A recent article on Starbuck’s success in China triggered this blog post.
3 Tips to Success in a Foreign Market:
1. Local Tastes Matter
Many companies struggle to stay afloat while doing business abroad as they fail to study the market well enough prior to entry. Emerging markets like China and India are so fascinated by “western” products and culinary treats that it would seem very practical to begin selling your product abroad. However, entering in to a foreign market based on a few people responding positively to your product is not the formula you want to work off of. Know your market well. Different regions have different appeals. What might work in the village WILL never work in the city.
What Starbucks did right in China is a textbook case study in how food brands can succeed despite rising labor and real estate costs and increased competition on the Mainland. Instead of trying to force onto the market the same products that work in the U.S., such as whip cream-covered frozen coffee concoctions, Starbucks developed flavors, such as green tea-flavored coffee drinks, that appeal to local tastes. Rather than pushing take-out orders, which account for the majority of American sales, Starbucks adapted to local consumer wants and promoted dine-in service. (Why Starbucks Succeeds in China and Others Haven’t , by Shaun Rein, http://www.usatoday.com/money/industries/food/story/2012-02-12/cnbc-starbucks-secrets-of-china-success)
Owning a “western” product is a matter of status for most people. Use that status appeal to your advantage. This means that catering to local tastes but maintaining the quality and price of your good(s) is essential. I use Shaun Rein’s Starbucks example one more time. In China, Starbucks price their drinks higher knowing people would buy them just to “show off”.
It goes without saying……KNOW your competition. If your market research reveals that people prefer price over quality when it comes to certain products, you need to make sure people know WHY your product is being priced the way it is being priced.
3. Protect your Intellectual Property
I don’t think I stress the importance of Intellectual Property enough… So all I am going to say on the topic is REGISTER YOUR TRADEMARK, PATENT or COPYRIGHT (PERIOD).
What are your personal experiences selling abroad?