Chapter 7: Avoiding & Managing Common Mistakes & Problems
7.3 REALISTIC MARKETING
Pg 228-238
Realistic Marketing
If one percent of China‟s population was to purchase your product, you would have sold
10 million items. This type of profit draws businesses to China. Poor market research
however, leads to failure of many of these businesses.
There are 3 interrelated types of marketing errors:
- Miscalculation of composition, size, and distribution channels of target market.
- Lack of research in branding, packaging, and timing of product introduction.
- Misunderstanding the culture, customs, and appropriate advertising and
promotion among potential consumers
For example, a company selling toasters in China would not have much success.
China‟s staple of choice is rice, not toast. Also a brand name such as Gatorade may
dissuade customers. They may feel as if it is made from „alligators‟. The gas company
Exxon did years of research to find a name that had no negative connotations in other
countries
People look at the population and see huge potential. But doing business in China is
very different from Canada. Surveys show only 40% of businesses in China were
making a profit. The real consumer population of China is only 275 million and they do
not have the hard currency to spend on products.
Many success stories are those associated with Business-to-Business relationships
(B2B). A Canadian company sets up a joint venture with a Chinese firm to manufacture
products in China. Both companies share cost and profit. For example, a DVD player
made by the Chinese APEX may have Canadian plastic in it.
Even the Japanese, the Americans, and the Finns have noticed the large potential for
consumers in Japan. Nortel Networks is one company that managed to succeed in
China through patience, research, experience, and understanding. Businesses looking
for a quick profit should, however, turn their attention away from China.
Size and Composition of the Market
Perhaps one of the most significant errors a company can make when thinking about
international markets is to overestimate consumer demand. Businesses have to answer
two questions before they import or export a product. The first “Will anyone buy it?” if
yes the next question should be “Is anyone else already selling similar product?” A
market of 500 million people is significant market only if it‟s composed of people who
actually need or want your product or service or who may reasonably be persuaded to
want or need it through marketing efforts.
To properly research a product in a foreign market it is a good idea for businesses to
hire marketing research companies that are familiar with the market composition of the
target country.
The preferences of foreign markets are often misunderstood. For example, there are
two million female teens in France. Without market research, Canadian manufacturers
would be attempting to sell products that too few consumers want to buy.
Branding, packaging and labeling
Companies that have developed a brand in their own country cannot expect that brand
to transfer to another without complications. One problem is that these companies
spend very little money on advertisement and marketing of their products in the foreign
market. The exporting company must examine the logo, slogan and brand name to
ensure that the brand identification is appropriate for the new market.
Many companies have different environmental standards from those required for
products sold in Canada. Companies risk consumer rejection on the self if they do not
consider that countries environmental concerns. Potential consumers will look on the
packaging for information on these qualities; they will buy products that make “green”
claims over other packages.
Packaging for imported products must conform to Canadian labeling requirements. For
example the labeling requirements for food products might make foreign exporters
rethink about entering into the Canadian market. These labeling requirements have
been established in accordance with the Consumer packaging and Labeling Act, the
Weights and measures Act, and the Canadian Agricultural Products Act. One of the
roles of the officials of the Canada Customs and Revenue Agency at our borders is to
ensure that that products entering Canada are labeled correctly. Products that are
incorrectly labeled can be impounded until the labeling problem is corrected.
All pre-packaged foods and beverages sold in Canada require the following content on
their labels:
 Country of origin
 Bilingual labeling
 Product identity declaration, with the product‟s common name as prescribed by
regulations.
 Declaration of net quantity or volume, specified metrically
 Minimum type of font size relative to display surface
 List of ingredients and their components, when necessary, in descending order of
proportion by weight. Ingredients must be in common name.
 Company identification and principal place of business to identify where the pre
packaged product was manufactured
 Shelf life, when a food or beverage has a shelf life of 90 days or less. A “best
before” date is required
 Artificial flavors when used alone of with natural favoring agents.
Labeling requirements for Canadian products entering another country are very strict.
Failure to research these requirements before a trade deal could lead to serious
expenses for a Canadian manufacturer.
Culture and Customs
Culture and customs have a major impact on consumers buying habits and product use.
Examples such as Pumpkins, Christmas lights and mother‟s day cards are in demand in
one country but may not be in demand for another due to a lack of market for these
products. It depends on how multicultural a country is for a market to develop for certain
products.