International marketing and regional markets

International
marketing and
regional markets
Prof. dr Miloš D. Milovančević
International Business Entry
International business holds out the promise of large new market
areas, yet firms cannot simply jump into the international
marketplace and expect to be successful.
- Firms must adjust to needs
and opportunities abroad, have
quality products, understand
their customers and understand
the …… vagaries of international
markets.
-The rapid globalization of
markets, however, reduces
the time available to adjust
to new market conditions.
December, 19-20/2008
This chapter is concerned with the activities of firms preparing
to enter international markets. Primary emphasis is placed on
export activities.
The chapter focuses on:
1) Analyzing the
role of
management
in starting up
international
operations
2) Describing
the basic
stimuli for
international
activities
3) Highlighting the
entry modes for
the international
arena, and
analyzing the
problems and
benefits of each
mode
4) Describing the
role of
facilitators and
intermediaries
in international
business
1. The Role of Management
The quality of its management is key to a firm's success in the international
business. Management dynamism and commitment are crucial in
the first steps toward international operations.
Management dynamism
Managers of firms with a strong
international performance typically
are active, aggressive, and
display a high degree of
international orientation. Such an
orientation
is
indicated
by
substantial global awareness and
cultural sensitivity. Conversely,
the managers of firms that are
unsuccessful internationally usually
exhibit a lack of devotion to
international business.
Management commitment
The issue of managerial commitment is a critical one because foreign
market penetration requires:
1) a vast amount of market development activity,
2) sensitivity toward foreign environments,
3) research, and innovation.
Regardless of what the firm
produces or where it does
business
internationally,
managerial commitment is key
for stagnation and sometimes
even failure.
To obtain such a commitment, it is
important to involve all levels of
management early on in the
international planning process
and to impress on all players that
the effort will only succeed with a
commitment that is companywide.
Business
Planning
Initiating international business activities
Going international means that a strategic change is taking place. The
decision to export usually comes from:
1) the highest levels of management,
2) the owner,
3) the president,
4) the chairman, or vice
president of marketing.
The initiation of international business transactions and their
implementation is the primary responsibility of marketing
personnel. It is important to establish a center (an organizational
structure) in which someone has the specific responsibility for
international activities.
Such a center need not
be large. For example,
just
one
person
assigned part time to
international activities
can begin exploring
and
entering
international markets.
• The first step in developing international commitment is to
become aware of international business opportunities.
Management must then determine the degree and timing of
the firm's internationalization.
For example, a German corporation that expands its operation into Austria,
Switzerland, Belgium, and the Netherlands is less international than a German
corporation that launches operations in Japan and Brazil. Moreover, if a
German-based corporation already has activities in the United States, setting up a
business in Canada does not increase its degree of internationalization as much as if
Canada was the first "bridgehead" in North America.
German
corpopration
German
corpopration
International market
International market
B
A
CH
NL
Brasil
Japan
when to start the
internationalization process and how quickly it should
progress. For example, market entry might be desirable as soon as
Management must decide the timing of
possible:
-because clients are waiting for the product or
- because competitors are expected to enter the market shortly
In addition, it may desire to either enter a market abroad selectively
or to achieve full market coverage from the outset. Decisions on
these timing issues will determine the speed with which
management must mobilize and motivate the people involved in
the process.
Internationalization is a matter of learning, of acquiring
knowledge. A firm must learn about foreign markets and
institutions, but also about its own internal resources in
order to know what it is capable of when exposed to new and
unfamiliar conditions.
Management is often much too
preoccupied with shortterm problems. As a result,
many firms are simply not
interested in international
business. Yet certain situations
may lead a manager to discover
and understand the value of
going international and to decide
to pursue international business
activities.
Trigger
factors
frequently are:
- foreign travel, during which
new business opportunities
are discovered, or
- the receipt of information
that leads management to
believe
that
such
opportunities exist.
Influencing employee behavior to
drive business results.
Managers who have learned foreign languages or are
particularly interested in foreign cultures are more likely to
investigate whether international business opportunities would
be appropriate for their firms.
New management or new employees can also bring about an
international orientation. For example, managers entering a firm
may already have had some international business experience
and may try to use this experience to further the business activities
of the firm where they are currently employed.
