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 its 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 narcisism or, worse, unadulterated ignorance.
Typically, though, developing countries miss out on a couple of 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. Here’s how:
1. Find out about local contacts in the market which
your company wants to enter.
2. 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.
3. 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!)
4. 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.
5. 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 Communications, L.L.C., an international markets research consultancy
that helps businesses develop and place successful products and people
in foreign markets. He can be reached at wdodson@silkrc.com
or +1 (847)722-7817.
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