For years, many Nigerian families complained about the cost of laundry detergents. Two companies, Unilever and PZ, dominated the market. They sold their Omo and Elephant brands in big boxes that were unaffordable to most families.
Families looked for alternatives so they could buy the detergents in smaller quantities. Local companies sprung up, but failed due to quality issues. During this period, it was common for families to pool resources to buy the big boxes and share them. Retailers noticed this trend and started repacking the goods in smaller nylon bags so that more people could buy.
Yet the major brands did not change their packaging strategies. They failed to understand that, though the product may be cheap, people were having trouble buying it. A similar problem existed for powered milk. Peak brand, distributed by a Dutch company, was dominant in the market. But to most families, the packaged size, in tins, was too large to be affordable. The multinational companies distributing these products were merely sending the same content and size they sold in more affluent economies.
Then Procter & Gamble came into Nigeria and introduced products that were differentiated by size. Their Ariel detergents could be bought in sachets, at sizes many families could easily afford. Ariel became very popular and soon other brands introduced sachets. Sure, over a long period of time, families might spend more on Ariel; but to most consumers the choice it provided, to meet other needs while still getting laundry done, was huge. The same thing happened with powdered milk. A company introduced a brand, Cowbell, in sachets. It became the most popular powered milk in college dorms as students could easily afford the smaller units.
As companies go global, some replicate the business model that has worked in their native nations. They fail to recognize the new culture, purchasing power, and general economic development in the new markets. That lack of understanding leads to them selling products that fail to meet the needs of the locals.
Firms must think global, yet act local; it other words, they must have a glocal strategy through which they utilize their global experiences and yet customize the services and products to the local markets. This is not just for product design; it applies to branding, marketing, and distribution.
Even within a country, a firm might need multiple messages. A few years ago, a meat processor opened a plant in northern Nigeria, which is predominantly Muslim. He had operated successful ones in the Christian-dominated southern part of the country. He replicated his model without any major change; after all, he was still in the same country. But four months later, the new plant was doing so poorly that he considered closing it. Nothing seemed to work.
After working with consultants, he learned that in his TV ads, one of the animals appeared to be dead before being slaughtered. The locals do not eat such animals and they avoided the brand. The business immediately changed the ads and showed clearly how the animals were raised, killed, and processed. The business blossomed.
Next time you plan to enter a developing market, do not just ship what you have sold in the developed world. Engage these new customers to help define the products they will buy. At the bottom, there is a fortune, but you can only unlock it if you allow the people to help inspire some of your products.
originally published in HBR