How To Create Value For Foreign Consumers; Balancing Global And Local Priorities; Domestic Benefits Of A Global Mindset

Summary

MarTech Podcast ™ Episode Summary

Title: How To Create Value For Foreign Consumers; Balancing Global And Local Priorities; Domestic Benefits Of A Global Mindset
Release Date: March 31, 2025
Host: Benjamin Shapiro
Guest: Kathryn Melchior Ray, President of Global Ally Consulting and Author of Brand Adapt Local

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1. Introduction to Global Marketing Challenges

In this episode, host Benjamin Shapiro welcomes Kathryn Melchior Ray to discuss the intricate balance between maintaining a global brand presence while adapting to local markets. Kathryn brings her extensive experience from working with international giants like Nike and Louis Vuitton to provide insights into creating culturally intelligent marketing strategies that drive business growth.

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2. The Necessity of Cultural Intelligence

Kathryn emphasizes that globalization demands cultural relevance. She states, "77% of customers prefer to buy brands that share their values" (02:48) and highlights that assuming domestic marketing strategies will work internationally is a common mistake. Instead, brands must think globally but act locally to prevent costly missteps and maintain consumer trust.

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3. Adapting vs. Duplicating Marketing Strategies

A key discussion point is whether to duplicate successful domestic marketing campaigns abroad or adapt them to fit new markets. Kathryn argues that adaptation is crucial, noting, "Your automation sequences that convert in Chicago just aren't going to perform in Tokyo" (01:15). She underscores that varying cultural nuances require tailored approaches rather than one-size-fits-all solutions.

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4. Implementing the CAGE Framework

Kathryn introduces the CAGE framework—Cultural, Administrative, Geographic, and Economic distances—to evaluate and segment global markets effectively (12:16). This framework helps marketers understand the multifaceted challenges of entering diverse markets, such as the significant cultural and administrative barriers Airbnb faced in China.

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5. Case Studies of Marketing Failures

The conversation delves into notable examples where brands failed to adapt appropriately:

• Chevy Nova in Mexico: The name "Nova" translates to "no go," leading to poor sales (15:34).
• Starbucks in Australia: Despite Starbucks' global success, it struggled in Australia due to the established local coffee culture and competitive pricing (16:01).
• Coca-Cola in Peru: Faced strong local competition from Inca Cola, which resonated deeply with indigenous pride (15:54).

Kathryn explains that these failures often stem from inadequate market research and misunderstanding local consumer behaviors.

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6. Success Stories: Coca-Cola and Kit Kat

Conversely, Kathryn highlights brands that have mastered internationalization through cultural adaptation:

• Coca-Cola: Adjusts sugar levels and packaging to match regional tastes. For instance, "In Mexico, Coca-Cola uses real sugar and bottles the drink, resulting in a less sweet and higher quality taste compared to the U.S." (18:37). In Japan, Coca-Cola successfully launched Georgia Coffee, leveraging local distribution channels like vending machines (19:29).

• Kit Kat by Nestlé: Offers over 300 varieties in Japan alone, including unique flavors like matcha and azuki bean. In Malaysia, KitKat adapted to local preferences by sourcing cocoa locally and introducing the "Dark Borneo" variety, which quickly became popular (20:09, 22:21).

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7. Common Threads for Successful Global Marketing

Kathryn distills her insights into actionable strategies:

1. Study the Market Thoroughly: Begin with quantitative research to understand demographics and economic factors, followed by qualitative research to grasp consumer behaviors and cultural preferences (07:03).

2. Leverage Cultural Intelligence: Develop a deep understanding of local cultures to create relevant and resonant marketing campaigns (22:36).

3. Master the Art of Freedom Within a Frame: Allow local teams the autonomy to adapt strategies within predefined brand guidelines to maintain consistency while catering to local tastes (22:36).

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8. The Role of AI in Enhancing Cultural Understanding

Kathryn discusses how advancements in artificial intelligence, such as ChatGPT, can aid marketers in conducting deep cultural research without the need for extensive fieldwork. AI can facilitate a nuanced understanding of cultural differences, enabling brands to adapt more efficiently and effectively (23:48).

