Lessons in International Marketing
Yesterday, I saw an article by Tony Daltorio at Investment U Research about how Google forgot Rule #1 of international marketing: know your market. Seems obvious, but it often catches companies out when they make a run at a new market. They don’t stop to think about the market, or they haven’t done the research to get to know a market.
Daltorio’s article points out that Google strode into China with all the hubris of a Greek tragedy. They knew little about the local competition, like Baidu, which might have enabled Google to pick up on what was driving Baidu’s market share in China – free music downloads, which are not a core expertise for Google. Google also assumed that their U.S.-style model would automatically work for China, as it had worked in so many other places, but they built no good way to cope with Chinese character searches. Chinese users want to minimize typing, but do want to be able to merely click on buttons to conduct a search. (Would a Yahoo-style search by categories work better in China?) Daltorio says that Chinese internet users are more likely than the rest of us to use the Internet for entertainment, not for the business searches that reign supreme in other markets. And, says Daltorio, Chinese tend to use blogs more than company websites, preferring to trust word-of-mouth recommendations, which puts a premium on putting blogs high up in search results. Now, that is not to say that Google didn’t run into all sorts of official and unofficial blockages in China. Most companies do.
The article got me to thinking about companies I have worked with that did a good job of learning the market – and those that didn’t. We did some market research in Germany for a firm (that should remain nameless) that wanted to introduce an American consumer product. Our findings were very negative; in fact, we told the company they would lose their shirts in Germany and probably in much of Europe. I was a U.S. commercial officer at the time and the company was so angry they complained all the way up to the U.S. Secretary of Commerce. We stuck by our research. The company then went to a neighboring European market with their original approach – and promptly lost their shirts. Never ignore negative market research. It can be the most valuable research you will ever see. (BTW, the company never apologized.)
I saw KMart fall on its face in Singapore. They came into the market in a rush and opened up what appeared a magnificent store in downtown Singapore. What they didn’t realize was that Singapore already had plenty of cheap goods, that they are sold through small stores in the many housing estates on the island, and that – once the flash of the new was over – few Singaporeans would make the trip downtown to buy such things. Why wait for a Blue Light Special when you can get the same thing cheaper from the guy down the street? (The expat community, which didn’t live in public housing estates, worshiped KMart. They had that part right.)
Some firms do get it right. I have worked over the years with a Honolulu architecture firm, Wimberley Allison Tong & Goo, that makes a fetish of getting cultural things right. When they begin work on a project, say a resort or hotel, they send architects to the site for months or even a year to study the local culture, mores and architecture before they begin to design the project. The goal is to please the customer, make sure the resort fits with the local culture, and please the visitors to these hotels who want an experience that can’t be replicated in a chain hotel. WATG has been so successful at this, and has won so many international awards for their work, that now they need to do very little marketing. International customers come to them.
Doesn't Sell in Germany
Germany was the site of one of the most egregious cases of ignorance of the market I have experienced. We were helping U.S. companies at a trade fair for costume jewelry in Stuttgart when we found a California company setting up to sell their biker jewelry. Bikers seem to love old SS-style symbols, swastikas and especially the SS deaths heads. But Germany, for good historical reasons, has outlawed display of such stuff. The U.S. company had not thought to ask about selling Nazi paraphernalia in the country that invented it. We got the deaths heads under cover just before the police arrived. Phew!