2. Top 10 Management Mistakes
1) Putting policies ahead of people. The smaller the firms, the
larger the mistake this is. Policies are made to be followed, within
reason. Some flexibility with employees, particularly in a small company, is
important. An even bigger mistake is standing behind policies at the
expense of losing loyal customers. Weigh the significance of standing
behind your policy in each situation.
2) Lack of communication. In any industry, at any level,
communication is key to being a successful manager. Employees need
to know what is expected of them and when specific projects or tasks
need to be completed. Communication needs to be clear, and any
questions that arise need to be answered.
3) Failing to hear what your employees have to say. To
manage effectively, managers need to understand the needs and
concerns of their employees.
4) Not acknowledging that you do not have all the answers.
A good manager does not make the mistake of trying to solve every
problem. Seeking help from individuals with expertise in specific areas
is a sign of strength, not weakness. In addition, a good manager must
understand that his way is not the only way to do the job.
5) The glass is always half empty. Managers who continually
focus on the negatives employee, end up with employees who are not
motivated and often have one foot out the door looking for a more
positive work environment.
6) Not accepting responsibility. A common mistake made by
managers is to either delegate blame or simply not accept responsibility
for that which happens under their guidance. Being in charge means
taking responsibility for whatever happens.
7) Favoritism. Once a manager has obvious favorites, he loses
credibility and the respect of the rest of the team.
8) Just do it.
The Nike slogan does not work when employees are
trying to gain an understanding of the process or project. Rather than
expecting your team to simply work blindly on tasks they do not understand,
a good manager takes the time to explain what the project is all about
and how the team's work is incorporated into the plan. Remember, the
more the team is invested in a project, the better the results will be.
9) Too much technology.
Embracing technology is a key to
success in the modern office environment, but not at the risk of embracing
people skills. Do not hide behind e-mails and other technology.
10) Never change. In a rapidly changing business environment, not
being open to change can be a major mistake. Above all, be flexible.
3. Motivations to Go Abroad
Normally, management will consider international activities only when
stimulated to do so. A variety of motivations can push and pull individuals
and firms along the international path (see Table below).
1) Proactive motivations represent stimuli for firm-initiated strategic
change.
2) Reactive motivations describe stimuli that result in a firm's response
and adaptation to changes imposed by the outside environment. In
other words, firms with proactive motivations go international because
they want to; those with reactive motivations have to go
international.
Table - Major Motivations to Internationalize Small and Medium-Sized Firms
Proactive
Profit advantage
Unique products
Technological advantage
Exclusive information
Managerial commitment
Tax benefit
Economies of scale
Reactive
Competitive pressures
Overproduction
Declining domestic sales
Excess capacity
Saturated domestic markets
Proximity to customers and ports
3.1 Proactive Motivations
1) Profits are the major proactive motivation for international
business. Management may perceive international sales as a
potential source of higher profit margins or of more added-on
profits.
- The profitability perceived when planning to go international is
often quite different from the profitability actually obtained.
Particularly in international start-up operations, initial
profitability may be quite low. The gap between perception and
reality may be especially large when the firm has not previously
engaged in international business.
- Despite thorough planning, unexpected influences can change the
profit picture substantially. Shifts in exchange rates, for example,
may drastically affect profit forecasts.
2) Unique products or a technological advantage
can be another major stimulus. A firm may produce goods that are not
widely available from international competitors. Again, real and
perceived advantages must be differentiated. Many firms believe that
they offer unique products or services, even though this may not be the
case internationally.
If products or technologies are unique, however, they certainly can
provide a competitive edge. What needs to be considered is how long
such an advantage will last. The length of time is a function of the
product, its technology, and the creativity of competitors. In the past, a
firm with a competitive edge could often count on being the sole
supplier to foreign markets for years to come. This type of ad vantage
has shrunk dramatically because of competing technologies and the
frequent lack of international patent protection.
Nike began marketing in the
Pacific Rim by creating a
partnership with Nissho
Iwai. Nike's Asia Pacific
revenues reached $1.2 billion
by the end of 1997. Nike
achieved this extraordinary
growth by connecting the
Nike
brand
to
consumers emotionally,
culturally, and with
local relevance.
