"The best of".....
Fabrizio Freda spoke recently with Barron's (read this week's "CEO Spotlight")about the makeover that he is leading at the global cosmetics giant Estee Lauder. He spoke about a variety of 10 year initiatives including digital media and product localization, or "building brands from the ground up in emerging markets."
[testimonial by="Fabrizio Freda, CEO, Estee Lauder" from="CEO Spotlight, Barron's 16 Jan, 12"]
Over the years we've been very, very good at bringing the best of North America to the rest of the world....but now we are going to the next level: Like we've done for North America, we will take the best of (key global markets) and bring this to the rest of the world as well...If you live outside of the U.S. it is evident that the aspiration of the world, from India to Japan or China or Italy, is no to become all the same."
Content to "try" or determined to succeed?
Freda touches on critical points for US companies beginning or increasing international business development....and they can be lumped together into a category of dangerous assumptions.
Different markets are different - by definition. How would you feel if you wanted to buy a product in the US and the only information you could find was by SMS (text message) in a foreign language about a product that was only made to run on 220V electricity (common in foreign countries vs. 110V in the US.) Likely you would be at least discouraged if not annoyed.
And yet so many US companies (of the small number that actually take the leap to try exporting - read here why you should!) approach global markets with their single US website, their US sales model and their standard US product. And even despite this many achieve some modest export success. English is a generally international language, many recognize our intentions are good and forgive our naive presentation, and US products carrying the "Made in America" label are coveted. But with a couple of steps, real success is attainable.
Breakout success - break out of a domestic mindset
Each market buys different products and buys them differently. Companies that are focused and intent on substantial international business development understand this and incorporate localization as key elements of their internationalization strategies.
Marketing localization is the fancy name for the ongoing process of adapting and refining the communications and sales strategies to specific markets. Often companies stop at simple "translation", but local internet domains, colloquially localized translation, appropriate images, delivery methods (newspaper still dominates in some markets, email is far less prevalent in others than in the US, SMS is leading in others and mobile adapted websites are critical in yet others) and competitive messaging sensitivities are examples of important considerations. (Read our white paper "4 Immutable Laws of International Marketing and Localization" and our eBook "International Marketing Considerations")
Product localization is equally important, but takes more research and time to fully understand and incorporate into product manufacturing. In many cases the costs and implications of this phase can be substantial. It may therefore be a strategic goal longer term, with the expectation that volume can be increased enough in the interim to justify the increased expense of graduating to this next level.
Learning through export
Freda also alludes to the business value of lessons learned in diverse markets, and the opportunity they represent if properly captured and packaged for sale in yet other markets. This is in fact one of the huge benefits of exporting, albeit one lost in the common platitudes about revenue growth.
Companies can dramatically improve their domestic operations in a variety of ways (product, marketing, new applications awareness, etc.) through their export experiences. Marketing to Latino(a)s in the US is a great example. Companies which export to various Latin American countries will have a far better understanding of the fast growing and very heterogeneous Latino population in the US. Companies which target that demographic even as a homogeneous yet distinct group are seeing great success....companies which target it in a nuanced way appropriate for the diversity will have blow-out success. And lessons learned through export can get them there. Read our white paper "How Export Teaches Lessons to Use at Home" for more information on this benefit.
Tying it all together
Too many companies wonder about export, but never get beyond the local chamber of commerce continental breakfast info session. Consilium Global Business Advisors is the professional resource which helps companies bridge the gap between initial interest and ongoing execution. Interested in these topics of exporting and international business development in general? Contact us today to learn how we can help.