The importance of research when exporting overseas

Arek Estall was marketing manager at language services company Wolfestone and now runs his own marketing agency, helping businesses grow their revenues in the UK and abroad.

Countries like the UK and the US are finding it increasingly difficult to grow, burdened by national debt and mature markets.   Meanwhile, emerging markets are growing, and fast. Not just China and India, but also in Africa, home to seven of the top 10 fastest growing countries, where demand for new products is growing at an electrifying rate.

In other words, there’s never been a better time to explore the potential of overseas markets.

Taking advantage of growth abroad

We might not know much about many of the countries that are the fastest growing – with Mozambique and Tanzania two of the countries on the list – but they definitely know about us.

In fact, in some industries such as luxury fashion, the share of international searches for British brands is 62.5 per cent.

Brand Britain is big abroad.  Some companies such as ASOS have already taken advantage and are reaping the rewards.

In 2011, ASOS CEO Nick Robertson announced that he was disappointed with sales growth in the UK and the company began to target the foreign market. They translated their site into most major languages, opening them up to a large percentage of internet users.  They also invested heavily in marketing and promotion.

In 2011-12 UK retail sales rose 26 per cent to £137.6 million, while overseas sales increased 39 per cent to £214.7 million.  ASOS’s overseas sales now account for nearly twice the value of their domestic sales.

B&Q has joined ASOS in expanding abroad by establishing itself as the number one DIY brand in China and Tesco is now the biggest retailer in Thailand.

But it’s not just big brands taking advantage of growth abroad.

Software entrepreneur Jonathan Horley has grown his business valuelicensing.com in several countries, and says being based in the UK alone is no longer an option.

“When I set up the business, I had the intention to start as I meant to go on – building an international business,” explains Horley. “International sales now account for over a third of my turnover and growing, just through having an online presence in several key European markets.”

The importance of research and development

While Tesco is the biggest retailer in Thailand, it has also failed in the US, Japan and India recently due to misunderstanding the target customers.

The key is success abroad is to tailor your products for the new market, something French brand Danone did well when expanding into Russia.  When launching their biotic yoghurts in Russia, they took the advice of market research and added a hint of garlic to the mix because, according to Russian customs, adding garlic to yoghurt protects you from getting the flu.  They increased their turnover in Russia by 5 per cent in 2012.

You can read more about research and development through Open to Export’s article on getting started in market research and its guidelines for conducting it.

Language is also key

Electrolux went to the US market with the slogan “nothing sucks like an Electrolux”, completely unaware of the American slang that implied a very different meaning to what they intended.

Osram tried selling lightbulbs in Poland and wondered why they weren’t making any progress.  They then realised Osram means “to poo on” in Polish.

In 2009, HSBC had to spend US$10 million on a rebranding campaign after the slogan “Assume Nothing” was translated for several markets as “Do Nothing”.

For more information read this article on the role of translation in entering new markets.

So what’s the answer?

Research, research and more research.  It’s all about understanding and responding to consumer tastes in your target market, which may be very different to your customers back home. The value of finding out what customers in your target market want before you start cannot be overstated.

We mentioned earlier that B&Q is now China’s largest home retailer.  But the story didn’t start well – B&Q nearly pulled out of China because of lack of demand.

They had followed the same format as the UK stores, concentrating on DIY, thinking they could replicate the success.  The problem was Chinese consumers didn’t actually like DIY.  After years of making their own furniture, they wanted someone else to do it for them!

So B&Q went back to the drawing board and repackaged their offering from scratch.  They developed a product range of bathrooms, kitchens and furniture with a “design and decoration” package, sending a tradesman with the order to install the products for the customers.

They are now the biggest home retailer in China but they could have saved a lot of embarrassment and money by getting it right first time.

If some of the companies mentioned had done an in-country review, they may have realised they needed to translate more than just their web site.  A proper trans-creation process will flag up these potential issues and ensure maximum impact.

Get your offering right

The moral of the story is to never assume anything.  Research your market, research their tastes and get your message right.