Expansion into foreign markets is a tempting prospect for many companies, as they can increase their profits and scale of business. Yet, many of them fail to do so by copying the same solutions that worked well in their home market. Most of these companies underestimate the power of cultural differences, which may determine the perception of the brand and product. What mistakes are most often made by companies and how to avoid them?
What evokes positive emotions in one culture or country, in another can evoke extremely negative once. While the swastika is seen as a symbol of happiness and prosperity in Asia, in Europe or America it’s perception is totally different. What does it means for business owners who are looking for an opportunity to go abroad?
Geert Hofstede and the cultural dimensions theory
In the 1960s and 1970s, Dutch psychologist Geert Hofstede conducted research among IBM employees. Based on it, he described the most important distinguishing features of national cultures, such as: Power Distance (in short PD – defines the relationship between government and citizen, between employer and employee, parent and child), Collectivism/Individualism (IDV – the difference between the well-being of an individual and a group), and Masculinity/Femininity (MAS – the differentiation of gender roles).
His work is still a must-read for researchers dealing with international marketing or cultural relationships. It is a theory that puts factors like culture into a coherent category system.
If we take a look at the individual elements of culture included in the theory, we can distinguish, among others: political system, language, culture, the legal system, education, values, religion, cultural norms, history, folklore, and social hierarchy.
Let’s take a look at some of the most important issues, which resonate strongly in society, and are difficult to notice for an outsider.
Religion is still important
Although the Western World became increasingly secular, religion and religious believes are still a very important part of our life. Some holidays had disappeared, others changed like Christmas, which for many has lost its religious character. However, if you want to promote your brand during the holiday season, you will do it differently depending on the country. Let’s say your company produces chocolate or some other food product. The marketing campaign will focus on different things in Poland (where Christmas Eve is a big thing), in Great Britain (boxing day), and differently in Japan (no religious context of the holiday).
Before the World Cup in Russia, in 2018, the Heineken company issued a special edition of one of its beer – it placed the flags of all the countries that qualified for the competition on the beer bottle caps – among them the flag of Saudi Arabia. This caused widespread outrage among Muslims, as the flag include the Shahada – Muslim confession of faith. Placing a religious element in such a place, although not intentional, caused a very negative reaction. This is a great example that a lack of sensitivity and reliable checking of information may affect the image of the company.
Language is the key to understanding others
When entering a foreign market, it becomes necessary to learn the language. Research shows that native speakers are best suited for negotiating international contracts, as they have the ability to fully understand and use the system of cultural codes expressed in a client’s language, and by that to reach the client better. The same is true for marketing activities undertaken in foreign markets. Something that works well in the USA does not necessarily have to be well received in India; Italian slogans referring to values sound different in Poland and different in Brazil. And there is also a very delicate issue: translation.
The American beer company Coors launched its marketing campaign “Turn it loose” when it entered the Spanish market, but the slang expression was difficult to translate and the Spanish version was translated as “Suffer from diarrhea”.
There are many examples of such unsuccessful translations.
Culture, social hierarchy, taboo
You’ve heard this many times – Western World is oriented towards individualism, while eastern cultures are oriented towards collectivism. And this is partly true – partly because countries like Mexico or Portugal also belong to collectivist societies. How an individual is perceived and how a group of people (e.g. family) is perceived has a big influence on the global marketing strategy. While the figure of a liberated, twenty-year-old woman driving an old mustang around the city (like in The Rolling Stones’ video) can seem persuasive in the USA or France, in Japan or in China it will be perceived in a completely different way, which is also related to the equality factor: in China, instead of a twenty-year-old woman, a young and successful man will do better; instead of the old mustang, a new SUV or Jeep will do better; instead of freedom – responsibility; instead of the individual – family.
The horizontal and vertical cultural structure is important as well. It’s – to simplify – about what kind of hierarchy exists in a society. In a “flat” (horizontal) cultural structure, people consider themselves as equals, and in the vertical structure as a part of society, and social hierarchy plays a strong role.
Procter & Gamble did not take this issue into account when it launched its advertisement in Japan, which was previously successfully aired in the United States. What was in the advertisement that triggered a wave of outrage? In the ad, a man walks into the bathroom where his wife is bathing. It was enough for many people to feel that certain boundaries of privacy and good taste had been violated.
History can be a great marketing tool. It can refer to national emotions and personal family stories. Yet, you have to be extremely aware of its complexity.
There have been many studies showing the link between the perception of a product and its ‘origin’. The Greeks are less inclined to buy Turkish products and the people from Central and Eastern Europe have a negative attitude towards products from Russia. Depending on the historical narrative, historical events may also be depicted differently and even dated differently – such as the “Great Patriotic War” as the term of the Second World War in Russia. Symbols may have a different meaning – swastika in the cultures of the East is perceived differently and evokes different emotions than in Europe or America.
This happened to UPS in Germany in 1976. The uniforms of UPS employees – brown shirts worn by its workers all over the world, in Germany were associated by many people with the NSDAP Assault Troops (Die Sturmabteilungen der NSDAP), commonly called “brown shirts”. The color of the uniforms was changed to green for many years.
How to avoid mistakes?
When entering a market that has been alien to us so far, It is important to understand the dependencies, the customs that exist in a given country. How our brand will be perceived may very often depend on seemingly insignificant things, phrases or images, which may be crucial for our image in the end.
Companies deal with this in various ways – by hiring “locals”, i.e. people who are native to local customs and habits, or by cooperating with marketing companies operating in a given country.
Some companies, instead of entering the market directly, use partnership agreements, or so-called joint-ventures, using the 1+1=3 system (two companies decide to cooperate with each other and appoints a third company to manage it).
Regardless of which path you choose, the first step when considering entering a new market should be an in-depth analysis. Apart from financial or legal issues, social and cultural issues should also be considered. Perhaps adapting your product to the local market will bring better results? This is what McDonald’s did in France, changing its franchise model in 1995 when it started using local cheese and baguettes for its meals. The restaurant’s working system was changed as well. This is a great example that adapting to local preferences will not only allow you to survive in a foreign market but can significantly increase sales of products abroad. Today, the average French customer leaves almost four times more money than the American one.