A Financial Times article titled “Technology Let’s Buyers Unravel Ethics Behind the Label” cites that ethical spending has increased significantly in the past 20 years. As an example in the United Kingdom, “The amount of spending and investment influenced by ethical considerations almost doubled between 1999 and 2008 to reach £36 billion.” The FT article mentions the growth of fair trade and certified organic products as part of this growth trend. And fellow Daily Fix author Ted Mininni says, these types of goods “are increasingly being added to retail assortments”—and in growing numbers!

However, one of the major challenges for both retailers and manufacturers alike is authenticating ethically sourced products. There’s more to the process than taking the supplier’s word for it.

In the case of organic bananas, the FT article notes, “the food company Dole labels each of its organic bananas with a three-digit number that, when entered on its website, reveals details of the farm where that banana is grown.” Identifying where a banana is sourced, however,  is simple compared to such products as sweaters or t-shirts that pass through multiple suppliers and countries.

In “The Elephant and the Dragon,” author Robyn Meredith confirms that products often “zigzag” through the global supply chain from factory to factory. “A cheap toy may be assembled by parts from 12 different factories,” she says. And something as sophisticated as an automobile might contain five to seven thousand parts.

Fortunately for marketers, the challenge is not beyond the capabilities of today’s technologies. Some progressive companies are engaging in a purposeful effort to build effective policies (including auditing), technologies (supply chain analytics and infrastructure) and processes to track and monitor the extended supply chain.

Of course, implementing a data-driven supply chain infrastructure is only half the battle—supply chain managers, operations personnel and marketers must learn how to use it! Marketers, working alongside operations, will need training on the various tools and systems used to access data for reporting and query purposes. And marketers may also choose to make supply chain data available directly to consumers—similar to Dole’s web portal—thus enabling them to verify product origins for themselves!

Ethical sourcing, trade, manufacturing and retailing will continue to be a hot button for consumers. However, as seen from this article, jumping into this marketplace requires much more than just fancy signage and/or promotion. A real commitment to corporate responsibility and sustainable practices must be much more than lip service; it involves significant investment in people, processes, technology, and strategy. As seen from the complexity in supply chain traceability alone, it’s definitely not an effort a company should take lightly.

Questions:
• Does it matter to you how a product is made? Are you interested in the origins of the products and services you consume?
• The Financial Times article says that companies should make information about their supply chain public—or consumers will do it for them. Do you agree with this statement?

A Brand = A Reputation

The term “brand” can be confusing. Think of a brand as a reputation. Building a reputation in any new market involves a first impression. This first impression forms through the initial interactions someone has with your company, products, and services. It can be formed in many ways, including: advertising, media, word-of-mouth, and contact with your products or services. Through additional exposure over time, you build a reputation among your potential and existing customers. This reputation is your brand.

Getting Started

As you move through this following four step process you should constantly measure what you are doing as it relates to your new customer. Each step of the way, ask these filtering questions:

To my target customers, am I being Relevant?

Do my offerings make a difference in their lives? Do they translate, both literally and figuratively, to their life and lifestyle?

To my target customers, am I being Appropriate?

Am I pursuing things the proper way? This includes culturally, legally, traditionally, etc

To my target customers, am I being Remarkable?

Do I stand out from the competition? What make you unique in the mind of your customers?

Key Steps

STEP 1) Re-Examine Offerings (Ensure Demand)

Proven success with your current target audience, that doesn’t automatically mean that your new target will connect in the same way with your products or services. Use the questions you used to build your initial business plan and re-ask them for the new market.

First and most important you’ll want to determine if a market exists for your product? If so, make sure the want or need isn’t already being well met by someone else. If there are existing competitors, what (in the perspective of your potential customers) makes you remarkably different? If you do see a need, but competition does NOT exist, make sure you find out why. (e.g. It is not permitted by law, it is provided through another method, etc).

If you don’t have a formal business plan from your first go around, pick-up a guide on how to writing a business plan or use online resources. A formal plan will ensure you don’t forget to ask any important questions. (Inc.com has a great section called “Business Plan Building, Section by Section”

STEP 2) Determine Your Logistics (Ensure Supply)

Make sure you can get your product to, or manufactured within, the new market. Import and manufacturing laws vary from country to country. Before you go any further, ensure you can make your products reliably and consistency available to your new target markets.

