Hello everyone. Today’s guest gave me the blooper that I’m going to share with you. He told me about an American senior executive who went to China and presented his business card. The translation of company names into Chinese requires a lot of special attention and extra steps, which the executive’s translation agency obviously did not provide. 

And instead of correctly translating the company name, Standard & Poor’s, the company name in Chinese became “Average & Bankrupt.” It’s one of the funniest mistranslations I have ever heard and a perfect illustration of why using AI alone or non-professional linguists can get you into trouble, and how professional agencies such as ours will ensure to get it right and make you shine. 

Today’s guest is Vinod Jain.

Vinod, is an expert in global and digital strategy, a former business professor, and the author of books on global and digital strategy. His latest book, Global Meets Digital: Global Strategy for Digital Businesses and Digital Strategy for Local Businesses, was published in June 2023 by Routledge in London and New York. 

Vinod has lived and worked in six countries, including India and the US (for 30 years each), Britain, Bahrain, China, and Poland He has taught at the University of Maryland and the Rutgers Business School in New Jersey. Previously, he worked for many years with the foreign subsidiaries of British and US multinationals, including as VP of Macmillan Publishers, as the Manager of Coordination at Mullins, and as a market research executive at Coca-Cola. While not a techie, Vinod is fascinated by and has flirted with digital business and digital strategy almost since the .com days, and he has written many articles and opinion pieces for magazines worldwide. Vinod is a member of the Forbes Business Council, TiE (one of the world’s largest associations of CEOs and entrepreneurs), and has taken two business delegations to India. Vinod has a Ph.D. in strategy in international business from the University of Maryland. 

Welcome, Vinod. I’m delighted that you’re with us today.

Thank you, Philip. Very nice of you to have me.

Thank you. Your expertise is both in global strategy and digital marketing and the intersection of the two. I think it would be best if we start by perhaps discussing how companies have developed a global strategy but don’t necessarily rely on digital marketing as the only way to do it. So what strategy do these companies tend to use?

Well, this is how companies have always done business abroad. Before digital marketing came along, they would use local marketing channels. But let me first try and explore what I mean by digital strategy. 

Yes.

Digital marketing to me was a strategy. The whole process works from R&D to manufacturing to marketing to distribution and so on, whereas digital marketing is a lot more: promoting the product through LinkedIn, AdWords, and so on.

The typical definition of marketing used to be the four Ps: product, price, promotion, and place. To me, Marketing is like the five fingers of a hand which includes the product, price, promotion, location, and customer experience. The most crucial aspect of a company’s marketing strategy and the idea behind this is that these are the elements within a company’s control. Not like weather or government policy, which are not within a company’s control. 

And you would think of customer experience as something a customer experiences outside the company’s control. But truly, it is within a country’s control how a customer would experience the product through their strategies and their own approach. So that’s how I would look at marketing from a broader perspective, rather than just a promotion. 

I’ll now give you a couple of examples. It depends on the product that you’re selling. For most consumer products, when you take them abroad, it will be based on the practice there. For instance, let’s take Dannon.  They’re all products of the yogurt company from France, one of which is Activia. Activia probiotic yogurt is sold in something like 70 countries. And being a fresh dairy product, it is manufactured there, wherever it is sold. And it is flavored differently in different countries. In Mexico, it has a cactus flavor. In Japan, it has a vegetable flavor. In Russia, it has a Kefir flavor.

I’m sorry, what?

KEFIR and it depends on where they are sold. They customize the product.

Sure. Yes. 

That’s part of their marketing mix. Then customize the product depending on the customs, the taste, the nutritional needs of where it is being sold, and besides, it’s a fresh dairy product, so it cannot be manufactured in one country and shipped to another country. 

Take another example from Nestle, which I have also discussed in my book. Nestle is the world’s largest food product company. One would think of many national products as being pretty standardized the world over. Evian water, of course, is very standardized; it comes only from one source in France. And what would you think of Nescafe? It’s a very standardized product. But as I understand it, it even varies between countries. In France, they tend to drink stronger coffee than in Britain so they tend to standardize or even customize presumably standardized products. So that is marketing: how you design the product. 

