By William R. Dodson
Did you hear the one about
the Chevy Nova, which sounds like a really cool-sounding name in English? Well,
when Chevrolet took the car and its name to Latin America, no one bought it
because “No va” means “Does not go.” And then there’s McDonald's: it
received many complaints from local authorities in 1988 when it displayed the
Mexican national flag on its placemats. The Mexicans were offended by grease
and ketchup defacing their national symbol and quickly confiscated the place
mats. And don’t forget Gillette, which thought it was a sure bet that one
billion Chinese would want to shave with it’s razors. The company quickly
learned, though, that first it would have to teach the Chinese that shaving what
little body hair they have was in their best interests. Gillette quickly scaled
back its China-earnings estimates.
For every big name,
Fortune 500 debacle like the Nova or McDonald’s or Gillette that enters a new
foreign market, there are scores of others we never hear of from Small and
Medium sized Enterprises (SMEs) that never make the front page of newspapers.
Consistently, hundreds – perhaps even thousands – of businesses annually lose
investments in foreign countries because of one reason: they never asked the
locals what they wanted.
I’m not going to pick on
just American companies here, or even restrict myself to European businesses:
the business people from developing countries also make the mistake of ignoring
what their customers want in favor of what is expedient for them, or requires
the least investment, or is based in narcism or, worse, unadulterated
ignorance. Typically, though, developing countries miss out on a couple counts:
not only may they place a product in an inappropriate foreign market, but the
quality may not be what the customers in the target market expect. Hence, an
American customer I know had to reject hundreds of custom-ordered tote bags
made in China: the quality was so poor as to be indefensible. The customer
actually went to an American manufacturer and was able to get the bags on short
notice at nearly the same price as the Chinese bags.
Americans, though, often
make a similar mistake with the insular Japanese market. The Japanese have
extraordinarily stringent requirements on the quality of products: an American
manufacturer of engine components was having product rejected by Japanese
inspectors because of a cosmetic scratch or two on parts that did not affect
functionality.
No one likes being sold
down to, and yet marketing and sales departments of companies everyday refuse
to ask the local consumers of foreign markets what they want and how they want
it. So what’s the best way to go about researching what products or services
will work in a market other than your own?
Just ask.
That’s it. Really. It’s as
simple as that:
- Find out about local contacts in the market
into which your company wants to enter.
- Go to the country yourself. Travel alone, if
possible and safe; in pairs at the most. Don’t do scripted delegations.
Delegations insulate you from the real people who buy consumer goods: the
people on budgets who may like Western styles with local influences.
- Eat in small, family owned shops; frequent
those places. Build trust with proprietors and regulars so they’ll open up
to you. (There’s a great mom-and-pop noodle shop in Beijing I can
recommend to you!)
- Find a local you trust and whose language you
understand, someone with whom you are comfortable reclining at a plastic
table outdoors sipping beer or tea or the local brew, just to chat.
- Have fun the way the locals do. You’ll meet
people and see things you’d never be able to in focus groups and
facilitated sessions.
Formal market research
that involves focus groups and test samplings and analyses of Return on Investment
have to be done, but only after you’ve grounded yourself as a product maven in
the local culture of your target market.
Do your cultural homework well, and you just may find yourself developing and selling products local companies may kick themselves for never having conceived of in the past.
William
R. Dodson is Managing Director of Silk Road Advisors, L.L.C., which advises businesses on how
to adapt people and
products for success in international markets. He is the contributing editor on
international business to the American Management Association’s (AMA) MWorld
Journal of Management, and writes the weekly column “The Cultured Business”,
found at www.silkrc.com and at the Global
Perspectives section of the AMA’s member website. He can be reached at sradvisors@gmail.com or +1 (847)722-7817.