Understanding your market

By Peter Sorgenfrei

Today I had lunch with the former U.S. president of a European luxury brand. We ended up talking about the understanding of consumers and understanding of the market you compete in. For a lot of companies that compete in foreign markets, what often happens is a misunderstanding of what matters to consumers in those markets.

In my previous post on Acura I mentioned the example of Mercedes with cup holders where sales were flat until a $20 fix was done. Similarly when BMW introduced the Z3 roadster there was no room in the trunk for golf clubs – a problem because many of the middle aged women that wanted that car, play golf! in the Z4 the designers made up for that and sales were more smooth.

My lunch date talked about how the mothership resisted augmenting the U.S. offering with items that would appeal to consumers here. Not to sell large volumes of those new items, but to allow the consumers to buy deeper into the brand since they could get all the different components they needed from your brand. A price of entry into the consumers’ consideration set.

What’s the point? The point is (sounding insanely obvious, but often disregarded) – listen to your people in the foreign markets, use all the intelligence you can derive from consumers in those markets, be flexible and test things in foreign markets that would ‘never’ fly at home.

Who knows, you might discover what has limited your growth abroad might also lift sales at home….

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One thought on “Understanding your market

  1. Jeff says:

    Glocalization – as what my professor in international business hammered into my thick skull. A seemingly global product doesn’t necessarily translate global success. It’s amazing how naive (or arrogant) decision makers can be. If Coca Cola and McDonald’s do it across foreign markets, why shouldn’t all other MNCs? Glocalization – accepting and integrating globalization yet localization at the same time. Go global, but know your local market.

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