By Michael Smith, guest blogger
President & CEO, Linx Communications
Global markets are now the norm for many companies. But how does a company make the decision to expand into a new market? While foreign markets are potentially lucrative, international marketing is significantly more complex than domestic marketing. This includes legal and financial differences—every country has its own separate set of laws that govern business that must be taken into account—as well as cultural differences that must be addressed within marketing.
In 2018, global B2C sales will reach $28 trillion and global B2B sales are expected to hit over $9 trillion. While most of the business is generated from domestic companies or true global brands, there is a huge opportunity for mid-size companies to look at foreign markets for growth, especially when their brands match well to those markets.
The advent of ecommerce for both B2B and B2C brands makes marketing globally easier, but you still need to deliver and support your product or services within each country you sell.
So how do you build the right marketing strategy and plan for expansion?
- Research. Work with local experts to determine the size of the market for your product/services in each country the company will expand. Learn the laws governing business and marketing in those countries. You will want to look at key competitive factors in that country such as the top market leaders and how they control distribution or access into your desired markets.
- Build the infrastructure. Leading with a robust infrastructure early on to streamline the process of international marketing is key. This includes activities around the products such as registering trademarks, reserving international domain names for local language microsites, and placement of your products (such as distribution locations and/or partners).
- Adapt the current marketing strategy. Creating an international marketing strategy usually requires the assistance of local talent in the new market, but much of your current marketing strategy and tactics can be adapted from the company’s domestic strategy.
- Localize the product and marketing materials. This includes translating and tailoring messages to appeal to new demographics.
- Reevaluate and adapt. Just as domestic markets are constantly changing, so are international markets. Continue to conduct market research and adapt marketing strategies.
When it comes to creating a global marketing strategy, there is no such thing as too much research. It really is more than just a matter of language. Each country has its own demographics, cultures, competitors, and regulations. Companies need to tailor their marketing efforts to each country.
Here are a few questions to keep in mind:
- How big is the market in the target country for the product or service being offered?
- Are there direct competitors in the target country?
- What have those competitors done in the same arena? How did they succeed? What obstacles did they face? What would this company do differently?
- How is the target demographic in the new country different from the target demographic at home?
- Which social media tools are the most popular in the target country?
- What search engines are most effective in the target country?
- What are the most effective marketing channels in the target country? In some countries, social media may be the most effective marketing environment, while traditional programs may work better in other countries.
- How expensive is advertising in the new country?
- Are there cultural differences between the two countries that should be taken into account when creating marketing materials?
- For companies in the retail or consumer goods verticals, how will orders be fulfilled? Are there potential problems with distribution? How will packaging be affected?
- What type of customer service is standard in the target country?
- What are the local laws governing business practices?
- How drastically does the country’s currency fluctuate over time?
These are only some of the questions to ask while building an international marketing plan for a specific region, but it’s a start. This sort of research should be done each time the company expands into a new region.
Build the infrastructure
This is where the brunt of the work in breaking into a new country takes place. Creating the infrastructure in each country early in the process will pay off exponentially down the road.
It’s wise to have a local representative in the country to help navigate unexpected obstacles and clearly explain local business practices and terminology. Executives should be sure they fully understand the laws and legal terminology of any contracts within the country before signing them and making them legally binding.
As a best practice, companies should secure top level domains early on for their websites, such as .co, .cn, .au, .us, and so on, to prevent squatters from reserving them and then charging a premium to turn the name over. Businesses should also register trademarks immediately once the decision is made.
Real estate laws often work differently in other countries as well, so if the company intends to create a physical presence for offices, distribution, or brick-and-mortar locations, executives should make sure that they are clear on the local laws.
Adapt the current marketing strategy
Again, while it is important to tailor marketing content to specific regions, that does not mean that all previous marketing work is useless. Rather than throwing everything out and starting from scratch, look at the current marketing plan and see what aspects will work in the new country.
There is a popular story about the General Motors expansion into the Latin American market. According to the story, when Chevrolet introduced their popular Nova model into countries that primarily spoke Spanish, the vehicle sold very poorly. Supposedly, this was because in Spanish, “no va” literally translates to “no go” or “it doesn’t go.” And who would want to buy a car whose name proudly declared that it wouldn’t run?
While this example may be fun to laugh at, it raises a valid point. When doing business in other countries, it is important to take the local language and culture into account in every aspect of marketing. Often there are local opportunities to tailor your brand to the local culture or even local tastes.
Even companies that seem to have standardized offerings across all markets have adapted their products to match the target demographic. For example, in the Philippines, hamburger giant McDonald’s (locally called “McDo”) offers “McSpaghetti.” The idea of ordering a plate of spaghetti at McDonald’s seems completely alien to anyone familiar with the chain restaurant in the United States, but in the Philippines, it is a regular part of their menu. Other local offerings include macarons in France and the flatbread McArabia in the Middle East.
To boost SEO, companies should also make sure that search engines are able to see which languages their websites are able to handle by using hashtags or language meta tags. These varies greatly depending on which search engines are being used around the globe.
Reevaluate and adapt
Once the core brand and product strategy are completed, you still need to look at local media, influencers, and activities to help sell your products. Today these local market preferences can change rapidly and require agile strategies to test new ideas and meet the current trends in each market where the company has a presence. As the company’s presence becomes more established, there is a good chance that marketing plans in each country will diverge, becoming more specialized and better able to target local business.
Michael Smith is the President and CEO of Linx Communications, a leading strategic marketing company, and has helped expedite market access for countless companies around the world. Contact him at Michael.Smith@linx.com.
Note: this article does not necessarily reflect the views of CMM and does not constitute legal advice.