3) Special knowledge about foreign customers
may be
another proactive stimulus. Such knowledge may result from:
- particular insights by a firm,
- special contacts an individual may have,
- in-depth research, or
- simply from being in the right place at the right time
Although such exclusivity can serve well as an initial stimulus for
international business, it will rarely provide prolonged motivation
because competitors-at least in the medium run-can be expected to
catch up with the information advantage.
- Only if firms build up international information advantage as an
ongoing process, through, for example, broad market scanning, can
prolonged corporate strategy be based on this motivation.
4) Another motivation reflects the desire, drive, and
enthusiasm of management toward international business
activities. The managerial commitment can exist simply because
managers like to be part of a firm that engages in
international business. Further, such activity can often provide a good
reason for international travel. Often, however, the managerial
commitment to internationalize is simply the reflection of a general
entrepreneurial motivation, that is, a desire for continuous growth
and market expansion.
5) Tax benefits
can also playa major motivating role. Many
governments use preferential tax treatment to encourage
exports. In the United States, for example, as a result of the tax benefits,
firms either can offer their product at a lower cost in foreign markets or
can accumulate a higher profit.
6) A final major proactive motivation involves economies of
scale. International activities may enable the firm to increase its
output and therefore rise more rapidly on the learning curve.
- The Boston Consulting Group has shown that the doubling of output
can reduce production costs up to 30 percent. Increased production
for international markets can therefore help to reduce the cost of
production for domestic sales and make the firm more competitive
domestically as well.
3.2 Reactive Motivations
A second type of motivation, primarily characterized as reactive,
influences firms to respond to environmental changes and
pressures rather than to attempt to blaze trails.
1) Competitive pressures
are one example. A company may
fear losing domestic market share to competing firms that have benefited
from the economies of scale gained through international business
activities. Further, it may fear losing foreign markets permanently to
competitors that have decided to focus on these markets. Since market
share usually is most easily retained by firms that initially obtain it, some
companies may enter the international market head over heels. Quick
entry, however, may result in equally quick withdrawal once the firm
recognizes that its preparation has been inadequate.
2)
Similarly, overproduction can result in a major reactive
motivation. During downturns in the domestic business cycle, foreign
markets have historically provided an ideal outlet for excess
inventories. International business expansion motivated by overproduction
usually does not represent full commitment by management, but rather a
safety-valve activity.
As soon as domestic demand returns to previous levels, international
business activities are curtailed or even terminated. Firms that have used
such a strategy once may encounter difficulties when trying to employ it again
because many foreign customers are not interested in sporadic business
relationships.
2) Declining domestic sales,
whether measured in sales
volume or market share, have a similar motivating effect. Goods
marketed domestically may be at the declining stage of their product life
cycle. Instead of attempting to push back the life cycle process
domestically, or in addition to such an effort, firms may opt to prolong
the product life cycle by expanding the market. In the past, such efforts
by firms in industrialized countries often met with success because
customers in less-developed countries only gradually reached the level of
need and sophistication already obtained by customers in the developed
countries. Increasingly, however, because of global competition, these
lags are shrinking.
3) Excess capacity
can also be a powerful motivator. If equipment
for production is not fully utilized, firms may see expansion abroad as a
way to achieve broader distribution of fixed costs. Alternatively, if all
fixed costs are assigned to domestic production, the firm can penetrate
foreign markets with a pricing scheme that focuses mainly on variable cost.
Yet such a view is feasible only for market entry. A market-penetration
strategy based on variable cost alone is unrealistic because, in the long run,
fixed costs have to be recovered to replace production equipment.
The reactive motivation of a saturated domestic market has similar
results to that of declining domestic sales. Again, firms in this situation
can use the international market to prolong the life of their good.
4) A final major reactive motivation is that of proximity to
customers and ports. Physical and psychological closeness to the
international market can often play a major role in the international business
activities of the firm. For example, a firm established near a border may not
even perceive itself as going abroad if it does business in the neighboring
country. Except for some firms close to the Canadian or Mexican
border, however, this factor is much less prevalent in the United States
than in many other nations. Most European firms automatically go
abroad simply because their neighbors are so close.
