Design thinking: The process of entering a new market

The failure of these big brands in India could be the result of an
inherent cultural disconnect that isn’t bridgeable by reading a few
books and hiring a couple locals. Perhaps the big brands are just too
far up market to understand how to execute down market. Perhaps the
values and activities that helped these big brands get big and stay big
are exactly the values and activities that reinforce the disconnect
preventing them from easily taking over India (so there’s at least one
place where we’re safe from Starbucks–for the moment).

Niblettes’ comment on my previous post incited me to think about the ways companies enter new markets – whether a new segment in their home market or expand globally to another – and how the fundamentals of design thinking maps on to this process.

Let’s start from the beginning of the user centered design process, borrowing from IDEO their visual of the process [because it would be so much faster than recreating it myself, thank you for the loan]

Methods_diagram_1

Observation –> Insights –> Prototyping –> Implementation

Very simplified of course, but this is the basic step by step approach, and if you’ll note, the first step, before developing a strategy, designing a product or creating a service, is the focus on the interplay of three key factors:

  • User desirability
  • Business viability
  • Technical feasibility

In other words, is this something that the intended target audience wants (as evidenced by our observations and other ethnographic methods), is it something that we can give them – i.e. is it cost effective for us to make and can we make it in the first place.

Steve Portigal specializes in using ethnographic techniques to develop consumer insights that lead to product and service concepts and business strategies, from his website,

Using ethnography to go beyond the reach of traditional market research, I discover new insights about how customers work, play, shop, entertain, eat, and live their lives around my clients’ products, services, and "stuff." On their own, these
insights are powerful data to inform the ongoing decisions that
companies make.
My specialty is recommending specific business actions that are responses to these insights,

I’ve italicized the key statement in Steve’s introduction – these insights are powerful data to inform the ongoing decisions [corporate strategy] that companies make.

Coming back to the example of Kellogg’s cornflakes that I used in the previous post, here’s a quote from Homi Bhabha in Harvard Magazine’s article titled, A Humanist who knows corn flakes,

“When the Indian market opened with globalization,” says Bhabha,
“Kellogg’s set up a branch in India and started producing corn flakes
to give consumers the real thing. What they didn’t realize was that
Indians, rather like the Chinese, think that to start the day with
something cold, like cold milk on your cereal, is a shock to the
system. You start it with warm milk
. But you pour warm milk on Mr.
Kellogg’s corn flakes and they turn to wet paper. You pour warm milk on
the sturdier Indian corn flake, it holds up. Does it taste better than
Mr. Kellogg’s? No. If Mr. Kellogg’s is eaten as Mr. Kellogg intended,
it is somewhat better than Indian corn flakes. The point is that in
business studies, when you look at a market, you have to know something
about the anthropology of a place and its cultural rituals
. People in
the humanities have to be part of the conversation.”

Italicized are words that could have been superfluous, "what they didn’t realize", had Kellogg’s entered with a strategy derived from consumer insights based on user observation. The issue of "not realizing" does not arise, when someone like Steve goes out there in the field and talks to people about what they think about breakfast, what their cultural rituals are etc.

Then, and  only then, can effective strategies for entering a new market be designed – whether to enter with an existing product or service, or with one tweaked, like a prototype, to suit the idiosyncracies of the specific market or target audience. And this, I believe, is where the application of design methods will make a far greater impact on corporate strategy and competitive advantage.

And is it just translating products and services to what Niblettes refers to as "down markets"? No, here is an interesting article titled "Global vs. Local: Lessons from the past decade" by an ex McCann Erickson employee on the perils of "Pan European advertising"

Therefore, it became essential to use the same imagery, taglines, positioning, product and brand assets across all campaigns in all
countries. Economies of scale could be achieved, and global brands
built, as campaigns were extended from one country to another. {Theodore Levitt’s Globalization}

About
six years later, pan-European advertising was completely out of vogue.
The focus, once again, was on advertising and marketing to specific
nations.

It
was surprising at how quickly a great idea became a dumb idea, until
you looked at the reasons why pan-European advertising failed. To be
fair, it didn’t fail completely, because there were some notable
successes.

What
it came down to then, just as it does today, is consumer tastes and
timing. For international internet marketers today, it’s very important
to understand the dynamics of these two things.

