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

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 (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 (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

The Buzz of Anticipation

Successfully creating a buzz around products is an art that few companies are able to consistently master. Generating buzz is tough to achieve because it spreads mainly by word of mouth and can’t be created by advertising dollars. Recent examples of great buzz generation include the much anticipated Fox show “X Factor” debut, Amazon’s release of the “Kindle Fire” and Boeing’s Dreamliner aircraft that was just delivered to its first customer in Japan. Given that buzz often leads to profits, this is a problem that many companies have been looking to solve. Interesting research on buzz from Brian Uzzi, Professor at Northwestern’s Kellogg School of Management, sheds light on how to generate buzz and how companies can be more effective practitioners of this elusive art form.

Uzzi used a private survey which asked 180,000 participants about their impressions of “soon-to-be-released” Hollywood films. Uzzi used the results of this survey and the resulting box office success of these movies to better understand buzz and how it relates to profits. From the data, Uzzi found that once buzz reached a certain tipping point–21% of Americans–there was a dramatic increase in box office revenues. But how did the level of buzz reach this point?

Interestingly, Uzzi discovered that buzz is not generated based on an actual experience with a product but more the anticipation of that experience. He found that there was little to no relationship between buzz and advertising dollars spent. Buzz instead was driven by intangible factors such as a catchy trailer or unique film premise that piqued the interest of movie goers. As a result, Uzzi argues that marketing efforts should focus on planting seeds that consumers would ideally spread themselves throughout their extensive social networks.

One company that has been able to consistently plant these buzz generating seeds is Apple. Famous for its tight-lipped approach to pre-release product information, Apple strategically incorporates secrecy to generate buzz about its new products. It was reported that Apple sent the media invitations for its October 4th event that simply read “Let’s talk iPhone.” Within a few minutes the internet was abuzz with anticipation of what the new iPhone would look like and what new features were possibly going to be in included. In this case less was more, and the web was full of anticipation.

While generating buzz like this is great in bringing attention to products, ultimately, the product itself must stand up to the buzz that has been created in order to be successful. We’ve all had the experience of rushing to a theater or signing up for the latest web phenomenon and have had the product not live up to the lofty expectations that we have had. In the end, buzz can’t substitute consumers’ desire for a product that adds substantial functional value.

BY MIKLOS RAIBON