Over the past nearly two decades, Analytic Partners has analysed brands across roughly 50 countries around the world. As much as many want to think that it is a small world – and of course we do live in a global economy – there are substantial country-by-country differences. Smart marketers learn to take advantage of similarities and act on the differences of each market.
At Analytic Partners, we see that a number of clients are centralising their product development and marketing budgets to improve efficiency. These Global and Regional teams invest significant budget in developing campaigns and products that can be used in multiple markets and are often surprised that the performance varies so much from one market to another. One of the most frequently asked questions we get from our clients is: “How can my campaign/product be so successful in market A and have such a low ROI in market B?”
Here is a primer on how to adapt, evolve and thrive no matter what each market throws at you.
Understand Market Dynamics
Typically, innovation that is successful in one market will be successful in others, but it may need to be tweaked to suit market preferences. Take food & beverage products in Europe as an example: there are huge regional variations in palate and tastes which can impact how successful a product will be. Markets closer to the Middle East may prefer fruit or nut-based snacks, while Southern Europeans have a strong taste for chocolate products.
Local external factors can be key to determining the success of a product. Mexico and the UK both introduced taxes between 2013 and 2018 on high sugar content, which can impact the price point and perception of the product. While in Italy, for example, retailers charge very high listing fees for new products, so it can be very costly for any manufacturer to introduce a new product compared to the US - which often has a rolling range of limited edition “in-and out” products.
Adapt to Pricing Sensitivities
Looking at our research, we occasionally see that sensitivity to price can be similar across different countries when it comes to certain categories. However, there are some significant market trends.
Understand Promotional Structures
While Asia has a preference for smaller-sized products, LATAM typically goes for large-sized packs and promotions generally involve extra free product. The UK often has very high discounts where >50% off is not unheard of, while discounts in the US tend to be shallower.
How promotions are funded can differ significantly across markets and between retailers within a market. France and UK typically fund “on retro” (retroactive payment for what was sold on promotion) with additional fixed costs for secondary locations in stores, like an end-of-aisle display etc., where in other markets such as Germany promotional costs are rolled into annual contracts and cannot be tied to promotional events.
Sampling in emerging markets typically has higher ROIs compared to developed markets. One of the factors behind this is higher implementation and personnel cost in more developed markets, coupled with the relative value and thus effectiveness of what free means.
Assess Your Media Support
If your new campaign performed very well in one market, it has the potential to perform well in others. AP analysis has shown that good creative is the strongest driver of ROI. However, there are some big watch-outs with regard to media execution that can have a very strong impact on your ROI when you move from one market to another. While strong performance in one market may have potential for other markets, it is by no means a slam dunk. Different cultures see different concepts as being contextually relevant to their lives, and the visuals and demographics of what’s shown in the media can be large factors in success when rolling messaging out across different countries
As more companies look for cost efficiencies in developing creative to be used globally, seasonality of media costs & copy length are two factors which often get overlooked when developing global marketing plans.
Realize What Tactics Cost
Let’s take TV as an example. The US market standard commercial lengths are :30 seconds and :15s, but this differs significantly as you move into Europe, LATAM and Asia, where :15s are less common. Germany, Colombia, Russia, Spain and Turkey have cost structures which are more favourable to shorter length ads while markets such as Australia, Chile, France, Mexico, Poland, UK and France do not deliver significant savings by airing :15s vs. :30s. In some markets a :60 TV ad is 3X cost of a :30, but in other markets it can be up to 6X. Some markets also charge penalties if you want to tag a different product to a commercial, event if the length of the ad doesn’t change. For example, a brand might have to pay 2x the usual cost of a :30 second spot if they want to mention two products.
Embrace Difference…Just Be Prepared
Yes, there are many market variations that make truly global marketing impossible. But a successful campaign in one market can be replicated in another – as long as you avoid the common pitfalls. Make sure you take into consideration product sizing preferences, seasonality issues, promotional sensitivities and copy length dynamics. One of the benefits of working with a truly global, independent analytics firm like Analytic Partners is that we know the ins and outs of each market and we can help you adapt, evolve and thrive wherever you are doing business.
- Justine O'Neill, Director, Dublin