-In general, firms that are most successful in international
business are usually motivated by proactive-that is, firm
internal-factors.
- Proactive firms are also frequently more service oriented than
-
reactive firms.
Further, proactive firms tend to be more marketing and
strategy oriented than reactive firms, which have as their major
concern operational issues.
The clearest differentiation between the two types of firms can
probably be made ex post facto by determining how they
initially entered international markets.
- Proactive firms are more likely to have solicited their first
international order, whereas reactive firms frequently begin
international activities after receiving an unsolicited order from
abroad.
4. Marketing Translation Mistakes
Lessons In Marketing
According to the EE Times, October 8, 1996 (and numerous web
sites), Matsushita Electric was promoting a Japanese PC for
internet users. It came with a Japanese Web browser courtesy of
Panasonic. Panasonic had licensed the cartoon character "Woody
Woodpecker" as the "Internet guide.“
The day before a huge marketing campaign was to begin,
Panasonic stopped the product launch. The reason: the ads
featured the slogan "Touch Woody - The Internet Pecker." An
American at the internal product launch explained to the stunned
and embarrassed Japanese what "touch woody" and "pecker"
meant in American slang.
- Latte means milk in Italy.
- In English, Latte is a coffee-drink.
- Many folks like to head to Starbucks or other coffee shops to take
early morning latte breaks... In Germany slang, Latte is a well
known word for an erection. So, "morning latte" is when you
wake up in the morning with an erection! Gives a whole new
meaning to "morning latte break". The word "break" means
"destroy", so taking that "morning latte break" is destroying that
erection. This item is thanks to Jochen Gumpert, a standup guy!
Apparently, Germans are amused at American morning television
shows called "Morning Latte" and book's like the popular Amanda
Hesser's book "Cooking for Mr. Latte"!
Coca-Cola Fresca
In Mexico, Fresca is a term for Lesbian. Jokes abound, but sales
weren't hurt. (Despite what you read elsewhere on the web.)
There are many fruit drinks named Agua Fresca (fresh water).
- In Latin America, Coca-Cola markets an entirely different soft
drink under the Fresca brand name. This drink is grapefruitflavored, but contains sugar. It is similar to the Squirt soft drink
marketed in the United States by Dr Pepper & Seven-Up, Inc.
-In 1997 Coca-Cola, which had had requests for "Mexican Fresca"
from immigrant communities, launched the soft drink throughout
the U.S. as Citra. However this was not successful as a separate
product line, and that drink is now sold as the Citrus flavor in the
Fanta line in areas with a large Hispanic populations. The name
may have been confusing for Latin American consumers, as "agua
fresca" is a common local beverage.
- For years, Fresca maintained somewhat of a cult following, similar to
Tab, consisting of people who had grown up with the drink, yet it didn't
obtain major market appeal. Around the turn of the century (2000),
however, Fresca grew in popularity somewhat organically, enough so
that it was sufficiently popular for Coca-Cola to take notice.
- In 2005, Coca-Cola gave Fresca a more contemporary look, Fresca's
first makeover since 1995. Fresca advertising continues to emphasize
sophistication.
Coca-Cola North America announced on May 25,
2005 a makeover for its Fresca brand along with two
new line extensions that launched in the United States
on September 2005.
Fresca was given a fresh, contemporary look,
including a new logo and new packaging graphics.
Two new flavors – Sparkling Peach Citrus Fresca
and Sparkling Black Cherry Citrus Fresca – have
also been introduced as zero calorie line extensions to
the brand. The unique sparkling citrus flavor of
original Fresca remained unchanged.
•
•
•
•
Mexico and Iceland have the highest per capita consumption of Coca-Cola.
Coca-Cola translated to Chinese means, "To make mouth happy".
Every second over 7,000 Coca-Cola products are consumed.
The tallest Coca-Cola bottling plants are in Hong Kong. The plant in Quarry
Bay is 17 floors, and the plant in Shatin is 25 floors.
• The bottling plant at the highest elevation in the world is located in Bolivia, at
12,000 feet.