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11 Responses to Design thinking: The process of entering a new market

  1. This is an interesting concept, Niti and you and I chatted about it briefly (as briefly as you and I ever chat! ;-D) the other day.
    At the risk of being a bit controversial, I think it belies an underlying arrogance that is pervasive throughout the West and certainly here in the good ol’ U.S.A. At the heart of it is a rather naïve belief that people around the globe — but particularly in emerging markets — are exactly like us only they speak a different language or look a little different and have less money.
    The belief is that if only these people could be exposed to the products that we love, they would love them and embrace them as well. In other words, Indians and Chinese citizens are just a few stores and ad campaigns away from walking around with a tall-skim-latte in their hand, an iPod on the hip and a pair of Levi’s on the butt.
    Rather than employ the most basic tenets of marketing — find out what the target audience wants and then GIVE it to them — multi-nationals see them as yet another area of growth into which they can funnel their existing products and services. It just never occurs to them that the people might have different wants and needs. They want what WE want, only they just haven’t had the money to be able to afford it up to this point.
    I think back to the 1999 film “Austin Powers: The Spy Who Shagged Me”. An American film with the title a spoof of the James Bond film “The Spy Who Loved Me”. Americans don’t use the word “Shag” except when trying to impersonate a Brit. We typically see the word used in racey send-ups of Brits. For us, it’s one of those funny words the Brits use in their brand of funny English.
    Despite the fact that “The Spy Who Shagged Me” was a big budget film and a very much anticipated sequel, the film producers were startled when the film encountered a bit of controversy and criticism while it was being marketed in the UK. I guess that while “shag” is a funny British word to us, it’s quite offensive to many Brits who took exception to seeing it emblazoned on posters and movie marquees.
    Oops!
    How did this happen? How much effort would it have taken to figure out that in the UK, “shag” is akin to a word we would never use in a movie title? The answer is “not much”. The problem is that it simply NEVER OCCURRED to them.
    .chris{}

  2. Niti Bhan says:

    Chris,
    Yet another post worthy comment! 🙂 In brief (ha!) the problem is two fold, one, the “blinkers” factor that you mention, pop culture and marketing spreading freedom, democracy and peace everywhere, but the other has it’s roots in Theodore Levitt’s infamous 1983 article “The Globalization of Markets” which in fact asserted these very claims and led to the fiascos such as “pan european advertising” and the assumptions that everyone, if they could get it, want iPods, Levi’s and “chai” tea. [pet peeve, chai means tea] In fact, read the last paragraph here http://hbswk.hbs.edu/pubitem.jhtml?id=3542&sid=-1&t=special_reports and weep.
    And it’s true to a degree, they *do* want iPods, Levi’s and Barista coffee [http://www.chennaionline.com/hotelsandtours/News/08news05.asp] but that is just skimming the surface of a culture and it’s preferences. Some things like food habits, fiscal management habits and sheer priorities of consumer purchase are going to be different, regardless of the surface “westernization” of the individual.
    Lots of food for thought, thank you for continuing this conversation, and please, I love the examples. Controversy is supposed to be the blogger’s prerogative!

  3. Thanks (once again) for the props. The cornflakes story reminds me of From Bonsai to Levis by George Fields [http://www.amazon.com/gp/product/0451623797/sr=1-1/qid=1137107037/ref=sr_1_1/102-7680232-5222565?%5Fencoding=UTF8][it’s $0.01 at Amazon, maybe pick it up] that related various marketing mishaps in Japan. Cake mixes that didn’t work with the oven, or that were for the “wrong” occasion and so on. I think finding that stuff out is a reasonable application of contextual research (or ethnography, if you like) but often it stops there.
    I remember a giddy press piece a few years ago that related the story of how designers went out to watch how their snow shovels were being used, and it turned out that women instead of men were shovelling, so they made the handle smaller. Sure, that’s a win, but really, it’s a yawn story.
    If Kellogg’s redesigned their corn flakes to stay crisp in hot liquid, won’t they have missed the point? I mean, you can fix the problem, but the problem is rooted in a bigger cultural shift. It’s not simply the usage, but also the meaning.
    Basic: corn flakes get soggy
    Slight insight: they want something warm not cold
    Bigger insight that could lead to innovation: the breakfast ritual is about X and Y {note that I don’t know what it is specifically myself} and NOT simply the same cultural meaning that we have in the West
    I’m much more interested in playing with the third type of finding; indeed most work reveals that sort of thing but often my clients are tasked with solving the first level and maybe thinking a bit about the second level. And that’s okay; not everything needs to be innovative (nor should it be).
    I’ll stop rambling now!