How do you market it now in terms of non-digital marketing? It’s sold through… Food products are sold in general stores. They may still be advertised using AdWords, LinkedIn, social media, and so on.

Very interesting. You mentioned Nestle, and there’s a classic – it’s more than a blooper – it’s a classic, huge mistake that Nestle made. And this was decades ago. I assume they’ve corrected it, but they introduced their baby food in Africa – I think it was in Ethiopia – and of course, we all know Nestle as having the pretty baby on the label. And they did not realize — and this is a classic mistake in marketing: not doing proper research – that in some African countries where people are not literate, people look at the label and assume that that’s what’s inside the container. 

So of course, the Ethiopians, or whoever it was, assumed that the jar of baby food contained puree of white baby, which is not exactly the image that Nestle wanted to give. And perhaps they have fixed that somehow. 

So, there are examples that you gave that are very interesting in how products are still tweaked and changed even though they’re standardized according to flavor according to the tastes of the local market. It’s very interesting. 

You also mentioned, as I believe in your book and previous conversations, that digital marketing is not just LinkedIn and AdWords, as you said in the beginning. But your definition is more expansive, including platforms and ecosystems. Could you elaborate on what that means?

Yes, of course. As I said earlier, marketing involves all the decision elements that are within the company’s control. As to what product they are making, whether it’s standardized, customized, or whatever: the pricing policies, the promotional policies, place, and customer experience. Now promotion can be through digital media such as LinkedIn and AdWords. 

But how is it sold? Where is it sold? It can be sold through stores. But increasingly, companies are using platforms such as Amazon.com, to sell their products. So today, Amazon has millions of products. I’m a big customer, so I know that very well. And I understand that 60% of the products sold on Amazon are sold by small and medium-sized companies. Not by major companies like Procter and Gamble. Those small and medium-sized companies can have their ways of selling, but they are increasingly selling through Amazon. 

Similarly, there are many other platforms where one can sell their products. Most retail stores, including big retail stores like Walmart and Target, have their own digital marketing which is increasing in volume, of course.

And also, it depends on the kind of product. Is it a digital product? It is sold through digital media online by the company. I’m thinking of Microsoft 365, a suite of software products like Word, PowerPoint, and Excel. You can buy it at a store like Best Buy. For some, like for $400., you can buy it online at Microsoft.com. But much of the 365 is sold through online media. 

In fact, the trend now is that a lot of such software products are being sold through subscriptions. I mean, we have a subscription to 365 as a family. So instead of paying $400, I pay them $99 a year for a family subscription for up to six laptops or six computers.

So, it depends on the products that you’re trying to sell since digital products are increasingly subscription-based. Even with a product like eBooks, reading eBooks on the Kindle by Amazon, you can buy the physical product. And listen to books. But now there’s an app for that. I don’t even have to buy it physically; I can get it on my phone or through my computer, and I can listen to any book I want.

Do you see that there will always be a market for the stores themselves, the retail stores, or do you think everything will increasingly go to digital items, and we won’t need stores anymore?

One of the things I point out in my book Is the number of stores and the major chains that have gone out of business during the pandemic. Partly because of the pandemic, but partly because of the Amazon effect, by which I mean buying online through platforms like Amazon. And I think that there will always be a market for physical stores. Now I’m thinking of my village in India. They are stores that will always exist there.

Right. 

I think you mentioned something about a lack of electricity or unstable electricity. Internet connections. So, this is not always the case. So, people have to revert to physical stores.

Well, that’s especially true in developing countries.

Absolutely, yeah. 

I mean, I just don’t like buying online. I avoid buying online as much as I can because I’d like to see a product and touch it. You know, understand the colors, the sizing, and so forth, especially clothing, shoes, and so forth. And I’m going to contradict myself and say that I’ve bought shoes online, sight unseen, and this worked fine. I think there’s definitely a need for both, but obviously, a lot of younger people feel that they will only buy online. They will only buy through Amazon or something else because of the convenience. 

What about ecosystems? What do you mean by that?

The ecosystem now goes beyond a platform. Now when I’m trying to buy something, it’s not just that thing. It’s the whole lot of others. When a company wants to buy something, they are looking to satisfy a need, which may include many other things, including services. 