• The world's longest Coca-Cola truck is in Sweden. It is 79 feet long with a
four-axle trailer.
• The best selling non-carbonated soft drink in
Japan is a product of The Coca-Cola Company
named "Georgia", a coffee flavored beverage.
The “Got Milk?”
Campaign didn’t do
well in Brazil. In
Portuguese,
it
translated to “Are you
lactating?”
The Dairy Association’s huge success with
the campaign “Got Milk?” prompted them
to expand advertising to Mexico. It was
soon brought to their attention the Spanish
translation read “Are You Lactating?”
www.admit-one.net/?m=200707
FARTFULL
- IKEA sells this workbench as the FARTFULL.
- Swedish is a Germanic language, and “Fährt” is German for travel, so
“fartfull” is being used here to suggest mobility, given the desk’s wheels
and design. Swedish has several words for fart, but one of them is “Fjärt”,
which strikes as close enough that their marketing department knew what it
was doing. If even bad press is good public relations, then this is a case of
allowing an ill wind to blow some good. Let your imagination run wild when
they say this not-for-sale desk passes a lot of gas!
The campaign “Hello Moto” did nothing for Motorola
in India because in Hindi Moto means ‘fatty’.
A Japanese company makes “Calpiss” soda. They wanted
to market it in the US. Fortunately, they found out before it
went on US shelves that it sounds a lot like “Cow piss”.
The soda was renamed “Cal-piko.”
Most Unfortunate Car Names
Buick LaCrosse (in French: "masturbating teenagers“)
When Buick launched the "LaCrosse" in Canada why couldn't it have come
across as "the fancy pen on wheels," or something to do with archery? Nope,
in French-speaking Quebec, the meaning is, of course, masturbating teenagers.
Ford Kuga is also sold (from
September 2008) under this name on
Serbian market. Kuga means Plague in
the local language.
Mazda LaPuta (in spanish: "the whore“)
The car's name actually derivates from the book Gulliver's Travels by
Jonathan Swift, but go explain this to spanish speakers. For them, it
means "the whore“.
Nissan Moco (in spanish: "booger“)
It was only marketed in Japan as such; otherwise it would have been a
bad (nose) pick for spanish speakers.
Alfa Romeo, famed Italian automaker since 1910, unveiled a new
model for the US and European market, the 164. Evidently, in one
or both of the two Chinese languages it is very, very close to
sounding like, ‘death to you’. They learned of this AFTER the car
was for sale in many continents. Sales in Asia were quite weak.
Ford Pinto, Ford Corcel
Ford had a similar problem in Brazil when the Pinto flopped. The company
found out that Pinto was Brazilian slang for “tiny male genitals“.
Ford pried all the nameplates off and substituted
the word Pinto for Corcel, which means horse.
Ford Pinto (under any name) wasn't ever sold in Brazil, except maybe as a
low-volume import.
-The Ford Corcel was a totally unrelated product, the result of a joint project
by the Brazilian subsidiary of Willys Overland and French automaker Renault
(Willys used to make Renault cars, like the Dauphine and Gordini, under
license in Brazil.) When Ford acquired Willys's Brazilian operation, they
inherited the almost-finished project and decided to launch it under their own
brand. They MAY have considered to use the "Pinto" brand on it, but saner
heads prevailed and decided on the "Corcel" name in order to keep to the
"horse" theme Ford seemed to like at the time. The "Pinto" name was never
used in Brazil.
"Corcel" was a huge success, and remained in production for
more than a decade, spawning a station wagon version called
"Belina", a second-generation "Corcel II", a luxury version
called "Del Rey" and a light pick-up version called "Pampa". In
the early eighties, almost the entire production of Ford Brazil's
automobile division was comprised of Corcel-related vehicles.
Due to the world-wide success of the Mustang,
Ford named the M after a horse too: Corcel
(“Courser”, in English; according to the Webster’s,
it’s a “swift horse, a runner, a war horse.”)
Official introduction of the new-for-1969 Ford
Corcel is dated at September 26th, 1968. But most
of the public saw it first at the 1968 São Paulo
Auto Show in November. It was a hit, though it had
to share attention with a direct competitor from
Volkswagen, the 1600 4-door sedan, and GMB’s
larger and pricier Chevrolet Opala.
