Cosmetics, Culture and Canada. Within a few years, 66% of the world’s middle-income earners will be in East Asia, making exports important for companies of all sizes. And blunders in etiquette can doom ventures there before they even begin. Doug Hartley of Focus Asia Marketing in Calgary, Alberta explores many topics that can determine success. How do cosmetics companies segment sub-markets within countries? What cultural issues are critical to know? What packaging is most impressive? How does his company determine prime country markets for clients? In which pocket should you put received business cards in Japan and why? What makes back translations so important? And what are some differences with US and Canadian business practices? Especially in Asia, advanced knowledge is essential.
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[email return to Philip@Auerbach-Intl.com]
Hello everyone, and welcome to Global Gurus, where every Friday we explore stories of international business and speak with industry leaders operating around the world. I’m your host, Philip Auerbach of Auerbach International (www.auerbach-intl.com). Thank you so much for joining us.
If you’re tuning in for the first time, we start each podcast with a running segment called “Faux pas Fridays,” when we explore funny bloopers or mistranslations that do not quite convey the professional image that your organization wants to project.
And, because today’s guest has been involved in business in Japan since a young age, I thought it appropriate to give you a blooper from a Tokyo hotel—a sign in a Tokyo hotel that was written in English. I have no idea what they intended to say, but what they wrote in English was that “guests are required not to smile or do other disgusting behaviors in bed.”
So, with that, I’d like to introduce today’s guest, Doug Hartley. Doug’s interest in Asian cultures and business dates to age 16, when he represented his home city of Calgary on a trade and business development campaign in Itami City, Japan.
During that time, Doug saw the tremendous business opportunities in Japan and across Asia, especially for small- to mid-sized Canadian and American companies. After graduating with an MBA in international business, specifically Pacific Basin studies, in addition to ten years of presidential and executive-level business experience across Asia, Doug returned to Canada to form Focus Asia Marketing.
Focus Asia guides small to mid-sized companies to successfully enter Asian markets. The company provides services such as country market research, best-fit prospect identification, introductions, and meeting facilitation.
Doug is a strong advocate for companies to be well-prepared and educated in cultural differences and business practices between North America and Asia. Doug is married and has two children, both attending the University of Calgary.
So welcome, Doug. I’m delighted that you are with us.
Well, thank you very much. Philip, it’s good to be here.
So, before we plunge in deeply, perhaps you could tell us a bit about your background, how you grew up, and how you gained your global experience.
Well, I was born and raised here in Calgary, Alberta which is right next to the Rocky Mountains in Western Canada.
Most of my family members did very well in business, were well-educated, and were quite worldly in that respect, and I was able to do the same. As you mentioned, I began having international, particularly Asian, experiences when I was around 16 years old.
And going over to Japan and seeing how that made a tremendous difference in that I could see how different the Asian cultures were compared to the North American culture. I had visited the US from Canada, but our cultures are pretty close. So, there was not that much of a distinction, and it hit home to me how important culture was.
And the mindset of the culture in any kind of dealing, whether that be in business transactions or as a tourist. Like you opened with the story of the sign saying no smiling in bed. I chuckled at that. So yeah, I can see that, and I can tell you from personal experience that I made that decision right away with a whole pile of goofy cultural mistakes but that’s how we learn. But I had no idea. That culture was brand new to me when I arrived in Tokyo. A rude awakening.
Perhaps you could share with us some of the goofy cultural mistakes you made when you were younger, and then some from when you were older … your more experienced self.
OK, during that trip? We wanted to take a group photograph of all of us—those of us from Canada and the Japanese who were helping us on our trip over there. So, it was a group photograph, and so they’re all there. Everyone was nice and ready, and everything went as planned. And I was taking the picture.
I wanted to say “cheese,” you know, to get everybody to smile. But I didn’t know the Japanese word for cheese. However, I learned from my English-Japanese phrase book that the word for the toilet was benjo, which sounded like not a banjo, but a benjo. I got this kind of stupid look from them and a smile, and I took the picture because I thought everything was fine. A couple of days later, the Japanese tell us he has come over. He said, “Douglas, excuse me, but do you know what benjo means?” “Well, yes, that’s what it means,” I say. “Toilet,” he says. Well, not really. It really means the fxxxing shxxx hole where we do our business.