STEP 3) Re-Examine Your Identity

Now that you’ve established demand and supply, continue asking relevant, appropriate, and remarkable filtering questions (mentioned above) with regard to your identity. You now should ensure your company and product names, logo, packaging, registration, and trademark status are relevant in your new market.

• Company / Product Names
  Ensure product names make sense to the customers in your new markets – this includes both in their English form and/or in the local translation.Re-brand Locally – Similar to the way auto manufactures change the names of their cars to appeal to local markets, perhaps you need to re-brand your key product to be locally relevant. Many companies re-name their products to find the local language equivalent. Don’t simply use translation tools for this stage. You don’t want what you think is an effective name to mean something opposite or offend potential customers. Work with someone locally who can help make sure you communicate what you intend.Here’s a true story. One of the most popular Christmastime lattes at Starbucks Coffee in North America is the Gingerbread Latte. However, the first year it was offered in Germany it was surprisingly unpopular. Germany nearly invented gingerbread – they love it! The marketing team realized in Germany that flavor isn’t called “gingerbread” but rather, lebkuchen. So the next Christmas they changed the name on the menu to Lebkuchen Latte and they sold like crazy.
• Logo
  Ensure that any logos or symbols you use have the same meaning locally and don’t offend. Do research to make sure your logo isn’t similar to that of another international company. Ensure your use of color is culturally appropriate. Color choice to make packaging stand out from competition in the US may not suit the color meanings in your local market. Consult a local marketing or design firm to confirm.
• Packaging / Labeling
  Does your packaging permit your products to exist among your competitors? (e.g. Your package uses a clear plastic shell that hangs from a rod, but the competition puts theirs in a box that sits on a shelf). While packaging may help to differentiate you, be sure it doesn’t prevent proper merchandising. Do your labels contain the legally required and locally desired information? Learn the local standards and ensure your packaging includes any necessary regulatory information and meets transportation standards.
• Registration / Trademark Status
  Follow the process in your market to ensure you preserve patent and trademarks. Thanks to the NAFTA Treaty your marks may already be protected in Mexico and Canada. If you’re doing business in the European Union filing for a Community Trade Mark (CTM) will protect you. (Please find an expert to help you with registration and trademark – this is not my expertise.)

Find local resources to help. It is nearly impossible to understand local culture simply by visiting a country. If you don’t speak the language, don’t assume you can translate – Google translator ain’t gonna cut it. Find local customers, local translators. Two years of French language in high school doesn’t make you qualified to understand the French market, nor perform your own French translations.

In the same way consumers’ needs are different in Rhode Island from those in Florida or California, so differ the needs of customers in Paris from Marseille. (And perhaps completely different from those in Italy, or Ireland, or Spain).

See how the best of the best do it. Download the Interbrand Surveys & Research “Best Global Brands” study [PDF] as a guide to research great global brands.

Step 4) Communicate & Build Awareness

Communicate
The manner and tone in which you engage your potential and new customers is as important as the words you choose. What will be the tone of your conversation? Manner and tone will come across to customers through your packaging, advertising, online, through your sales people, and the way you answer the phone.

What types of interaction you will have with them? What will be the tone you choose? What types of sales process and policies will you use? Be sure to take note of what the competition and other businesses are doing. What may have seemed witty or charming in the United States may be misunderstood in your new market. Be careful playing the “old and established” angle. “Old” is a relative term. An old company in US can sound impressive, but you may be doing business in a country that has cheese older than your company.

Build Awareness
The key to building awareness, trial, and sales is the same all over the world. Craft and communicate a message that is relevant to the needs and wants of your customers. Deliver this message:

• in the places they are receptive to it,
• in terms they can relate to and understand, and
• through the channels that will truly reach your potential customer.

The research you do during Step 1 should provide nearly all you need to know to do this successfully.

For your website, while a domain ending in “.com” is the universal, truly being relevant to local customers includes registering your website to the country domain as well as translating to the local language.

Using these key four steps as a guide will help you build your brand in a way that is locally relevant and will create a positive reputation for you.

Questions to Ask

• Do your homework – Be sure to fully research and understand your new markets. Look before you leap.
• Visit before you commit – Spend some time where you want to sell your products. See what the competition is doing. See what they’re doing with the competitions’ product.
• Find a local ally/resource – Don’t go it alone. Get advice from someone locally who can help you fill in any gaps in understanding the local market, customs, and customers.
• Make no assumptions – What seems logical and “a given” to you may be completely different in your new market. Ask too many questions.
• You are the foreigner – Local traditions and customs – as foreign as they may seem to you – represent the local way of doing things. Add value where you can, but realize you’re the outsider and should respect the way it is done locally.

