Hult Life - Undergraduate Life at Hult International Business School Winter Issue 5 | Page 8

08 HULT LIFE MAGAZINE
Global
business,
culture,
and brand
failures
By Dr. Mo Willan,
Dean, Undergraduate
Program at Hult San
Francisco, Discipline
Lead for Marketing
Globalization means companies now see the whole world
as their market. Firms generate huge sales and profits by
exploiting opportunities in global markets, including in
emerging and developing markets. The most profitable
brands today are also arguably the most global.
For each of these brands, it is safe to state that they make more
sales and profits outside of their home markets. However,
pursuing global expansion also comes with risks, and culture
is without doubt one of the biggest causes of brand failures in
global markets.
Culture has a profound effect on people. It shapes our thinking,
behaviors, actions, and decisions—especially when it comes
to how we interact with products and services. Here are some
examples of how misinterpreting cultural norms has ultimately
caused brands to fail in global markets.
Y-O-Y
Change:
Apple
$214,480 +16%
Google
$155,506
Amazon
$100,764
Microsoft
Coca-Cola
Samsung
Toyota
Mercedes-Benz
Facebook
McDonald’s
$92,715
$66,341
$59,890
$53,404
$48,601
$45,168
$43,417
Fig. 1: Top 10 Global Brands by Brand Value ($m) in 2018
MarketingCharts.com (October 2018); data source Interbrand
+10%
+56%
+16%
-5%
+6%
+6%
+2%
-6%
+5%
Big Mac
bombs in India
Religion is an aspect of culture that is very close to
people’s hearts and heavily influences the behaviors
of individuals. McDonald’s, arguably the world’s
leader in fast food, ventured into the Indian market
in 1996 to take advantage of its large population and
launched its biggest selling product, the Big Mac.
However, it bombed mainly because it goes against
Hindi religion, which forbids the eating of beef as it
is considered sacred. As a result, McDonald’s suffered
heavy financial losses and brand damage.
Not-so-lucky
numbers
Numbers have different meanings and connotations
in different cultures. For example, in China, the
number eight is considered to represent good
fortune whereas four is an unlucky number. Chinese
people get married on August 8 and banks use the
number 8% to charge the rate of interest. In England,
as another example, many hotels do not have rooms
numbered 13 as it is considered a bad omen. Not
knowing these nuances has caused several brands to
fail in markets where people avoid certain numbers.
Beer that gives
you diarrhea
Words can have the same pronunciations but
different meanings and interpretations in different
cultures. From a marketing perspective, this has
implications on the choice of brand names and
slogans. For example, the American beer brand
Coors uses the slogan “turn it loose,” which is
interpreted in some cultures to mean: “drinking
Coors gives you diarrhea.” American Airlines used
the slogan “fly in leather” when it launched its
first-class passenger service from the US to Mexico.
However, this slogan when interpreted in Spanish
means “fly in the nude.”