Building a globally recognized brand is not an easy task. These brands are celebrated all over the world because of their products, marketing and distribution strategies that appeal to diverse customer groups in different markets. Despite this success, even the most successful brands face difficulties when entering new markets.<\/p>\n\n\n\n
As Bill Gates once said, \"Success is a bad teacher. It also makes smart people think they can't lose. \"It's important to look at some of the factors that have pressured successful brands in certain markets. Here's some:<\/p>\n\n\n\n
1) Lack of awareness of the market
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 can lead to failure. For example, Tesco, one of the largest retailers in the UK, tried to enter the United States under the brand name \"Fresh & Easy.\" But the company faced many challenges that ultimately meant their stores were on the wrong side of the road and 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 grocery store, which made it difficult for Fresh & Easy to attract customers.<\/p>\n\n\n\n
2) Inefficient software systems.
If the information systems used by a company are unreliable, 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 due to its proximity and English-speaking customers. However, Target's entry into Canada was not successful. The company expanded rapidly, opening 124 locations in just ten months with an inadequate supply chain that left it structurally unsound and plagued by data errors. These problems were aggravated by major technical problems and a defective goods distribution system, which led to overstocking in warehouses and empty stores. Stores that did not have enough stock frustrated customers and affected Target's ability to compete with competitors such as Walmart, Costco, Giant Tiger, and Sears.<\/p>\n\n\n\n
3) Misleading advertising
Consumers expect companies to be honest and transparent in their advertising. When they feel that 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 found that it did not come from an alpine glacier or natural springs. It is made from tap water. Although the company added mineral salts through a purification process, the source was tap water, leading to frustration and loss of trust among consumers seeking a premium product.<\/p>\n\n\n\n
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 primarily the brand sells stylish, well-engineered, and relatively affordable cars. A people's car is a car for the people. Still, with the Volkswagen Phaeton, it tried to break into the luxury car market by 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 U.S., where consumers were willing to spend a higher price on a Volkswagen.<\/p>\n\n\n\n
5) Customer value 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 motorcycles was unaffordable for many potential customers. In addition, the high cost of maintenance, including 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. Over the course of a decade, Harley-Davidson sold around 27,000 units in India, while its biggest rival, Royal Enfield, sold a similar number in just a month.<\/p>\n\n\n\n
6) Poor dealer and service network.
To succeed, 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 get the expected response.Determined to succeed in the Indian market, GM introduced its Chevrolet brand, which had some success.Despite these efforts, GM is still struggling to establish a significant market presence due to various challenges such as lack of an adequate dealer and service network.Dealerships in India are often the ones selling a brand.So, GM's low sales metrics mean that a dealer sells only a handful of cars in a month and incurs a loss on the cost of running the business.The brand was withdrawn in 2017, after years of declining market share, reaching an all-time low of 1% in 2016.<\/p>\n\n\n\n
7) Source problems 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, which are led by Danone, 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 in the homes of farmers. Big companies like Amul, Mother Dairy and many local companies have built their dairy supply chains over the years. So, 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 yogurt drinks, which were popular in the U.S. and France and generated high profits. However, in India, curd constituted only seven percent of the milk consumed at that time. These combined factors ultimately led to Danone shutting down its dairy business in India in 2018.<\/p>\n\n\n\n
8) Misaligned product and brand image.
If a brand's product doesn't match its image or messaging, it can cause confusion among consumers, meaning they don't understand what the brand stands for or what it offers.When Dunkin 'Donuts came to India, it was a brand that was seen as a breakfast option in Western countries.But, Indians are generally fond of their local dishes for breakfast.And Indians did not want to start their day with sweet hot delicacies.Doughnuts are usually considered a high-calorie dessert.The brand was considered a pastry shop, and Dunkin 'tried to change its image by offering burgers to appeal to India's large vegetarian population.While this strategy would be effective in bringing in more customers, it also diluted the brand's image as a doughnut retailer.<\/p>\n\n\n\n
The secret to conquering new markets lies in in-depth and thorough research that delves into the complexities of local consumer behaviour and needs. But it's only a starting point. The road to success in new markets requires meticulous planning, effective implementation, and most importantly, the flexibility to pivot and adapt to changing market conditions.<\/p>","protected":false},"excerpt":{"rendered":"
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