So, an ecosystem is a group of companies, often from different industries. That satisfies somebody’s needs. You know SAS? They have a huge ecosystem for industrial goods. So, when you need to buy 1000 tons of steel of some kind, they have an ecosystem for that. So, you’re not only promoting the products of different steel companies, which you can buy through, but there is also a question of payments, delivery selection, and all kinds of other issues. So, an ecosystem is beyond a platform.

And do these ecosystems include product servicing as well? That’s pretty critical. 

Absolutely, yeah.  

What about companies that are solely using digital marketing to expand abroad? Can you give us some examples of those and how they have worked?

Digital companies would almost exclusively use digital marketing to expand abroad. I gave the example of Microsoft 365. It is only digital that they sell the product through. Even physical product companies could be using digital marketing. I mean, the product itself is digital, not physical. I mean, they might use Amazon.com in a different country. There is digital marketing.

They are companies that sell only digitally, but those are for digital products. I’m thinking, for example, of books. Those are obviously physical, and they can be sold in bookstores, but increasingly, they are also sold online.

Right. 

What strategies do these digital companies use? Do they find mailing lists, for example, or target lists? How do they find their potential customers?

I think all of the above, and not just through AdWords, LinkedIn, and social media. By speaking on podcasts like I’m doing. Writing articles. Reaching out to journalists to write a free story about them. They use all kinds of media.

And when I said mailing lists, I meant emailing lists.

E-mail, of course, yes. And I use all of those for my book. I have a fairly large one, but not the last one. 500 is not a lot. These are people I know. I send them regular emails. I have a blog. I am writing articles and trying to speak on podcasts like yours.

Are there any methods that seem to be more successful than others, or does it depend on the product or service that you’re selling?

Yeah, I think that’s right. It depends on the product or service you’re selling. Products like software go through social media. They sell well through social media and other forms of online advertising.

And when a product is solely digital, I assume that that requires a lot of translation and localization to target the appropriate country or culture. And if it is localized, then it may also have to be acculturated and culturally adapted, as you gave in the example of yogurt. 

Can you give some examples of companies that have translated their products and perhaps adapted them in translation or culturally changed them in some way?

I think practically all companies—most smart companies—like to do that. I think we also talked about developing countries. And to what extent would you customize a product to suit their needs and wants? With customs and regulations of the country, In my opinion, it is entirely dependent on the product.

When selling products abroad, and this is on the non-digital level such as the shops in India, for example, very often repackage their products to meet local needs. As you’ve given some examples. But some of that is actually in the packaging itself. I’ll call it the Costco model in the United States. You can go there infrequently and have small purchases of large quantities.

Right.  

Toilet paper, for example. Or detergent in the developing world, where people don’t have as much money; they may be paid weekly or monthly, but most people are paid monthly or biweekly. And in cash. Well, that’s changing now, but it used to be in cash, and then they would want to buy very small quantities. 

Can you give some examples of how companies have to repackage their products for the developing world to meet those needs?

I’m glad you asked because I have an example to show you. Show and tell. You know, in India almost 70% of the people live in villages. And many of them, not just weekly or monthly, get a daily wage. They just can’t afford to buy a whole bottle of shampoo. But they will buy a little sachet. Can you see this? It used to cost about a rupee or so, or a few cents. So anytime they needed shampoo, they would buy a sachet. I brought a few. A lot of consumer goods in India are available in small sachets for the rural markets, or for anyone in cities. I bought these in New Delhi from a shop. 

So, companies have to try to do anything and everything to try and sell their products, and packaging is very important. Depending on the buying power of the market.

And you know, candy is another example. Where we would have a whole box of candy, for example, in India or developing countries, you would have just one or two candies in a packet. 70% of the rural population is rural. I assume they are still paid in cash.

A lot of them are paid in cash. And in India? Even cash is becoming a little digital.

Right.  

I have friends in India. My old classmates Who don’t use cash, who don’t even carry a wallet with them anymore, you know, with cash.

And what do they use instead?

Credit cards or some digital currency.

