Global marketing is a demanding field because of the many different factors involved in the success or failure of a business venture in foreign markets. It can be fascinating because of the windows it opens into different peoples, cultures, and places around the world. It can also be fraught with difficulty. Even some of the smartest companies on the planet have a tough time making it work.
To close the discussion about global marketing, we offer two examples that illustrate how things can go very wrong in global marketing, as well as how things can go very right.
Google: Stumbling in China
Take technology giant Google, which has made many smart moves in its growth to become a successful multinational company. But for all its technology and business brilliance, it has struggled in mainland China. The Chinese government is heavy-handed when it comes to censoring the types of information its citizens can find and access–even via the Internet–and it continually monitors the online activities of its citizens for any behaviours it deems inappropriate. China’s government requires technology and media companies to comply with demands to censor search results and block sites that discuss sensitive subjects. Despite back-bending efforts to find solutions that would satisfy government demands as well as Google’s internal policies around free speech, privacy, and freedom of information, on several occasions Google found its mainland China sites completely blocked to users by cyberattacks backed, in all likelihood, by the Chinese government.
In 2010, Google finally pulled its search engine and related services from the Chinese market. It faced a seemingly insurmountable problem around how to make its products fit not only consumer needs and preferences in China, but also the rigorous regulatory environment around digital information. Google is not alone in facing this challenge. According to a 2016 article in The Atlantic,
Google’s move to pull the plug in China is an extreme example of the kinds of decisions Internet companies operating abroad are often up against: If they want to do business, they have to abide by local laws, which can include restrictions on speech. And since the United States has some of the most permissive freedom-of-speech laws in the world, American companies must adapt in order to do business even in parts of the world that are culturally very similar to the U.S.
After sitting out of mainland China for several years, in 2015 Google signaled its intentions to possibly reenter the market. The question was how. The following video discusses Google’s dilemma and the directions its product strategy may take to gain a new foothold.
You can view the transcript for “Tech giant Google may return to China” here (opens in new window).
How Google might localize its products for Chinese users and the regulatory environment (again) remains a big question. And Google is not alone. Every day, global marketers in companies around the world face questions of where to do business, what to offer, and how to function in the local business environment. The Googleplex is the corporate headquarters complex of Google and its parent company Alphabet Inc. It is located in Mountain View, California. It must comply with U.S. laws but adapt its operations in the countries it operates in. In August 2018, the investigative journalism website The Intercept reported that the company was working on a secret prototype of a new, censored Chinese search engine, called Project Dragonfly. Amid a furor from human rights activists and some Google employees, U.S. Vice President Mike Pence called on the company to kill Dragonfly. Today Alibaba is China’s largest search engine.
L’Oreal: Success with the Ladies
Tackling a very different set of global marketing challenges is L’Oreal, the world’s largest beauty and cosmetics company. Based in France, it operates globally with a keen focus on understanding what “beauty” means in different nations and cultures and how to serve the beauty needs of women (and increasingly men) around the world. To provide the “inside scoop” on beauty in different world regions, the company has established research and development centers on five continents. Each one is focused on understanding cultural differences in the beauty market, formulating innovative products to fit localized needs, and helping the company adapt its products and marketing activities to what its target customers want.
For example, to address the preferences of women in India for heavy eye makeup, L’Oreal developed an eyeliner “crayon” that holds up for 6+ hours in India’s extreme humidity and heat. It also introduced low-cost, single-use shampoo packaging for distribution in local, traditional shops serving the many consumers in India who, due to economic constraints, purchase products according to their day-to-day needs.
L’Oreal’s nuanced understanding of the global beauty market is apparent in the words of Jean-Paul Agon, the company’s CEO:
For a Brazilian women, hair and body are most important, for a Chinese woman facial skin is the priority, for an Indian woman it’s make-up. Our approach is the “universalisation” of beauty, i.e. globalization without uniformisation.
Applying this deep and localized customer knowledge about its global markets, L’Oreal’s marketing team members are actively invovled in generating ideas about what’s next. Engaging with consumers, beauty industry bloggers, and influencers in social media is a big part of the company’s marketing strategy and promotion mix because it gives them opportunities to listen and learn, as well as promote. It gives them insight into trends and needs in each global market. Successful localized products may be introduced in other regions where marketers see strong potential. At every step, marketers are keenly aware of each aspect of the marketing mix—product, pricing, distribution, and promotion—and how to match offerings to fit what its target audiences (primarily women) want.
In this video, produced by L’Oreal, the Chief Digital Officer describes what it’s like to work at Station F, where L’Oreal partners with beauty start ups. She also discusses their shift to digital first marketing strategies that allow for a global brand.