And I thought, oh my God, no wonder I have these crazy looks, so what should I learn from that one? One of the biggest lessons I took away from that was, “Can we rely on these in English, Japanese, or Korean? Translate these dictionaries and/or even Google Translate, which we have now, and those are the definitions from the dictionary.”
Which is OK. But what do you need to pay attention to? What do they call idiomatic distinctions?
I had no idea that benjo meant that. I thought it meant toilet.
I learned from that one in a hurry.
That’s funny. Well, by the way, the Japanese word for cheese is “cheezu”.
Now you tell me. OK, I should’ve figured it out.
They import words because they don’t have them indigenously, so they use the English word for it with the Japanese pronunciation.
And the other aspect, of course, is that normally when you see pictures of Asians, they don’t smile. Because, you know, smiling is very Western, but there are some exceptions. Well, I know the Russians think this, and Asians tend to think that when you smile, you’re trying to hide something. You’re suspicious. Okay, so normally if you see pictures of Asians, they don’t smile at all.
They don’t say yes, so you have to have that very calm and cool demeanor.
Yes, from the outside.
That’s right, and similarly, I learned that in Korean and Japanese society, if a foreigner is good at Japanese or Korean, they may impress their English friends. But will the Japanese and Koreans get a little suspicious? Because, you know, maybe he knows a bit too much. Maybe he understands too much. Do you know?
You can’t have that. And then they think that their language is so difficult and unique that there’s no way any Westerner could get their head around it.
Right, and I’m learning these languages on my own, I know it’s not easy.
It is very tough, yes, but as I’m sure you know, there are a lot of foreigners who have lived in Japan and Korea for many years, and so they, of course, master the language.
Right, and they know the language beyond just the dictionary definition.
Yes, of course.
And this is a plug for our own company. Auerbach International, which does translations into 120 languages, is at least a very good reason not to rely on Google Translate or pocket translators. They’re very good for travel and very simple phrases, but when you get into anything colloquial, as you’re illustrating, or certainly anything technical that can have multiple meanings, they’re not good, so that’s where professionals come in.
Right, that’s right. Very true.
And so perhaps you can talk from your business point of view, Focus Asia, about some of the successes you’ve had and what made them successful.
Some of our successes have come from working with companies in the natural cosmetics industry here in Calgary and in the US. They were able to introduce their products in several Asia-Pacific countries, and we were able to do that primarily through using a lot of social media and influencers.
So, test the markets as far as whether that particular product is going to be popular or sell well in whatever particular Asian country we’re looking at. We would do a lot of research before that to identify what we thought were the best fits for that particular product or service or company, and it was quite effective.
We were able to get some data in. We would then go back to our clients and say, “OK, this is the work that will go into our report and then we’ll go from there.”
Were there any differences in cultural adaptability? Take, for example, when cosmetics are sold to Asian women in Canada, the UK, or the US. The formulas are perhaps made with Asian women in mind, but do Asian women deal with cosmetics differently in any way? Do the products have to be adjusted for Asian complexions, Asian hair, or styles that Westerners don’t have?
Yes, they do have to be adjusted up to a degree.
The Asians seem to be more in tune with nature than we are, and they’re really sticklers for synthetics or chemicals or anything like that, so we have to be careful when exporting into these countries to make sure that it’s very, very plain that the ingredients are honest-to-goodness natural ingredients.
So that’s what they’re after, in addition to being able to customize your products. Physically, depending on where you are, for example, the women’s complexion in northern Thailand is quite different from what it would be in southern Thailand.
Or do we know it’ll keep in Thailand? Men have few skin blemishes, but women have a lot. And women will have lots of acne and pimples up to the age of maybe 19 or 20 or so, and then it dramatically drops off.
And it is the skin of the people and individuals who live in more rural areas in comparison to those who live in Chiang Mai or Bangkok where there are almost no complications.
Or you can go in a similar vein. In Korea, for example, in the Seoul area, women typically have very oily skin, more so than they would in the middle part of the southern part of the country.