Volkswagen Jetta
Volkswagen named the sedan version of Golf the Jetta. However, the letter "J"
doesn't exist in the Italian alphabet, so Jetta is pronounced "Ietta", which means
Misfortune...
Thanks to Alberto Malin. Omanko writes: It's true... the letter J don't exist in the
Italian alphabet but it is in use a long time. (e.g. There is also an old city called Jesi
and Italian names like Jacopo...). The word ietta don't exist in Italian but Jella exists
(yes, you write it with the letter J!) and there are two or three words derived from this
one, e.g. jettatore/iettatore (evil-eyed man) or jettatura/iettatura (bad luck). In
neapolitan dialect Jetta means throw, throw away!!! Jetta has good sales in Italy.
Ford Comet, Ford Caliente
Ford's Comet, was called "Caliente" in Mexico.
"Caliente" literally means "hot" (as in
temperature), but colloquially it is also used for
either "horny" or "prostitute".
Ford Cortina
Ford's Cortina is translated as "jalopy".
Ford Fiera
Ford's Fiera doesn't do well with Spanish-speaking
Latin-Americans, since "fiera" means "ugly old woman".
Mitsubishi Pajero (in spanish: "wanker"):
The Spanish version ended up as
"Montero", but still many spanishspeaking customer do have a wanker.
Mitsubishi Pajero, Montero
Mitsubishi had to rename its Pajero automobile because the word is a
vulgar
term
for
a
masturbating
man.
This story is true, although there was no blunder involved because the car
was marketed under a different name from the beginning. In Spanishspeaking countries, this model has been sold as the Montero.
Opel Ascona
• General motors made a car named "Opel Ascona". This model sold
poorly in Galicia, the northwestern region of Spain. In the galician and
also portuguese languages, the term is similar to the term for female
genitalia.
Why couldn't the "Opel Ascona" mean "little flower" or "cute worm,"
which would have been cause for just mild embarrassment? Instead, it
means female genitalia in Northern Spain and parts of Portugal.
Ford Comet, Ford Caliente
Ford's Comet, was called "Caliente" in Mexico. "Caliente" literally
means "hot" (as in temperature), but colloquially it is also used for
either "horny" or "prostitute".
Daihatsu Charade
It's not really a car, it's just pretending! This
was one of those econo-boxes that was not
merely humiliating to drive, it embarrassed
its owner each time its name was uttered. "I
drive a Charade." Good-bye, prom date!
Dodge Swinger
You'll also find ads for these on the back
pages of adult magazines. Okay, it was the
'70s, but still - why not just call it the STD?
Honda Fitta (in swedish and norwegian: "cunt“)
So why can only spanish speakers
have genitalic cars? Here's one for
up there: the Honda "cunt”
AMC Gremlin
Do you really want to own a car named
after annoying small problems that are
next-to-impossible to fix? Courtesy of the
same folks who brought you the Pacer
Chevy Nova, Vauxhall Nova, Opel Corsa
When General Motors introduced the
Chevrolet Nova in Mexico, it was apparently
unaware that "no va" means "it won't go".
After the company figured out why it wasn't
selling any cars, it renamed the car in its
Spanish
markets
to
the
Caribe.
This one is untrue.
Rolls Royce Silver Mist, Silver Shadow
Rolls Royce changed the name of its car the
Silver Mist to the Silver Shadow before
entering Germany. In German, "Mist" means
manure.
Toyota MR2
Marcel Rigadin reports that Toyota makes the
MR2, which in France is pronounced "merdé" or
spelled 'merdeux', means "crappy". (Mentioned
in Dave Taylor's Global Software.)
Coca-Cola, Ke-ke-ken-la, Ko-kou-ko-le
The name Coca-Cola in China was first rendered as Ke-ke-ken-la.
Unfortunately, the Coke company did not discover until after thousands of
signs had been printed that the phrase means "bite the wax tadpole" or
"female horse stuffed with wax" depending on the dialect. Coke then
researched 40,000 Chinese characters and found a close phonetic equivalent,
"ko-kou-ko-le,“ which can be loosely translated as "happiness in the
mouth.”