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9. Conclusion: Embracing a Global Mindset

The episode wraps up with Kathryn reinforcing the importance of viewing global success as a series of local victories rather than relying solely on headquarters’ strategies. She encourages marketers to embrace cultural intelligence and adaptability to build brands with lasting international appeal.

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Notable Quotes:

• Kathryn Melchior Ray (02:48): "77% of customers prefer to buy brands that share their values."

• Kathryn Melchior Ray (07:18): "Start with quantitative research to understand the market, then delve into qualitative insights to grasp cultural nuances."

• Kathryn Melchior Ray (22:36): "Use cultural intelligence to create brands with lasting value that appeal to people's culture. That is your competitive edge."

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For more insights and detailed strategies, listeners are encouraged to read Kathryn Melchior Ray's book, Brand Adapt Local, available on Amazon. Connect with Kathryn through her LinkedIn profile as provided in the show notes.

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This summary captures the essence of the episode, providing a comprehensive overview of the key discussions and insights shared by Kathryn Melchior Ray on successfully navigating global marketing challenges.

Transcript

[Benjamin Shapiro]

The Martech Podcast is a proud member of the I Hear Everything Podcast Network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com.

[Kathryn Melchior Ray]

From advertising to software as a service to data across all of our programs and clients, we've seen a 55 to 65% open rate. Getting brands authentically integrated into content performs better than TV advertising. Typical life span of an article is about 24 to 36 hours. We're reaching out to the right person with the right message and a clear call to action. Then it's just a matter of timing.

[Benjamin Shapiro]

Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world class marketers that use technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.

[Kathryn Melchior Ray]

Every time you internationalize your marketing, you face a choice. Duplicate what already works at home or adapt your marketing campaigns to a new market. According to CSA research, can't read, won't buy study 76% of global consumers prefer to buy products with information in their native language, and 40% of consumers won't even consider buying from a website in other languages. Yes, translation is important, but assuming that what works at home will connect abroad is a fallacy. Your automation sequences that convert in Chicago just aren't going to perform in Tokyo. So why do marketers struggle to adapt when crossing borders? The good news? It's not about rebuilding your tech stack, it's about adapting what you have. Germans respond to product specs, Brazilians connect through stories, and your tech and your team need to know those differences. So how do you cross borders with your marketing campaigns without rebuilding everything from scratch? I'm Benjamin Shapiro and to explain how to make your marketing culturally intelligent is Kathryn Melchior Ray, who's the author of Brand Adapt Local. Catherine has worked for international brands like Nike, Louis Vuitton and Shiseido before becoming the President of Global Ally Consulting and a professor at the Haas School of Business. And today she's gonna share the playbook for how your marketing can cross borders. Katherine welcome to the Martech Podcast.

Hi there.

Very excited to have you on the show and excited to talk to you about what you wrote the book on. Let's start off at the top. Tell me about what it means to brand global and adapt local.

Well, first of all, thank you so much for having me on the podcast. It's really exciting to be here and talk about this new book. It's my first book, so I'm really excited and it's something that I've spent, spent a career learning how to do. Basically the idea is that Americans don't think globally first, but the world is more demanding than ever for cultural relevance. And winning brands do that. They think global, but they feel local. You mentioned a stat up there about how much people want something that responds to their values. And it's true, 77% of customers prefer to buy brands that share their values. But many brands take this kind of a one size fits all because it's easy and it's efficient until it's not. The bigger you get, the more you have to adapt to each of those markets individually because otherwise you have costly missteps and lost revenue. And ultimately if you break the trust, then you've got a really big long term problem. So the reason we talk about cultural intelligence is that our world is just more interconnected than ever, but actually more culturally distinct. So that's the key for brands to remain relevant throughout their global reach.

It seems like if I had to summarize what you're saying is when you're thinking about your brand and sort of the original positioning, you need to think worldwide, right? You're thinking about a global brand. But Whedon, you are adapting to market conditions. That is not a universal condition. That is something that has to happen locally. So brand global actlocal. When you're thinking about foundationally or you're going through a transition, how do you set up a marketing department to understand not only how you are relevant across the globe, but how to understand and interpret data from local conditions.

