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Educator Insights:International Marketing Blunders byAmerican Firms in Japan—SomeLessons for Management

This article investigates separate cases of marketing blunders com-mitted by prominent multinationals in Japan. Examined areGeneral Mills, Avon Cosmetics, Simmons Mattress, Procter andGamble, General Motors, Ford Motor, and Chrysler. A pattern offundamental blunders is revealed that is common to all. This pat-tern and the lessons it suggests for management are discussed indetail. Suggestions are offered on how marketing blunders can bestbe avoided, in general, by firms seeking to sell in international mar-kets.

ABSTRACT

This article addresses marketing failures of prominentAmerican firms in Japan. It is based on actual blunders com-mitted by these companies over the last 30 years. Most popularbusiness writings concentrate on firm successes, in partbecause such information is readily available from companiesseeking positive publicity. But unless success stories are trulyextraordinary, they tend to be forgotten and consequently, littleof value is learned. Indeed, studying the mistakes that compa-nies commit is useful because of the invaluable lessons thatemerge. Ricks (1983) has uncovered many such cases in dozensof foreign markets in areas such as packaging, translation, mar-ket research, and especially regarding adaptation of the "fourPs" of marketing strategy—product, distribution/place, pricing,and promotion.

Similarly, the focus of the present study is on internationalmarketing. Because it is the conduit through which the firminteracts with its world, and because it is the function overwhich local managers usually have the greatest control, mar-keting, when handled skillfully, is perhaps the most importantsuccess factor for companies operating in foreign markets. Theobjective of this article is to examine marketing mistakesabroad to see what can be learned, in the hope that interna-tionalizing firms today can avoid the problems that haveplagued others in the past.

In this study, company ventures were chosen that reflect avariety of product types and cases representing some of themore egregious examples of marketing blunders by American

Gary A. Knight

Submitted December 1994Revised March 1995

© Journal of International MarketingVol. 3. No. 4. 1995, pp. 107-129ISSN 1069-031X

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firms in Japan. Prominent companies were chosen becausethey tend to be more active overseas and because detailedinformation on larger firms is more readily available. Datawere obtained from published company histories, journaland newspaper articles and, when possible, through inter-views with executives involved with the cited firms. Everyeffort was made to verify the accuracy of informationreported, with multiple sources used wherever possible. Thechosen companies were General Mills, Avon Cosmetics,Simmons Mattress, Procter and Gamble, General Motors, theFord Motor Gompany, and Chrysler. The last three firms weretreated collectively as "the Big Three" automakers. Thesecompanies represent a cross section of multinationals han-dling a variety of product types. It must be noted that thesefirms are all American and, as conditions in the UnitedStates—including the large size of the U.S. domestic mar-ket—are often substantially different from those in othercountries, lessons drawn from U.S. firm experiences may notbe consistently relevant to the needs of companies in othercountries. Nevertheless, the examples presented and theproblems encountered are relatively generic, and the lessonsthat emerge are fundamental—they should apply to mostfirms in most markets around the world. Moreover, it must beemphasized that the focus of this article is on the marketingof consumer goods. Given that the marketing requirementsfor consumer goods may be substantially different from thoseof industrial goods (e.g., Campbell and Cunningham 1983;Hakansson 1982), the findings of this article should beviewed accordingly.

Japan was chosen because it possesses a culture and businessinfrastructure that are different in the extreme from those ofmost other countries, thereby providing numerous salientexamples. Moreover, it is often said that firms which can makeit in Japan can make it anywhere. Therefore, the article shouldprovide suggestions having universal application. Finally,Japan is the second largest consumer market in the world andshould be of interest to any company about to expand over-seas.

The article starts off with case histories of some of the moreinfamous marketing blunders by American firms in Japan.These cases are examined for common patterns of marketingfailure. It then concludes with an extensive treatment of man-agerially relevant implications that, it is believed, are funda-mental to success in not only Japan, but in most countriesaround the world.

108 Gary A. Knight

As the U.S. market for cake mixes began to mature in the early1960s, General Mills, the originator of Betty Crocker brand CASEScakes, turned its attention to Japan. With its standard of livingrising rapidly and displaying a penchant for Western goods, j ~~Japan seemed a logical target. Moreover, early market research General Millsrevealed that the Japanese never made cakes at home—theyalways bought them from bakeries and sales of Western-stylecakes were on the rise. This fact suggested the emergence of anopportunity for General Mills to make a killing in Japan'shuge, family-oriented market.

There was, however, one major technical problem to over-come: the vast majority of Japanese households had no oven.General Mills perceived this as the reason Japanese house-wives were obliged to buy expensive ready-made cakes—theysimply had no way of preparing them at home. Managementassumed that the devoted mother and wife might thereforefind great pleasure in making her own cakes and, in theprocess, save money for her family. Searching around to over-come the technical impasse. General Mills hit upon the oneappliance found in every Japanese kitchen: the electric ricecooker. Immediately, the company set to work and soon devel-oped a cake mix that could be used in the rice cooker. In sub-sequent test marketing, Japanese housewives gave theresulting cake very high ratings. After naming the product"Cakeron" (a Western sounding name intended to distinguishthe cake from local brands). General Mills thereupon launchedit in Japan.

At first, local retailers quickly stocked up on Cakeron and allseemed to go well. However, it soon became apparent that thenew product was not getting repeat sales. The Japanese house-wife was clearly resisting the Cakeron concept. It was at thisstage, well into the launch, that Ceneral Mills decided to con-duct focus group sessions with Japanese consumers in anattempt to unravel what was going wrong. Two major problemswere quickly revealed. First, in Japan, rice is often eaten atevery meal and hence, the housewife usually makes enoughrice at one time to last through three meals. When not beingused, leftover rice is often stored in the cooker. This meant thatthe rice cooker in the typical Japanese household often hadrice in it throughout the entire day. Consequently, using thedevice to bake cakes proved inconvenient.

Second, not only is rice the main staple of the Japanese diet, itis also considered a sacred food, possessing numerous sym-bolic qualities and traditions that date back thousands ofyears. Newly cooked rice may be seen as reflecting the core ofJapanese civilization itself: pure and unadulterated by thingsforeign. For the average housewife, the daily cooking of rice islike an age-old ritual, sacred and purely Japanese. Thus, prob-

Educator Insights: International Marketing Blunders by 109American Firms in Japan—Some Lessons for Management

lems arose when, in the process of preparing Cakeron, house-wives discovered that the mix could leave a cakey aftertaste ofeither chocolate or vanilla in their sacrosanct cooker.Consequently, homemakers throughout Japan rejected the newproduct as a contaminator of the sacred rice. Later, one punditcompared the act of a Japanese making a cake in her ricecooker to that of an English housewife making coffee in herteapot—it simply isn't done. As a result, General Mills soonrealized its error and withdrew Cakeron from the Japanesemarket (Fields 1983; Fortune 1981).