My wife is from Pusan, and I’ll tell you, that should get your skin oily. I ask her if it is oily and she will say it is oily, but not to the degree of someone in Seoul.
That is why knowing that kind of information is extremely useful for exporters. So, if I have a product that will address oily skin more than another skin condition, that makes a big difference in how they target and position it.
Another big difference, of course, is in packaging. And whether they’re doing that and shifting toward more natural packaging, such as bamboo or a hemp-based box, or whatever the case may be. The makeup or product itself must be designed in such a way that when it is released into the environment, it will not cause havoc.
They’re concerned about the environment and the economy, or ecology, and all that stuff. And I certainly understand and respect that. It was just a little sidetracked when it was in Japan when I was a kid. The river going through Tokyo didn’t flow. So, it was still stagnant. It had a layer of green scum or something like that. Whatever it was, I don’t remember if you remember that movie Soylent Green or something, but it was that, and I was told if someone fell in the river at that time, they wouldn’t even bother to go looking for them.
The person would die?
Yeah, or he would ultimately. He would die, and he would be disgraced. They would be killed by the chemicals and everything like that. Terrible. And then, when I went back years later, the river was flowing. There was some guy out fishing, and I thought to myself, “Wow, I don’t think I would want to eat that fish.” Nevertheless, there is actual water, and it flowed. Yeah, it’s full, so that’s fascinating.
Just out of curiosity about cosmetics. Do you think the differences are the functions of pollution in the cities versus less pollution in the countryside? Or what would cause the oily skin? Or the typical acne in one place and not another?
I believe it has a lot to do with the air quality.
Their air quality and the amount of soot and dirt in the dirt, on the ground, on the roads, and things. That’s something else. It has a lot to do with the amount of humidity there is, too.
Isn’t the humidity the same nationwide?
No, no. It changes there.
I’d say Vietnam is as humid as maybe Thailand, but then again, it depends on where you go. I know that in Korea, Pusan was much more humid than Seoul, and it’s about 2 1/2 hours away, at the same distance as us going from Calgary to our provincial capital in Edmonton.
It is only two and a half hours away.
And there is a significant difference, but environmental factors do play a role. And another thing is that there’s so much exposure now to computer screens. That is making an impact on the skin as well. It’s simply due to the glare of the screens.
When I’ve been in Asia, you go from north to south. It’s equally humid and miserable, so I never noticed the differences in the degrees of humidity, and that’s fascinating to know. Thank you.
What about some business blunders? You gave some wonderful examples of the cosmetic industry and the successes they’ve had. Do you have any stories that you can tell me about when Canadian or other foreign companies entered Asia and screwed it up?
I can tell you about an incident I witnessed with a company I was working with that has the potential to be disastrous. up, but we finally caught it.
In Korea, I was working for one of the top manufacturers of excavators and diggers. You know, the tracked ones, the wheeled ones, and all that.
And we had gotten word from our engineering department that there’s this brand-new innovation with the engines, especially the spark plugs. And that this innovation, something involving spark plugs, would allow the force of the spark plugs to move the piston much more easily and efficiently. Therefore, the engine would have more power and the fuel costs would be lower, so this is a fantastic, fantastic car.
We had lots of markets in the Spanish-speaking countries, so I wrote out the content. And I needed it to be translated into Spanish. Our office was about a block away from the Spanish Embassy, so I thought, “Well, OK, I’ll just walk down to the Spanish Embassy, and I’m sure that they have a translator somewhere there who can translate this correctly.”
So, I went ahead and gave the two pieces, and they said OK. Thank you very much. And so, I came back to pick it up and I said, “Oh. This is fantastic” but I didn’t speak Spanish very well if at all, so I’d better get this thing translated again to make sure that it’s good.
And that translation means taking the translated version and putting it back into English.
Exactly, so I went from English to Spanish. Now we’ll switch back and forth from Spanish to English to ensure that we’re all on the same page.
So, the message that we got back was that this innovation is a spark plug innovation. It would essentially blow up the engine and you the driver along with it. Like “Kapow” I don’t think this would have gone over too well.
