Five strategies are used for adapting product and marketing communication strategies to a global market (see Figure 19.3).37 We first discuss the three product strategies and then turn to the two communication strategies.

Figure 19.3

Five Global Product and Communications Strategies

Straight product extension means marketing a product in a foreign market without making significant changes to the product. Top management tells its marketing people, “Take the product as is and find customers for it.” The first step, however, should be to find out whether foreign consumers use that product and what form they prefer.

Straight extension has been successful in some cases and disastrous in others. Apple iPads, Gillette razors, and Black & Decker tools are all sold successfully in about the same form around the world. But when General Foods introduced its standard powdered JELL-O in the British market, it discovered that British consumers prefer a solid wafer or cake form. Likewise, Philips began to make a profit in Japan only after it reduced the size of its coffeemakers to fit into smaller Japanese kitchens and its shavers to fit smaller Japanese hands. And Panasonic’s refrigerator sales in China surged 10-fold in a single year after it shaved the width of its appliances by 15 percent to fit smaller Chinese kitchens.38 Straight extension is tempting because it involves no additional product development costs, manufacturing changes, or new promotion. But it can be costly in the long run if products fail to satisfy consumers in specific global markets.

Product adaptation involves changing the product to meet local requirements, conditions, or wants. For example, in the United States, Dunkin’ Donuts sells good old glazed, powdered sugar, jelly, cream-filled, and chocolate-covered doughnuts to on-the-go customers in the morning. In South Korea, however, you’ll find an olive oil and tapioca starch donut called a Chewisty. In China, Dunkin’ serves doughnuts covered in mango pudding or green tea; in Russia, it dishes up doughnuts filled with scalded cream. And in many major global markets, Dunkin’ Donuts adjusts more than just the doughnuts. In India, for example, the company has also adjusted its full menu, its operations, and even its name to suit the local culture:39

“My grandmother only recently found out what a doughnut is,” says a 20-something Indian business professional as she wraps her mouth around a Dunkin’ Donuts Original Tough Guy Chicken Burger. “I don’t think anyone would come [here] just for a doughnut.” As it turns out, Indian consumers don’t start their day with frosted sweets or even with an early breakfast on the go. People usually eat breakfast at home with their families. And unlike Americans, they’ll maybe eat a doughnut for dessert, but they want a meal first.

So Dunkin’ Donuts has reworked its strategy for India, making a drastic shift from a predominantly “a.m. brand” to more of a “p.m. brand.” For starters, it changed its store hours, opening later in the morning and staying open later at night. It even changed its name, to “Dunkin’ Donuts & More.” To be sure, the chain serves a full selection of India-inspired doughnuts—stuffed, topped, and glazed with everything from rice pudding to saffron to crushed pistachios. (Top sellers in India include “It’s a Mistake,” a white chocolate doughnut topped with guava and chili.) But Dunkin’ features the doughnuts more as after-meal desserts. Befitting its new “& More” name, Dunkin’s all-day menu includes a hefty lineup of savory sandwiches, wraps, and eight varieties of burgers (all beef-free), such as the Brute Tough Guy Veg Burger. The adapted format is working well for Dunkin’ Donuts, which plans to have more than 100 outlets in India by next year.

Product invention consists of creating something new to meet the needs of consumers in a given country. As markets have gone global, companies ranging from appliance manufacturers and carmakers to candy and soft drink producers have developed products that meet the special purchasing needs of low-income consumers in developing economies.

For example, Chinese appliance producer Haier developed sturdier washing machines for rural users in emerging markets, where it found that lighter-duty machines often became clogged with mud when farmers used them to clean vegetables as well as clothes. And solar lighting manufacturer d.light Solar has developed affordable solar-powered home lighting systems for the hundreds of millions of people in the developing world who don’t have access to reliable power. d.light’s hanging lamps and portable lanterns require no energy source other than the sun and can last up to 15 hours on one charge. The company has already reached 51 million users, is adding 1 million users per month, and plans to reach 100 million users by 2020.40

Companies can either adopt the same communication strategy they use in the home market or change it for each local market. Consider advertising messages. Some global companies use a standardized advertising theme around the world. For example, Chevrolet recently swapped out its previous, American-focused “Chevy Runs Deep” positioning and advertising theme with a more global “Find New Roads” theme. The new theme is one “that works in all markets,” says a GM marketing executive. “The theme has meaning in mature markets like the U.S. as well as emerging markets like Russia and India, where the potential for continued growth is the greatest.” The time is right for a more globally consistent Chevy brand message. Chevrolet sells cars in more than 140 countries, and nearly two-thirds of its sales are now outside the United States, compared with only about one-third a decade ago.41

Of course, even in highly standardized communications campaigns, some adjustments might be required for language and cultural differences. For example, ads for Pepsi’s youthful “Live for Now” campaign have a similar look worldwide but are adapted in different global markets to feature local consumers, languages, and events. Similarly, in Western markets, fast-casual clothing retailer H&M runs fashion ads with models showing liberal amounts of bare skin. But in the Middle East, where attitudes toward public nudity are more conservative, the retailer runs the same ads digitally adapted to better cover its models.