In the 1990s, Betty Crocker is still relatively unknown inJapan. Indeed, a General Mills official reported that the com-pany, which also offers a hroad line of breakfast cereals, has nosales force and no formal operations there. Its Japan presenceis limited to indirect exporting via local distributors.

At various times, Avon has been the largest manufacturer andAvon Cosmetics marketer of cosmetics in the world. The company first entered

Japan in 1969. During its first four years there, Avon could notturn a profit. This was partly the result of failing to adapt itsmarketing and product offerings to the needs of the Japanesemarket. To begin with, when the Japan subsidiary was firstestablished, a sales force was organized in the traditional Avonway that had worked so well in America and in the dozenother countries in which the firm did business: door-to-doorsales by local, commissioned housewives.

However, this approach soon fell apart because, first of all, theaverage Japanese housewife is very reluctant to sell productsto total strangers. Second, Japan is a crowded place and thehome is considered a private refuge—it is unusual forJapanese to accept strangers into their homes in the same wayAvon ladies are welcomed in the West. Finally, Japanese arecharacteristically timid with strangers, and any suchencounter may be fraught with fear that one of the parties—buyer or seller—will lose face or suffer some embarrassment.Therefore, the Avon lady in Japan proved less aggressive andless outgoing than her counterpart in the West (Consiglio1992; Kraar 1976). This basic difference in culture almost ledto Avon's undoing in Japan. Eventually, the company over-came the problem by assigning each saleswoman's territory asher own neighborhood and social group, a milieu in which shealready knew her customers or could get to know them easily(Consiglio 1992; Kraar 1976; Salmans 1979). Avon's then-man-ager in Japan reports that modifying the company's sales terri-tory strategy in this way to conform with local standards ofsocial behavior played a large part in the firm's ultimate suc-cess in Japan (Hemus 1984). To help overcome the innate shy-ness of sales people, Avon began offering large "beauty class"

110 Gary A. Knight

meetings, where it dispensed product information and peptalks (Kraar 1976). The firm also tried other approaches to dis-tribution such as direct marketing and direct mail - innova-tions not previously applied in Avon's other markets - whichhelped the company further penetrate Japan's complex con-sumer market (Consiglio 1992; Hemus 1984; Holden 1990).

At the outset in 1969, Avon attempted to launch its dominantrange of products that enjoyed high popularity in the UnitedStates. These were make-up, fragrances, bath additives, skincare products, costume jewelry, and gift and decorative items.However, at the time, nearly 85 percent of cosmetic sales inJapan was dominated by just three categories: skin care, make-up, and hair care (Hemus 1984). Fragrance, while a huge busi-ness in the West, holds little appeal for the average Japanese.There are several reasons for this, which, if Avon had done itshomework, would surely have surfaced. First, Japanese menusually do not approve of their wives wearing perfume; it hasnegative connotations for them. Indeed, the women in Japanwbo wear perfume are often associated with the "night busi-ness"—bar hostesses, prostitutes, and the like. Second, Japanis an intensely bumid country, and hot much of the year.Under these conditions, a scent may become overly strong,and Japanese, evidently unbeknownst to Avon, find strongscents a bit overwhelming. Third, scents that appeal to womenin the West are just as likely to offend in the East; Japanesewomen have their own set of tastes (Salmans 1979). To counterthese problems, Avon conducted extensive local marketresearch and invested heavily in R&D. These approaches pro-duced a line of seasonally oriented products much more intune with local needs (Salmans 1979; Hemus 1984).

Another misfire for Avon was bath additives. In Japanesehouseholds, bathing follows an age-old ritual. In short, whilemost Japanese bathe everyday, the tub is not used for washing;it is used for relaxing. Bath water is constantly retained at ahigh temperature, with family members taking their turn in thetub or bathing together with small children. As part of the rit-ual, each family member always washes before entering thetub. As tbe same water is eventually shared by all, it is consid-ered unacceptable to use soap, shampoo, and other such addi-tives in the tub. This practice is so ingrained in Japaneseculture that the fact that Avon attempted to launch such aproduct indicates a failure of market research.

In the West, Avon is sometimes associated with popular pricesthat offer good value for the customer's money. Popular pricinghas worked well in many of its markets around the world. Butnot in Japan. For example, in the past, with a view to increas-ing market share, Avon has lowered prices on some of its keyJapanese offerings. Simon Hemus, the firm's former marketing

Educator Insights: International Marketing Blunders hy 111American Firms in Japan—Some Lessons for Management

manager in Tokyo, reported that this approach had exactly theopposite of its intended effect—sales were negativelyimpacted. Later research revealed that the Japanese are veryattuned to product quality and are willing to pay dearly for it.Whenever they encounter a good whose price is significantlylower than competing items, the Japanese usually assume thequality is poor. Thus, with so many other higher-priced brandson the market, Avon's image suffered. Moreover, becauseimage impressions last a long time, the company's long-termsales were hurt as well. Avon subsequently raised its prices tobring them more in line with the firm's desired image.Ultimately, through painstaking effort, Avon did succeed inJapan, capturing by 1989 a three percent share of the total mar-ket. However, in 1990, the firm sold its Japan business to alocal company (Holden 1990).

= The Simmons Mattress company currently enjoys substantialSimmons Mattress sales in Japan, but it wasn't always this way. Historically, the

Japanese had always slept on futons, usually in a room thatdoubled as living quarters by day. Undeterred by this fact,Simmons sensed the Far East's trend to Westernization; andso, hack in 1964, the firm decided to begin making and sellingits beds, mattresses, and boxsprings in Japan. Unfortunately,hy 1967 Simmons found itself in trouble with the government,and had not yet turned a profit (Sales Management 1967).

The first problem was that demand in Japan turned out to beless tban expected. For one thing, ingrained habits like sleep-ing modes are hased in culture and hence, change very slowly.By 1967, fewer than 15 percent of Japanese were sleeping onWestern style beds (Sales Management 1967). Additionally,rooms in typical Japanese houses are usually not big enough tocomfortably accommodate large-sized Western style beds. Thesituation was much worse in the small apartments in whichthe vast majority of Japanese lived in the 1960s. Simmons fail-ure to adequately recognize these conditions nearly killed itsFar East business.