I love to talk about the Samsung brand. If you think about it, at one point in the 1990s, Samsung was a provider of white label products for a lot of other people's brands. But today Samsung is one of the top technology companies around the world known for premium brands. So imagine to go from putting other people's logo on a product to commanding top price. What they did is, and it's in my book and I teach it in my class at Berkeley as well, is it's really an incredible transformation. And the global marketing department looked at the world in regions, they did studies and realized that they can't just do the same thing in different parts of the world. So they segmented the world in terms of where the brand was in its development places where it was really well known and entrenched in a certain kind of positioning. Which would take some difficulty to change where it wasn't known at all and where it could actually come into the market through white space. So when you're looking at the world, it's very helpful to break it into style, somewhat similar markets, and then deal with maybe three kinds of regions in terms of global growth, rather than countless.

Yeah, it's interesting thinking about the segmentation in sort of a worldwide perspective. And I'm assuming that a lot of the segmentation is the western world, the eastern world, Latin America. It's like there are some common trends, but then when you get down to like Brazil versus Colombia, it seems like there are some dramatic cultural differences there. So when you're talking about Samsung as an example, they can't just be saying, okay, we're dividing the world into three pieces. It's like the risk board. You know, there's the red, the yellow and the blue, and everything is that simple. There is the little individual countries and territories that are culturally different. How do you interpret that and still have a global perspective on what your brand should be?

Well, it's one of the complex aspects of why this is fascinating. And you have to be dexterous and you have to be curious. So you want to study each of those markets differently. It depends on the resources that you have. There's a place in a continuum of a brand's growth where it's going to be doing the lowest common denominator. But at a certain point, it's going to need to distinguish that and adapt to each market if it wants to continue to grow and have dominant market share.

Let's walk through the playbook here. So if you're a marketer and you're starting to think about crossing borders, let's make the assumption that you've got a national playbook for marketing, something that's working. What is the playbook? When you try to expand into other.

Countries, it's kind of the same as you should start in your own country. You want to understand the market. One, two. That requires research. And then once you understand who your target market is, you want to adapt your products, distribution, positioning, communication, service to that market. The challenge is that often the market isn't right next to you or right around you. So learning to recognize that it may be different to just first understand that it is likely to be different, and then you can work on how it's different. But I have worked for a number of companies, and I would spend a lot of time trying to explain to people that consumers in Japan were reacting differently to certain products. Than they would in the United States. And I wanted to just get past that and get to the actual work rather than working internally to convince people of the need to adapt.

Understand the market. Yeah, of course I want to dig deeper. How? I'm an American, I don't speak Japanese, I've been to Japan twice in my life. How do I understand the cultural differences and the buying behaviors without actually having been there? What are the resources that you rely on to A, investigate the opportunity of the market, and B, if I'm going to actually try to get into that market, understand those cultural differences that are going to give me the best foothold.

Again, I'm not going to say anything that's different than how you might approach a new market in your domestic country. You're going to start with quantitative and qualitative research, right? Start from the broad and work your way in. So the easiest thing is to start with a bunch of existing quant research that will tell you how the market is broken up economically, age wise, demographically, all of those kinds of statistics, and try to see what your competitors might be doing in that market. If you have competitors, if you are disrupting an industry, you might have white space and trying to figure out where you're going to make your product land. So you start on the broad level, on the quantitative side, and then you work your way into the qualitative side, which is where I think it's really exciting. Because then when you get into the qualitative is where the magic happens, because that's where you're trying to discern how people really use products or make purchasing decisions differently than we might do in our own country. For instance, packaging. Packaging is one of these aspects of purchasing of a product that is very important in certain markets and in other markets not at all. Like if you were to go to the grocery store and you were buying a can of beans and there was a slight dent on that outside part of the can, would you even notice it? Would you care? What would you think about the brand and the peas on the inside? In certain markets, notably Japan, they wouldn't even want a dented can on the shelf because they know the consumer will read dented can, dented product. If you're not going to take enough care to make sure that your packaging arrives properly, how can I be assured you're going to take a certain kind of care on the way the product is made or delivered or serviced? If I have a problem?

