Tag Archives: local

Chinese Find IKEA Is Swede Place for Romance

Ignore local knowledge at your peril: this is the lesson for retailers heading for China in the recent Wall Street Journal article “In China, Ikea is a Swede Place for Senior Romance” which Laurie Burkitt capably details.

Recounted in her revealing piece are educational stories about international retailers — IKEA, Wal-Mart, McDonald’s — that are getting accustomed to Chinese consumers expecting to use them as their home away from home, aiming to spend a great deal of time—if not serious money—at these usually generous sized, comfortable stores.  Examples from the article (below) can spare any business expaqnding there much time and stress:

Ikea: At the weekly IKEA romance session in Shanghai, the elderly arrive in swarms of 70 to 700 to get the free coffee offered to holders of the IKEA Family membership card. Ms. Tang, seated amid the backdrop of Poang reading chairs and Vreta poufs, sips coffee and says she is grateful to have such a meeting place. “I make more senior citizen friends when I come here,” said Ms. Tang. In China, IKEA is planning to up its nine locations to 17 stores by 2015 to meet demand from the nation’s growing middle class, who aspire to Western lifestyles at affordable prices. On a recent Sunday in Beijing, Liu Yunfeng sat in a 3,999 yuan ($625) white leather Tirup chair, watching home videos from the screen of her Sony digital camera while her shoeless daughter jumped on the Nyvoll bed of a mock-up room.

Wal-Mart: Several years ago, some Wal-Mart stores in China set up a children’s camp for summer and winter school breaks. During daily sessions, children are encouraged to try their hands as part-time greeters and announce deals over the broadcast system. “If I go to Wal-Mart I’ll want to go for the day,” said Cui Hongyan.

McDonalds: With its free Wi-Fi and clean bathrooms, is adding more electrical outlets to most of its China stores in hopes that people will actually come and hang around longer. In Hong Kong, the fast food giant is developing a service known as “McWedding” to encourage people to marry in their stores. One proposed feature of the ceremony: When it is time for the big kiss, the bride and groom can each chomp on the end of a french fry until their lips meet.

But did these retailers do their homework? Were they prepared for Chinese consumers expectations?

It seems that the retailer s relied on what worked in their home markets and are now struggling to adapt to consumers wanting to turn the retail experience into a full day social experience – “retailtainment.” Chinese consumers love Western and European brands and generally prefer them to their own Asian options. Retailers need to be educated about the unique demands of customers – they need to be relevant and have personality, which is exactly what Ikea, Wal-Mart and McDonalds have done – just a little too late. IKEA, however, is missing one of the biggest brand lessons – cultural sensitivity – when they propped up a notice board at the entrance of the cafeteria, which stated “IKEA would hereby like to inform this group and its organizers: Your behavior is affecting the normal operations of the IKEA cafeteria,” the notice said.

Comparably, Mercedes called on the local culture by flying over some of its best customers from China to join in a focus group to determine customer expectations in a new market. The brand not only differentiated itself, but it also went through the brand localization process, increasing its brand relevance and image in China. Again the key lesson here is to always challenge your assumptions and be prepared for foreign consumers’ very different expectations, particularly in the Chinese market.

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Chilean Miners: Recap of my BBC Breakfast Interview

As I discussed this morning in my BBC TV Breakfast interview, the successful rescue of the 33 miners is a welcome respite from the otherwise depressing news about economic turmoil, banker bonuses, paltry pensions and property prices.  What is key once the miners have had a chance to process all they’ve experienced, is that they get good advice about any marketing opportunities that are presented to them.  It’s not beyond the realms of possibility that life insurance, beer, personal hygiene manufacturers amongst others approach them to endorse their brands.  No doubt the William Morris agency is already on-site to secure movie and TV rights for their amazing story which might bring them at least a financial cushion on the back of the horrendous trauma they’ve experienced and the fact they are now all unemployed.  The happy ending in any case is one that delights everyone, regardless of where in the world they are.

An unexpected benefit I suggest is Chile’s country brand is now much more favourably viewed than before the miners were rescued.  It demonstrated to the world it can manage expectations (having told the media it would be Christmas at the earliest before the miners are rescued) and projects, having engineered the rescue capsule flawlessly and ahead of schedule.  Hopefully their inward investment team are working overtime to capitalise on this unexpected success and showcasing of talent.

Beware the culture gap on global growth trail | Marketing Week

Beware the Culture Gap on Global Growth Trail
I’ve been interviewed for an in-depth analysis by Marketing Week on this topic.  One of the key reasons it’s so important for brand owners and developers to master the global/local dilemma is because the costs for those who haven’t are immeasurable.  For example, the costs to the brand’s and parent company’s reputation from market ignorance is tangible but often difficult to measure due to the time lags involved.  Similarly, the cash spent on campaign investments – above and below the line – are wasted when a company’s local execution is misaligned to the culture.

The lack of a global marketing strategy means the risks of off-message behaviour and executions are tremendous.  These inconsistencies we know undermine brand building, for which consistency is a prerequisite.  It also means the experience for customers across touch points is inconsistent, lowering their loyalty and thus lifetime value and revenue streams to the company.

Marketing Week’s  Marylou Costa, who first heard me speak at The Marketing Academy’s Boot Camp, for which I conducted the International Marketing curriculum writes:

In a digital world where consumers and corporations are less divided by geographical borders and more and more brands are launching into emerging markets, it’s more than likely that at some point in your career you will be required to go and manage your brand in a totally different region of the world. As a result, the marketing community needs to become “cross-culturally” aware, according to consultants such as Allyson Stewart-Allen, director and founder of cross-cultural specialists International Marketing Partners.