Other problems arose in sales and distribution. In Japan in1967, there were ahout a dozen domestic bed manufacturerscompeting for what was already a small market. As with mostother industries there, these firms were closely allied withretailers and distributors in ways that virtually excluded for-eign access. Japanese suppliers and retailers are bound to eachother through a deeply imbedded sense of obligation known ason and the intense desire to maintain societal harmony, knownas wa. For a Japanese to switch suppliers in a manner that dis-regards on and wa is to incur great dishonor and embarrass-ment. Thus, owners of Western-style hotels, condos, or otherhousing almost always gave their business to the compatriot

112 Gary A. Knight

supplier to whom they owed a favor, no matter what Simmonsoffered (Ricks 1983; Sales Management 1967). This impassewas furtber complicated in the 1960s by escalating Japanesefears of an invasion by Western manufacturers. Indeed,Simmons sales activities became so aggressive that for sometime the Japanese government considered sanctions against thefirm (Sales Management 1967; Train 1981).

Consequently, Simmons had no choice but to create its ownsales channels. In the beginning, tbe company hired andtrained a sales force consisting of eight Japanese men.However, sales failed to materialize for reasons that becameclear only several weeks into the new program. It seems thatnone of the salesmen could attest to the benefits of Simmonsproducts because none had ever slept in a Western style bed(Ricks 1983; Sales Management 1967; Train 1981). In a marketwhere people bad bad a particular sleeping mode for tbou-sands of years, potential customers were unwilling to switchto a totally new concept that the seller hadn't tried himself.Once this problem was corrected, anotber arose that wasrelated to Japan's strict class system. Simmons had discoveredthat many of its potential customers were Japanese who hadacquired Western tastes and typically belonged to the upperclass. Unfortunately, none of the company's sales staff couldcall on these clients because they all came from lower classes.In fact, if a salesman called on someone of a higher class, therewas a good chance the customer would be insulted (Ricks1983; Sales Management 1967; Train 1981).

The next obstacle was in pricing. Simmons had bought andstaffed concessions in major Tokyo department stores, butsales soon floundered because its products were way over-priced. In advertising, the company bypassed television, by farthe best medium in Japan for increasing awareness of newproducts. Indeed, largely due to its misunderstanding of thelocal market, Simmons applied numerous untraditionalapproaches, all with little success (Ricks 1983; SalesManagement 1967). This series of blunders reduced the likeli-hood of converting the locals to mattresses and nearly forcedthe firm to leave Japan. Eventually, Simmons downsized itsJapan operations, entrusting its sales there to a local licensee.

P&G formally entered Japan in 1972 through a joint venturewith Nippon Sunhome, a minor player in the local soap indus- Procter and Gambletry. P&G's initial problems began with its Japan launch of itslaundry detergent. Cheer. The Japanese soon discovered thatCheer didn't produce many suds if fabric softener was addedto the wash. This was at a time when fabric softener hadbecome very popular among Japanese housewives (Swasy1993). To make matters worse, P&G's local advertising empha-


sized, as it had with great success in the West, that Cheer waseffective in all water temperatures. The problem, as the com-pany soon learned, was that Japanese housewives washclothes in cold water, usually straight from the tap.Consequently, they didn't care ahout all-temperature washing.The formula that had worked so well in America was a failurein Japan (Huddleston, Jr. 1990; Swasy 1989). To better suitlocal conditions, P&G subsequently reformulated Cheer sothat it wouldn't he affected hy fabric softeners and advertisingwas changed to emphasize Cheer's cleaning power in coldwater, not all temperatures. P&G officials noted that the deter-gent later hecame one of their best-selling products in Japan(Swasy 1993).

In another incident concerning Camay soap, P&G, having hadmuch success with a particular television ad in Europe,decided to run the same campaign on Japanese TV. In the ad, awoman is taking a hath when her husband suddenly walksinto the bathroom. She begins telling him ahout her newbeauty soap and how it produces great lather. But the hus-band, stroking her shoulder, reveals that it isn't suds that's onhis mind. As P&G chairman Edwin Artzt later reported, thecompany found that Japanese consider it had manners for aman to intrude upon his wife. Moreover, Japanese attitudestoward sex are distinct from those of consumers in the West,and consequently they didn't consider the ad funny either(Huddleston, Jr. 1990; Swasy 1989, 1993). Later, the companyran Camay ads showing men approaching women and tellingthem how lovely they look. But in Japan, men simply don't dothat kind of thing, and these ads flopped as well (Huddleston,Jr. 1990; Swasy 1993). P&G conducted marketing research andquickly redesigned the ads to make them conform with localsensibilities. The approach paid off as the company's morerecent ad campaigns have proven quite popular (Swasy 1989).

Later, P&G fumbled again on the Japanese launch of Pampersbrand disposable diapers. Initially the firm iritroduced thebulky and shapeless Pampers version that had sold so well inthe United States. However, market research subsequentlyrevealed that Japanese mothers change their babies' diapersmore than twice as often as Americans (Huddleston, Jr. 1990).Moreover, unlike young families in America, the Japanesetend to live in tiny apartments (often less than 500 square feet)and so have very little extra space to store bulky items such asAmerican-style diapers. In short, with so little storage spaceand so many changes per day, what Japanese mothers need arethin diapers that are easy to store and use. Eventually, thecompany redesigned Japan Pampers along these lines and ulti-mately became the market leader (Freeman 1990; Swasy1993). Indeed, P&G cites its experiences with Pampers inJapan as one of its biggest lessons in the importance of tailor-

Gary A. Knight

ing products to suit actual needs of local consumers (Freeman1990).

Currently, with nearly $1.5 billion in sales, Japan is poised toreplace Germany as P&G's biggest foreign market. But it tookten years and nearly $300 million in lost profit and sales forthe firm to learn how to succeed there (Huddleston, Jr. 1990).As chairman Artzt recently confessed, P&G "stormed into theJapanese market with American products, American man-agers, American advertising, and American sales methods andpromotional strategies" (Freeman 1990). The approach proveddisastrous. Eventually the company had to learn to adaptproducts and marketing style to Japanese culture. Indeed,according to Artzt, the company eventually succeeded inJapan because it came to truly understand the country regard-ing its customers, trade, culture, and key competitors—P&GJapan now thinks and acts like a Japanese company (Freeman1990; Freeman and Kilburn 1988).

