, sport and recreational purposes.

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Objectives of the communication:

Since various markets are at different stages of development, the strategy of each market is usually different. The communication in a new market should focus on consumer education. Similarly, the communication in a market facing a challenging new competitor should focus on fighting off that specific competitor.

Message formulation:

Message design seeks to address the below four main problems.

  • Message content (what should be said)
  • Message structure (logical arrangement)
  • Message format (symbolic arrangement)
  • Message source (who is saying)

The above are usually influenced by varying environmental factors like cultural and legal factors in different markets. Thus, special consideration needs to be applied in the formulation of each communication about market dynamics.

Budget Allocation:

The amount of the total marketing expenditure and the apportionment of this amount to various elements of the marketing campaign are normally quite difficult decisions. The below methods are commonly used to set marketing budgets.

  • Affordability – The budget is set according to what the business believes it can afford.
  • Sales Percentage – A predetermined percentage of sales is set aside for marketing.
  • Objective & Task – The marketing budget is set according to the objectives of the communication and their corresponding tasks.
  • Competitive Comparison – The budget is set according to the market average of similar companies operating in the same market.

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Advertising:

Advertising is the non-personalized promotion and presentation of ideas, goods and services by a specific sponsor. Different privacy laws and advertising regulations can affect the type of advert used in different markets.

The effectiveness of different streams of media in different regions may also affect the type of media used to advertize. For example, a new product in India is more effectively marketed through radio while a new product in the US is more effectively marketed via television.

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Supply Chain Transparency in International Markets

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It is important for a company to have transparency for their supply chain. Unfair act in any part of the supply chain can affect the company reputation locally and globally.

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Fair Trade certification gives the consumer the knowledge that if they purchase a certain product it will benefit the workers or the producers who directly were involved in its production. The certificate is designed to make sure that a fair trade is happening on every level of the supply chain. There are many rules you have to follow to be a fair trade certified which include:

  • There is no discrimination based on sex, gender, religion, color, or political views
  • No child labor, and workers can form unions and should not be forced to work
  • Fair wages and safe working conditions
  • Producers must protect the environment by making sure they don’t use machinery or waste that could harm the environment

Global retail sales of Fairtrade products such as coffee, sugar and bananas increased by 15% last year to reach $6.86 billion , with the UK as the largest international market of $2.80 billion. There are 30,000 Fairtrade products on sale in 125 countries. The most popular product are coffee which grew by 8%, sugar by 22%, banana by 12%, and flower by 16%. Germany the second largest Fairtrade country after the UK, witnessed a 23% annual growth of Fairtrade sales. Now there are more than 1.4 million farmers and workers, belonging to 1,210 producer organisations, including local co-operatives.

Increasing sales of product that has the Fairtrade label means that people deliberately choosing those product over the other options without the label. This means that people are becoming more aware of the inhumane and poor working conditions for worker and farmers in some countries and they want to make a change. Companies should acquire these certificate in order to make their supply chain more transparent and help the society.

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