  4. Niti Bhan says:

    Steve,
    YOu make a VERY insightful point here and it’s extremely valuable. Thank you. I, too, was stuck on level 2 thinking. And the level 3 is something to contemplate deeply – everything doesn’t have to be about innovation, it often is about ‘serving the user’s needs in the most effective manner’ no? correct me if I’ve not understood correctly, but if I have, that’s food for a post in itself. I can’t wait for you to visit Bangalore!

  5. I’m very excited to be travelling to all these new countries (well, they are hardly new, but new to me) starting tomorrow. I’m sure it’ll provoke some new thinking!
    And no shame in being stuck on 2. Not to be too judgemental, but think the shame is when people are stuck on level 1. IMHO, natch.

  6. Ashish Banerjee says:

    In 1986, as a cub at JWT (then HTA) Bombay, I was part of a team coordinating some preliminary work for Kellogg, pre-entry.
    A couple years later, having moved to NY by then, I was aghast to learn they’d launched with corn flakes…. but then again, they were probably focussing on the top income decile initially, perhaps with good reason.
    A better mass-oriented strategy may have entailed launching with “sattu,” similar to muesli, with hot instead of cold milk, for the reasons you suggest. “Sattu” — cereals and dry fruit crushed into granular form — is what rural N. India has traditionally consumed in the morning. Wouyld have had wider acceptance potential, IMO.
    Fortunately, things look better now…. Nokia is doing development work in India, ditto HP, and others will surely follow. I for one expect to see products developed in India, possibly even China, rolled out into much of the emerging world… LatAm, Africa, Turkey, Russia, etc.
    Best,
    Ashish.

  7. Niti, great post. So many good themes to ponder!
    There is a battlefield truism that goes something like; “a battle plan cannot survive contact with the enemy.” I wonder if there is a marketplace corollary, “no brand or product can survive contact with the consumer.”
    The tension between the creative vision of brand and product developers (differentiation) and what consumers recognize as useful (relevance) is the given. How to navigate that dynamic tension is perhaps the wisdom we seek. Chris Gee’s comment about conceit suggests a good starting point: we all need humility in the development of any marketplace offering.
    Process and study will help too. IDEO knows the power of prototyping. And Steve’s expertise in ethnographic techniques is another essential ingredient.
    Introducing brands and products within a culture is a significant challenge, going cross-cultural even more so. But what a neat challenge in our networked world!
    And your last observation on Pan European advertising matches up with one of my favorite issues these days, “better sameness within a closed system”. I love it when the optimization mind set goes bad. Like Steve, I am hungry for the big insight that innovation.
    Thanks for leading the conversation!

  8. Just a quick note to say that the breakfast buffet at our hotel here in Bangalore provides (among many interesting choices) warm and cold milk for their various dry cereals (including a dry muesli that is nothing like the European gloppy muesli btw). Hot milk, says the sign, available upon request.
    More India observations and photos to appear elsewhere, eventually, but suffice to say we’re culture shocked-as-hell.

  9. Niti Bhan says:

    Can’t wait to hear all about it, and see all your pics! Oh man, O joy, an ethnographer’s observations of Bangalore. First dibs on anything interesting 😛

  10. Smart goes to India via Italy?

    This news is one for Niti: The German business magazine Handelsblatt.com reports that DaimlerChrysler has plans to sell their sister company Smart to Europes biggest manufacturer of motor-scooters, the Italian&…

  11. Perspective says:

    BCG misses the mark with new study on emerging markets

    Sensational headline, no? Thought I’d try and be a tabloid on Sunday rather than a blog. Jokes apart, an article on Rediff.com caught my eye. Yes, it’s originally from BusinessWeek but you try searching for the original on their site.

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