Going Global: Adapting Your Products to Meet the Needs of the Marketplace
Adapting your product to meet the needs of an overseas market is a considerable undertaking and will likely require a substantial investment of time and money. You might do it to gain an export marketplace or a parallel market or to introduce a new product. No matter what your motivation, if the anticipated international sales will outweigh the expense, why wouldn’t you do it? You’ll need to know how to adapt a product for export, and what important factors you’ll need to consider before making the leap.
Case Study: Give Customers What They Want
Years ago I had a client who manufactured the most decadent ice cream ever. Whether winter or summer, it flew out of supermarket freezers throughout the United States. Customers could not get enough of it. Demand was so great domestically that the company knew its next big growth opportunity would be international expansion.
The company settled on Japan — a country exacting about quality — as the overseas entry point. It started with a small test shipment and fell flat on its face. The first problem was that the company packed the ice cream in gallon containers, convenient for Americans’ big freezers but a problem for Japanese’s preference for everything small, especially appliances and individual products. The second problem was with the ice cream itself. The Japanese like their sweets far less sugary than Americans do.
If my client wanted to succeed in Japan, it would have to adapt its products to meet the needs of the Japanese marketplace. Trying again, it packaged a reduced-sugar ice cream in individual-sized containers and began by shipping a 20-foot freezer container each month. That one freezer grew to nearly 10 a month over the ensuing years. Had the company not made the change, it would have had no business in Japan.
When it is not possible to sell the standardized products and services, as in the ice cream producer’s case, a small business must adapt if it wants a global business. And although the changes might be to satisfy foreign countries’ regulatory requirements, the biggest test is always with the end user — the customer — because that’s who ultimately buys your product or service. If customers turn their noses up at your offering, even with regulatory approval, there will be no sales. Always keep the customer top of mind and have empathy for another’s point of view; it will lead to ideas for meeting cultural differences.
7 Tips for Adapting Your Products to a Foreign Marketplace
Many business owners believe that only packaging has to be adapted in the overseas marketplace. But other factors are at play as well:
1. The name of your brand might work well in your local market but could have negative connotations in a foreign market’s local language. For example, in the 1950s, there was a Swedish car magazine called Fart, which in Swedish translates to “speed.” To Americans, however, the title meant a good laugh. Check to see what your brand’s translation means in the language of the country you are about to enter.
2. Electrical power systems differ from country to country. If your product requires electricity, make sure it is compatible with your target market’s system.
3. As outlined above, packaging and labeling can include anything, from the size of a unit to colors to the label’s language to the number of units packed in each case. Details like this matter and need to be thoroughly researched and addressed before shipping anything of significant value to a foreign market.
4. The physical environment — climate and weather variations — plays into how a product works. Consider the differences between your home market and the foreign market. For example, when room air-conditioners are exported to Egypt, they must have special filters and the coolers must be sturdy enough to handle the thick dust and heat of Egyptian summers.
5. Weights and measures vary from country to country. You must label according to the local standard measures. Metric is considered the global standard, but double-check.
6. The CE mark, which ensures consumer safety, is required on many products sold in EU countries. A manufacturer that has gone through the conformity assessment process may then affix the CE mark to the product. If you plan to do business in the EU, look into the benefits of making your product look safer in your target audience’s eyes.
7. Local product regulations need to be scrutinized. In order to sell a product in retail stores or elsewhere, some countries require a statement on the product that indicates where a product is made. Check with your prospective customers or a logistics specialist to determine if a country-of-origin label, for example, is required by law before you export a product in the country where you are about to do business.
If you are willing and able to make strategic changes to your product, it will open doors to many more international markets. The risk is minimal compared to the risk of maintaining the status quo. It’s crucial to remain who you are (e.g., German, American, Japanese) but develop an understanding and willingness to accommodate differences that exist. Follow that path and great success in the global marketplace will come your way.
Laurel Delaney runs Chicago-based GlobeTrade.com, a leading management consulting and marketing solutions company dedicated to helping entrepreneurs and small businesses go global. She is the creator of The Global Small Business Blog, ranked No. 1 in the world for entrepreneurs and small businesses interested in going global. She is currently at work on a new book on exporting to be published February 2014. You can reach Laurel via email.