Going Global? Think Local: Insights from Kikkoman and Coca-Cola

January 11, 2012

As companies increasingly look to global expansion as a way to drive growth, tailored marketing is essential to maximizing opportunities abroad. A recent symposium held at Columbia Business School shed light on the ways in which two large global brands, Kikkoman and Coca-Cola, have been able to effectively expand internationally by adding a taste of local flavor.

Last fall, Columbia’s Center on Japanese Economy and Business hosted, with support from the Center on Global Brand Leadership, the “Global Marketing of National Products: Kikkoman and Coca-Cola” which featured Yuzaburo Mogi (MBA ’61), Honorary CEO and Chairman of the Board of Directors for Kikkoman Corporation, and Masahiko Uotani (MBA ’83), Chairman of Coca-Cola Japan Co. The two leaders shared powerful insights about effective techniques they developed for cross-border branding.

Yuzaburo Mogi

Yuzaburo Mogi (click for video)

For Kikkoman, an important innovation in its U.S. marketing, which had only focused on the Japanese immigrant community, took place after World War II. Chairman Mogi noted that Kikkoman watched American soldiers and civilians in post-war Japan using soy sauce on their American-style dishes. This inspired Kikkoman to position its product as a general, “all purpose” condiment, and began in-store sampling demonstrations in the early 1960s to encourage Americans to experiment with soy sauce. It also used experienced chef’s to develop and share recipes that used soy sauce in standard American dishes in order to further push Kikkoman into American food consciousness. Brand trust and financial impacts were also gained when Kikkoman became one of the first Japanese companies to build manufacturing plants in the U.S. in the early 1970s.

Today Kikkoman owns 60% of the market for soy sauce in the United States. “Kikkoman has never thought in terms of just selling a Japanese product overseas,” explained Mogi. “We prioritized our targets. We focused on the U.S. market, developed a successful business model here and then took that model to other targets.”

Masahiko Uotani

Masahiko Uotani (click for video)

Mr. Uotani then flipped the discussion by describing a strong U.S. brand, Coca-Cola, effectively entering the Japanese market. Central to Coca-Cola’s strategy for market expansion, was the decision to construct its Japanese subsidiary to tailor its product and marketing initiatives specifically to Japanese consumers. Uotani described it as a “hybrid approach” that allowed tiered levels of decisions to be made at the global, national and local levels. “The hybrid model enables us to offer new value proposition to our consumers,” explains Uotani. This approach aided the development of new products such as canned coffee and allowed for innovative features such as facial recognition to vending machines, of which there are 2.6 million in Japan. Furthermore, Coca-Cola Japan was able to provide insight to its parent company, Coca-Cola Company, about regional trends they thought could influence other geographies. This led to new vending machine designs that have become popular in the United States.

In closing the symposium, the discussion turned to how the interaction of global brands and local preferences will increase and companies should be meticulous in formulating clear strategies. The underlying message of both speakers was that brands shouldn’t focus on pure expansion, but rather integrate and assimilate brands with the local culture in order to be successful.

To watch video clips of the symposium and to read more about the event, click here.

BY MIKLOS RAIBON

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