Global companies often have difficulty crossing the language barrier, with results ranging from mild embarrassment to outright failure. Seemingly innocuous brand names and advertising phrases can take on unintended or hidden meanings when translated into other languages. For example, Interbrand of London, the firm that created household names such as Prozac and Acura, recently developed a brand name “hall of shame” list, which contained these and other foreign brand names you’re never likely to see inside the local Kroger supermarket: Krapp toilet paper (Denmark), Plopp chocolate (Scandinavia), Crapsy Fruit cereal (France), Poo curry powder (Argentina), and Pschitt lemonade (France). Similarly, advertising themes often lose—or gain—something in the translation. In Chinese, the KFC slogan “finger-lickin’ good” came out as “eat your fingers off.” And Motorola’s Hellomoto ringtone sounds like “Hello, Fatty” in India.

Marketers must be watchful to avoid such mistakes, taking great care when localizing their brand names and messages to specific global markets. In important but culturally different markets such as China, finding just the right name can make or break a brand:

After a long day’s work, an average upscale Beijinger can’t wait to dash home, lace on a comfortable pair of Enduring and Persevering, pop the top on a refreshing can of Tasty Fun, then hop into his Dashing Speed and head to the local tavern for a frosty glass of Happiness Power with friends. Translation? In China, those are the brand name meanings for Nike, Coca-Cola, Mercedes, and Heineken, respectively. To Westerners, such names sound pretty silly, but to brands doing business in China, they are no laughing matter. Perhaps more than anywhere else in the world, brand names in China take on deep significance.

Ideally, to maintain global consistency, the Chinese name should sound similar to the original while at the same time conveying the brand’s benefits in meaningful symbolic terms. Nike’s Chinese brand name, Nai ke, does this well. Not only does it sound the same when pronounced in Chinese, its “enduring and persevering” meaning powerfully encapsulates the “Just Do It” essence of the Nike brand the world over. Similarly, P&G’s Tide is Taizi in China, which translates to “gets out the dirt,” a perfect moniker for a tough-acting detergent. Other names that wear well on Chinese ears while also conveying a brand’s essence include Lay’s snack foods—Le shi (“happy things”); Reebok—Rui bu (“quick steps”); and Colgate—Gau lu jie (“revealing superior cleanliness”).42

Rather than standardizing their advertising globally, other companies follow a strategy of communication adaptation, fully adapting their advertising messages to local markets. For example, in the United States and most Western countries, where running is accepted as a positive, healthful activity, Nike advertising focuses on products and personal performance. In China, however, running is viewed as a boring sport or even a ­punishment—something rigorous and painful. It’s not something that most people in Asia’s polluted cities choose to do, especially on streets jammed with pedestrians, bicycles, cars, and even rickshaws. “The joke is that when there’s a person running in the city (and it’s often a Westerner), people turn to see who’s chasing him,” quips one observer.

However, China is the largest footwear market in the world, offering huge untapped potential for Nike. So, in China, rather than pushing products and performance, Nike’s advertising focuses on just trying to get more Chinese to put on running shoes. Ads and social media feature ordinary people who choose to run on city streets, letting them relate their reasons in their own words. “I run to make the hidden visible,” says one young woman. “I run to get lost,” says another. Salad—a stressed-out office worker who lives and runs in Shanghai—relates: “The city is always noisy and busy. This adds even more pressure to my day. I guess for me, running is about shutting down the noise.” To make running a more social activity, Nike also sponsors nighttime “Lunar Runs” in big cities like Beijing and marathons in Shanghai, featuring fitness instructors, live music, and celebrities to introduce Chinese students and young professionals to running as a fun and rewarding after-class or after-work activity. The goal is to get more people to at least give running a try. But changing basic perceptions of the sport won’t be easy. “It’s a very long road for us,” says a Nike China marketer.43

Media also need to be adapted internationally because media availability and regulations vary from country to country. TV advertising time is very limited in Europe, for instance, ranging from four hours a day in France to none in Scandinavian countries. Advertisers must buy time months in advance, and they have little control over airtimes. However, mobile phone ads are much more widely accepted in Europe and Asia than in the United States. Magazines also vary in effectiveness. For example, magazines are a major medium in Italy but a minor one in Austria. Newspapers are national in the United Kingdom but only local in Spain.44

Companies also face many considerations in setting their international prices. For example, how might Makita price its power tools globally? It could set a uniform price globally, but this amount would be too high of a price in poor countries and not high enough in rich ones. It could charge what consumers in each country would bear, but this strategy ignores differences in the actual costs from country to country. Finally, the company could use a standard markup of its costs everywhere, but this approach might price Makita out of the market in some countries where costs are high.