Yeah. It's funny using that as an example. Maybe this is the cultural difference and it's where I struggle to understand how to know these nuances. In Japan, the association is dented can bad production. Here, I would assume dented can, bad grocery store. I'm not actually blaming the bean canner. The guy that put it on the shelf, dropped it and wasn't paying close enough attention. And so I don't know if that's sort of a sample size of 1. But to me, I'm not associating the neglect of the can and the packaging with the manufacturer. It's the distributor. So it doesn't necessarily mean, I think that the product is therefore bad. So honestly, when I think about globalization, a million years ago, I worked for this company called ebay, that they were in a lot of different countries, didn't actually sell physical products, but a lot of translation and a lot of work. But ebay meant different things in different places. And we had these local country managers that was trying to understand these nuances and position the marketplace. But one of the challenges was always the translation piece. To me, it's like, if I'm thinking about expanding globally, honestly, my head goes to what are the closest parallels to the existing culture we have, so we can use the existing playbook and existing language as much as possible. So I'm going from US to Canada to the UK to Australia. Obviously, you have to factor in your distribution, and Australia is really far away and can you get your products there. But to me, there's like an ease of migration of what's working. How much should you prioritize being able to replicate what you know is working, as opposed to doing these studies and hoping that you can learn the culture?

I think it depends on where the brand is in its growth and how different the market is from your domestic market. There's a framework that I like a lot called cage, which is an acronym. So it's about cultural, administrative, geographic, and E is for economic. And what are those various distances between two countries? So let's say the United States and China, if you're going to be shipping steel for a product that's in the.

News these days, boy, that's a loaded example.

Yeah, right. So obviously the geographic distance is going to have a huge cost that's implicit in it. But for China, if you're looking at Airbnb, for example, which is another example in my book, obviously there's not really a geographic difference and even you might say economic difference, well, there's probably a similar target there. But the administrative challenge with China and the cultural challenge or distance with China are huge. So in fact, Airbnb, that went into the market around 2014, 15. And imagine in those days in China, you have this huge travel market, you have a young, digitally savvy consumer, and you even had some competitive home sharing businesses emerging. So Airbnb that had strategic investors in China, had kind of everything you would think to be able to go in there. Well, 2014, seven years later, they actually pulled out in 2022. Some of the problems were in China, Chinese travelers didn't trust the apartment photos. Trust is a huge cultural difference between Chinese consumers and American consumers. Now, granted, home sharing didn't start easily in the United States either. There was a question, am I going to get into this guy's Uber? Am I going to actually sleep in strangers room? But Americans didn't have the same distance to a stranger that Chinese do. The Chinese did not feel comfortable staying in a stranger's house. They didn't trust the photos in there. They didn't want to clean on their vacation. And then there was another issue is that they didn't have a credit system, so the hosts weren't sure that people were going to pay. So you have all these various challenges. Now, the local competitors knew these challenges and they innovated very, very rapidly. Now, we're very proud of our tech businesses and we think that they innovate quite rapid. But when you're competing in China and you're smiling, so maybe you know, and you've had that experience, when you're competing in China, speed is on a whole different pace. They respond very, very quickly, and Chinese competitors respond very quickly. So as I said, in the end, Airbnb pulled out of China. It's kind of an amazing story. But there are other examples too. Like Home Depot went to China too. And there's the same cultural challenge that they face because we love Home Depot because it's like, do it yourself, save some money. Now, saving money is another principle that the Chinese actually like. They're also very cost oriented, but labor is cheap in China. So the do it yourself in America was like, no, no, do it for me. I'm going to just hire other people to build my home furnishings because it's cheap. So that's a huge cultural gap in terms of entering the market and how you want to enter the market.

You're on a roll here. With great examples of times that brands have fallen down. The first one that comes to my mind is the Chevy Nova trying to go to Mexico, where Nova was interpreted as Nova, which is no go. Give me some other examples of Brands that have tried to cross borders and failed.

