International Business – Norcal Wingman

Dateline: Nanjing, China

In a “5 Star” Hotel, in the capital city of Jiangsu Province, the Sheraton Nanjing Kingsley Hotel & Towers, one might expect to be able to find a drinkable wine, however, you would be mistaken.

I had the fortune of having my first visit to the country of China a few weeks back. I have heard much about China becoming one of the largest markets for fine wine, and thus, was unconcerned that I would be able to find something to drink for the #Cabernet day being put on by Rick Bakas on September 2nd. I had even seen a review of one of the other Sheraton hotels on the “SPG” channel where the host had a chat with the hotel sommelier and they discuss how outstanding the wine selection is and enjoy a glass over some conversation and gourmet snacks. So when the evening of September 2nd rolled around, I happily boarded the elevator, bound for the forty-first floor (where the cigar and wine bar are located) and marched in. I found myself a spot at the bar (which was completely empty BTW) and asked for the wine list.

Now, a side note. The girl working the bar this particular evening had waited on me on previous evenings at the hotel’s Irish Pub, and she was always exceptionally helpful and courteous. There was clearly a language barrier but she was always willing to try her hardest to serve the customer properly. Her English name is Cassy. Now back to the story.

I looked over their wine list; which for being touted as an extensive list was seriously lacking, but anyhow… I chose a Chilean Cabernet, which I know to be one of the best value Cabernets in the marketplace. After all, I didn’t really want to blow my expense reports out of the water by picking a super expensive wine. No luck! The bartendress said it was out of stock… Okay, back to the list for a second choice. Since that Cab wasn’t available, I thought I’d keep it in the Bordeaux varietal club. There was an Argentinian Malbec on the list and I’d had some good Malbec on my flight over from the states, so I thought I’d settle for this. I happily ordered up a bottle of that, again, I was dashed. This too was out of stock. Slightly more dejected this time I buried my nose back into the wine list. By this time I had eliminated most of the less expensive options and was down to some seriously expensive French Cabs and a few Californian Cabs. Now, I don’t know about you but I thought that it would be ridiculous for a guy, from Sonoma County, to travel Six Thousand miles (A 12 Hour Flight) and order a Cabernet from less than 20 miles from his home. But, it was either that, or order some seriously expensive (even for Chinese standards) French stuff, so, I did it. I found a Sonoma County Cab that was on the list and ordered away. The Barkeep checked her list and confirmed, it was available… or so she thought. She pulled down bottle after bottle from her wine rack, she showed me the ones she couldn’t read and asked if that was okay, none were what I had asked for. She finally came back with one, a Napa Cabernet. 2001 Beringer, Knight’s Valley Cabernet Sauvignon. Now, here’s the funny part. The wine list showed only a 2005, but I figured if she was willing to give me the 2001 for the same price, it was either that or forget #Cabernet Day, so I bit.

Table Tent featuring some interesting wine reviews

Cassy opened my wine and poured me a glass. As usual I gave it a whirl and a sniff… eh, cough. Well, it smelled a bit off but, again, it was #Cabernet day so it was my duty to drink some damn Cab on this day or die trying. I muscled through about 1/2 of the glass before I couldn’t drink any more.

Now I’ve heard from my friend, Dominic Foppoli of Foppoli Wines, that the Chinese wine palate is very “young” and “undiscerning,” that they usually mix their wine with cola or 7-up, even really expensive Bordeauxs. That drinking expensive wine is just a status symbol and that they don’t actually enjoy wine for its intrinsic characteristics, yet… So this wine was spoiled. It was terrible at best, and disgusting at face value. I imagine that it had sat on some customs dock, in the sun, cooking in its own bottle. Disappointed, I gave up on having a good #Cabernet day. But, somehow, a little part of me was glad for the experience.

Now, here’s where the rubber should meet the road. An open comment to the management of the Sheraton Kingsley, Nanjing, China. Your wine selection seems decent, however, your staff are untrained on wine and if wine is spoiled, you should not charge your customers for it! You should not advertise on your “Starwood Preferred Network” that your Chinese based hotels offer an excellent wine experience. They do not. I’m disappointed with your wine list not being up to date with what you actually have in stock and perturbed that you boast about your wine offerings.

I know that at some point, trade with China will become simpler. That fragile agricultural products will not have to rot on some customs dock, while someone waiting to be bribed sits on product bound for eager consumers, and that the palate of the new generation of Chinese young urban professionals will grow to appreciate wine for its multifaceted character. Until then I will stick to Chinese Budweiser… Sad, I know.

Do you believe that adherence to the “marketing concept” is the right way to approach international markets? Why, or why not?

Here is what netMBA.com defines as the marketing concept “The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition.”[1] For US companies venturing into international markets, following this rule is absolutely critical if they want any sort of success. International markets are so diverse that reuse of existing market strategies may not be effective in delivering results that have been achieved in domestic strategies.

Asia is considered by many companies to be an opportunity market. However, aggregating the most populous region of the globe into one segment is a grave error. The diversity of each country, and even the cultural differences within regions and sub-regions of countries can demand a different marketing strategy to connect with that area’s consumer. Although the name of the article suggests otherwise,[2] “In Asia Marketing 101 Doesn’t Work,” it talks about getting to know the consumers in differing areas “better than the locals.” This is psychographic marketing if I’ve ever heard of it. Just as stated in the AE Article “Three Dimensional” each country has nuances that are unique to itself. For example, Samsung, understanding that due to the small living quarters in Japan, small, multi-function devices garner higher value to the Japanese consumer.

In addition to physical constraints of each of these countries, political and social differences permeate differently. China has had a long history of Communism and therefore has a much more communal sense of each other rather than an individualistic approach that would be commonly used in a western marketing strategy. The HBR article refers to this effect as “Tapping the communal mindset.” To market effectively companies should start with a clean slate and build a strategy from the ground up. This does not mean ignore principals of demographics and segmentation, it does however, mean that this is an entirely new game and the rules are very different. In an article from the Association for Consumer Research I found a prime example of specific segmentation for a single city in China. The abstract is a psychographic segmentation of Beijing Adults and Food Consumption[3]. Here is an excerpt:

“The people of the PRC have been through considerable and rapid social, political, and economic changes during the last 50 years, They have experienced changes from Confucianism to Communism and then Consumerism. These rapid and enforced changes (by the government) have had substantial impact upon the values system and lifestyles of the people in the PRC. Some of these changes have caused alterations to the basic structure of the PRC society.”

The article continues into great detail on the Beijing consumer. It is uses Beijing as an analogue for the rest of the country’s larger cities because it is the capital city. Even this may be to generalized to hold up over time.

In conclusion, the “Marketing Concept” should be followed. The basic principals it drives at are crucial to any successful foray into marketing to any consumer. The catch is that every market is different and a savvy marketer should not underestimate the minute differences in geographic regions. Asia is, or could certainly be the economic engine for the next century, but if you fail to understand the uniqueness of its various pieces you will most certainly fail.

[1] http://www.netmba.com/marketing/concept/

[2] http://blogs.hbr.org/cs/2010/02/in_asia_marketing-101-doesnt-work.html

[3] http://www.acrwebsite.org/volumes/display.asp?id=11813

McGraw-Hill Companies, Annual Editions, Marketing 09/10