Leo Burnett is an advertising agency that was founded in 1935 in Chicago. One of their clients is Ontann Beauty Care (OBC), which is a leading global manufacturer of health and beauty care products. OBC has been awarding Leo Burnett’s (LB) its business for many years. OBC has been a client of LB’s Toronto and London offices since 1958 and mid-1970, respectively. OBC has centralized its global marketing campaign for a given brand and creates the communication materials as templates for local offices to follow. Local offices are then responsible for adapting these raw global materials and developing local “below the line” materials. LB also centralized its decision making to better service it original client. In 1998, OBC presented a new skin care line that would target a rapid growing population of consumer over the age of 50. This new skin care line would be called “Forever Young”, and was more expensive than other OBC skin care products. OBC awarded its advertising and brand communication to LB. Mirroring the global OBC team structure; LB global brand team remained in London and formed satellite teams in Toronto and Taiwan. The Taiwanese Team would receive the creative templates from the LB global team and would adapt for the local market. In addition, they would have to adapt the television ads and retake photos for the print ads with an Asian model. The Toronto team would use English television ads and print advertising for the Canadian market. Furthermore, they would produce direct marketing and Web site materials.
In short, the Toronto Team had less autonomy, and was not able to adapt to the Canadian market. The results showed the Forever Young launch in Taiwan was successful. While the results of the launch in Canada was below “action standards”, in spite of the success of the isolated pre-launch test. Furthermore, LB’s future business with OBC was now in jeopardy and tension raised within LB to improve the OBC brand in the Canadian market. One of the first contributing factors is the idea of Pluralism of Cultures vs. Cultural Pluralism. What should a firm pay attention to: The unique cultural characteristics of Canada or the variety of cultures within Canada? In my opinion, cultural pluralism is a contributing factor in the lack of success of the launch. Canada has many different cultures within its nation. When LB decided to use the data from a small town in the interior of British Columbia to make a general assumption about the entire nation of Canada they should have known that one area should not be the blue print for an entire nation. The product trail and product sales indexed 120 against its objective, which had a base index of 100. This is a successful result, but that is only one area in Canada.
For example, Canada is known for having a French and British influence in different areas. Canadian also has many American cultural norms. The Canadian launch indexed 50 against a base index of 100, which is not a surprising result considering the fact that LB only tested one area of Canada. Next, we have the idea of a global mindset. LB had their global team headquarters for the project in London. The reason for this was because London had experience in leading global business teams and it was closer to OBC’s global team. When dealing with Canada, LB London wanted to push English filmed television ads & print ads in the Canadian market. At the same time, LB allowed Taiwan to exercise autonomy. This proved to be unsuccessful for the Canadian market, and successful for the Taiwanese market.
The reason for this is the idea that there needs to be shared views when it comes to thinking globally and locally. The ads being run in Taiwan were adapted to include a popular Asian actress, and this also allowed the product to show how effective it was on Asian skin. Taiwan is a successful example of incorporating local and global thinking. In Canada, ads featured a blond Caucasian actress as the lead in television and print ads. The Toronto team was not able to adapt the ads as they best see fit. The Canadian culture may not accept the ad because it was filmed under London assumptions and values. It did not take into consideration Canadian values. Specifically, Canadian consumers perceived the ads as violent. The case does not specify why it was considered violent, but if LB London allowed local thinking that situation might have been avoid.
Another factor that contributed greatly to the events that occurred is culturally mediated cognitions in communication. Communication was very difficult in many cases for both LB Toronto and London. Teams relied increasingly on e-mails and phone calls. Although emailing is quick and easy to create, this does not help develop relationships, which does not build trust between parties involved. Also, Meta communication is not involved, which can be important in different cultures. For example, in an email you are not able to hear the tone of a voice or the facial expression of the person sending the email. Speaking on the phone has similar weaknesses, which include not being able to visually see the person reactions. Lastly, videoconferences are personable, but may not be as convenient. This was apparent in the presentation of a creative concept to the London team which took 45 minutes and lead to frustration.
The last contributing factor was poor management of global teams. One of the main problems was the inability to communicate directly to Carmichael. LB Toronto wound have to contact Annabel Forin, and then she would contact Carmichaels. Geoff spoke about the challenges he faced when working with someone else’s art direction by stating, “This would be easier if I could connect directly with Annabelle, but she’s on the road so much of the time it’s hard to catch her.” Lastly, referring to Toronto and Taiwan as a satellite may lower morale of employees because they may feel as though they are not as important as the headquarters in London. Lastly, the inability to manage global teams lead to extremely tight timeframes because the two teams would not be able to communicate effectively their desires leading to repeated changes in materials.
My first recommendation is the ability to allow LB Toronto to think locally. To achieve this LB London should produce a creative template for a brand, but allow the Toronto team the adapt for the local market. The Toronto team knows what’s best, and has in-depth knowledge in their local market. The only problem that Carmichael sees with this is the fact that key executives have departed and that giving autonomy to an inexperienced team may not be a good idea, but I feel as though LB Toronto has a better grasp of the local market than LB London even with the absence of key figures. By allowing Toronto to have more autonomy this well also decrease the amount of interaction between London and Toronto because they are not using LB London’s work so the need for constant clarification will not be necessary. My Second recommendation is to improve marketing research on countries that LB plans to enter. The prelaunch test of British Columbia was not enough to make an assumption of the entire Canadian nation. Leo Burnett needs to ensure that they are identifying the different cultures and testing does cultures.
Once they have ample research on a particular company they can then enter the market. For example, if they enter US market it is important to realize that different areas of the country might value skin care products differently. In New York City skin care product may be popular, but in Seattle it may not be as popular. If emails and phone calls are still used there may be an adverse outcome between the culturally mediated cognitions in communication of two parties. With that being said, my third recommendation is to have a quick and simple training session to better understand how to effectively collaborate with another foreign team. By learning the culturally mediated cognitions in communication and communication protocol it will assist when two teams need to speak with each other on the phone or through email.
The training sessions will include guidelines for communicating, and how to efficiently communicate your message to another countries team. Lastly, I recommend a better means of communication within LB through a better management of a virtual global teams. As mentioned before communication seemed very difficult especially for Geoff and Cathy Lee. Getting a hold of Carmichael was very inconvenient since they needed to first contact Annabel Forin. LB needs to create a better communication setup so that a team member can communicate directly with their supervisors, or their supervisor’s supervisor. This will allow members of team to get answers more efficiently instead of not receiving a response.
The launch of Forever Young proved to be a challenge for Leo Burnett, but with the implementations of my recommendations we can insure that the losses we face in Canada are never faced again.