In Japan, American automakers have finally hegun to make ''inroads after many years of failed attempts and escalating The Big Three Automakerstrade frictions. Since 1993, vehicle imports from the Big Three(GM, Ford, and Ghrysler) have enjoyed substantial growth(Boone, 1994). Increases are attributable in large part to fivefactors: (l) the Japanese yen has sharply increased in value,making U.S. goods significantly cheaper for Japanese con-sumers; (2) the Big Three have, at the same time, substantiallyreduced the Japan pricing of many of their models; (3) for thefirst time, a few of Detroit's products are now heing offeredwith steering wheels installed on the right-hand side, reflect-ing actual driving conditions in Japan; (4) in a country wheregasoline sells for nearly $4 a gallon, the automakers are finallyoffering a larger selection of smaller cars that get hetter gasmileage and, overall, are hetter suited to Japanese road condi-tions; and (5) Detroit is establishing domestic shops for repairand maintenance of American cars (Boone 1994). Yet in spiteof these gains, the Big Three have not yet managed to captureeven one percent of the Japanese car market. In contrast,European car companies, smaller and possessing fewerresources than Detroit, have captured more than seven per-cent, proving that it can he done.

The Big Three were active in Japan from the 1920s, but wereforced to pull out with the approach of World War II.Following the war, the Japanese government erected a wall oftariff and non-tariff barriers that greatly hindered U.S. compa-nies' attempts to enter the local market. The situation began toloosen in the 1960s as the economy improved and foreign gov-ernments demanded greater access. While auto import quotaswere eliminated in 1965, major vehicle customs duties were


not removed until 1978 and the certification procedure forimported cars was rather complex until 1982 (JapanAutomobile Manufacturers Association 1989). The Japanesegovernment meanwhile did not allow American firms to formdomestic ventures with local companies until 1972. All ofthese obstacles were further compounded by Detroit's higherproduction costs, relative to those of their Japanese competi-tors. Finally, Japan long enjoyed substantial advantages deriv-ing from lower cost of capital, lower commodity and othertaxes, higher productivity levels and, until 1985, highly favor-able exchange rates.

Consequently, many of Detroit's problems have been clearlytraceable to protectionist foot-dragging by the Japanese gov-ernment and to idiosyncrasies of Japan's culture and businessinfrastructure. However, other obstacles were just as surelymade in Detroit, the result of inadequate market research andmarketing efforts by the auto-makers themselves. Indeed, themost striking indicator of this is the Big Three's failure, until1993, to supply vehicles with right-hand drive steering (RHD)in spite of the f"act that the Japanese have always driven on theleft. This is a classic case of firms failing to adapt a product, ina very fundamental way, to the needs of the market. In Japan,there are numerous domestic and European manufacturers allsupplying cars with the requisite steering design. Given allthese choices, it's no wonder few Japanese even consider buy-ing American. Management in Detroit would no doubt con-sider a foreign firm's attempts to sell a RHD product in theUnited States a disaster of product design and ridiculouslyinsensitive to local needs. Yet this is exactly what the BigThree have been attempting to do in Japan throughout almosttheir entire history there.

There are several reasons why attempting to sell LHD cars inJapan is unlikely to succeed. First, Japan is a land of narrowstreets and congested highways. Thus, driving a car from theleft-hand seat is inconvenient and frequently even dangerous.Second, freeways in Japan are overbuilt with toll booths; onsome expressways, the driver may encounter one every fewmiles. These are obviously difficult to use for the opposite-seated driver. Third, the failure to accommodate Japanese con-sumers on such a basic point is the clearest indication of theBig Three's lack of commitment to the local consumer. Thetypical Japanese is extremely quality conscious. His view isthat, if the automaker won't even supply a RHD car, thensurely there must be other problems with the car. Recently,management in Detroit has started to get serious about thisissue. The president of General Motor's subsidiary in Tokyohas even admitted that the company cannot succeed thereuntil the right-hand drive problem is properly addressed(Maskery 1991). It must be noted that each of the Big Three

Gary A. Knight

firms is now offering RHD models in Japan, but it took severaldecades for them to finally address this basic need in the localmarket (Boone 1994).

In a related issue, Japan's mainstream passenger car market isfor models with engines 2,000 ccs or smaller in size. The mar-ket for engines over 3,000 ccs accounts for only 3 percent oftotal sales but, prior to 1994, Detroit had nearly always pro-moted models that were typically 3,000 ccs or above (Chipelloand Chandler 1992; Johnson 1993). Moreover, the large-bodiedcars that most Americans favor do not fit in the averageJapanese garage and they are simply too big to be convenientlynavigated over many domestic roads. Yet these are the carsthat the Big Three have traditionally pushed in Japan. Withregard to pricing, Detroit typically targeted its offerings atJapan's most affluent consumers. In 1993, about 80 percent ofall passenger cars sold in Japan were priced under ¥3 million(about US $30,000) (Chipello and Chandler 1992). Yet, it wasonly within the last couple of years that the automakers beganpricing some models below this level (Boone 1994). For exam-ple. Automotive News reports that following price cuts in1993 that brought Big Three pricing much more in line withlocal conditions, sales of some models have risen substan-tially, thus underscoring the importance of pricing strategythat is tailored to suit local purchasing power (Johnson 1993).

Another major obstacle for Detroit has been quality.Historically, in view of quality-conscious Japanese, the BigThree have had a reputation for shoddy products requiringexpensive maintenance. Boone (1994) cites one study by theU.S. Department of Commerce in which the proportion ofJapanese consumers surveyed who considered American carsin their most recent purchase was only 0.2 percent. Over halfthe respondents listed "May require more time and money torepair" and "May have frequent mechanical trouble" as princi-pal reasons for their lack of interest. Other studies have simi-larly suggested that quality issues have been a majorimpediment to American car sales in Japan (e.g., Nagashima1977; Niffinegger and Odlin 1983). Indeed, the problem is con-founded because such concerns are likely to rub off on poten-tial Japanese distributors.

Historically, Japan's idiosyncratic distribution system hasposed substantial barriers to market penetration. At first,Detroit thought to link up with Japanese manufacturers in aneffort to gain access to local consumers. However, these effortsdid little to increase American sales. What the automakersfailed to properly address is the fact that Japanese manufactur-ers keep a tight rein on the distributors that handle their salesin Japan. In the United States, car dealers are usually indepen-dent operators, free to market a wide selection of competing


brands, both foreign and domestic. But in Japan, makers ownequity in about a third of the dealers and 40 percent of dealershave long-term debt with the makers. In short, the vast major-ity of Japanese dealerships are in some way beholden to theirdomestic suppliers. Moreover, among Japanese sellers, therehas long existed a strong cultural bias in favor of locally madegoods. Consequently, most Japanese dealers won't even con-sider handling American cars, and even when they do, theysimply do not give them the same attention as domesticbrands (Boone 1994; Maskery 1991).