The most famous digital currency is M-PESA which was developed in Kenya. Can you tell our audience, for those who don’t know, how digital currency works?

OK, that’s a little difficult. Just last week, I gave a talk on the history of money and digital currencies. And because I didn’t know much about digital currencies, I used ChatGPT to prepare a few slides. Would you believe that? 

So, these are these two currencies; they are not physical; they are only digital. And they have value. It’s just that digital currencies are highly variable in terms of their pricing and so on. But a new trend is the central bank’s issuance of digital currencies. And I think that’s what you were referring to in Kenya. There, they are much more stable and probably more reliable.

Very interesting. And I know there’s one in India whose name I can’t recall. It’s got an AA. But the government has now set up basic bank accounts for people. For most Indians all over the country, including the rural population, any financial benefits they may get, whether it’s for welfare, healthcare, or whatever, is transmitted electronically by the government into their electronic bank accounts.

That’s true. 

And what is that called?

Aadhaar, and this was a great experiment that India did. I think more than a billion people now have an Aadhaar card, like a Social Security card here, which is an incredible achievement of the government there.

And so, everybody has to have an Aadhar card to have a bank account and to do any transaction. Recently I sent a gift to some relatives in India through Amazon’s Indian subsidiary. So, they wanted the Aadhaar numbers of the recipients. Without that, they would not give it to them. 

That’s wonderful. 

It’s a great achievement, I think.

Yes, that’s an extraordinary achievement that the current government has implemented, rolled out, and been extremely successful with. And one of the purposes, of course, is to reduce corruption, to reduce the ability of the bankers and local officials…

Absolutely, yeah. 

… to transfer money to, say, the states and the equivalent of states, counties and villages. Along the way the money diminishes and no longer gets to the proper recipient. 

A lot of people who had no bank accounts entered the banking system.

And so now that they are banked, I assume they can get credits and potentially mortgages and financial products. Is that correct?

Yes, there’s also, I think, a growing trend in microfinance.

Microfinance. Yes, so. 

If somebody could just get a $100 loan to start a business, that sort of thing.

Microfinance, for listeners, was another incredible achievement created by, I believe, Muhammad Yunus, who was in Pakistan, and he won the Nobel Prize for that if I’m not mistaken.

That’s true. 

And as you’re saying, you can lend a villager say $100 or the equivalent of $100, and with that, a person can buy a few sheep, ducks, chickens, or something else physical and then sell the produce from that. And that’s remarkable. Obviously, from chickens come eggs, from ducks come other ducks and so forth, and from sheep come wool, lamb meat, and so forth. 

So, these micro-financial loans empower people in developing countries to become entrepreneurs where they could have either starved or just become wage laborers before, so that’s created an enormous boon all around the world.

Yeah, let me provide a little background as well. You’re right, but he’s from Bangladesh, which was part of Pakistan when he was born.

Sorry. You’re right.

Right.  

So, when he returned to Bangladesh, He found that several people owed money to the money lenders in the villages which can never be repaid because the interest rates are so high. Somebody owed just something like the equivalent of $35, and he was indebted for life. 

So, what did [Dr. Yunus] do? He just paid off those loans for his village people. And that’s how, as you suggested, microfinance began. Now it’s a fairly big opportunity, or a fairly big thing, in a lot of countries.

Yes, and I have read that the jury is still out. Whether it’s successful or not, there have been problems with it. I don’t quite remember what those problems are. But I do know that in many ways, it works beautifully, and in some ways, it’s been problematic.

I think initially, the repayment used to be pretty good. There have been problems with the repayment part. The repayment side was reasonably successful.

Even though Muhammad Yunus pioneered microfinance in Bangladesh, the idea was that the village would all come together to support the loan recipients and help guarantee that the recipients, often 80% of whom were women, would pay the loan back. 

So, the village would come together again, taking on the loan collectively, not only individually, but also it was also a very wonderful and powerful incentive, I think, for a lot of people.

Right. 

Is there anything else you’d like to add before we close?

