Tag Archives: localisation

Starbucks has Brand Localisation Plans for the European Market

With Starbucks 2008 US sales performance forcing the return of founder Howard Schultz to the company, we are seeing a similar performance for Starbucks in the European marketplace.

Although Starbucks is seeing profits grow in other markets, it is having difficulties meeting the needs of European consumers, which is evident in its lower sales over other markets.

In response, Starbucks has many plans for the European market to revitalise its stores. Soon we may see Starbucks products on planes, trains and vending machines. The brand will also open 300 new stores in the UK alone over the next five years. But what is most impressive, is Starbucks recognition of the importance of brand localisation. According to Louise Lucas in her recent FT article  (5 Feb 2012), offerings will include “a lighter espresso in France, cheaper cappuccino in Greece and a double shot of espresso in lattes for the UK.”

Poppy Trowbridge from Bloomberg Television also recently reported on Starbuck’s plans for “European domination” as they try to bring the Starbucks experience to European consumers.

But Starbucks isn’t the only one who is increasing efforts to localize product offerings in the European market. McDonalds will be offering a McBaguette starting this April in France. According to Daily Mail’s Jill Reilly, the Fast Food Brand is trying to “appeal to more upscale diners by mixing their famous beef burgers with French-made Emmental cheese and mustard.”

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.

Think you’re a Corporate Diplomat?

One of the key skills for today’s ever-flatter world of commerce is the ability to be both “on message” and credible in all the regions your organization does business.  With the recent gaffes of BP, Toyota, Goldman Sachs and countless others, it’s very important executives can look and act local and “do” empathy in culturally-resonant ways.  Take our Poll here below and tell us what you think are the key traits of an effective corporate diplomat …

Now WalMart has bought Massmart of South Africa, where do they go next?

Lots of interesting coverage this and last week of WalMart’s first foray into Africa via its acquisition of Massmart which was approved despite concerns this uber-powerful retailer will force local players to hemmorage jobs or be put out of business.  Push-back isn’t new to WalMart — protests against their planning applications in American communities are legendary, as are the Michael Moore films on the company’s healthcare and other policies for its workers.  What legacy will WalMart leave in the South African market that improves the quality of life for its customes?  Does it have a plan?  Let’s hope so.