In response to this problem, the Big Three have traditionallycomplained that setting up their own Japanese distributionnetwork would be prohibitively expensive. But data for the sixyears through 1988 confirm that Japan's most successful for-eign automakers—Mercedes-Benz, BMW, Rover, and Volvo—were those that established their own extensive domesticdealer outlets (Japan Automobile Manufacturers Association1989). Clearly, Detroit needs to reconsider it distribution strat-egy in Japan. One executive at GM recently admitted that, in ashift from traditional approaches, the firm did set up an inde-pendent distribution system for the Geo car model, whichresulted in increased sales. In Japan, as in numerous countriesaround the world, independent distribution represents a real-istic solution for circumventing the idiosyncrasies of local dis-tribution patterns. Ford is currently the most aggressive of theAmerican firms in building its own network there and thestrategy is just beginning to pay off. In fact. Ford's stature inJapan has improved so much that recently, Japanese bankersasked the American giant to take over management ofthe trou-bled Mazda Motor Corporation, in which Ford owns a largestake. That the Japanese auto industry would seek help fromAmericans is something of a historic first and underscores theprogress made in recent times (Reitman and Suris 1994).

LESSONS FOR MANAGEMENT

Patterns of Failure

At the most fundamental level, these cases appear to under-score the following marketing errors that firms are likely tocommit not only in Japan, but in any foreign market worldwide.

(1) Insufficient commitment to the market

(2) Inadequate market research

(3) Failure to tailor products to suit consumer needs and tastes

(4) Failure to modify basic marketing components to fit localconditions

(5) Failure to set prices at market-sensitive levels

(6) Mishandling of tbe firm's image and reputation.

Each of these problems is now examined in turn.

118 Gary A. Knight

It is often the case that American firms enter foreign markets ; ~casually, sometimes as a means of dumping excess inventory Commitment to the Marketduring slack periods at home. In the long run, most such ven-tures fail partly hecause foreign dealers and customers sensethat the American supplier is unreliable and lacks commit-ment. Top management commitment is critical to successahroad because it affects the specific international strategiesand decisions of the firm. After objectives have been identifiedin a given market, management must determine whether or notit is sufficiently willing to commit the financial and humanresources necessary to realize long-term gains. This point isespecially critical overseas because, for a variety of reasons,foreign ventures usually require substantially more time thandomestic ones to bear fruit. The firm's degree of commitmentnaturally determines the aggressiveness and persistence withwhich it enters the local market. Management that is timid oruncertain about its prospects may adopt inefficient marketingand other strategies, thereby setting the stage for early failure.The situation is particularly hopeless in those markets wheredomestic competition is keen.

If the home office is less than enthusiastic about internationalsales, it is unlikely that the foreign manager will receive thesupport he or she needs to succeed. The task of the foreignmanager is already difficult owing to unique conditions in thelocal market. He or she may have to go to extraordinary lengthsto satisfy the demands of consumers whose tastes may be quitedifferent from those of customers at home. Under such condi-tions, the manager is likely to make unusual requests of supe-riors. If upper management is reluctant about supporting itsforeign operations or is preoccupied with business at home,such requests are likely to go unheeded and the foreign ven-ture may never achieve the momentum it needs to survive. Insuch cases, upper management may become disappointed andwill probably reduce the already inadequate resources goingabroad. Ultimately, the foreign venture is abandoned, withmajor losses accruing to the firm.

Sometimes, in competitive and demanding markets likeJapan, the best solution to this problem may be to establishlocal manufacturing facilities, so that full attention can begiven to satisfying local tastes and demand. However, as manyfirms are unwilling to take this costly step, a second option isto establish a subsidiary with warehousing facilities in thecountry. The primary way to avoid such failures is for man-agement, at the very beginning, to undertake a thorough real-istic evaluation of its prospects in the target market as well asof the resources and length of time required for success.Management must then fix upon the extent of its commitmentto the venture. Once a substantial commitment level is deter-mined, it must then be communicated, in a comprehensive


and consistent way, to all concerned players in the proposedchannel, from production at home to after-sales serviceabroad. High management commitment derives in part fromthe knowledge gained through market research.

—^^—-—^^———^—-^—^— Market research doesn't always work and is sometimes unnec-Market Research essary at home where executives may possess a natural feel for

the market. However, the kind of understanding an executivehas for his home base comes naturally only to those who havelived, studied, and worked in a given country for most or all oftheir lives. Consequently, it is virtually impossible for the non-native to thoroughly understand conditions overseas withoutcomprehensive market research. While research seldom guar-antees correct decisions, it usually improves the firm's chancesfor success by a substantial degree. The company that attemptsto go international without doing prior research is surely ask-ing for trouble. The most important requirement in this processis obtaining information that is current and unbiased.

The executive who manages to get overseas is often well-edu-cated and may have enjoyed substantial success at home. Heor she may have long ago relegated the market research func-tion to a trusted staff and may have developed the habit of syn-thesizing business decisions from abstracts of data andinformation gathered from numerous sources. With such abackground, the executive may find it hard to be humble andaccept the reality of his or her profound ignorance about spe-cific conditions in a foreign market. Feelings of pride and alifetime of self-sufficiency may inhibit such a person fromundertaking the learning required to make a foreign projectsucceed. Or, ifthe boss is sensitive to this need, he or she maymake the other mistake of relying on reports and data pro-vided by subordinates who themselves have neglected theirhomework. In extreme cases, some executives may not evenacknowledge the elemental necessity of studying the targetmarket. Such deficient processes are common amongAmerican executives about to take their businesses abroad. Ina large sense, it is a form of arrogance and may be the mostfundamental reason why Americans neglect to adequatelyresearch foreign opportunities.

The cases outlined in this article illustrate how insufficient orfailed market research leads to blunders. Avon attempted tolaunch products for which there was no demand and Simmonsneglected to adequately consider the sleeping habits of ordi-nary Japanese. Procter and Gamble made the common error oftranslating successful Western ad campaigns directly intoJapanese, without first investigating possible conflicts with tra-ditional values. The Big Three automakers continue, to thisday, to market products in Japan that are simply ill-suited to

120 Gary A. Knight

local needs; deficient understanding of distribution issues hashindered their efforts there for nearly three decades.

