Monday, April 30, 2001

And the New Economy Winner Is Europe

“The European Union is emerging as a formidable competitor among world economies, thanks to an aptitude for cross-border management and an ease with cultural diversity.” With a sub-head like that how could I not pick this article for the Week 2 assignment? J

Stuart Crainer’s article entitled, “And the New Economy Winner Is Europe” in the current edition of Strategy+Business magazine (online at www.strategy-business.com) delves into the popular American myths that paint Europe as a fractured market flawed via multiple languages, laws, and cultures to conclude that those flaws are actually the basis for Europe’s strength in the new economy.

He anchors his work on conclusions drawn from The Global Competitiveness Report 2000 by Oxford University Press, which indicates that seven of the top eight countries ranked are European. The United States is ranked number two by this measure while Finland ranked number one in global competitiveness. To salve your curiosity, Germany, Netherlands, Switzerland, Denmark, Sweden and the UK were ranked third through eighth while Singapore and Australia checked into ranks nine and ten.

Crainer points out “at its best, new European management is founded on the embrace of the ‘single market’ concept, an aptitude for cross-border management, an ease with cultural diversity, and a belief that business is founded on relationships.” This makes sense to me as points of strength as I’ve always envied compatriots whom were able to move from one language and cultural orientation with ease while their US counterparts were often frozen like deer caught in the headlights.

Having been responsible for a sales office in Holland for a few years, I always marveled at the fact that while I was most easily able to relate in American-like terms to the team there, they could very readily switch gears to assist in addressing the needs of Germany, the UK, France, Spain and Egypt in that sometimes seemed the opposite of an approach they had worked just moments before. This chameleon-like reality was perhaps most evident at large trade shows where one moment you might find yourself being hugged by an Arabic customer and chatting about life in general while in the next instance you’d shift to rattling off specifications to a German customer in crisp, dry notes with nary a casual beat.

Crainer’s belief is that rather than being “hidebound by a combination of culture, history, and habit” Europe is poised to leverage its (historically) US perceived weaknesses into a strength capable of flourishing in the new economy. Europe clearly has a sensitivity to other cultures and the ability to work in teams that surpasses the US’s cultural individualism and hero worship approach within the global economy.

As Crainer writes, “the New Economy demands more consensual and culture-based management skills. It is built on relationship-dependent initiatives like cooperative strategies and strategic alliances, for which European managers appear well equipped.”

So, while Europe struggles with its multiple voices, regulations, and sense of self-confidence in the New Economy, its struggles could lead to a huge gain in business success at the exact time when the US must learn more about other cultures.

For as choice appears in the global economy, just being boisterous, fast, and good starts being weighed against the long held-social values within Europe. My own suspicion is that those long held values will make it tougher to choose US business if the European pace of reincarnation continues.


Source:

Strategy+Business, 2nd Quarter, 2001 p 40-47.Title: And the New Economy Winner Is Europe
Author: Stuart Crainer


P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Monday, April 23, 2001

Living in A Material World

I came across this article in the current edition (April 16, 2001) of FORTUNE magazine and thought it the perfect way to kick off an International Marketing discussion!

Geoffrey Colvin, in his article entitled “Living in A Material World” places the real issue of marketing right in front of your face, “the reality is that customer are not cyborgs but human beings, who haven’t evolved significantly in 20,000 years.”

To me this quote strikes at the very heart of the marketing conundrum, especially on an international basis, that is: the need to remember at all times that there is a human being on the receiving end of all marketing actions and to be successful, one must speak in a marketing dialect that matches that consumer.

The text talks about the obstacles created by “Self-Reference Criterion” and how such SRC can filter decision-making via “an unconscious reference to one’s own culture values, experiences, and knowledge as a basis” for those decisions. While sometimes SRC driven marketing can deliver success, Colvin notes that Ted Turner has “made himself a billionaire on the belief that most people are a lot like him” the simple truth is that even when we can “all see where we’re going” … “as human beings, we’re not there yet.”

I remember when I was just starting out in sales; I believed my job was to tell every customer everything I knew about the equipment they were considering. In this manner they would be making informed decisions and I would be doing my job to the fullest. Lucky for me, sheer enthusiasm (passion for the product) carried the day otherwise my commission checks wouldn’t have paid any bills. Eventually, I discovered that if I attempted to learn about where the customer was coming from, my presentations could be much more succinct and effective which when combined with passion made for great sales performances.

The key to marketing then is a true understanding, in terms used by the end consumer, of the needs and desires that a given product may or may not fill. From that understanding a bridge can be built to connect to the consumer and deliver the sale.

In spite of how many times we might be tempted to skip this vital understanding step in the belief that the whole world is changing and the whole world gets it (sound dot.com’y enough for you?) as Colvin writes, “major shifts in how we live never happen instantly or completely.” Marketing has more to do with the basics of being human than most any other organizational function (yes, even more than HR ;-)) certainly more than for which marketing is normally given credit.

Source:

Fortune, Apr 16, 2001 p80.Title: Living in a material world.
Author: Geoffrey Colvin


P. Cateora, J. Graham. "International Marketing." Irwin McGraw-Hill. 1999.

Saturday, April 07, 2001

German Shoppers Get Coupons

In an article by D. Wessel in the 4/5 WSJ entitled CAPITAL: German Shoppers Get Coupons, I learned of the Free Gift Act and Discount Law both on the books from the Nazi era just now being repealed which wreaked havoc with retail efforts.

Did you know that half-price happy hours are (were) illegal because half-price is an illegally large discount? The Discount law enforced a maximum discount of 3% from list. Imagine trying to figure out a 3% discount two drinks into a happy hour. ;-)

Did you know that you can’t (couldn’t) advertise a percentage of all charges on a charge card going to fund AIDS research? German law said you are allowed to advertise your product, “but may not exploit the emotions of customers.” Hello?

American Express’ popular Members Reward program that lets you earn points on purchases just like a frequent flyer program is legal but can’t be advertised because it “creates the impression that they are offering something attractive yet the customer does not know what exactly – if anything – they will receive.”

Now you might say, but Greg they are repealing those laws so give them a break. However, the article explicitly states that the only reason is (not common sense) rather the Internet and Globalization and the way they are forcing economic change!

BTW, other laws limit clearance sales to twice a year plus the day of a business’ birth in years divisible by 25. Aaach!

How do we count for these issues in our country risk assessments? ;-)

At least the closing paragraph of the article made sense. Simply stated, “only by continuing to unshackle its muscular, yet rule bound economy can the world’s third largest economy realize its potential for its 80 million consumers.”