Sunday, May 26, 2019

Psst- The Secret to Improving China-US Business AND US-China Business (forget Trump)- DISAPPEAR

Wow, this goes against everything I and my colleagues teach in courses like Global and Digital Marketing, Competitive Strategy. Porter and all conventional theory teaches us that we should have a UNIQUE, disruptive strategy that flies in the face of competitors.

But the formula for success may be given to us by a much older strategist- Sun Tzu-from nearly 2,000 years ago. "Win all without fighting."

What does this all mean? WE are trained to believe that our success in Global Markets is to distinguish ourselves as a competitor to local brands, and to take PRIDE in our foreignness.  But the truth is that the winners in BOTH US and Chinese markets have gotten under the skin of consumers without fighting for their origin or ethnicity.

There is no doubt about the simple fact that the winning competitor in ANY market is the one that earns the conversions, TRUST and loyalty of the local public. But what does it take to accomplish this? This is the conundrum that foreign firms have been facing- China firms trying to get a foothold in US markets, and vice versa.

I am 100% sure (yes, 100%) that the solution is contrarian: DISAPPEAR.

What the hell does this mean? How can I get established in and conquer a market if I DISAPPEAR?

Let me give some examples in both China and US and let's see if we can't come to agreement.

Example 1. Carrefour- A French company that has firmly established a foothold in China and Asia as a go-to supermarket-hypermarket vendor. Products, merchandise arrangement and store layout cater to the local public-always. Only a very small section of the store is dictated to imported product. Store locations are selected for those which can be reached by ALL forms of transit (a huge percentage of the customers are seniors). Even the transliteration of the Carrefour log into Chinese is a familiar and comforting phrase in Chinese: 

In Pinyin, jia le fu- loosely translated as Family, Happy, Lucky.  Clever or what?

CounterExample 1. Marks & Spencer- The English company saw an opportunity to expand its business into the growing Chinese market and opened many large stores in China. But they forgot one important thing: the customers are Chinese, not British. 

So they did no separate design, merchandising or sizing for the Chinese market; they just assumed that Chinese customers would be lucky to be able to purchase the (conservative and often ugly) mens and womens and kids product that they also offered in UK. Problem: the stuff wasn't nice (for any customer), very conservative and not fashionable (for any customer), and sizing in most cases was the same as offered in UK- wait, Chinese bodies are different-they didn't get it and their ethnocentric arrogance blocked their view.

Result: M&S Gone from China.

Example 2. White goods market. Haier-Actually a very good quality brand that has established footholds not only in China but in Europe, MENA, Mexico as the Leading brand. But in US it lags at only about 1% of purchases. Why? 

Counterexample 2. Samsung and LG- Both Korean brands, but are the absolute and undisputed market leaders in US. Wait- Korean brands leading the US market- why? Two reasons: 1. They EARNED it with great quality and service and, most important, 2. Their country of origin is either INSIGNIFICANT, or INVISIBLE to buyers

Statista surveys suggest that, while Samsung and LG enjoy an overwhelmingly positive perception in US, Haier is in the I-don't-know range. Why? Because it has not DISAPPEARED as a Chinese Brand.

Easier said than done, I understand. But it absolutely CAN be done, both ways. How?

1. Leave your Ethnocentrism home (disengage those who can't). Business is business and who cares about your country of origin;
1. Study and conquer the local markets so customers FORGET that you are a foreign brand. 

I would love and invite anyone to disagree with this premise. IF not, companies that want to succeed in either the Chinese or US marketplace need to follow this course. 

Forget the trade BS- China and US markets will be there forever. So some little political babble won't change anything.

So, do we want to be successful or NOT? Going back to Porter, we can analyze each of the above company's position vis a vis the Five Forces and come up with exactly the same result (you need to take my class for those details:-)

Good Luck!

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