International Marketing Blunders and Culture Risk Strategies

Introduction

There are several notable blunders that have occurred in international marketing. Some fall under the category of basic linguistic misunderstanding, while others are more catastrophic in nature, causing offense in addition to costing companies significant sales. In some cases, the blunder reaches back to the home market and causes damage there as well — as was the experience Nestlé had in Africa. This paper outlines some of the blunders of the past and how international marketers can avoid similar mistakes in the future.

Types of International Marketing Blunders

Some international marketing blunders are simply issues of translation — or mistranslation. Google Translate does not get the job done. Languages vary from region to region, and international marketers can be caught out by idioms and slang very easily. A classic example occurred when Chevrolet launched the Nova in Mexico in the 1970s. "No va" in Spanish means "doesn't go" — probably not the image a car manufacturer wants to project — and sales of the Nova reflected exactly that. While modern marketers are unlikely to make such elementary mistakes, they can still stumble over slang or idiomatic expressions. When this happens, local consumers notice the blunder immediately, even if the company does not. Slogans and advertising copy are particularly vulnerable when directly translated from the home language without local review.

A second type of blunder in international marketing is the promotion of a product for which a culture has no practical use. An Australian company seeking a new market for its frozen fish sticks decided to enter Hong Kong. The company had studied the market — noting the ease of entry, the absence of direct competitors, and Hong Kong residents' well-documented appetite for fish. What could possibly go wrong? As it turned out, virtually nobody in Hong Kong owns an oven. Apartments in Hong Kong lack the space and electrical infrastructure for such appliances, and baking is simply not part of the culinary culture. Even if consumers could purchase the fish sticks, they would have no way to cook them at home. The venture was a dismal failure, born entirely of the assumption that Hong Kong households are equipped like Australian ones.

This failure echoes the more tragic outcome of Nestlé's infant formula campaign in Africa. The product was marketed aggressively, but the formula required mixing with water. Nestlé, apparently without adequate on-the-ground knowledge of local conditions, failed to account for the fact that while tap water is safe in Switzerland, it frequently is not in much of Africa. Infants died — the formula, prepared with contaminated water, was more dangerous than their mothers' breast milk. Compounding the problem, many mothers could not afford to use the formula at the recommended dosage and stretched their supply by diluting it further. Swiss consumers follow package directions and can afford the full dose; Nestlé failed entirely to recognize the difference in local circumstances. When these stories reached Western markets, Nestlé suffered severe damage to its reputation in its core consumer base. The company remains associated with this tragic episode decades later.

A third type of blunder is misreading local market conditions — and this can happen even to sophisticated companies. Starbucks succeeded in Japan and China by recognizing that these nations were full of tea drinkers and adapting its offerings accordingly, emphasizing dessert drinks, teas, and the concept of the café as a "third place" away from home and work — a concept that resonated strongly in densely populated Asian cities where personal space is scarce. So how did Starbucks fail so badly when it entered Australia? Surely a company that had thrived in Canada and the United Kingdom could succeed in another English-speaking market. It could not. Australia has a far richer and more deeply rooted coffee culture than most other English-speaking countries. Its independent cafés offer a superior atmosphere, significantly better coffee, and lower prices than Starbucks. Australians were unimpressed by the Starbucks experience, and the company was forced to close hundreds of stores, retreating to CBD business districts and tourist-heavy areas. Starbucks had assumed its coffee and in-store experience would sell themselves, without recognizing that both fell well below the standard Australian consumers already expected.

Avoiding blunders of this kind requires several deliberate steps. First and foremost, it requires a high standard of market research. Companies generally invest in understanding their customers and markets, but clearly Starbucks did not do so adequately in Australia, nor did the Australian fish-stick company in Hong Kong. In their rush to enter a new market, neither conducted nearly enough research. They did not speak with locals, deploy enough personnel on the ground, or develop a genuine understanding of the competitive dynamics at play. Such failures could have been avoided with more thorough research and, critically, with local partners.

Avoiding International Marketing Blunders

Advertising mistakes are among the most preventable. The international marketer must work with a local agency rather than assuming that what resonates in one country will translate effectively to another. A local agency understands the nuances of translation that no internet translator can capture. It knows which creative approaches will work, which scenarios and frames of reference will resonate with a local audience, and can help the international marketer steer clear of cultural sensitivities that might otherwise go unnoticed until it is too late.

As the examples above illustrate, culture risk can be enormously costly. A company can permanently lose the goodwill of an entire market, and if the mistake is serious enough, it can suffer negative consequences even in markets where it did nothing wrong. The risk is therefore very high. Poor advertising choices and culturally ill-suited products can cause direct offense to the very consumers a company is trying to win. Political risk carries the possibility of sanctions, market exclusion, or even nationalization. Commercial risk can force a company to exit a market due to a strategic misstep, as Starbucks experienced in Australia. Culture risk is equally dangerous because of the lasting damage it inflicts on a brand.