The Crumbling Worldwide Wall
How global traders scale local market barriers
How global traders scale local market barriers
“All in all it’s just another brick in the wall” … as the lyrics of the Pink Floyd song goes, walls are built one brick at a time. The Berlin wall came down on 911 (9th November) symbolizing the advent of global free trade. So, all this talk brick by brick of rhetoric on buying local to save the local economy; will only result in a trade wall keeping out the wealth of the global market from local economies.
As both domestic and global markets contract, the marketing strategy should be, to carve out a niche in the wider global economy so that the net effect will be more trade and bigger profits. For many countries worldwide, the year 2008 has seen both exports and imports down. Companies that can transcend protectionist tendencies will find global trade the logical way to ensure growth.
“Buy a made in Asia $99 DVD player instead of an imported ‘high tech’ $999 one”, so the rhetoric goes. Are the European Union, North America and Japan creating a technology trade barrier by insisting on environmental and safety standards that require more sophisticated technological innovation? The simple answer is there is a market for both the latest in technological advancement which will cost more and for the lower priced old technology version of the product. If we let the global market sort it out, we will find in all countries of the world consumers who can afford the particular product depending on the economic niche the product appeals to. So, targeting the right niche globally is a strategy worth exploring.
Visit any North American departmental store and you will find products made in China. The consumer is more focused on fulfilling his or her needs and desires rather that staying focused on brand loyalty. The brand is more a convenience for identifying function and quality assurance. This allows new innovative products from smaller companies to find a niche in the consumer market.
Look at the iPod phenomena. It has been more of an individual, Steve Jobs and his innovation team rather then brand Apple that made it a success. This, suggest that a single product capturing the imagination of the consumer can come to dominate a new niche in the market. The same can be said for the Canadian Blackberry mobile phone.
A product when promoted through an effective supply chain can deliver to consumers worldwide at prices that translate into strong sales. An interesting case of global expansion is the Japanese clothing brand UNIQLO which started operations in 1984. Their strategy has been, to offer high quality casual wear at relatively low prices. The company benefited from the boom across Japan in 1998. A fall in revenue after this period was arrested with an expansion of women’s wear products. Subsequently, the company expanded across Japan and internationally into the United Kingdom, the United States, and China and now, with the current global economic slow down expansion continues into other Asian and East European markets.
The lessons we learn from such companies include the importance of investment into research and development of markets worldwide in order to ensure that products are tailored to local taste. The idea is to go global by serving local needs and demands. Small and medium sized industries can take advantage of market data and statistics available through government agency websites at national, provincial and city levels of target countries. A virtual business networking site can connect businesses worldwide and provide links to such government agencies through a web of connections.
Test marketing a product in the right city before expanding into the rest of the country makes perfect sense. Market studies as to which city to be selected for initial entry and which cities are to be considered as trend cities for subsequent expansion will allow for a natural growth of market share.
Quality assurance is another factor in building market acceptance. Being transparent as to how quality control is maintained in the form of insistence on quality ingredients and safe production processes is critical in creating confidence. If production is located in a third country then the systems put in place and information on the competency of employees need to be made as transparent as possible.
Having your own signature store or an established retail departmental store as your distributor in an established market such as Canada, Europe or the United States can establish consumer confidence better than any brochure or sales presentation of success in a developing economy. It is time to do the market research to expand your market share and increase sales by going global.
Siddha Param
http://worldwidebusinessconnection.com/
