July 3rd, 2009
In his latest Thursday Night Insight post, Matt Powell reflects on his experiences working in our China office and the difficulties inherent in conducting business across cultural boundaries.
I recently saw a TV advert from one of the world’s major banks that professes to its excellent local knowledge in every single country. Of course, this campaign has been going for quite some time now as the bank positions itself not as a sprawling, faceless mega-corporation, but indeed as a very localised and personal bank. Whether or not the bank does in fact deliver upon its promise remains to be seen, but the importance of local knowledge cannot be underestimated.
There are many horror stories about corporations naively taking one product or brand that is successful in one country and launching it into a foreign market without first adapting the product or its branding to meet the local culture. Pepsi and Coca-Cola give two sterling examples of ‘how not to do it’.
When Pepsi launched their cola in China, the company thought it would be sufficient to translate their slogan "Pepsi Brings You Back to Life" into Chinese and simply launch the product. Unfortunately, the slogan was translated a tad too literally and instead proclaimed that "Pepsi brings your ancestors back from the grave." Of course, the problem was rectified, but damage had already been done.
Coca-Cola did something fairly similar when launching their product in China; they chose to launch their brand using Chinese characters that read phonetically as “Kekoukela”. Of course, the phonetic spelling sounded similar ‘Coca-Cola’ to a westerner, but I imagine there weren’t many Chinese consumers looking to purchase a refreshing can of “female horse stuffed with wax”. Surely, even just the smallest foray into market research would have highlighted these significant blunders, and saved the companies millions of dollars – let alone the damage done to the brands.
Indeed, in many cases, the same message or piece of information can still cross hazy lingual and cultural boundaries. I myself had an experience when on secondment in our Beijing office, where lingual barriers became slightly hazy to say the least. Each day when finishing work I would order a taxi to where I lived, pronounced ‘Hua Mao’. Every time I asked, the taxi driver would either laugh, shake his head, ask to see a map, or (in one extreme case) make a loud cat-like ‘miaow’-ing noise at me. I knew I was saying the name of the location correctly, so although slightly perplexed at the behavior of the Beijing taxi drivers, I thought nothing of it… until, that is, one day towards the end of my stay when I took a taxi with some of my Chinese colleagues. When I asked the taxi driver to me to my destination my colleagues burst into uproarious laughter – it turned out that for two months I had been saying the words correctly, but pronouncing them with the wrong tonal inflection – and, of course, was asking the taxi driver to take me to ‘cat with flowers’. At least the miaow-ing taxi driver seemed slightly less disturbing after that.
Although it is an amusing story, it does indeed highlight the importance of local knowledge and just how critical the nuances of any language and culture really are. To most westerners, what I was saying and what I should have been saying sounded fairly similar indeed, but (despite me always managing to get to my destination) the difference it made to the local person - the person who mattered - was huge.
At B2B International we, like the large bank, recognise just how important local knowledge is. Every country is different and brings with it a whole set of language issues and cultural traits. We use ‘mother-tongue’ interviewers when conducting international interviews for this very reason; the cultural nuances are critically important in understanding information and indeed any subtle inferences that may be missed by someone who is not completely immersed in that particular culture or language. Indeed, across our three offices we can span the globe from Asia, to Europe, to the Americas.
Our expertise can help our clients in many ways – from conducting multi-country studies in various languages, to conducting in-depth research and analysis in specific countries, to researching new markets to enter. For more information about how we could help your Company, contact a member of research team at our European headquarters in Manchester, our Asian headquarters in Beijing, or our American head office in New York.
Posted in
China, Culture, Matt Powell, Thursday Night Insight, Market Research China, International Market Research |
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July 1st, 2009
Matthew Harrison, B2B International’s Director of International Operations, was featured in Marketing’s recent special issue on emerging markets.
Drawing upon his time spent working in our China office and using his extensive experience gained through managing research projects in such far-reaching geographies as Russia, Sri Lanka and Tanzania, Matthew offers invaluable advice to Western companies looking to establish or build a presence in any emerging B2B market. The full published article is as follows:
Some years ago, the chief justification for Western companies entering emerging markets was to establish low-cost manufacturing operations.
However, in the past five years there has been a revolution in strategy as the purchasing power of emerging economies has grown and these companies have now shifted their focus from supply to demand.
