The globalization of the world economy has triggered more and more firms to expand overseas. This is especially true for brands that already enjoy a good reputation in their country’s market. Exploring foreign markets for these big players means not only that the company can benefit from scale economies, but also that the brand equity accumulated over the years at home can be transferred to the new entities abroad. Moreover, when it comes to developing countries,  foreign brands are quite likely to be warmly welcomed by local consumers.

Still, this “easily-gained” acceptance is not going to transfer into profits if the company overlooks local consumer specific needs and demands. After all, consumer preference and loyalty depends on both functional and emotional attribute of brand.

Marks & Spencer, for example, has been quite disappointed by the ROI from its recent investment in Shanghai – China. The beloved British brand stands for the largest retailers in the UK with more than 600 stores and 20 million visitors every day.Still, after having entered the Chinese market M&S has found out the hard way that what appeals to their consumers overseas – and even in Special Administrative Region of Hong Kong - might not be as successful as expected in mainland China.

Local consumers complain the retailer runs short of sizes fitting their natural build and that the cut and style do not meet their tastes. It seems that the UK brand is totally unaware of the fact – pretty well known to say the truth - that Chinese customers are generally “more slim” than Europeans. Moreover, because of supply chain problems, the retailers have had troubles to put food products on the shelves – and that, naturally, has not made local consumers happy either.

Now, it looks like M&S is admitting its mistakes in China – reportedly Sir Stuart Rose, executive chairman of the British retailer Marks and Spencer has been saying that they have screwed up. Maybe a well managed research into the tastes and shopping habits of Chinese consumers could have saved the UK retailer all these troubles?

Source: chinaretailnews.com