By William R. Dodson
Did you hear the one about the Chevy Nova, which sounds like a really cool-sounding name in English? Well, when Chevrolet took the car and its name to Latin America, no one bought it because “No va” means “Does not go.” And then there’s McDonald's: it received many complaints from local authorities in 1988 when it displayed the Mexican national flag on its placemats. The Mexicans were offended by grease and ketchup defacing their national symbol and quickly confiscated the place mats. And don’t forget Gillette, which thought it was a sure bet that one billion Chinese would want to shave with it’s razors. The company quickly learned, though, that first it would have to teach the Chinese that shaving what little body hair they have was in their best interests. Gillette quickly scaled back its China-earnings estimates.
For every big name, Fortune 500 debacle like the Nova or McDonald’s or Gillette that enters a new foreign market, there are scores of others we never hear of from Small and Medium sized Enterprises (SMEs) that never make the front page of newspapers. Consistently, hundreds – perhaps even thousands – of businesses annually lose investments in foreign countries because of one reason: they never asked the locals what they wanted.
I’m not going to pick on just American companies here, or even restrict myself to European businesses: the business people from developing countries also make the mistake of ignoring what their customers want in favor of what is expedient for them, or requires the least investment, or is based in narcism or, worse, unadulterated ignorance. Typically, though, developing countries miss out on a couple counts: not only may they place a product in an inappropriate foreign market, but the quality may not be what the customers in the target market expect. Hence, an American customer I know had to reject hundreds of custom-ordered tote bags made in China: the quality was so poor as to be indefensible. The customer actually went to an American manufacturer and was able to get the bags on short notice at nearly the same price as the Chinese bags.
Americans, though, often make a similar mistake with the insular Japanese market. The Japanese have extraordinarily stringent requirements on the quality of products: an American manufacturer of engine components was having product rejected by Japanese inspectors because of a cosmetic scratch or two on parts that did not affect functionality.
No one likes being sold down to, and yet marketing and sales departments of companies everyday refuse to ask the local consumers of foreign markets what they want and how they want it. So what’s the best way to go about researching what products or services will work in a market other than your own?
That’s it. Really. It’s as simple as that:
Formal market research that involves focus groups and test samplings and analyses of Return on Investment have to be done, but only after you’ve grounded yourself as a product maven in the local culture of your target market.
Do your cultural homework well, and you just may find yourself developing and selling products local companies may kick themselves for never having conceived of in the past.
William R. Dodson is Managing Director of Silk Road Communications, L.L.C., which advises businesses on how to adapt people and products for success in international markets. He is the contributing editor on international business to the American Management Association’s (AMA) MWorld Journal of Management, and writes the weekly column “The Cultured Business”, found at www./ and at the Global Perspectives section of the AMA’s member website. He can be reached at wdodson@/ or +1 (847)722-7817.