The casual observer watching a Muscovite sip a Starbucks cappuccino could be forgiven for thinking that customers in developing markets want Western products in Western packaging, promoted in a Western style at Western prices.
While many Western brands have developed a cachet across the developing world, the real picture is more complex, particularly in B2B markets. There are six factors that must distinguish B2B marketing in emerging markets.
The first is the importance of conveying higher product quality. In developing markets, companies’ product requirements often place less emphasis on product durability and quality of materials than in Western countries, putting greater importance on a lower cost. This is a huge challenge to Western companies seeking to enter the market, as they may find it hard to convey the value of the technical superiority of their product.
Second, when it comes to the services associated with a product offering, buyers in emerging markets are frequently as demanding, if not more so, than Westerners. For example, branches of Subway in China often take telephone orders for their sandwiches, and deliver these free of charge to customers’ homes or workplaces. A service such as this would be seen as extravagant in the West, but is often a basic requirement in Beijing and Shanghai, and no economic value is attached to it.
The third factor is the importance of local presence. Western companies entering developing markets often assume that the prestige of their brand excuses them from establishing a local presence. This is not the case. While customers in developing countries may be willing to pay more for the quality, prestige and technical know-how of an established Western company, all these advantages must be in addition to, not instead of, the basic requirements of spare-parts availability, access to technical support and face-to-face contact with local-language speakers.
Then there is promotion. If a Western brand can deliver on its promises, its name and values can prove a huge advantage and allow extremely large margins to be achieved. This is particularly true in consumer markets, where products such as luxury clothing and perfume brands frequently collect higher premiums than they do in the West.
In B2B markets, Western brands carry a particular weight if they can boast international accreditations such as ISO or a prestigious client list. These demonstrations of a company’s aptitude are often vital.
Fifth, relationships are key. As developing markets open up, buyers are only gradually becoming comfortable with dealing with people and companies they don’t know. Relationships are widely used as a substitute for brand when it comes to verifying provenance. Most B2B offerings also involve repeat purchases or after-sales support, and this makes attendance at events, face-to-face contact and local language capability essential.
Lastly, market research is vital. This is commonplace among Western companies, and the necessity of obtaining independent information is even more critical when it comes to operating in foreign markets. Not only do many Western companies lack insight into the developing markets, but cultural barriers and a lack of familiarity between managers in different locations can often mean that the exchange of information within international companies is wanting.
The most successful multinationals conduct frequent research across geographies, challenging their own thinking as well as the flow of information within their companies.
More of Matthew’s white papers on developing markets are available on our website:
Posted in
Market Entry, Emerging Markets, BRIC, Marketing, Market Intelligence, White Papers, Matt Harrison, Market Assesment |
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June 30th, 2009
The Association of National Advertisers (ANA) has found that two-thirds of marketers have, in response to the current economic environment, shifted their emphasis to more short-term strategies. These were some of the findings of a Brand-Building study of 129 marketers, which took the form of an online survey.
Yet in spite of the short-term tactics, marketers are already planning increased activities for when the recession ends. 68% will be increasing their media budgets, 41% increasing social networking/word-of-mouth, and 40% allocating more money to innovation and testing/learning. Almost three-quarters of respondents admitted that they would ideally like to implement these additional marketing activities three to six months before the recession ends.
The survey found that few marketing initiatives had been postponed or cancelled outright, but many had suffered from reduced budgets. Those activities that are being maintained during the recession include:
- Research and development (47%)
- Public relations (42%)
- Innovation/test/learn budgets (33%)
- Promotion activities (33%).
A number of activities have been increased over recent months, including:
- Pricing deals (47%)
- Social networking/word-of-mouth (26%)
- Public relations efforts (23%)
When compared to the results of previous surveys, many traditional media channels have suffered:
- Television (down from 80% in February 2007 to 64% in April 2009)
- Magazines (down from 67% to 51%)
- Radio (down from 36% to 30%)
- Outdoor (down from 35% to 26%)
- Newspapers (down from 36% to 19%)
These results are fairly representative of current sentiment in the wider marketing community. Many organizations are shying away from traditional media and focusing on online opportunities. Indeed, a recent survey by B2B International showed around half of marketers planning to increase their e-marketing spend in 2009, with many stating that online marketing had already proven itself to be a successful strategy in the face of recessionary pressures. More than a quarter were planning increases in their PR activity. On the flip side, around half planned to cut expenditure in the more traditional areas of tradeshows/events and magazine advertising.
