On Global Growth Strategy
Marketers are under tremendous pressure to find ways to “grow elsewhere”, deliver successful new market penetration plans and hit aggressive growth targets. Having worked with numerous B2B and B2C brands over the past 20 years, we have witnessed many successes… but also many failures. Here is a list of the most common mistakes that marketers make when trying to build a brand and launch into markets outside their home markets.
8 Common Mistakes in Trying to “Grow Elsewhere”
Moving too slowly: Brands that hesitate to get into emerging markets stand to lose out on the best opportunities and concede significant market share. Recovering from loss of market share and playing “catch up” is an expensive proposition and the loss may prove irreversible.
Moving too quickly: Chasing “bright shiny objects” and reacting to opportunities while being unaware of different capabilities needed to operate in unfamiliar markets leaves managers scrambling to deliver on customer expectations and incurring heavy expenses to close the marketing capability gap. These “blind spots” erode profitability, and the lack of success makes the company vulnerable to valuation penalties by investors, as well as opening the door for aggressive competitors to enter the market and steal share.
Thinking that “Amazon” is a Strategy for Emerging Markets: Just because you have customers who are buying your products through e-Commerce does not mean that you have cracked an emerging market. e-Commerce plays a critical role in evaluating and conditioning a market for a new entry Strategy. However, e-Commerce is not a substitute for having a Brand Story that connects emotionally with your target audience at a local level; a multi-channel Strategy that gets your Brand Story in front of the right audiences and gives them a reason to listen, a reason to care a reason to engage and a reason to buy; and the right Systems implemented in the emerging market to scale and flawlessly execute your Strategy.
Overinvesting in local customers: Spending too much on customer-centric activities keeps brands from understanding the needs of other valuable stakeholders throughout the industry value chain: government agencies, suppliers, distributors, and important family relations in family-owned businesses. By working in a vacuum, brands pay a high price for unforeseen gaps in the local industry and for poorly understood market and distribution dynamics.
Telling an irrelevant brand story for the local market or not telling brand story: Being relevant to a market means that a brand is cognizant of and willing to address the needs and interests of a wide range of local stakeholders. The Brand Story must center on making the customer and the local stakeholders the hero – rather than making the brand the hero. Marketers with narrow views of how to achieve success (i.e. focusing almost exclusively on short-term financial or market share gains, rather than, say, helping train local suppliers) fail to become integrated contributors that help elevate the standard of the local industry and, consequently, do not prosper as well as firms that show they are willing to stay the course during the ups and downs of the local economy.
Being overconfident about Strategy and Systems: Brands assume that the capabilities that served them well in developed markets are sufficient to succeed in emerging markets. Overconfidence results in underinvestment in mission critical local capabilities and keeps executives from objectively analyzing how well prepared their businesses are to meet the challenges of fast changing emerging economies.
Underestimating the role of local stakeholders and governmental organizations: Governments can and do impose hard terms and conditions on western companies. Successful brands have learned to meet opposing views half-way, thus opening the path to long-term success. They understand that insensitivity toward the needs of local governments and local leaders may result in costly penalties, delays, excessive red tape, and may even challenge business continuity.
Failing to embrace a Transformational Marketing approach: Most business leaders dislike change. They prefer the status quo and view changes to existing marketing and operations tactics as costly distractions when entering a new market. They may also fear losing influence, putting their personal career ambitions at risk and maybe missing out on an upcoming promotion. Successful brands avoid the gravitational pull from “better sameness” and strike a balance between transformational activities that condition the emerging market by embracing a holistic perspective on Brand Story, Strategy and Systems: creating a playbook to assess, reconfigure, develop, and evolve their marketing to succeed in emerging markets.
Cracking into new markets and authentically connecting with people requires a transformational approach to the overall customer experience and, more importantly, telling your brand story in a way that makes them the hero. A compelling brand story engages and delights consumers; it makes them want to learn more, want to participate, and want to advocate on a brand’s behalf. Learn how to architect a 6-second story that drives business growth – download our best-selling book: Marketing, Interrupted