Good Grief. I caught this one, you know, because you always know that this continues well, this looks good, this looks better. I think I’ll go with that one, right? And you would be familiar Phil in your industry. That’s a no-no; you don’t do that. Back translate once or twice, or as many times as you want. Make sure you get it right.
That’s a wonderful story.
The way that it’s done professionally, first of all, you illustrated a wonderful point. Most people assume that if a person speaks a language, he or she can translate it. The issue becomes that the people in the Spanish Embassy are, of course, diplomats, and maybe they’re specialized in trade or agriculture. Hopefully, they will use technical terminology.
Each industry, of course, has its terminology. You know, real estate and medicine and all of that. But my experience is with diplomatic translators mor diplomatic interpreters, who do speak Communication as opposed to writing. Some people are terrible at technical translations because they don’t understand the terminology, so professional translations are what we do and the proper way to do it is to first hire linguists who have master’s degrees in the art of translation …. those who work full time in the art of translation and have at least ten years of experience, and most importantly, those who speak that industry’s terminology
But if they’re speaking, if it’s about excavators, then they need to speak engineering terminology, and therefore when you do it the first time, and through the process, you always use two translators; one to do it and one to check it. Then you can be guaranteed that it’s done correctly. But to rely on diplomats is not very good.
Right. Absolutely. And the lessons we took away from it because what I learned was identical to what you did. You’re saying that if I’m going to have an interpreter or translator working on behalf of a client or whatever, they need to be knowledgeable of the terminology in that particular industry. You know, because if they’re an expert on carpet lines and I want them to translate something about dental surgery, It will not come back as well.
We can carpet your tongue or your buttocks only once.
This does not quite compute.
It doesn’t quite compute. But it looks good on paper, so yeah.
That is fascinating.
You gave a wonderful example with cosmetics of how the companies adjusted. Is this advice that you gave them, or when you have a client who is entering a new country or culture that you may not be familiar with … let’s say Indonesia, and let’s say you don’t have a lot of experience there, although you’ve studied Bahasa [the language of] Indonesia …
Yeah, yeah, I used to live there.
how would you advise the company in your case for Focus Asia? How would you advise me to proceed in that case?
We do what we call a “country notebook study,” which is very intensive. And we examine everything from culture to language to economics, demographics, geography, infrastructure, all that stuff. It’s quite intensive, right?
We use it as a sort of landing pad, source, or resource. We do that for every country’s company on an individual basis. What do they want to do and get? We’ll use that as our starting point for evaluating which country is going to work best. This country is not going to work the best.
From there, the company and we can say, “OK, well, this is going to work in Indonesia, but this is not going to work so well in Singapore.” And so, you know you don’t want to go with a blanket approach.
Often, you’ll find that you could make minor adjustments per market, but we like to look at each particular market on its own, and from there, the company can say, “OK, well, this makes sense to us.” And then we’ll go from there, and then at the end, our clients will have a little preliminary marketing plan and a direction. OK, this is where we want to go, and from here.
We’ll do some more legwork and find out if this company over here would work for that company over there… Maybe not so much. And then we create a basic wish list of companies that we think would be good contenders, and then go from there. So, we do a lot of prep behind the scenes.
That’s wonderful, and do you just focus on East Asia, or do you go to South Asia as well? India, Pakistan, Bangladesh?
Southeast Asia to the northeast. I’m talking about Japan and Korea, outside of China. I do not have that much experience with China. Well, mostly Southeast Asia: Thailand, Malaysia, Indonesia, Singapore, and Vietnam.
What other cultural blunders, differences, or difficulties have you come across?
One of the big ones, I think…
What I discovered is that first and foremost, the pace of doing business differs. We get to the point. We did well in North America. “Hi, how are you doing? OK, let’s sit down and talk business.” In Asia that’s not going to work. You can try it. Right? B it’s not going to go very far like that. You probably know that old expression that says you can easily sell something in Japanese once, but not twice. That’s a different matter. That’s a whole different kettle of fish.
