To download the full PDF version, click here.

By Gordon Chu | June 09, 2009

When in Rome, Do as the Chinese

I remember in business school, one of the first case-studies I worked on was Euro Disney. I specifically remember reading the severe backlash from the public about the park’s “squeaky-clean” American image despite Disney’s promise to angle the park for a more European taste. Sure, there were the European themes on the rides and Mickey would wear his cultural garment when parading around, but I’m talking about the real cultural sensitivities.

Let’s take service of wine at the park for an example – for a year after Euro Disney’s opening, wine was not served in accordance to Disney’s other amusement park rulings despite, culturally, Europeans regularly drink wine with nearly each and every one of their meals. This might be a ‘small’ example of market ‘misinterpretation’, but imagine a dozen of these and that single problem, all of a sudden, doesn’t seem to be so ‘small’ anymore.
That was my first lesson in localization early on and definitely a lesson that, as a brand marketer, we need to breathe, sleep, and live by in our marketing handbook.

Why such the heavy emphasis on this lesson on localization? Because this is the one biggest mistake companies make when making the plunge across international lines. It does not matter if you are a media company or a brand, do not assume your name or brand will be enough – there is still an absolute need to acclimate your product for the surrounding market. And in China, this cannot be amplified more – with 1.3 billion people across the country, localization is a must.

Let’s take a closer look at the impact of localization on two companies from two different perspectives: Coke and Kentucky Fried Chicken (KFC). For Coke, localization is much more relevant on its marketing / branding strategy in China. And for KFC, localization is found all the way to KFC’s product offerings.

COCA-COLA

Coke has been in China for a very long time now. It built its first bottling plant in China immediately after World War I. However, Coke’s real growth has come only recently post-1999.

Before 1999, the branding position was still very US-centric. In fact, TV ads were merely dubbed versions from the US – nothing in particular cried out to the Chinese market.

After 1999, Coke reinvented its marketing campaigns to be more direct and tailored for China. It incorporated the Chinese culture into the marketing creatives including inspiration from Chinese folklore, colors, and themes that helped emphasize some of China’s traditional core values. Come to China during Chinese New Year and you can experience first-hand just the amount of effort Coke invests on properly localizing their brand strategy to the Chinese market – you’d swear Coke was made in China and not in 1886 in Atlanta, Georgia.

KENTUCKY FRIED CHICKEN (KFC)

KFC has only been in China since 1987; however, has grown to the top of the highly coveted list of king-of-the-fast-foods. One of their secrets to their recipe of success is product localization. Over in China, you have more options than just your regular, extra crispy, and grilled. You’ve got the option for Peking Chicken or Chicken Sichuan-style. And for the side dishes? Try a seasonal salad with bamboo and fungus or Chinese-style porridge along with your chicken.

KFC went as far as to reinventing their product offerings to fit the Chinese consumer preference – a very bold move considering the US strategy of decades of avoiding dramatic changes in their consumer offerings. However, they were quick to adapt to the new environment and are now are the ones leading the very competitive fast-food market in China.

Coke and KFC are only two companies of many that are practicing localization. In fact, there probably is not a single major global brand that has not taken into consideration the cultural and market differences in China. Its no mystery that localization is a marketing must, but you have to wonder – is it enough?

Localization reaches beyond just our branding position or product offerings, but also encompasses the media channels we go through, the areas for growth, and recognizing the different trends that are happening in China today. In other words, localization is a process, an iteration, and a practice. Coke and KFC’s success did not come without their own hiccups and bumps along the road – I’m certain Coke has missed the boat on many occasions and I’m equally certain not all of KFC’s new products had raving reviews. Nevertheless, both companies pushed the envelope of localization and brought marketing to a whole new standard to China.

Gordon Chu is the VP of Business Development at METAN Development Group. For comments/questions, email gchu@metanmedia.com.