If you're a mega-brand doing business in the global village, you may start to believe that all the world knows your name, or more appropriately your brand name. Yet, what if your brand doesn't mean the same thing in every locale?
Global brand giants like Electrolux, a Scandinavian vacuum manufacturer whose tag line translated into “nothing sucks like an Electrolux” in their US ad campaign, or KFC, whose slogan “finger-lickin' good,” means “eat your fingers off” in Chinese, found out the hard way. Such mishaps make a very strong case for brand localization.
Adapting your brand, messaging, product packaging, etc. for entry into a new market comes with its own unique challenges. Not to mention the cost, time and resource allocation that leaves many companies feeling deterred by the process. But for companies that wish to leverage their brand success into new geographic regions with significant cultural, economic and business differences, localization may be necessary. This issue's dilemma asks, Does a brand need to be localized to be successful?
Not interested in building a global brand? Let us know what keeps you up at night. What dilemma do you take with you when you leave the office? Your peers would love to help. Write to us and ask our SWOT Team about your dilemma. Tap into the collective strength, wisdom and experience of this group. It works, and you could win a free copy of our book, A Marketer's Guide to e-Newsletter Publishing.
Revisit our previous dilemma; read below for your peers' best advice on implementing a results-based compensation plan.
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- Give advice about this issue's dilemma.
- Read your peers' responses to the previous dilemma (below).
- Submit your own dilemma.
This Issue's Dilemma
SWOT Category: Internal Weakness
Is brand localization necessary to be successful in foreign markets?
I work in marketing communications for a small IT company in Japan. We import IT management software from our parent company in the US for resale to local Japanese customers. These days the gap between our US board members and the local staff in Japan seems to be widening. There is a lack of understanding about the local conditions in the Japanese market.
Our parent company has become very accustomed to the brand recognition that they hold in the US. (They have received many awards and been chosen as one of the most powerful companies in the industry). Unfortunately, they do not hold the same visibility in Japan.
We have been asked to use the same brand collateral as our US parent company (which consists of only the company name and some images). They have not done any localization and stress the importance of “sharing resources,” and “carrying one brand image.” To be honest, I feel this “branding ad” will only work in a market where the brand is well known, but will do poorly in countries like Japan, where the company has very little market penetration. I suspect that other readers in different areas of the world have experienced this. Do your readers have any idea how to measure/compare the effectiveness of a “branding ad” between two different regions, using different marketing vehicles? Is there a way that we can test/prove that market results will improve with a localized brand campaign?
—Anonymous, Marcom and PR Manager
SWOT Category: Internal Strength
When considering compensation, should results matter?
Our small, international software company has suffered declining or stagnant revenues over the last ten quarters. I'm sure many companies can relate. We are forecasted to see an increase in sales this quarter and a slow, but steady climb over the next three quarters. Having just come through this slow period, our executive board is considering implementing a new remuneration plan that ties compensation to results.
Our marketing and sales management teams would feel the greatest effect of any changes made in this area. Can SWOT Team members shed some light on the advantages and pitfalls of implementing such a program? Experiences from both sides of the line would be helpful.
—CEO, International Software Company
Summary of Advice Received
SWOT Team CEO, the issue of results-based compensation is a hot one right now. While maximizing profitability is always top of mind with executives and shareholders, it seems that this issue has gained greater importance in the last five years.
With the downfall of dot-coms, the resulting flood of devalued stock options and the out-of-control behavior of companies like Enron, you are right to want to examine the issue of results-based compensation from both sides.
Our SWOT Team readers offer the following advice that helps illustrate points to consider when creating a results-based compensation program, as well as the associated risks and advantages:
- Consider specific performance criteria that which tie into compensation.
- Account for the downside of results-based compensation.
- Motivate with cash, and results will improve.
1. Consider specific performance criteria that tie into compensation
What you measure will determine your results. During the planning phase, it is important to consider what new administration and management issues will arise, and how success will be tracked and measured.
An anonymous SWOT Team member sheds light on specific points to take into consideration:
When planning our new compensation program, we took the following into account:
1. Clarifying goals for departments, managers and employees;
2. Measuring group and individual performance against those goals;
3. Using outcomes for further training and planning, and
4. Finding the right software program to facilitate the program.
Overall, we found that tying compensation to annual reviews or using a performance program as the foundation for calculating pay increases, without understanding the broader relationship of each manager and their employees to the overall performance of our company, to be ineffective and not worth the investment.
Another anonymous SWOT Team member, an executive director for a charitable organization, shares this perspective from the not-for-profit world.
Working for a not-for-profit organization, our success measures are very different, but perhaps our implementation criteria can be of benefit to you. We examined qualitative factors, such as how our organization's reputation changed under a director and his or her ability to attract the right talent and support.
We also took into consideration the overall financial stability of our organization and how well our team was meeting or exceeding the public mandate. We also tried to make sure individual compensation was fair in relation to how others in the organization were paid.
2. Account for the downside of results-based compensation
Results-based compensation plans are not without their pitfalls. With increased pressure to perform, many individuals are compelled to take greater risks or make unsupported decisions to meet objectives.
Chui Tey, owner of Cognoware Pty. Ltd., makes this point:
I am a little wary about making too strong a connection between compensation and results. It can encourage risk taking that goes beyond an appropriate risk level for your company. The executives risk the company's future and brand, but get rewarded if it works! Can you see the weakness of this approach?
It may be that the product strategy is no longer suitable for the current market, or that you are facing stronger competition. You will need to engage fresh thinking—who is eating your lunch? Is your market maturing? Is your product competitive? Your marketing department won't become smarter overnight because you pay them more. You could send them back to school, attend courses, do more field work. This should be your first stop. If you don't think your marketing department is working hard enough, perhaps you ought to be looking for another marketing department.
3. Motivate with cash, and results will improve
Of course, there is something to be said for cold-hard-cash motivation. Contrast the individual who feels locked in by his or her salary, no matter how much this person contributes to the bottom line, with an individual who does a stellar job and is rewarded accordingly for his or her performance.
An anonymous SWOT Team member believes that underneath it all, as humans, we are all motivated by money on some level:
Yes, an incentive-based remuneration plan would definitely bring better results. It is a material world and we all are very human. The thought of more cash is, should I say, one of the most important driving forces towards better output. This is a much better strategy than just increasing the basic salary of employees. With incentive-based remuneration, it's a case of “mutual back scratching.” A win-win situation for everyone.
Excellent performance as always, SWOT Team—thanks again!
We did our best to provide a thorough overview of your responses to this timely topic. All of the advice we received was insightful. Thanks for your participation. We appreciate it!
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