Ready to take your business to a global stage? Before you floor the international-growth accelerator, you might want to take a moment to consider the lesson of the Oreo cookie, which now sells in China with enormous success—after more than a decade of ho-hum performance.
Without further ado, I present you…
The Tale of The Oreo’s Almost-Failed International Expansion
Most Americans know Oreo cookies intimately. If we don’t eat them on a regular basis, we remember them from our childhood or buy them for our own kids. The Oreo has been called both “America’s favorite cookie” and “milk’s favorite cookie” Stateside, and nobody has ever really challenges those monikers.
But in 1996, when Kraft introduced the Oreo in China, the cookie wasn’t very successful. For about a decade, sales puttered along. Kraft considered removing the Oreo from Chinese markets altogether, but before pulling the plug, it decided to do some research about why Oreos weren’t selling to Chinese consumers.
What they found is solid gold for any company thinking of expanding overseas.
- The taste was a problem for most people. In the U.S., nobody questions the taste of an Oreo. We’ve grown up with it, and we’ve grown to love it. In China, though, testers noted that the bitter part was too bitter and the sweet part was too sweet. When Kraft tinkered with the recipe, it found a balance that suited Chinese customers’ palates better.
- Chinese buyers didn’t have the emotional attachment to Oreos that most Americans do. This meant that Chinese buyers didn’t “love” Oreos in the same way. But it also meant that Kraft was free to experiment—and it did. In addition to new Oreo flavors (including green tea, orange-mango, and others), Kraft introduced straw- and wafer-shaped Oreos to great acclaim in Chinese markets.
- Chinese consumers responded well to emotional Oreo ads. As part of its Chinese Oreo renaissance, Kraft launched a series of ads in China that did exactly what American Oreo ads do: they portrayed adorable children showing their parents “the right way” to eat an Oreo. Chinese consumers responded well to these emotionally fueled ads and began buying Oreos in droves.
Thanks to Kraft’s careful efforts, Oreo sales increased 800 percent in just a few years, which earned it the place as the top-selling cookie in China.
Ensure Your Financial Success in Global Expansion
The most important lesson we can learn from Oreo (besides how to twist, lick, and dunk) is that you can’t take anything for granted when you’re expanding internationally. If you absolutely know that your products or services will be welcomed on a global stage, trust that instinct—but make sure you have your marketing ducks in a row before launching your company far from home.
What stumbling blocks have you experienced when considering global expansion?
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