As revealed in the cases, marketing blunders usually resultfrom inadequate knowledge and are almost always moreexpensive than the research that would have prevented theiroccurrence (assuming management acts on its knowledge).Indeed, comprehensive market research pays for itself, usuallyin the short-run. It allows the firm to plan for a successful ven-txire, or reveal disqualifying problems before any investment ismade. Market research should be undertaken without fail byfirms venturing abroad.

In a 1993 survey, of the vast majority of Japanese who stated ~ ~~ ;they would not buy an American car, nearly half cited Product Adaptation"incompatibility with Japanese road conditions" as the mainreason (Johnson 1993). The fact that success has evaded theBig Three in Japan for so long must be a result in large part oftheir refusal to supply cars with right-hand steering andwhose size matches local conditions. While it is true there aresome products with universal appeal requiring little localadaptation, the vast majority of goods bound for overseas needto be modified in ways that address the needs and desires ofthe local consumer.

A product is the sum of the physical and psychological satis-factions it provides the consumer. Thus, in addition to itsphysical aspect, a product also provides the user with a bun-dle of satisfactions incorporating its form, taste, color, odor,texture, performance, packaging, warranty and servicing,prestige of the brand name, reputation of the maker, countryof origin, and any other utilities or meanings that the buyermay perceive.

Nearly all consumers are profoundly affected by thousands ofinfiuences refiecting the culture of the country in which theywere raised. While it is comforting to assume that peoplearound the world are "modernized" and becoming "just likeus," the reality is altogether different. Fields (1983) notes thatwhile market phenomena and fashion change constantly, thevalues underlying basic culture evolve at a glacial pace, oftenover periods spanning hundreds of years. Moreover, con-sumers are constantly touched by demographic, socioeco-nomic, infrastructural, and a myriad of other dimensionsspecific to the place that they call home. These cultural andother factors necessarily determine behavior in purchase situa-tions and, consequently, the ultimate success or failure of newproduct introductions. The marketer cannot afford to ignorethe needs and desires of any group of consumers as reflected inthe factors noted above.


Most companies are reluctant to modify products to suit theneeds of foreign markets. They justify this reluctance hy sug-gesting that such changes are too costly, would create controlprohlems, or that the market is simply too small to justify achange. Ironically, as Takeuchi and Porter found (1986), prod-uct modifications of successful firms overseas are often rela-tively minor and may require little additional investment. Innearly all cases, where research reveals that a product willenjoy acceptance in the target market, it will probahly have tohe modified in some way, even if this applies only to packag-ing and translation of instructions.

—^——^————^^—^^•^— All products go through a life cycle of some duration. ProcterMarketing Adaptation and Gamble may still he selling Camay a century from now,

whereas computer software innovations often endure lessthan a year. An important first step in adapting a product toforeign markets is determining at what stage it is in the locallife cycle. That is, market research should ascertain, amongother things, how new a product is to its target market.Products that have been around a long time in the UnitedStates may be perceived as new in a different country andmust therefore be treated as innovations. Obviously, the mar-keting effort required to sell a completely new product is sub-stantially different from that required for an old one. The firmthat wishes to succeed must accommodate accordingly.

Because it is the principle means through which the firm com-municates its message to the new market, advertising is amongthe most important of marketing tools abroad. In fact, it is usu-ally more essential because, in many cases, not only is the newaudience unaware of the product, they may have never heardof the maker either. In other situations, local consumers mayhold misconceptions about the company and its brands thatmust be dislodged before the product can succeed. For exam-ple, in 1989, in one of its first major Japanese ad campaigns.General Motors had to overcome the commonly held andincorrect belief that their cars got extremely low gas mileage(Ribeiro 1990). In a country where gasoline prices are nearlythree times those in the United States, this was a major obsta-cle to sales. A well-designed promotion mix must include sub-stantial advertising, in addition to personal selling and publicrelations. All of these components should be mutually rein-forcing and focused on a common goal—successful sale of theproduct.

Language is a key obstacle to the creation of effective ads,instructions, and other marketing communications. Translationerrors have been the source of a great variety of marketing hlun-ders in virtually every country of the world. One Americanautomaker almost began marketing a car in Japan under a name

122 Gary A. Knight

that in the local language meant "idiot." Probably the classicsuch error occurred in China in the 1920s where Coca Cola mar-keted its soft drink using a name written in Chinese charactersthat, when pronounced, sounded like Coca Cola, hut whosetranslation meant "hite the wax tadpole"—definitely not therefreshing image Coke intended (Ricks 1983). There are manysuch examples in the annals of American business overseas andthey are not always confined to non-English-speaking countries.For example, "napkin" is synonymous with "diaper" inEngland and "rubber" means "eraser" in Australia. A Japanesecompany is currently marketing a brand of sweets in the UnitedStates under the name "Homely Cookies." While "homely" issynonymous with "homey" or "comfortable" in British English,its meaning to Americans - something that is ugly or lacking ele-gance - is entirely different. When creating an ad (or any otherkind of written communication) for a foreign market, languageprohlems can be avoided by following two simple rules: (1)always have the final translation done and approved by a nativespeaker who resides in the target country, and (2) in order to ver-ify that the proper meaning is conveyed, always have a secondtranslator re-translate the message back into English (a tech-nique known as "backtranslation").

From the examples given in this article, it should be clear that,in the vast majority of cases, some degree of marketing adapta-tion is necessary to succeed overseas. Typically, those factorsrequiring the greatest change are in the areas of language usedfor communication (in selling, advertising, etc.), distribution,personal selling, salesperson training, pricing, media selec-tion, and packaging. Those components that may be moreamenable to standardization are brand name, product posi-tioning, service standards, warranties, and the advertisingtheme (Takeuchi and Porter 1986).

When it comes to setting prices, Avon, Simmons, and the Big —__—^^——^^^———.^^^—.Three all encountered problems in Japan. As these examples Pricingrevealed, imprudent pricing can sink a foreign venture evenbefore it gets off the ground. Unfortunately, because of all thecomplex variables involved, pricing is one of the most compli-cated issues of international business. These variables areeither internal or external to the firm. The internal groupincludes company goals, manufacturing costs, costing meth-ods, degree of company internationalization, the degree ofcontrol desired over prices, and the firm's price levels in thehome and other markets. The external group includes generaleconomic conditions, purchasing power and demand of con-sumers in the target market, competitor's prices, freight, insur-ance, landed costs, exchange rates, taxes, duties, and othergovernment-imposed costs (Cavusgil 1988). All of these factorsmust he considered in the foreign pricing decision.