There are a lot of them. When we talk about understanding the naming one, because you talked about translation early with ebay, that's a big challenge. And I think the Chevy Nova stands as one of the most famous examples of Nova, but you have companies that have really learned from this. Now, Coca Cola is an example that I like to cite because Coca Cola went to Peru and I went to Peru many years ago as a teenager. I drank this local cola called Inca Cola. Inca for the indigenous people in Peru. And they're super proud of this Inca Cola. Everywhere there was Inka Cola. So Coca Cola actually struggled to gain a foothold because of this strong local competitor and the pride of the people. Similarly. Now, that was a long time ago. We might come back around to Coca Cola because it's learned a lot since then. But even more recently, Starbucks did the same thing going into Australia. I mean, come on, you would think that Starbucks would be able to study the market in Australia to realize there is a very developed coffee culture in Australia with lots of local coffee cafes that were strong. And so Starbucks came in, and then it didn't realize there was the kind of competition that it had. And it came in as overpriced and couldn't compete. And they lost hundreds of millions of dollars until they kind of stopped, closed all these stores and had to rethink how they were going to go about it. So you think that people will learn from the 60s when Chevy Nova went, trying to go into Mexico, but it happens all the time. And it can be language, it can be taste, it can be culture. And often it's about understanding your competitors and getting your product, your positioning, your pricing, your distribution. Right?

Yeah. It's funny you mention Coca Cola and Starbucks because when I think of brands that have mastered internationalization, those are two brands absolutely at the top of my list, specifically Coca Cola. And I'm sure that in different markets, they've had different challenges. Obviously, Peru, they might have had some local competition. Tell me more about which brands have mastered internationalization and what can we learn from them?

Well, let's go back to Coca Cola, because I shouldn't pick on it. I like Coca Cola and what they have done, because I also like some of the Coca Cola products outside of the US Better than I like them in the US because what have they done? They have learned to adjust their sugar levels to sweetness, to sweetness preferences, because sweetness preferences are different around the world when we get to taste. So you have Starbucks, there's Coca Cola. One of my favorite ones is Kit Kat that adapts its product to different markets. So if we finish with Coca Cola, they adapt their sweetness to different regions.

Who's got the biggest sweet tooth? I'm assuming that's the United States.

Americans have very high sweet tooth. And it's a different kind of sugar. That's the other thing. So if you live in California, many people know there is echo in Mexico, which is the Coca Cola, that they have Mexican Coke in the bottle. First of all, it comes in a bottle. Second of all, it uses real sugar versus fructose, so the flavor is different. It's not only less sweet in Mexico, but it is a different quality of sweetness. So. And then you get to taste it in the bottle. So for instance, that's a really great one. They've learned to do that. It's not only the level of sweetness that Coca Cola has changed. They actually create different kinds of products. Do you know we're going back to Japan again? I did spend nine years in Japan, so I know a lot about the Japanese market and a lot about the nuances of how brands have adjusted there. Coca Cola is the single largest provider of canned coffee in Japan. It's incredible.

That's funny. I would have assumed it was Starbucks.

No, it's Coca Cola. So once they figured this out, they launched a product called Georgia Coffee. Remember, it's from Atlanta. Coca Cola is from Atlanta, Georgia, so it's called Georgia Coffee. And they leveraged their distribution of vending machines, so they put it right in their own vending machines all around the country. And then they learned what people liked. And so now if you go to a vending machine in Japan, you're going to find all of these versions of Georgia Coffee with these different kinds of sweetness. And then they have milk coffee or non milk coffee or dark coffee. So Coca Cola has actually learned a lot. And it's always innovating different kinds of products for different markets. But they're not alone.

There's some real irony there. Before you go on that Georgia, not necessarily a place that I think of having a lot of coffee plantations, is known as essentially the brand of coffee in Japan. Who knew?

I know it is. It is actually quite funny. But if you think of it as related to just the corporate brand, it's very easy to make sense if you know it's from Atlanta. So another one that I like, it's not an American brand, is Nestle from Switzerland. So they own the chocolate bar Kit Kat. You had a Kit Kat?