So, one of the challenges, I think, is that for Westerners, we want to go in there thinking that, OK, well yeah, there are some differences there, but it’s all about the bottom line. It’s all about the sale. It’s all about the profit and everything else.
Sure, it’s about the profits in these countries. They’re in these cultures, absolutely, but in Asia, they want to get to know you first. They want to know if they can do business with this company being located outside of the United States or Canada, and I want to ensure that I can. Want to do this with me? I know some people that I can trust. I can slowly build a relationship, and I can trust them. From there, we can go on.
Typically, we’ll say that the bare minimum we’d like to have is at least two, maybe three, Zoom meetings planned for the prospects in Asia. You know, before they go completely into things or wherever the case may be with them.
I coach my clients not even to bring up anything about you or your product. Don’t mention it, but that’s for them to get to know you on a personal basis. Let’s know about you. Let’s find out about Philip. His background… That’s the kind of thing that they want to know because then they feel more comfortable with you. And it’s the second or third time they’ve met, you can also say… OK, now I’m going to talk a little bit more about my company or my service.
Because if you rush too quickly, they’ll think, “Hey, wait a second here. Umm. Maybe they’re not entirely honest, right? They want to get what they want.”
Get a feel for it.
Very different from here in Canada. Anyway, getting there and knocking on the door is all that matters in sales. Hi, how are you doing? My name is Jeff. Your name is Frank. OK, we met each other for five minutes. Let’s go. Come down and talk turkey, right?
Well, first of all, there are not too many turkeys in Asia. I’ll tell you that much. Nevertheless, that just doesn’t work. It doesn’t work. Right, it has to be built up, you know, slowly.
And, of course, another big thing—I’ll just add this to a small one—is how important it is to be familiar with just the basics of the different cultures, so you’ll know this. I absolutely can’t remember, I can’t count the number of times that I have seen well-known Western companies come in, and they don’t. They haven’t prepared all that much for the cultural differences.
And then they wonder, “Well, how come that didn’t go quite as well as we had hoped?” It’s so important. I was speaking just a couple of weeks ago with a lady here in Alberta who was one of our former ministers of trade going back and forth, and she had done a lot of work in Asia, and we were trading war stories.
And she said it beautifully. She said, “You know if you don’t pay attention to the cultural aspects of dealing with Asia, you just might as well set up and go. Right, It’s just that important,extremely important.
Do you notice any differences between Canadian and U.S. business styles? Are they pretty much the same?
There are some subtle differences, I think. I think we Canadians are a little bit slower to get on track. I think the Americans are a little bit more direct than we Canadians. But we’re catching up.
I’m not sure if that is good or bad.
Well, that’s for better or for worse. I think Americans are much better at marketing themselves than Canadians. And American companies, from what I understand, they’re much more open to new markets than Canadian companies were, and I was.
Rather than what? I’m sorry, rather than what?
Companies based in Canada
Canadian companies are starting to come around now. But, in my view, they should have come around to that 40 years ago. But that’s another story.
I presume your life is not all business. What do you like to do in your free time? What is it that gets you excited?
What gets me excited?
Well, I like to play golf, although I’m not very good at it. I like playing it, but you see, we only have a very limited season here, right?
Although some people like to play snow golf, and I’ve never tried that.
What is snow golf? Playing golf in the snow?
Oh, that’s weird. That’s where you spray paint the ball black, and you hope that you can find it. If you hit it off the tee, you’ll know. I think they do that way up north in the Northwest Territories in the Yukon.
I like to play. I’m a golfer. I like to hike in our mountains. And my, it’s so close to here—maybe 60 minutes, if that.
I enjoy spending time with the kids and am an avid hockey fan. It’s a heart attack every season, nevertheless.
From hockey, of course.
So yeah. I like to golf, and I just like to play racquetball, hike around, and spend time with the kids. Mow the grass over and over.
As long as you can see it. When there’s no snow over it.
You want to let it grow. high, and then you get your neighbor to cut it.
That’s so wonderful.
Before we close, is there anything else you’d like to share?
Just how important international export trade is for businesses of all sizes.
There are opportunities out there for all sorts of things, and when companies make the decision, I think for myself in international terms as in Asia. You know that they get some guidance.
