Contrary to common belief, big brands also make mistakes when evaluating their markets. At most, such instances lead to ridicule for the brands. But as they say, mistakes are human and so do big brands. However, when big brands become victims of cultural blunders, their PR agencies, advertising and marketing agencies might go unscathed while the brand hurt eternally (Fromowitz 2013). In some cases, simple mistakes could lead to total failure of a brand.
Some of the successes or failures of big brands could be attributed to the effectiveness or ineffectiveness of market evaluation in one market or whole of its market. Do you guys relate to the examples of these brands? Some failed while others succeeded in their STP implementation in their respective target markets.
× Walmart in Germany
× Costco in Australia
A preview of these cases is explained in the http://commisceo-global.com/blog/international-retail-and-cross-cultural-issues while other cases of brand failure are described by Fromowitz (2013) in the article http://www.campaignasia.com/article/cultural-blunders-brands-gone-wrong/426043.
Failure meets Success; Walmart vs. Costco
A common point to note is that brand failure or success could be directly associated to cross cultural issues. For instance, even after Walmart’s acquisition of two companies in Germany; Interspar and Wertkauf, it failed in its attempted entry into Germany. This example contrasts Walmart’s successful entry into Chile, Brazil, Canada, India and China. The defeat of Walmart in Germany was majorly blamed on poor market evaluation which failed in identifying cross cultural limitations of its growth in Germany. The brand was poorly managed in Germany which led to deadly blunders including frustration among customers and employees (Fromowitz 2013). Definitely this experience impacted on loyalty which is adequate proof of a failing brand. The returns on investment were curtailed by poor performance leading to the failure of Walmart in Germany. Read: http://www.huffingtonpost.com/david-macaray/why-did-walmart-leave-ger_b_940542.html. Evidently, market evaluation could have saved the brand.
The second case explains the case of success of Costco in Australia. Expert opinion was rife that the venture would be a great flop in Australia but did the big brand fail? Were the experts only pessimistic in prophesizing about Costco’s failure in Australia? Definitely they were all wrong. Costco applied segmentation, targeting and positioning (STP) and other principles of market evaluation that enabled it to realize a fair view of the Australian market. The market evaluation informed the management at Costco that Australia was a competitive market owing to the competitiveness of Woolworth and Coles. Secondly, market evaluation helped identify that Australia had different shopping habits and customer preferences which point to cross cultural differences. These are essential factors to note when entering a new market. Certainly, this example reinforces the case of success after an effective market evaluation.
Marketing Evaluation and STP
These examples reinforce the notion that market evaluation is important since it enables a firm to identify the attractiveness of the proposed market. Some of the factors to consider when undertaking this evaluation is to apply segmentation, targeting and positioning (STP). This tool is helpful in identifying with precision the market size, pricing potential, cost of value delivery, uniqueness of offers, customer behaviour, consumer habits and other factors that could hinder or promote the growth and expansion of a brand.
From my personal perspective, which is justified by experiences of failure of brands such as Walmart in Germany among others including the failure of Proctor and Gamble in Japan, I can affirm that market evaluation could save brands from cross-cultural blunders (CGC 2016). In the case of P&G, the company used an advert that was popular in Europe to advertise it’s bathing soap in Japan. The advert showed a woman taking a bath after which he was joined by his husband who entered the bathroom and started touching her seductively. Watch failed advert on: https://www.youtube.com/watch?v=mMdrqXtWu7s. Whereas this advert was successful in Europe, the Japanese customers rejected the product because of their interpretation of the advert as inappropriate behaviour. This was a case of cultural insensitivity which could have been corrected through a market evaluation.
Assuming that companies conduct market evaluation for their brands before entering new markets, then they will likely increase their chances of success in the new markets. Boundless (2016) seconds this observation by noting that marketing evaluation could support planning and budgeting which are important in brand expansion. Secondly, marketing evaluation will enable the identification of important marketing performance metrics thus guide decision making for the company. Third, marketing evaluation will save brands from cultural blunders by influencing the marketing mix where a company will make a favourable combination of product, price, and promotion and place in order to avoid cultural blunders (Dev & Don 2015). Perhaps, this analysis justifies that marketing evaluation could save brands such as Walmart and P&G from cross-cultural blunders.
List of References
Boundless. (2016). “The Importance of Evaluating Marketing Performance.” Retrieved from: Boundless. (2016). https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/introduction-to-marketing-1/evaluating-marketing-performance-23/the-importance-of-evaluating-marketing-performance-133-4047/
CGC. (2016). International Retail and Cross Cultural Issues. Retrieved from: http://commisceo-global.com/blog/international-retail-and-cross-cultural-issues
Dev, C. & Don, E. (2015). “In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century”. Marketing Management, 14 (1).
Fromowitz, M. (2013). Cultural blunders: Brands gone wrong. Retrieved from: http://www.campaignasia.com/article/cultural-blunders-brands-gone-wrong/426043
Macaray. D. (2011). Why Did Walmart Leave Germany? Retrieved from: http://www.huffingtonpost.com/david-macaray/why-did-walmart-leave-ger_b_940542.html
Harsimran Singh Mand