Posted by Hilka Klinkenberg on Wed, Nov 04, 2009 @ 08:15 PM
The dollar is down, and it may continue to decline even further…by how much depends any number of different models from the Organization for Economic Cooperation and Development (OECD), the Bank of Intercontinental Settlements (BIS), The International Monetary Fund (IMF), or the IntercontinentalExchange dollar index, among others. While that may be bad news for importers into the USA, it should present a golden opportunity for American exporters.
Unfortunately, that is not always the case. Over the years, I delivered many speeches on cultural issues to trade groups, and the response was always the same: “We don’t have the time or the money for that. We have to put all our 
resources into our marketing and advertising.” But how can you create a marketing plan if you don’t know your market? You can’t do what you always did and expect the same results you always got once you enter another culture.
Before you even consider going into new markets, there are any number of issues to consider:
- Is there actually a market for your product? Price alone is not the determinant. Cultural values and tastes can be the deciding factor in whether your product…and your marketing/advertising campaign…will be successful.
- Once you have determined that your product or service is a good fit, are there any changes that need to be made, for example in sizing for the Asian market or packaging and labeling for the Canadian market? Canadian labeling laws have deterred many American companies from entering the French-Canadian market.
- What are the barriers to entry in that market…tariffs, government regulations, infrastructure and transportation, climate, political or economic issues?
- Do you need a local ‘partner’ or a local representative? If so, what is involved in finding the right contact, making the connections and developing a profitable relationship?
- How will you be paid and how can you protect yourself from further fluctuations in the exchange rate?
Some of these points are obvious; some may be handled by your lawyer or accountant…or even the Department of Commerce. It is most often the little things, the cultural things, though, that derail what should be a lucrative export venture. Jack Brown’s article on the little mistakes major advertisers have made in new markets is a beginning. Watch for future whitepapers on some of the more challenging cultural risk issues exporters confront in their marketing and advertising plans.
Posted by Sue Perlmutter on Thu, Oct 15, 2009 @ 04:19 PM
Whether it’s cupcakes in Doha or sushi in Warsaw, following cultural trends and ever-evolving cultural preferences will forever be one of my favorite pastimes. Such inclinations are of interest as reflections of their surroundings, economic and otherwise. Although not ‘big ticket’ items, the sudden appearance of cupcakes in the Middle East, sushi in Eastern Europe and fine chocolates in China are new tokens of luxury in select
burgeoning economies and segments thereof. What is of greater significance to me, though, is what has happened to the luxury market in Japan, and how this has affected both consumer thinking and its cultural manifestations.
Much has been written about changing consumer spending habits in Japan (see
Carrefour post below), as the country’s collective belt has been tightening for a considerable period of time. The early proliferation of ¥100 stores in the post-bubble 1990s was perhaps an early indicator of an emerging trend in shopping, which until then had generally eschewed bargain hunting as a cultural sport. Now, such shops with names like Seria, Watts and Don Quixote are as ubiquitous in Tokyo as tea vendors, and cheap chic is now not only acceptable, it’s downright trendy. The country’s ailing luxury sector, meanwhile, has been steadily eroding, evidenced by plummeting department store sales, and punctuated by Versace’s complete withdrawal from the Japan market last week.
This is all music to the ears of companies like Fast Retailing (of Uniqlo fame), H & M, and Forever 21. They, like many others, have been ‘recession ready,’ and are now all battling for supremacy on Japan’s legendary fashion battleground, with jeans at $10.00 and cashmere sweaters of decent quality at eye-popping prices. For even as the country’s luxury market suffers, and one can conjure up a picture of austerity and restraint in a culture known for embracing stability and resisting change, Japan is at the same time one of the most cutting edge trend-driven places on earth. Thus, its new economic realities have simply presented new challenges for its trendmeisters, whether in food, fashion or tech devices and beyond.
As buying on the cheap continues to evolve from ‘hazukashii’ (embarrassing) to virtuous and even cool, it will be exciting to monitor the manifestations of this cultural trend in Japan, along with others across the globe. Now if only flying to foreign cultures were as inexpensive as those Uniqlo jeans………
Posted by Sue Perlmutter on Wed, Sep 23, 2009 @ 09:15 PM
Reading all the recent banter about Kraft and Cadbury not only unleashes my undying sweet tooth, it also gets my cultural molecules spinning. This potential acquisition, written about almost daily in the past few weeks, involves far more than simply the wisdom of connecting two companies. For one thing, on a personal level, it arouses passionate debate by virtue of its connection to chocolate, that addicting and magical substance 
which has captivated us for centuries. Taste, so much a part of our emotional and cultural DNA profile, is significantly shaped by our surroundings, as any global marketing team will attest. Nations do, in fact, have their own very distinct chocolate preferences, some of them surprising. Judging from all the ruminations on the hugely nostalgic powers of Cadbury, and the attendant bashing of Hershey's, the brand Cadbury aficionados love to hate, the U.S. and U.K., never mind Kraft and Cadbury, could probably go to battle on this culturally sensitive matter alone.
Indeed, cultural preferences are at stake here, but so are corporate culture differences. How ironic, then, that Cadbury is now headed by Todd Stitzer, a "preppy New York lawyer,"* in the words of a Financial Times writer. Nevertheless, its company culture continues to run deep, and like so many organizations who entered early in the chocolate industry -- Fry's, Rowntree, and Hershey's as prominent examples -- its roots were philanthropic, perhaps further feeding into the nostalgia factor. Kraft, meanwhile, whose "tanks rolled on to Cadbury's well-tended Bournville lawns,"* is viewed as the U.S. behemoth ready to devour Cadbury's, despite recent rebranding efforts and cries to the contrary. There is a bright spot, though, and again, an ironic twist. Under Stitzer's reign, with one of the company's factories in Keynsham, England, about to shut down and move to Poland, and with Kraft promising to keep it open if the acquisition materializes, there are some in the U.K. now hoping the "white knight" from across the pond will in fact prevail.*
With rumors swirling about almost daily as to new tactics, potential suitors and sweeter offers, this emotionally and culturally infused topic will be one to watch closely -- perhaps with some "neutral" Swiss chocolate in hand.
*http://online.wsj.com/article/SB125245727048594365.html
*http://www.ft.com/cms/s/3/756b0108-a752-11de-9467-00144feabdc0.html
*http://www.ft.com/cms/s/0/2554c0f2-a322-11de-ba74-00144feabdc0.html?nclick_check=1