What Not to Do in Global Business
What Not to Do in Global Business
Major Brands’ Mistakes Cost Them Dearly Abroad
|“Cultural cruise control” remains a prickly pest in global commerce. What is “cultural cruise control”? Simply put, it’s not modifying your company or individual behaviors for different cultures.|
Although translation of a company’s brochures, manuals, contracts and websites is an essential element of global business, a company’s overall marketing strategy is even more important. And just as certain terms may not translate well, your successful marketing approach in the US may not transfer abroad.
In essence, one must study the business practices of the target culture. Forgetting this fact can cost you big bucks or lead to red cheeks. Some major brands know this story all too well.
Burger King’s European campaign for its Texican Whopper became a whopper of a different kind. This ad featured a cowboy and a masked Mexican wrestler (think Jack Black from Nacho Libre) in a uniform eerily similar to the Mexican flag. Abusing a country’s flag is dangerous even for a company like Burger King which pushed the limits of creativity (as well as taste) in its advertising.
Americans frown on desecrating the US flag. Mexico’s ambassador to Spain found Burger King’s flag commercial equally offensive to his people. Earning official diplomatic protests rather than sales is never a sound marketing strategy, particularly when the offense is amplified from Europe to 100 million potential customers in Mexico via Facebook or Twitter. The European ad with the Mexican flag was quickly changed.
Steve Jobs had the Midas touch with Apple. He successfully integrated style and functionality into all his products, particularly the iPhone. But the success of Apple’s phone in the US has yet to carry over to China and India. Issues involving the transfer of a sophisticated U.S. brand into developing countries have slowed the Apple express. Apple has successfully built a brand around individuality and elegance that becomes an extension of its users. In addition to the iPhone’s incompatibility with each nation’s wireless infrastructure, Apple was charging near-US prices whereas local consumers were very price conscious shoppers. And perhaps subtly, Apple’s emphasis on the individual smacked against these Asian cultures’ higher regard for the collective and the family.
Best Buy reigns supreme in the US for consumer electronics, but that’s no longer the case in China. In 2011, Best Buy closed all its branded Chinese stores. How could this happen to such a successful US brand? Because Best Buy failed to localize its marketing. According to a report by the Monitor Group, the company failed to account for significant cultural and retail marketing differences.
First, Best Buy organized its China stores by product category (all TVs, all DVDs, etc. grouped together) whereas Chinese stores group products by brand (similar to designers’ dress boutiques in upscale US department stores). Secondly, similar Chinese store employees work for their respective manufacturers rather than the retailer. Best Buy’s emphasis on store service did not mesh with the priorities of its in-store sales staff. And thirdly, Best Buy’s prices were high to reflect their anticipated service. But Chinese customers focused on product prices that were cheaper elsewhere.
Best Buy hit the copy and paste buttons in China instead of retooling its approach to match the needs of a market with one billion customers. Global marketing at its finest!
Thankfully, Barbie’s relationship with Ken lasted longer than her stay in China where the queen of every American girl’s doll collection had only a two-year reign. The saying “bigger is better” worked for the Beijing Olympics but sadly not for Barbie. Mattel’s Shanghai store had the largest collection of all things Barbie, but that was not enough for success.
Mattel hoped that the sales of some items would pay for losses on others. And the chain positioned Barbie as a luxury purchase with a high price. However, the Chinese market for dolls was price sensitive and sexy Barbies were no match for cute Hello Kitty products preferred by young Chinese girls. Meow! In addition, most foreign entrants partner with a local or national Chinese company to learn the country’s traditions, customs and sales approaches. It was unclear whether Mattel had done this … or had heeded the locals’ advice.
Don’t Get Lost in Translation
Successful translation is more than just getting the words right. Language plays two important roles: communicating facts as well as culture. The latter is where Burger King, Apple, Best Buy and Mattel all failed. These successful brands did not realize the essential role that country-specific cultural nuances, familiarities and business practices play in global marketing — just as they do in successful translation of marketing collateral and websites.
Another way to think about this is dieting. While Americans tend to overeat, in cross-cultural environments we should think and act as if we’re on a diet. Strict regimens force us to monitor our own behavior. The same holds true when marketing to populations in different countries.
These mistakes were no doubt costly on several fronts including revenue, branding and public relations. What’s important to remember is that they were completely avoidable.
Whether you are a Fortune 500 or a small entrepreneurial firm venturing abroad for the first time, the same lessons apply: what works in one market probably will not work in another. It is essential to hire consultants or experts who know your host-country business practices, culture, laws, HR traditions, accounting systems, etc. for your product or service, and can advise on pricing alternatives, payment methods, product (re)design, advertising, sales channels, negotiation strategies, and successful approaches tailored to each country.