Tuesday, February 28, 2012
Do's & Don'ts When Moving Into Emerging Markets
1. Do Your Research
Each market is different and has its own personality, culture and potential for growth. Your first impression needs to match what the market expects and requires. This involved preliminary travel, researching local market trends, making introductions to their equal to a chamber of commerce, local authorities, and government officials to determine how to proceed. Ensure you start test marketing your product or service to get a feel for how the market will respond. You may how to change your offering to fit local needs.
2. Do Hire Local
While your senior staff can initially be foreign, taking advantage of talented local staff, mentoring them while providing them with support and training will provide them with the tools to enable the local staff to lead and grow their market best. Identify partners, cultural exchange specialists, "introducers" who can facilitate meetings for you locally. They're worth the price. Understand that a "marketing executive" in the U.S. means something totally in markets like India and Myanmar - they're usually customer service representatives in these countries.
3. Do Trust Your Local Staff, But Maintain Strict Oversight, at Least at First
Communication and expectations need to be extremely clear. Talking to someone face-to-face, with a head bobble here, a bow there, a gift here, a "yes" meaning "no"… cultures talking English to each other is still a mine field. There will be a LOT of frustration at first. Even emails can be misconstrued, especially when you never get a response when the local staff don't have anything good to tell you - they may avoid to save face. You need to be open but not necessarily direct in your demands for reports, meeting sales quotas, etc. Some markets don't work that way, others handle it well. It's your job to find the right staff on your end to liaison with your overseas staff. Once the language is clear on both ends expectations are usually met.
4. Don't Expect Countries Next to Each Other to Do Business the Same Way
Three words: India, Pakistan and Myanmar. All three are distinctly different. Brand activation, product marketing, business styles are so different as to seem to be from different planets. Burmese are very direct, yet impeccably polite. They are facilitators and will out of their way to help you build your business. They understand partnerships, and in my experience are extremely fair. Indians never do business directly and are only outmatched by the Chinese as negotiators. They can kill you on profit margin to the detriment of the relationship. Pakistani's are primarily relationship-driven. They need to know everything about you as a person, and more about your company, before they'll entertain a meeting with you (and far preferable that you be male).
5. Don't Be Arrogant and Think You "Know" the Place.
You never, ever will. Expats, foreign MNCs - they all work separately from the culture. We can't be "immersed", no matter what anyone says, unless we spend our formative years here. This is absolutely true and I can show you my son's experience here. An average American living in the midwest until the age of 13, he's come to adulthood here in India, speak brilliantly fluent Hindi and counsels me on etiquette here. I've made big mistakes in my communication. He'd function here similarly to an Indian national. I never will be able to function here with that level of understanding.
With that in mind, emerging markets are changing where the money is right now and that will continue to evolve over the next twenty years. As global companies advance into new territories to take advantage of these markets, they need to act smart, face that the way they've done business in the past may not work in new markets, and stay open and nimble to adapt to developing markets. It's how you'll change the world.