Regardless of how companies go about pricing their products, their foreign prices probably will be higher than their domestic prices for comparable products. An Apple iPad Pro that sells for $799 in the United States goes for $993 in the United Kingdom. Why? Apple faces a price escalation problem. It must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price. Depending on these added costs, a product may have to sell for two to five times as much in another country to make the same profit.

To overcome this problem when selling to less-affluent consumers in developing countries, many companies make simpler or smaller versions of their products that can be sold at lower prices. Others have introduced new, more affordable brands for global markets. For example, Lenovo’s Motorola division developed the modestly priced Moto G smartphone. Although not a flashy, high-tech gadget, the latest full-function version of the device sells for as little as $179.99 in the United States with no contract. Motorola first introduced the phone in Brazil, one of the largest and fastest-growing emerging markets, then in other parts of South America, the Middle East, India, and more of Asia. Intended primarily for emerging markets where consumers want low-cost phones, the Moto G may also sell well to cost-conscious consumers in major developed markets, such as the United States and Europe.

The Moto G phone puts pressure on Apple, which has focused on selling older models at reduced prices rather than developing cheaper models. The extremely affordable Moto G is now the most popular smartphone in Brazil, where it is priced at $260 versus iPhones starting at $1,080. The low-end phone also helped catapult a then-flagging Motorola into the number-four position in the huge Indian smartphone market.45

Recent economic and technological forces have had an impact on global pricing. For example, the internet is making global price differences more obvious. When firms sell their wares over the internet, customers can see how much products sell for in different countries. They can even order a given product directly from the company location or dealer offering the lowest price. This is forcing companies toward more standardized international pricing.

An international company must take a whole-channel view of the problem of distributing products to final consumers. Figure 19.4 shows the two major links between the seller and the final buyer. The first link, channels between nations, moves company products from points of production to the borders of countries within which they are sold. The second link, channels within nations, moves products from their market entry points to the final consumers. The whole-channel view takes into account the entire global supply chain and marketing channel. It recognizes that to compete well internationally, the company must effectively design and manage an entire global value delivery network.

Figure 19.4

Whole-Channel Concept for International Marketing

Channels of distribution within countries vary greatly from nation to nation. There are large differences in the numbers and types of intermediaries serving each country market and in the transportation infrastructure serving these intermediaries. For example, whereas large-scale retail chains dominate the U.S. scene, most of the retailing in other countries is done by small, independent retailers. In India or Indonesia, millions of retailers operate tiny shops or sell in open markets.

When selling in emerging markets, companies must often overcome distribution infrastructure and supply challenges. For example, in Nigeria, Domino’s Pizza has had to dig wells and install water-treatment plants behind many of its restaurants to obtain clean water. Similarly, after having difficulty sourcing quality beef in South Africa, rather than buying scarce beef from scrawny cattle raised by local herdsmen, Burger King finally invested $5 million in its own local cattle ranch.46 And to serve northeast Brazil’s Amazon River basin, which lacks a solid network of good roads, Nestlé has even launched a floating supermarket that takes goods directly to customers. The boat serves 1.5 million consumers in 27 riverside towns with 300 different Nestlé products, spending one day at each stop. Customers can check the floating store’s schedule at nestleatevoce.com.br, call a toll-free number, or text for more information and plan their shopping accordingly.47

Even in world markets containing similar types of sellers, retailing practices can vary widely. For example, you’ll find plenty of Walmarts, Carrefours, Tescos, and other retail superstores in major Chinese cities. But whereas consumer brands sold in such stores in Western markets rely largely on self-service, brands in China hire armies of uniformed in-store promoters—called “promoter girls” or “push girls”—to dispense samples and pitch their products person to person. In a Beijing Walmart, on any given weekend, you’ll find 100 or more such promoters acquainting customers with products from Kraft, Unilever, P&G, Johnson & Johnson, and a slew of local competitors. “Chinese consumers know the brand name through media,” says the director of a Chinese retail marketing service, “but they want to feel the product and get a detailed understanding before they make a purchase.”48