Stewart-Allen goes as far as to say that cultural awareness and cultural ignorance can “make the difference between a successful international deal and an apologetic withdrawal”. Assuming that what worked in your home country will work in your new market not only puts an individual campaign or product at stake, but a marketer’s reputation and career.

She even claims that if senior executives such as BP’s ex-chief executive Tony Hayward or Toyota president Akio Toyoda had done cross-cultural preparation before trying to right their companies’ wrongs before a global audience in the way that seemed natural to them, they may have been able to protect their brand equity from damage.

Hayward failed to recognise the US demand for a positive and open attitude towards crisis management when communicating with the American public about how BP would rectify the Gulf of Mexico oil spill, which saw about £50bn wiped from his company’s stock market value.

And as for Toyota, the company’s initial reserved, typically Japanese approach of saying very little about the massive product recalls that were happening was seen by some Western markets as being inactive or even incompetent.

“These are two executives who didn’t read the cultural climate properly,” says Stewart-Allen. “Doing something that is in sync with a particular cultural climate is really important.”

A lack of cultural knowledge can cost a brand dearly. If a business executive makes a serious blunder in an overseas market as a result of not knowing how that business culture works, future working relationships will be hindered, says Stewart-Allen. “The more you study how people work, how they use your products and services in different places, the better. When you work on incorrect assumptions, you make bad decisions that you sometimes can’t recover from. Studying in advance is like an insurance policy, and the return on investment is high because you hit the ground running.”

Read the full article and let me know what you think!

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FT Judgment Call: Can too strong a national identity harm the business?

FT Judgment Call: Can too strong a national identity harm the business?

The problem

BP’s difficulties in the Gulf of Mexico seem to have been exacerbated by a perception that the business is overwhelmingly British. US critics have been irritated by the lack of an American voice at the top of the company. Should businesses try harder to include a wider array of nationalities in senior posts? Or is the call for greater diversity simply a politically correct management fad?

The consultant:  Allyson Stewart-Allen

Promoting your country of origin and heritage is the right thing to do when the country has high credibility in your sector internationally. For
example, promoting “Made in France” for a perfume brand makes sense. Any company doing business internationally must ensure the voices of those diverse markets hit the boardroom, not just because it is politically correct but because research shows diversity results in better decisions and risk management. Ideally, those voices should reflect the countries and business cultures in direct proportion to the level of revenue represented by those markets. A systematic process goes a long way to build and sustain brand value – and we know Americans speak the language of brands fluently.

The writer is director of International Marketing Online, a consultancy

The brand guru Wally Olins

The kind of rhetoric used against BP is politically motivated and intended to deflect anger that might otherwise be used against the US government towards “foreigners” – in this case, snooty Brits. But this won’t last long. Usually the country-of-origin effect is helpful. Mercedes thrives on German “characteristics” – efficiency, reliability. And L’Oréal was run by an Englishman for years – presumably “because he was worth it”. But national identity can cause problems. Toyota’s recent performance has had a knock-on effect for other Japanese companies. This episode shows you need people at, or near, the top of the business who can speak the language and use the style of the countries in which they operate.  It seems that Tony Hayward, with all his understated English charm, can’t.

The writer is chairman of Saffron Brand Consultants

The director Miles Templeman

In today’s business climate, a truly international company must take care to position itself as being internationally representative. Being viewed as just a
national company could inhibit growth in overseas markets. Multinationals need to be seen to be representative of each country in which they operate, with a strong local voice.  Of course, global companies have a national origin, but a purely national identity is not sufficient. BP may not have carried out a great piece of positioning over recent weeks, but it does have a transparently global position – 40 per cent of its shareholders are in the US, for
example – and that global positioning is vital to business success.

The writer is director-general of the UK’s Institute of Directors

Edited by Stefan Stern
Copyright The Financial Times Limited 2010.

My CNN “Connect the World” Interview Highlights on BP’s Uphill Battle to Restore Its Credibility:

BECKY ANDERSON: … At the end of the day, if you were crisis managing for this company and and helping them decide where they go next worldwide and looking at their public image at this point what would your advice be?

ALLYSON STEWART-ALLEN: Firstly, always put forward a local voice. If you’re ever in a crisis again, God forbid, always put forward someone who understands the local landscape and has that local cultural understanding, number one.  Number two, be transparent. You know, why wasn’t the public invited to look at some of the designs for some of these fixes and get the best brains in the United States and around the world who could look at them and say, actually, that one is good, that wouldn’t work.  And get input.

You don’t have to do everything by yourself. And they became very inward looking, very defensive, when, actually, they didn’t have to be. They would have engaged everyone and changed the conversation if we all were invited to contribute something.

BECKY ANDERSON: This is an easy one, Allyson, surely for Obama.  There’s no way he wants to be associated with big oil now, is there?

ALLYSON STEWART-ALLEN: Well, so far it hasn’t really helped him hugely. I mean he’s been getting extremely bad reviews for not demonstrating empathy, not taking action quickly enough. And, in a way, I mean I’m a bit sympathetic about his position, because he has gone there. He’s trying to demonstrate empathy. He’s trying to do what he can. But he is the president of the United States.  He’s not a scientist.