When taking your business and your product overseas to new markets it is critical to align to local needs, whether consumer tastes or regulatory requirements. Not taking into consideration local conditions can lead to an underwhelming start, possible restart, or even market departure. Based on personal experience, I will provide some entertaining examples of product and management issues when entering new markets which were not well-received in-market.
The German engineers simply did not dream of eating while cruising at unlimited speeds on the German Autobahns.
In 1996 I was a member of the global Product Management team for the first generation Mercedes-Benz M-Class (W163), now renamed to GLE. Even then American consumers loved to eat and drink in the car. German engineers could not understand this need to consume a burger, fries, and giant beverage on the road because they simply did not dream of eating while cruising at unlimited speeds on the German Autobahns. The result of not understanding consumer behavior was an underwhelming cupholder mechanism in the eyes of US customers.
The cupholders were located at the ends of the dashboard in order to keep beverages hot or cold using the air vents. See #4 and #13 (was this an unlucky premonition??) in the owner's manual photo. They were designed to fold out when deployed and when in the down position were easily hit with a knee when entering or exiting the vehicle. This could knock the mounting pin out of place and required a visit to the dealer workshop to fix.
Even worse, the cupholders were designed to hold 12 oz aluminum cans. Most of the large cups received at fast food establishments or convenience stores simply did not fit. This resulted in customer frustration, spilled drinks into the seats, carpets, and even the center console. A burgeoning aftermarket devised numerous clip-on solutions to compensate for the integrated OEM cupholders.
It took until the second generation of ML to remedy this issue. However, Mercedes-Benz did apply the learnings to its other vehicles in the meantime and developed cupholders for its E-, C-, S- and other Classes to hold a wide range of cup sizes. Final result: satisfied customers that could now enjoy their meals in the car without balancing large drinks between their legs or feet.
In my second example, I address local employment conditions, talent flight risk, and a remote headquarters' lack of cultural understanding. I was the Managing Director of FCA Russia at the time when the Turin, Italy headquarters HR department sent the order to cancel all company cars and mobile phones to save costs in 2012. This was being implemented in Italy to stave off more layoffs at the time. Though this policy was unpopular in Italy, employees did not complain for fear of job loss during uncertain times.
The situation in Russia was vastly different. English-speaking talent with automotive experience was difficult to find and harder to retain. Company cars and mobile phones were a widely accepted base package benefit for automotive management. In a country that was known for job-hopping just to earn a few hundred dollars more per month, it would have been a flight risk disaster to cancel company vehicles and mobile phones. First, the incumbent job holders would have quickly fled and second, it would have been nigh to impossible to recruit acceptable quality replacements.
It took a strong challenge to the headquarters, several HR benefits studies, and feedback from other OEMs' leadership or HR departments to confirm the local conditions. Still, it took weeks of pushback against the headquarters' one-size-fits-all policy to dissuade them from carrying through. Ultimately, they made an exception for Russia and we sought other less harmful cost savings to compensate.
Local talents in the market and local voices brought into the headquarters can help avert decisions that hamper launch or market entry efforts.
How is your company addressing its go-to-market (GTM) strategy in new markets? Are you calibrating your product or service to meet local consumer and regulatory needs? Is the voice of the customer being taken into consideration? Are your personnel policies equitable and aimed at recruiting and retaining local talent? Are your business practices aligned to the local markets, not just to the needs of the headquarters? Does the headquarters listen to the market needs?
These, and more, are issues that need to be considered when entering new markets. Local talents in the market and local voices brought into the headquarters can help avert decisions that hamper launch or market entry efforts. In the auto industry many Asian brands from China and Vietnam are turning their sights to Europe, the USA, and other new markets. It will be interesting to see how willingly they adapt to local business norms and how their decisions influence their success.
Having worked in numerous markets including Russia, Egypt, Latin America, Vietnam, and more, I have experience in asking the right questions to uncover the issues that can slow down a launch. Let's have a conversation how your market entry can be streamlined and localized for success.