Colgate Cue
Colgate introduced a toothpaste in France called Cue, the
name of a notorious porno magazine
Stay away from France if your name is Gerber:
it’s a French word for vomiting.
Gerber Products Company is a purveyor of baby food and baby products.
The company was founded in 1927 in Fremont, Michigan by Daniel Frank
Gerber, owner of the Fremont Canning Company producing canned fruits and
vegetables.
The brand eventually became a major international player in the baby food
industry, offering more than 190 products in 80 countries, with labeling in 16
languages. The company's main competitors are Beech-Nut and Del Monte
Foods, although Gerber controls about 83 percent of the baby food market in
the United States.
Gerber merged with Sandoz Laboratories in 1994. In 1996, Sandoz merged
with CIBA-Geigy to form Novartis, one of the largest pharmaceutical
companies in the world. In 2007, Gerber was sold to the Nestlé Company for
$5.5 billion.
Electrolux Vacuum
The
Scandinavian
vacuum
manufacturer
Electrolux tried to sell its goods in America but
didn't help itself with this slogan, "Nothing sucks
like an Electrolux." Apparently the "Nothing sux
like an Electrolux" campaign was mainly
marketed in the UK, rather than the US where
"sucks" has the obvious negative connotation.
Yamaha Electric Grand Keyboard
Yamaha had a mistranslation in their assembly instructions for their Electric
Grand Keyboard, circa 1993. They should have written "screw" and ended
up instead with instructions for the over-21 crowd. (And for consistency, it
should have been called a Grand Organ...)
Bacardi “pavane” being a bad name in germany is silly.
“Pavane” is a dance. Translation in German: Pavane
sounded too close to Pavian - baboon. Nobody will think of
“pavian” instead.
Kentucky Fried Chicken, KFC
• Also in Chinese, the Kentucky Fried Chicken
slogan "finger-lickin' good" came out as "eat
your fingers off.”
Nike Air
Nike offended Muslims in June, 1997 when the "flaming air"
logo for its Nike Air sneakers looked too similar to the Arabic
form of God's name, "Allah". Nike pulled more than 38,000
pairs of sneakers from the market.
“Allah” on Nike shoes
http://www.boutrosfonts.com/pit_det.asp?im_ref=1 http://masudblog.com/?p=335
The word "Allah" (God in Arabic) written on the back and bottom of the shoe. This
created a strong from Muslims and Nike had to withdraw it from the market
- In mid-March, 1997 NIKE received a letter from the Council on
American Islamic Relations (CAIR) alerting them that samples of
summer basketball shoes with the original logo had been seen in the
Muslim community.
- On March 27, CAIR indicated that commercial product with the
amended logo, becoming available at retail, included a graphic
design that could still “be interpreted as the Arabic word ‘Allah’.
Nihad Awad, executive director of the Council on
American-Islamic Relations, shows a preproduction pair of Nike Airs during a news
conference April 9. Nike agreed Tuesday to recall
the shoes because the "Air" logo resembles the
word Allah in Arabic script and offended Muslims.
www.enquirer.com/.../1997/06/25/bus_nike.html
In addition to recalling 38,000 pairs of the offensive shoes, Nike
has diverted another 30,000 pairs from Saudi Arabia, Kuwait,
Malaysia, Indonesia and Turkey to "less-sensitive" markets.
NIKE has taken the following steps to account for and resolve this
issue:
- NIKE has apologized to the Islamic community for any unintentional
offense to their sensibilities.
- NIKE has implemented a global recall of the original salesman samples,
including an accounting of any samples which may have been sold.
- NIKE has diverted shipments of the commercial products in question from
“sensitive” markets. To date, over 30,000 pairs have been diverted from Saudi
Arabia, Lebanon, Kuwait, Malaysia, Indonesia and Turkey.
- NIKE has discontinued all models with the offending logo.
- NIKE has agreed to pull back all remaining product in their distribution
center.
- NIKE has implemented organizational changes to their design department
to tighten scrutiny of logo design. Responsibility has been centralized into
one department and all graphic designs must now be approved by a
design review board.