In my experience, a lot of small to medium-sized businesses are struggling. You know, there’s this great opportunity over there, but I don’t know how to get started. Is this a big challenge for them?
Yes, of course, it’s cool.
Yeah, and quite often the decision makers will say, “Wow, I want to go over there and say, “Geez, I wonder?” If my device works, I know that there’s a lot of background research to be done, but I don’t have the time to do it because I am too busy putting out fires in Indiana, Milwaukee, or wherever the case may be. And another factor is that quite often they may not have anybody on their staff that has real Asian experience and simply getting it right.
Or international experience.
International experience and going over and hanging out. You know, on the beaches. Thailand for two weeks at a resort is great, but that just doesn’t quite cut it.
Right, it’s not exactly international business.
And not entirely international. There are lots of opportunities out there for companies, provided they know they can get some assistance.
And I suppose the last thing I’d say is that, recently, I read or heard just that in the next one, four, or five years, Asia will be home to 66% of the world’s middle-income families.
That’s a lot of people. That’s a ton of people, and that tells me or shows the tremendous number of opportunities there are over there that people can tap into, but if they’re going to do it, they’ve got to do it right.
They got to do their homework, cross their T’s and dot their I’s and if they do that, chances are they’ll go in there and do it well. Let’s say they figure that 90 to 95% of Western business failures can be traced back to very simple blunders in Connecticut. It’s in etiquette; it’s simple, right?
You know, a common one would be like business cards. Everyone knows you’re supposed to hand out business cards with both hands. All right, that’s good. But never once think, “OK, what are you?” After you, I’m going to do something with the business card. Get it right. You can put it on your left side or the right side of your jacket.
You always put it on the upper left side because it’s closer to the heart. There’s been some more sincerity. If you position it to the right, they think …You don’t respect me. But how do we know that?
You’ve also taken the time to read the business card, which most Americans don’t do. You get the card, immediately put it in your pockets, and look at it later.
That’s correct, and in a country like Korea, where a large percentage of the population is descended from about 13 different family names, Park Park Park Park Park Park Kim Kim or Mr. E, or minister, whatever. Then there’s S.J Park and M.J Park, both of which have no parking. Whatever the case may be, you know, they’re all lined up. To you, who is who?
Don’t you know, and please don’t write it in front of them, or you’ll have to return to your hotel, and then let’s see that guy?
And the other part with business cards, of course, is that the title is very important because it shows the position in the hierarchy, whereas North Americans don’t care as much about titles. I advise clients to also come prepared. If you’re the marketing manager, when you go to Asia, you can elevate yourself by being the marketing director because there will be more prestige. Obviously with the approval of your home company, but the higher you are in the hierarchy at your home company, the more respect you will gain in Asia among Asians.
That’s right, and you’re on your first junket going over to Asia. If you’re dealing with a pretty large company, just in Japan, for example, don’t expect to be able to sit down with the CEO. No, there’s no way. You’re going to be sitting with someone at a lower level.
And, if you’re looking for a CEO, the person usually doesn’t say much or make many decisions because the person is partly a figurehead and partly leads by consensus, right?
And it’s got to go through all the layers every once has to … this is why it takes so much longer to get everything in the deal signed. But then, when it is signed, you get tremendous value for your money. Then we have three or four people at a time. everyone else, too. Is that the kind of running you’re talking about? What the hell is going on?
Yeah, absolutely. That’s fascinating. Well, thank you so much for your wonderful insights. It’s extremely helpful, very practical, and very useful.
Well, thanks. I appreciate it. Well, I hope the list is warm. Well, enjoy it and get something out of it. I certainly know that you know, I love it over there. It’s a great experience, and it’s such a tremendous business opportunity. All right, everybody. If they decide, OK. Well, let’s take the next step.
Yes, absolutely. Well, thank you so much, Doug. It’s a wonderful pleasure.
This interview has been with Doug Hartley of Focus Asia, and this has been with Philip Auerbach of Auerbach International (www.auerbach-intl.com).
Please join us again next week for another edition of Global Gurus and their stories of international business. Thank you.
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