I just want to make one quick point. I look at products as three kinds: digital products, like we mentioned, software, for instance, or eBooks. And physical products like those we all buy and sell. But then some products are both digital and physical, and connected to the Internet. I’m thinking of very different characteristics. An Apple Watch. They’re called the Internet of Things (IoT). The Apple Watch is an IOT device. So is the newest thermometer. So is a drone. 

A lot of these products are very different. And they are increasing, today there are, I think, like 25 billion. Internet of Things devices and this is something I talk extensively about. What are the characteristics of the three kinds of products? And that has a big impact on how they are bought and sold.

That’s fascinating. Are the sales channels different? You know, the Apple Watch, for example, can be sold through a shop but can also be sold online.

Right.  

So, I never bought a drone. I’ve never shopped for one so I don’t know. But obviously, it depends whether it’s a toy or whether it’s for military use but still, if it’s for common people as opposed to the military, I presume it’s sold through the same channels, which are both retail and online. But are there differences also in how these products are sold?

Well, not just selling. I mean, I would say a key characteristic of digital products Is that they have network effects.  

And so, they have worked this out.

The greater the number of users, the greater the exponential value that they derive, and the traditional example used to be a fax machine. If only you and I have a fax machine, it’s of no use, but if more and more people get fax machines, The value of the fax machine to you and me multiplies exponentially. But digital products have that characteristic. IoT devices also have that characteristic. Physical goods do not have that characteristic. Like a platform which has a two-sided platform for buyers and sellers. If I start a platform of my own, it most likely would not succeed. The platform needs a large number of buyers and a large number of sellers to become successful. The more buyers come, the more sellers will come. The more sellers come, the more buyers will come. That’s the network effect. So, there’s a key characteristic of products these days, and increasingly so.

It’s very interesting and very insightful. And for people who don’t know –  there are still people who don’t know how to use a fax machine – FAX is the abbreviation for facsimile, and actually, I’ve got one built into my printer now.

Yeah, yeah.  

Printer, copier, and fax all in one machine but they used to be separate. It’s the equivalent of scanning a paper in through one’s fax machine at one’s home or office, and it comes out as a paper in the recipient’s home or office.

Have an interesting example… Sorry to…

Yes, please.  

It came to me as a very interesting example of how the business started. FedEx in the 1970s had a great idea. Hey, why don’t we install a fax machine in all our offices? So to send a fax from Washington, DC to New York, you had to take the fax to the local FedEx Office. They faxed it to New York. And they delivered it by vehicle to the recipient. It was called the four-hour fax. But because of network effects, the business failed in a few months. And more and more people wanted to buy fax machines. It was of no use. The business, even FedEx, didn’t survive that particular business.

That’s amazing. Well, another quick story about when our business started as a language translation agency.  The reason it started was that I have a master’s degree in international business and I’ve studied, I think, eight languages. 

So, some 33 years ago perhaps, I had a consultancy at the time, and we were approached one day by a group of translators who were in a separate country, which most people would never guess. They asked whether we could promote their ability to do translations to or from English or any other language combination. We would find American clients and handle the accounting, customer service, and so forth, but they would do the actual work. At the time, this was far before the Internet and far before digital communication of any kind. These transmissions were all done by fax. So we would send the English to this group of translators during our daytime where It would be their night – giving you a hint. They would translate it during their daytime, which would be our night, and fax it back to us. And in our morning, we would have it and could deliver it to the client by fax. And can you guess where these people were? They were not in the US time zone.

No, I mean, they’ll be somewhere in the East—possibly India, China, or somewhere there.

Well, this was far before the development of India or China. But they were in New Zealand, of all places, a country that has 3,000,000 English-speaking white people and 60 million sheep.

Brilliant. Wow.  

And very remote at the time. Now, not so much. At that time again, it was all done by fax, and that’s how our business worked, grew, developed and thrived, and went from the non-digital age straight through to the digital age and beyond.

That’s right. Yeah, very interesting.

So, thank you so much. This has been a fascinating conversation, and we’ve also gone through a lot of technological history, which I don’t think we expected to do.

Thank you, Philip. It’s been wonderful speaking to you.

And I hope you will all join us next week for another edition of Global Gurus and their international business.

Great. Thanks again.  

Thank you.