Resources

Online

• Community Trade Mark (CTM) – The Office for Harmonization in the International Market (OAMI) – Trade Marks and Designs – You can file for your CTM online.
• International Branding Organization – non-profit organization dedicated to establishing branding as a specialized area of expertise.
• US Department of Commerce US Commercial Services site BuyUSA.gov – An excellent resource if you need to figure out how to export and or find local resources in another country.
• Google Search for “international branding agency OR firm”
• Import & Export – article from MyBusiness.co.uk
• US Commercial Services (US Department of Commerce) – helps U.S. companies find new international business partners in worldwide markets.

Books
While the authors may not specifically address international branding, the same concepts apply. If you didn’t use these books when you first built your brand – you’ll appreciate them as you prepare for your new markets.

• The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything, by Guy Kawasaki
• Free Prize Inside!: The Next Big Marketing Idea, by Seth Godin
• Why Johnny Can’t Brand : Rediscovering the Lost Art of the Big Idea by Bill Schley
• Zag: The Number One Strategy of High-Performance Brands by Marty Neumeier
• Marketing in a Multicultural World: Ethnicity, Nationalism, and Cultural Identity edited by Janeen Arnold Costa and Gary J. Bamossy

Perform an online search of your favorite bookstore for titles that may be specific to the countries where you plan to expand.

I originally wrote this article in August ’08 for Inc.com. It sat mothballed until this February 1, 2010 it when ran re-written with additional interview content gathered by Elizabeth Wasserman. You can read her version here.

Forecasting sales and inventory levels is probably one of the most difficult jobs of a product and/or supply chain manager as companies need to marry demand signals with supply. Adding more complexity to the mix is global supply chains that span weeks, multiple countries and sometimes oceans. Lots of hand-offs, tons of data to track, and lots of points for things to go wrong.

For many product managers (and the marketing/brand managers that support them) inventory management is a critical task. By not carrying enough inventory, companies can not only lose out on sales but also suffer reputation damage by not meeting customer needs.

Nonetheless, with companies hoarding cash–it seems the last thing companies need is to be stuck with unsold finished goods or piecemeal parts.

Apple’s Chief Operating Officer Tim Cook agrees. In a recent Fortune article, Cook says inventory is “fundamentally evil.” And Cook should know, as he’s in the very fickle consumer electronics business. “You kind of want to manage it like you are in the dairy business,” he says. “If it gets past its fresh date you have a problem.”

Here’s the rub, however. Forces of globalization and tight coupling are magnifying the complexity, impact and frequency of events. Once steady suppliers are going bankrupt, some suppliers cannot get loans in the credit crunch, and disruptions in the supply chain are becoming more commonplace. Your product launch date doesn’t matter much if your suppliers cannot deliver.

But can’t analytical modeling save us? After all, most companies are using advanced planning applications to predict future trends and behaviors, right?

While statistical forecasting techniques can help extrapolate future trends, these methods rely on building models based on historical data. And some executives say in volatile times, historical data can no longer be trusted to accurately model and predict the future.

So what’s the solution? Should we build more redundancy into our supply chains to better manage the risk of suppliers, or stay the course with the trend towards information management and just-in time supply chains that are well optimized and thin?

Better communication is a potential answer says Camille Schuster, President of Global Collaborations. What is needed, she says is, “Proactive contact with suppliers on a regular basis to determine how supplies are doing, what issues are coming up, whether any shortages are foreseen, whether there is any softness in any product area, what changes and/or rumors are floating about.”

For many companies, effective inventory management is a critical component of financial health. With “cash” at a premium in this global financial pandemic, inventory decisions can literally make or break your company.

When it comes to inventory, what level of risk are you comfortable with?

Questions for DailyFix readers:

* Is a little inventory cushion warranted as risks (environmental, political, criminal, financial, reputation, terrorism etc) seem to be increasing in intensity, complexity and frequency?
* In volatile times, should forecasting and inventory management be more focused on “gut” decision making rather than mathematical models?
* Stockouts leave “money on the table” and ultimately reduce customer satisfaction. What is your marketing advice to supply chain, operations and/or engineering executives in these volatile times? Hedge their bets with a little more inventory, or continue to operate “thin”?
* Is inventory still evil? Should it be avoided at all costs?