124

Too often the firm attempts to charge the same price in foreignmarkets that it charges at home. This is ill-advised since, asindicated earlier, there are a myriad of factors that can affectinternational pricing that may not be anticipated based ondomestic experience alone. On the broadest level, the firmmust first decide if it wants to use skimming or penetrationpricing. Under skimming, a relatively price-insensitive seg-ment of the market is targeted and premium prices arecharged. Penetration pricing entails charging a low price(often lower than landed cost) with the objective of buildingmarket share. Both approaches have their strengths and weak-nesses, which should be investigated through market research.

To help with the pricing question, Cavusgil (1988) hasdevised a useful procedure to follow for pricing in interna-tional markets:

(1) Verify potential of foreign market. That is, make sure thetargeted market possesses qualities sufficient to ensureadequate demand and purchasing power for the com-pany's products.

(2) Estimate target price range. That is, estimate the floor, ceil-ing, and expected prices that can likely be sustained in thetarget market.

(3) Based on the prices estimated above, determine the proba-ble company sales potential in the worst, best, and aver-age case scenarios.

(4) Analyze import, distribution, and transaction barriers. Inother words, ascertain those factors in the local marketthat may result in additional, possibly unforeseen costs,particularly costs that the firm may not be incurring nowat home.

(5) Examine corporate goals and preference for pricing strat-egy. Bear in mind that without full commitment from topmanagement regarding innovations in pricing, new strat-egy is not likely to be implemented in a comprehensive orconscientious way.

(6) Select a suitable pricing strategy. The choice is usuallyone or a combination of the following: (a) rigid cost-plus;(b) flexible cost-plus; and (c) dynamic incremental. Theseare explained in detail below.

(7) Check consistency with current price setting. Often, ifexport pricing is too high, there is a risk that a gray marketmay development. That is, the firm's product risks heingdistributed by non-authorized intermediaries who profitfrom the difference between a high export price and a lowdomestic one.

(8) Implement the chosen pricing strategy by selecting appro-priate tactics, distributor, and end-user prices.

Gary A. Knight

(9) Monitor sales performance and make adjustments as nec-essary in order to strike an ideal balance for achievementof company goals regarding profits, revenues, marketshare, and sales volume (Cavusgil 1988).

By following this procedure, the firm is more likely to arrive ata price well suited to local conditions, providing a higher levelof profits. Regarding pricing strategies, rigid cost-plus is anapproach in which the international costs (freight, duty, taxes,local marketing, etc.) and gross margin are simply added tomanufacturing costs. This method ensures adequate margins,but it may also result in a price that is too high to be competi-tive. Moreover, it is insensitive to critical factors such as localpurchasing power and market demand, and it may lead to thedevelopment of gray markets. Flexible cost-plus strategy is thesame as rigid cost-plus except that it allows the granting ofprice reductions under special circumstances such as specificmarket needs, volume purchases, or intense competition.

Under the dynamic incremental strategy, prices are deter-mined by subtracting those fixed production and marketingcosts incurred by the firm in the home market from the cost-plus price. It is based on the notion that home costs areincurred regardless of foreign sales. Therefore, only variableand foreign market costs need be recovered on internationalsales. The approach may allow companies to charge pricesthat, while profitable, are substantially lower and thereforecompetitive in markets that might otherwise be overlooked. Itassumes that the firm has excess capacity and is making prod-ucts that cannot otherwise be sold at full prices (Cavusgil1988). Whatever pricing strategy is chosen, it must be tailoredto meet local needs.

In international business, consumers are usually sensitive to ; 1the degree of commitment a foreign firm demonstrates in the Public Image and Reputationlocal market. Foreigners, for a variety of historical and politi-cal reasons, may already feel some resentment or suspiciontoward, for example, American enterprise overseas. Moreover,American companies have been active in foreign marketsthroughout this century and, unfortunately, frequent disregardfor local culture, language, and customs, and blatant failures inadapting products to meet local needs have given them a poorreputation for numerous types of goods in countless marketsabroad.

By failing to adapt their products in very fundamental ways tothe needs of Japanese, the Big Three overtly demonstratedtheir lack of commitment to the local market. These misstepsin turn have contributed to Detroit's poor reputation in Japan


and may have negative consequences for auto sales there formany years to come. By the same token, in neglecting toaccount for the Japanese housewife's use of fabric softener inher washer, Procter and Gamble proved that Cheer was adefective good, thereby damaging the detergent's chances forearly market success.

Once an image is tarnished, it may take many years and hugeinvestments for the firm to restore its good name. On the otherhand, when handled correctly, an image can actually serve asan offensive weapon, allowing the firm to charge higherprices, hire excellent employees, obtain financing at betterrates, and pre-empt competitors. Additionally, a good imagecan pave the way for local expansion, product diversification,and a stream of profits that extends indefinitely into thefuture. The lesson is clear. As the above examples reveal, it isfar less costly, in the long run at least, to investigate andaccommodate local conditions from the beginning rather thanto commit egregious blunders that damage, possibly forever,the firm's good name. Indeed, the successful firm abroad isoften aggressive in taking proactive steps to promote a goodreputation. Such efforts almost always pay off throughincreased sales and smoother operations.

CONCLUSIONAs Hartley (1986) has suggested, in thinking about marketingblunders, two points are worth noting: (1) even the most suc-cessful companies make mistakes, but can and do survive aslong as they maintain a good batting average; and (2) makingmistakes can be an effective, albeit expensive, way for the firmto learn. In most cases, the difference between success andfailure may be whether or not the company learns from itsmistakes. Of course, marketing is a social endeavor and doesnot lend itself well to laws or axioms. However, there are cer-tain fundamentals that do apply to most firms operating inmost situations. This article has examined international mar-keting blunders and has attempted to elucidate critical mar-keting fundamentals abroad. It is hoped that Western firms canlearn from these blunders and apply marketing fundamentalsabroad in a way that ensures success.

NOTE1. The first case is taken from George Field's popular book on

consumer marketing in Japan, From Bonzai to Levis (1983).Fields was General Mills primary consumer research con-sultant in Japan and thus had special knowledge of therecounted events.

126 Gary A. Knight

Boone, Donald. "Analytical Review: The Big Three: Masters of ^^~^^~~~~~~ '~~~~"~^^^^^^^ '~Their Own Fate in Japan?" JAMA Forum—Journal of the Japan REFERENCESAutomobile Manufacturer's Association 13 (August 1994): 7-11.