Yeah. Give me a break. Break me off a piece of that Kit Kat bar.

Give me a break. Give me a Kit Kat. So what do you know about those Kit Kats? Like, what are you always expecting to find when you open that cover?

They're the two bars that are waffly. I don't know how to describe it, but yeah, exactly.

They're waffles and they're in these sticks. Like you either get two sticks or four sticks. So they keep that the same, but then they change the nature of the chocolate, the sweetness of the chocolate, and they'll change the packaging, but they'll keep the red KitKat on top. So not that I wanna keep talking about Japan all the time, but it happens to be the place where they have the most. There are over 300 varieties of kit Kat chocolates in Japan. Everything like matcha and sake and azuki bean. But even in other places like in Malaysia. So there's an incredible story about Malaysia during COVID when people started to eat more dark chocolate and there was also supply chain shortage. So what the team of KitKat Malaysia did is they realized that they, rather than sourcing cocoa from Africa, Ghana, most of the cocoa plants are from Ghana. They realized that Borneo was its own rainforest in the country of Malaysia. And so they worked in Malaysia locally to be able to source cocoa beans locally. And they made a local chocolate, which was dark chocolate, which was also appealed more to the Malaysian flavor. So they named this dark Borneo. And I believe it's 50% where you put the percentage of how much dark cocoa is in it on the package. And it again appealed to people's local pride that it actually came from their local rainforest and sold out very quickly.

How do we take some of the examples of the failures that you mentioned and some of the successes and come up with some common threads? So if you're looking for some themes across what works and what doesn't, give me some examples marketers can take home with them.

Okay, well, we're going to come back to where we started, which is study the market. Study the market is really important. And I would say with that, use cultural intelligence. So cultural intelligence, I think, is not as widely understood today, but with everything that's going on with AI and simple personalization, the notion of cultural intelligence becomes even important today to create brands with lasting value that appeal to people's culture. So that is your competitive edge. Then you have to learn how to what I call master the art of freedom within a frame. Knowing when to adapt, whether it's your taste or your marketing or your packaging. And then when to stay the same, when to keep that frame the same for your logo, your core product, maybe your colors. So knowing that balance of if you're in the corporate side, allowing your teams locally to have that freedom, but setting up a frame of what is adaptable and what is untouchable, that's the key. So it's really helpful to think about how global success is more of a series of local wins rather than thinking what you're going to do in your headquarters is going to work all around the world.

The world is about 8,000 miles in diameter. And I think for a long time, marketers have always assumed that the farthest places you can go are the hardest ones to expand to. It's shrinking, and not only in terms of our ability to get products to different places to manufacture around the world. The distribution is becoming easier. The technology allows us to connect and market to people. But there is still this gap of culture that we struggle, and it doesn't seem like that's getting any closer. Right. We're not necessarily getting to this homogenized world culture, but where we do have an advantage now is our ability to study and understand. One of the things that pops into my head when we think about internationalization is how much artificial intelligence can help us with this. Things like ChatGPT's deep research, right. Understanding the major cultural nuances. This used to be set up a team in Japan, train them, immerse them in the culture, and have them study the market and then come back six months or a year later and decide if you want to expand there. It doesn't have to be like that anymore. We could start studying and we can start learning how to adapt our existing brand to local conditions without having to fly around the world. All right, that wraps up this episode of the Martech podcast. Thanks to Kathryn Melchioray, the president of Global Ally, for joining us. If you'd like to get in touch with Katherine, you can find a link to her LinkedIn profile in our show Notes. You can visit her website, which is Katherine Melchiorray. Or you can find her book brand Global Adapt Local on Amazon. And if you'd like a daily stream of marketing and technology knowledge in your podcast feed, hit the subscribe button in your podcast app or follow us on YouTube. All right, that's it for today, but until next time, my advice is to just focus on keeping your customers happy.

Sa.

[Benjamin Shapiro]

Thanks for listening to the Martech podcast and I hear everything. Production looking to launch or scale a podcast like this one for your brand, Then visit. Iheareverything. Com.