Building a globally recognized brand is no easy task. These brands are celebrated worldwide for their products, marketing and distribution strategies that appeal to diverse consumer groups in different markets. Despite this success, even the most successful brands face difficulties when entering new markets.

As Bill Gates once stated, “Success is a bad teacher. It also makes smart people think they can't lose.” It is important to examine some of the factors that have pressured successful brands in certain markets. Here are some:

1) Lack of market understanding
When a company enters a new market, it is important to have a thorough understanding of the local culture, consumer behavior, and market dynamics. Without this understanding, companies can make costly mistakes that could lead to failure. For example, Tesco, one of the UK's largest retailers, attempted to enter the United States under the brand name “Fresh & Easy”. But the company faced several challenges that ultimately led to their stores being on the wrong side of the road. And they could not meet American consumers' preferences for large stores with a wide variety of products. The stores' everyday shopping design also contrasted with the bulk shopping preference of the typical American grocer, making it difficult for Fresh & Easy to attract customers.

2) Inefficient software systems
If the information systems used by a company are not reliable, it may result in inaccurate or incomplete data, which can adversely affect appropriate decision making. American retail giant Target saw potential in the Canadian market because of its proximity and English-speaking customers. However, Target's entry into Canada was unsuccessful. The company grew rapidly. In just ten months, 124 locations opened in an inadequate distribution network that was structurally poor and riddled with data errors. These problems were exacerbated by major technical issues and a flawed freight distribution system, leading to overstocking in warehouses and empty stores. Understocked stores frustrate customers and Walmart, It also hurt Target's ability to compete with rivals like Costco, Giant Tiger, and Sears.

3) Misleading advertising
Consumers expect companies to be honest and transparent in their advertising. When they feel they have been misunderstood, it can lead to negative emotions such as anger and frustration. In 1999, Coca-Cola launched Dasani bottled water in the US, where it became a huge success. Dasani entered the UK market in 2004. Despite being advertised as purified water, it was discovered that it did not come from an alpine glacier or natural springs. It was discovered that it was made from tap water. Although the company added mineral salts through a purification process, the source was tap water, leading to disappointment and loss of trust among consumers looking for a premium product.

4) Wrong brand positioning
When a brand is misplaced, it can confuse consumers and make it difficult for the brand to stand out in the market. Volkswagen means "people's car" in German, and the brand primarily sells stylish, well-engineered, and relatively affordable cars. The name People's Car implies that it is a car for the people. Still, Volkswagen tried to break into the luxury car market with the Phaeton, competing directly with Mercedes-Benz and BMW. The Phaeton was a wonderful car in most ways, but it was expensive. Despite its luxurious features, the car failed to sell well, especially in the US, where consumers were willing to pay a higher price for a Volkswagen.

5) Customer price sensitivity
In a price sensitive market, it is difficult for the brand to compete with lower priced alternatives. Harley-Davidson is a widely recognized brand that is often seen as a status symbol by many consumers. However, the high price of Harley-Davidson motorcycles in India was the main reason why the brand could not gain a foothold in the market. Despite the prestige associated with the brand and its iconic status, The price of the motorcycles was prohibitive for many potential customers. Also, the high cost of things like maintenance and parts made it difficult for Harley-Davidson to attract and retain customers. In India, many consumers are price-sensitive and often prefer to buy more affordable options. Within a decade, Harley-Davidson sold around 27,000 units in India, while its biggest rival Royal Enfield sold a similar number in just one month.

6) Poor dealer and service network
To be successful, automakers must meet a number of criteria, including fuel efficiency, resale value, proximity to service stations, affordability of parts, and low service costs. GM entered the Indian market with the Opel brand, hoping to capture a share of the growing automobile market. However, the brand failed to attract Indian users and did not receive the expected response. Determined to succeed in the Indian market, GM introduced its Chevrolet brand, which met with some success. Despite these efforts, GM is still struggling to establish a significant market presence due to various challenges such as lack of adequate dealer and service network. Dealerships in India often sell one brand. Therefore, GM's low sales volumes mean that a dealer sells only a handful of cars a month and incurs losses on the cost of doing business. The brand withdrew in 2017, after years of declining market share, reaching an all-time low of one percent in 2016.

7) Sourcing issues in the supply chain
A brand's inability to source high-quality raw materials from the right suppliers can lead to higher production costs and lower profits. Danone entered the Indian market in 2011. Unlike France and the US, where Danone leads, India's dairy industry is fragmented. Most dairy farms in India have only one or two buffaloes or cows. Most of the milk produced in India is consumed by farmers' households. Big companies like Amul and Mother Dairy and many local companies have built their dairy distribution networks over the years. Therefore, it was not easy for Danone to produce milk at a competitive price. The milk and ghee market in India was already crowded and competitive. Danone focused on popular and highly profitable yogurt drinks in the US and France. However, in India, only seven percent of the milk consumed at that time was curd. These combined factors ultimately led to Danone shutting down its dairy business in India in 2018.

8) Misaligned product and brand image
If a brand's product does not match its image or messaging, it may cause confusion among consumers, meaning they may not understand what the brand stands for or offers. When Dunkin' Donuts came to India, it was a brand that was seen as a breakfast option in Western countries. But Indians generally love their local dishes for breakfast. And Indians didn't want to start their day with sweet hot desserts. Donuts are generally considered a high-calorie dessert. The brand was considered a pastry shop, Dunkin' tried to change its image by offering burgers to appeal to India's large vegetarian population. While this strategy was effective in bringing in more customers, it diluted the brand's image as a donut retailer.

The secret to conquering new markets lies in deep and comprehensive research into the intricacies of local consumer behavior and needs. But this is only the starting point. The path to success in new markets requires careful planning, effective implementation, and most importantly, the flexibility to pivot and adapt to changing market conditions.