Campbell, N.C.G., and M. T. Cunningham. "Customer Analysis forStrategy Development in Industrial Markets." StrategicManagement Journal 4 (1983): 369-80.

Cavusgil, S. Tamer. "Unraveling the Mystique of Export Pricing."Business Horizons 31 (May-June 1988): 54-63.

Chipello, Christopher J., and Clay Chandler. "U.S. Car Makers FaceMany Problems In Efforts to Attract Japanese Buyers." WallStreet Journal, 8 January 1992, A2.

Consiglio, Louis V. "Global Competitive Advantage: Lessons FromAvon." Working paper, The Center for International BusinessStudies, Pace University, New York, July 1992.

Fields, George. From Bonzai to Levis. New York: Macmillan, 1983.

Fortune. "Learning How to Please the Baffling Japanese." Fortune104, 5 October 1981, 122-26.

Freeman, Laurie. "Japan Rises to P&G's No. 3 Market." AdvertisingAge, 10 December 1990, 51.

Freeman, Laurie, and David Kilburn. "P&G Eyes Tripling JapanSales." Advertising Age, 24 October 1988, 64.

Hakansson, Hakan. International Marketing and Purchasing ofIndustrial Coods: An Interaction Approach. Chichester, England:John Wiley and Sons, Ltd., 1982.

Hartley, Robert. Marketing Mistakes. 3rd ed. New York: John Wiley,1986.

Hemus, Simon. "Adapting for the Japanese Market." Journal of theAmerican Chamber of Commerce in Japan 21 (September 1984):25-28.

Holden, Ted. "Saying Sayonara is Such Sweet Sorrow." BusinessWeek, 12 March 1990, 52-53.

Huddleston, Jr. Jackson N. Caijin Kaisha: Running a ForeignBusiness in Japan. Armonk, NY: M.E. Sharpe, 1990.

Japan Automobile Manufacturers Association. Imports on theIncrease: Trends in Japan's Crowing Imported Car Market. Tokyo:Japan Automobile Manufacturers Association, 1989.

Johnson, R. "Japan Makers Blast Big 3's Sales Efforts." AutomotiveNews 67 (27 September 1993): 3.

Kraar, Louis. "Japan is Opening Up for Gaijin Who Know How." InAsian Business and Environment in Transition, edited by A.Kapoor, 244-53. Princeton: Darwin Press, 1976.

Maskery, Mary Ann. "Winning Favor in Japan." Automotive News66 (7 October 1991): 3.

Nagashima, A. "A Comparative 'Made In' Product Image Surveyamong Japanese Businessmen." Journal of Marketing 41 (July1977): 95-101.

Niffinegger, P., and J. Odlin. "How Good is the OverseasCompetition?: A Survey of Car Dealers in America." Journal ofthe Academy of Marketing Science 11 (Summer 1983): 259-68.


Reitman, Valerie, and Oscar Suris. "In a Cultural U-Turn, Mazda'sCreditors Put Ford Behind the Wheel." Wall Street Journal, 21November 1994, Al.

Ribeiro, Jorge. "Imports Get the Green Light." Business Tokyo,December 1990, 36 - 39.

Ricks, David A. Big Business Blunders: Mistakes in MultinationalMarketing. Homevifood, IL: Dov̂ r Jones-Irvvrin, 1983.

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TEACfflNG OBJECTIVES ANDSUGGESTIONS

This article can be used to meet several teaching objectives.Students should learn: (1) how differences in local cultureand business practices can impact company efforts to enter orsustain sales in foreign markets; (2) specific aspects of mar-keting in Japan, one of the most important consumer marketsin the world; (3) important success factors for doing businessabroad; and (4) various fundamental strategies and tactics ininternational marketing. In general, the cases presented helpto bridge the gap, in international marketing education,between theoretical teachings and real-world practice.

Areas for Discussion/AnalysisThe instructor might consider involving students in one ormore of the following topics for discussion or analysis.

(1) Ask the class to pretend that they, as the marketing depart-ment of company X, have been assigned the task of preparinga marketing plan for sales of product X (for example, a homeappliance, furniture, or a food product) in Japan. Based on theinformation provided in the article and in terms of product,price, promotion, and distribution, what factors should theyconsider and how should the product and its marketing strat-egy be formulated in order to maximize success?

(2) Have students describe the attitudes that executives at alarge domestic firm, one possessing a long history of success athome, might hold as they attempt to enter a foreign market for

128 Gary A. Knight

the first time. How might these attitudes affect the ability ofthe firm to plan and implement appropriate strategies for suc-cess in the new market?

(3) How would local consumers respond to a foreignautomaker that attempted to market a car in the domestic mar-ket with a steering wheel on the side that is opposite the localstandard? How would the offering of such a product affect theattitudes of local consumers toward the associated brand nameor the firm itself? The steering wheel example is extreme, hutcan he extended to other types of products (e.g., food, com-puter software) to emphasize the fundamental need to cus-tomize many types of products to suit target market needs. Thediscussion would he a good opportunity to present the con-cepts of product life cycle (PLC) and product diffusion ininternational marketing. That is, assuming that firms modifymarketing strategy to hetter position a product in differentstages of its PLC, it follows that, where a product is in a differ-ent PLC stage in a foreign market from where it is at home (theusual case), the product would have to he marketed differentlythere.

(4) As descrihed in the article, managers responsible for salesto a foreign market must often contend with problems of lowcommitment or indifference on the part of top management.What can managers in such positions do to overcome thisprohlem? What are some tactics or political skills managerscan use to "manage" their superiors in order to increase thechances for success in an international project? What kinds ofskills are important for eliciting top management commitmentand cooperation?

THE AUTHOR

Gary A. Knight is a doctoral candi-date in marketing and internationalbusiness at Michigan State University.

(1) Assign students to find an article (or the instructor can pro-vide one) that descrihes prohlems that a firm encountered inentering or sustaining business in a foreign market. Studentsare then asked to write a paper in which the prohlems are ana-lyzed, appropriate strategies and tactics are discussed, andfinal solutions proposed.

(2) Assign students to research the culture and husiness cus-toms of a given country, and write ahout their implications forplanning appropriate marketing strategies. The exercise can heextended hy having students develop a complete internationalmarketing plan. An excellent framework for conducting cul-tural and other analyses in the development of such a plan isprovided in Philip Cateora's International Marketing, 9th edi-tion, Chicago: Irwin, 1996 (see under "Marketing Plans" in thehook's index).

Teaching Suggestions

Educator Insights: International Marketing Blunders byAmerican Firms in Japan—Some Lessons for Management

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