- NIKE is working with CAIR to identify Muslim design resources for
future reference.
- NIKE has taken measures to raise their internal understanding of
Islamic issues.
December, 19-20/2008
Reebok International Ltd.
discontinued its Incubus women's shoes after
discovering that the name referred to a
mythical demon.
In
February
1997,
Dictionaries list three meanings for incubus: "An evil spirit believed to
descend upon and have sexual intercourse with women as they sleep;"
"A nightmare;" and "An oppressive or nightmarish burden.“ Generally,
Reebok names about 150 new shoes a year. The Incubus shoe line,
which was in stores, has since been discontinued ("World News
Tonight," ABC, 2/18).
December, 19-20/2008
Perdue Chicken
Chicken-man Frank Perdue's slogan, "It takes a tough
man to make a tender chicken," got terribly mangled
in another Spanish translation. A photo of Perdue with
one of his birds appeared on billboards all over Mexico
with a caption that explained "It takes a hard man to
make a chicken aroused."
Salem Cigarettes
The American slogan for Salem cigarettes, "Salem Feeling Free," got translated in the Japanese market
into "When smoking Salem, you feel so refreshed
that your mind seems to be free and empty."
Schweppes Tonic Water
In Italy, a campaign for Schweppes Tonic Water translated the name into
Schweppes Toilet Water.
Pepsi
In Taiwan, the translation of the Pepsi slogan "Come
alive with the Pepsi Generation" came out as "Pepsi
will bring your ancestors back from the dead."
5. Concerns and Problems of Going International
Going international presents the firm with new environments, entirely new
ways of doing business, and a host of new problems. The problems can
consist of:
- strategic considerations, such as service delivery and
- compliance with government regulations.
The firm needs to determine its preparedness for internationalization
by assessing its internal strengths and weaknesses. This preparedness
has to be evaluated in the context of the globalization of the industry
within which the firm operates, since this context will affect the
competitive position and strategic options available to the firm.
In addition, the firm has to focus on:
- start-up issues, such as how to find and effectively
communicate with customers and
- operational matters, such as information flows and the
mechanics of carrying out an international business transaction.
This involves a variety of new documents, including commercial
invoices, bills of lading, consular invoices, inspection certificates, and
shipper's export declarations.
The paperwork is necessary to comply with various domestic,
international, or foreign regulations. The regulations may be
designed:
- to control international business activities,
- to streamline the individual transaction, or, as in the case of
the shipper's export declaration,
- to compile trade statistics
6. Strategic Effects of Going International
As a firm goes international, unusual things can happen to both risk and
profit.
Management's perception of risk exposure grows in light of the gradual
development of expertise, the many concerns about engaging in a new
activity, and uncertainty about the new environment, it is about to enter.
Domestically, the firm has gradually learned about the market and
therefore managed to decrease its risk. In the course of
international expansion, the firm now encounters new and
unfamiliar factors, exposing it to increased risk. At the same time,
because of the investment needs required by a serious international
effort, immediate profit performance may slip.
- In the longer term, increasing familiarity with international markets
and the diversification benefits of serving multiple markets will decrease
the firm's risk below the previous "domestic only" level and increase
profitability as well.
- In the short term, however, managers may face an unusual, and
perhaps unacceptable, situation: rising risk accompanied by decreasing
profitability. In light of this reality, which is depicted in next Figure,
many executives are tempted to either not initiate international
activities or to discontinue them.
Figure - Profit and Risk During Early Internationalization
Understanding the changes in risk and profitability can help management
overcome the seemingly prohibitive cost of going international, since the
negative developments may be only short term. Yet, success does require
the firm to be a risk taker, and firms must realize that satisfactory
international performance
will take time. Satisfactory
performance can be achieved in three ways:
- effectiveness,
- efficiency, and
- competitive strength.
Effectiveness is characterized by the acquisition of market share
abroad and by increased sales.
Efficiency is manifested later by rising profitability.
Competitive strength refers to the firm's position compared to
other firms in the industry, and is, due to the benefits of international
experience, likely to grow.
The international executive must appreciate the time and
performance dimensions associated with going abroad in order to
overcome short-term setbacks for the sake of long-term success.
Discussion!