October 9, 2012

Ever since I was a young Navy officer serving in Vietnam and learned that there was no word for “democracy” in Vietnamese, I’ve wondered why Americans (in business and government) continue to cling to the irrational belief that exporting American beliefs (and marketing strategies) around the world works.

That’s why I find America’s retailers focus on the super-sized Chinese market fascinating. Sure, the thought of billions of Chinese buying your product or service is extremely alluring. But, as we are learning every day, exporting marketing is a very tricky business. As the salesmen riding the train in the Music Man musical warned, “You gotta know the territory.”

Home Depot recently announced they are closing their big-box stores in China after years of losses. They finally acknowledged that cheap labor makes the American do-it-yourself ethos pretty stupid. Plus apartment-based living leaves scarce demand for products like lumber.

Mattel shut its China-based Barbie flagship store when Chinese parents told them (by weak sales) they would rather have kids read books than play with dolls riding in plastic Corvettes. Best Buy has closed all its stores when it discovered that the Chinese want washing machines and air conditioners, not espresso makers and stereo systems.

Sure, increased competition has been a factor in the lack of success for a rash of retailers rushing into China. But the bottom-line issue continues to be American arrogance. If you’re thinking of expanding internationally, do yourself a favor. Send someone to the country to live for a year and learn and research what a different culture is really about.

One comment

  1. I toured several John Deere plants in Iowa. One of the tours was given by a semi retired engineer. He mentioned the challenges that Deere (& this man’s engineering team) faced in opening plants in India. Problem solving methods change from culture to culture. In trying to sync manufacturing methods across their corporate world, they ran into pushback and different thinking about how to tackle engineering problems.

    You point out that sales motivation is different from culture to culture too, Mark.

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