Global Marketing: Triage and Nuance

Even though I read, write, or hear the word “global” a thousand times a month, it’s still a term that makes me stop and think. For example, I recently watched a film about the International Space Station at the Kennedy Space Center in Florida. I marveled at the borderless planet that you can see from hundreds of miles in space. At a much lower altitude I follow the exploits of people like Steve Fossett, who has circumnavigated the world on one tank of gas in the GlobalFlyer. Those are brave, awe-inspiring endeavors.

But then I take a look around me at sea level and find lots of companies seeking to win the hearts and minds of consumers around the world, each coming from markets with different needs. Large enterprises such as Hewlett Packard, McDonald’s, Toyota, and United Parcel Service adapt (or localize) their offers in every market they enter. They market to, sell to, and support customers on the ground, on their Websites, and in the mass media. Every company of their size that we interview actively pushes a global marketing and sales agenda. And it’s not just the big guys. Even medium-size enterprises do not want to be left on the sidelines of international commerce. Big or small, some succeed, while others seem to have two left feet.

So whenever these companies ask me about best practices for their global adventures, I always echo the character in the film “Jerry Maguire” and ask them to “show me the money!” What do they expect to get out of their global endeavors? How much incremental revenue will they earn? How will they support these customers arrayed around the planet? Two words always pop to mind: “triage” and “nuance.”

Triage
When your boss says it’s time to globalize, you may take a breath. After all, there are more than 6 billion people on earth living in a couple of hundred countries, speaking thousands of languages and using lots of currencies.

But keep in mind that the biggest 25 countries account for most of the world’s industrial output, services, and commerce in a classic 80/20 split. Entering those markets with the right level of local presence, marketing, selling, and supporting your products will cost you. By reproducing the best practices and infrastructure in each market, you can lower the cost. You will also benefit from shared languages and currencies across some countries, but logistics, legalities, and culture will vary among even the most outwardly similar countries. So plan to enter countries that matter most to your business and your product.

And don’t fall for a new argument about the “long tail” effect. This term was popularized by Chris Anderson in a “Wired” article a couple of years ago to describe how Amazon.com used the long tail (or Pareto tail) of distribution curves to sell many low- to no-sales books. The globalization corollary to this statistical finding is that “many small markets in aggregate will make a lot of money.”

The fallacy here is that any company aggregating the revenue from many smaller countries would first have to enter those markets, adapt products and marketing materials to those countries, establish a selling channel, figure out how to support them, and continue to enhance their presence. Using the Amazon model, any company taking that approach would have to become an author, publisher, manufacturer, and translator of books. Ouch! This kind of long tail would have put Jeff Bezos through the shareholder blender a long time ago.

Nuance
Once you’ve decided which countries you need to be in and can afford to be in, don’t forget all your hard-earned lessons from domestic marketing. I can’t tell you how many discussions I’ve had with companies that have an excellent practice of segment marketing, that use personalization to great effect, that manage relationships with sophisticated tools but that somehow lose the scent when they go abroad. Their demographic wizardry disappears when they ask, “We’re going into Germany. What do Germans like?” This country of 82 million people suddenly becomes a faceless blob with the same marketing pitch to every tinker, tailor, soldier, and spy. Of course, privacy laws limit some types of marketing activities, but Germans have postal codes, salaries, buying patterns, and a whole bunch of data akin to the data you leverage when marketing to consumers in your home country. Use them.

This heavily nuanced sensitivity to market demographics will become even more important with big-population nations like China. With more than 1.3 billion citizens, China will definitely need some segmentation – especially once you understand that “only” a few hundred million are economically active.

Every company will use a time-honored calculus to figure out long it will take them to enter a new market, what they must do to achieve emotional bonds with their customers, and how much it will cost. But before you tackle these great, big global markets, define the scope of your plans and apply your marketing talents to these new opportunities.

Don DePalma is the founder/chief research officer of the research and consulting firm Common Sense Advisory and author of “Business Without Borders: