Marketing In Emerging Markets

Americans have a certain arrogance when it comes to marketing. Over the past few decades, as growth has been stronger percentage wise in emerging markets relative to North America, some surprisingly large United States based powerhouses have struggled for success as they invaded new territories. Somehow, many feel that if the marketing, pricing, advertising or even the product itself worked well in the US and Canada, it should be a hit in vastly different cultures as well. What they failed to realize is that if you want to succeed across the globe you need the localize your company’s branding.

By now, most of you know that McDonald’s has done a fine job with cultural customization. In France, there are little bottles of vin ordinaire available, spaghetti is served in some Chinese locations, and in certain Indian provinces McDonald’s serves no beef! Heinz has over 80 varieties of ketchup available all carefully tuned to local tastes from very sweet to sour. Naming and logos can be a problem, too. Nike’s flaming air logo on their air trainers product were a hit in Arab countries AFTER they realized their logo look far too similar to an Arabic term for Allah. Tide goes by seven different names around the globe as the name would have different connotations in many languages.

So, rule #1 is to be flexible and listen to the locals. The big advertising holding companies have a huge advantage here as they have offices in well over 100 countries and can guide North American marketers as they enter local turf. The media mix can be drastically different, too. Newspapers are still strong in many parts of the world and, despite the rapid growth of Netflix, television often works as well as it did in the US a few decades ago. Your commercial may have to change drastically, however.

A big area that people really need to wrap their heads around is the product itself. The poster child of a case study would be the eventual success that Oreo is having in China. The Oreo is the largest cookie brand in the world and has been around since 1912. When then Kraft Foods (now Mondelez) entered China in 1996, they had to be licking their chops about going in to a market with over a billion potential customers and a rapidly growing middle class. By the end of 2005, they were thinking of pulling the plug as their market share was a paltry 3% of the “biscuit” category.

So, back to the drawing board. Some research indicated that the Oreo was too sweet for the Chinese palate, it was priced too high for the mainstream consumer and the cookie was too large. So, they reformulated with an offering that was smaller, less expensive and they had a wafer style alternative that was popular with the Chinese. And, they had new flavors such as strawberry and green tea which resonated with the Chinese consumer. By 2012, they were #1 with a 15% market share. This worked so well that they continue to customize Oreo flavors as they roll out around the world. THE ECONOMIST reported that Mondelez has dulce de leche Oreos in Argentina and orange ice cream Oreos in Indonesia. For the last several years, Oreos have been a billion dollar brand in emerging markets alone and the growth continues.

The success is centered around localization. American brands and pop culture do travel well but often only in a way that locals find easy to accept.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com