Click here to read our white paper on Marketing Strategies in a Recession.
Posted in
Business Decisions, Budgets, Commercials, Marketing, Recession, Advertising Research |
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June 26th, 2009
They say that the customer is always right. But how exactly do you define a customer? Recent protests by British university students about the quality of the education they’re ‘purchasing’ have caused Carol-Ann Morgan to reflect on the lessons we can all learn in a wider business context.
Who would have ever thought it? …Students protesting about not enough teaching classes? However, this is exactly what has recently been seen at a number of well known UK universities, and reported in the national press. Thinking back to the days of my education, most students breathed a sigh of relief at the cancellation of any classes and headed for the nearest place of recreation. The recent actions from some students raise questions about the shift in students’ attitudes and behaviours related to their educational experience.
Higher education has undergone significant changes in recent years. Many of these changes have impacted directly on the perceptions of students themselves; not insignificantly the requirement for them to pay fees. This has prompted discussions within the sector about the positioning of the student as a “customer” or a “consumer”. It can, and has been argued that the term “customer” is not appropriate for the field of education as the relationship is completely different to that of the conventional commercial buyer/seller experience. The successful attainment of an educational qualification requires mutual investment from both sides of the equation. This said, many academics have directly observed a shift in student attitudes and behaviours in favour of the “customer” positioning; most recently in the very public protestations by students about both the quality and the quantity of the educational “product” they feel they have purchased.
Whether or not we agree that an educational qualification can ever be thought of as a “purchased” product given the nature of the necessary relationship between the parties involved, the student protestations serve to remind us of two things. Firstly, the importance and power of the voice of the customer, consumer or service user (by whatever name we choose to use), and secondly, the perceived value for money of the product. The students’ action was an open demonstration that their expectations are not being met as far as the delivery of the course is concerned, and that they would like to place the issue on the management radar screen. Customers in commercial markets may simply switch to use competitor suppliers.
Reputations take time to build, and taking our eye off the mainstream product, from which these reputations have been built, can have disastrous effects. Customers are generally unconcerned about internal operational or financial issues which can impact on the quality or delivery of a product to them; their satisfaction is rooted in expectation and direct experience. Taking care of our customers not only enables us to respond with offers and services which meet current and future needs, it also serves to protect the reputation of the company by ensuring we have a loyal base of advocates willing to spread the word – a valuable source of free PR.
B2B International offers an innovative student satisfaction package. Click here to read more about it.
Posted in
Universities, Customer Insight, Student Satisfaction, Education Research, Customer Satisfaction |
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June 24th, 2009
Not every industry can boast strong growth this year. And within each industry sector, not every geography will have experienced a great 12 months. Yet we are pleased to report that the UK market research industry has this year grown by an impressive 6.2%.
According to the Market Research Society’s (MRS) annual survey, the UK market research industry – the second largest in the world – is now worth an estimated £2.16 billion (2008 figures), up from £1.8 billion in 2007. Meanwhile revenue generated from international research grew by a remarkable 12.5%.
The 6.2% increase over the past year compares extremely favourably with revenue growth of 2.3%, 2.4% and 2.5% in 2007, 2006 and 2005 respectively.
Of course, there can be no guarantees about the sector’s growth for 2009. Yet market research – which is arguably even more vital to ensuring the survival and growth of companies, across all industries, when times are hard – has, unsurprisingly, proved itself to be “relatively resilient compared with other disciplines in the marketing services sector,” during previous downturns, according to The MRS Director General.
The news that international research is experiencing such an upsurge is pleasing for us at B2B International, yet presents no real surprises. Having conducted b-to-b research across the world for many years now, we have experienced first-hand the increasing desire of many clients to compete on a global scale. With a growing presence in Asia and the Americas over the past few years, B2B International is now even better placed to serve UK clients looking to research international markets.
To find out a bit more about our international market research services, click here.
Posted in
Market Research UK, UK, Global Research, International Market Research |
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