As Newell Rubbermaid Inc. seeks future growth in international markets, the company is considering how to make proven products resonate across national and cultural borders, CEO Michael Polk told Global Atlanta last week.
A lot of research is going into the localization of products, from upscale pens to carseats, in markets like Brazil and China, which are similar in their potential but very different from a regulatory and product acceptance perspectives.
“We are a company with global ambitions, and for us to realize our ambitions we must build our share position in our home markets, which in most cases is the U.S. and then Europe and Japan, and then extend the footprint to a faster growing group of markets in a systematic and disciplined way,” Mr. Polk said.
Currently 65 percent of the company’s business is U.S.-based, with Canada accounting for another 5 percent. Europe contributes 15 percent and emerging markets the remaining 15 percent. Mr. Polk intends for emerging markets to take up 20 percent of the company’s revenues by 2017, “which is more difficult than you think.”
He believes that business is “won and lost on the ground locally.”
“You can create a global brand, but you have to make sure they are understood in a locally relevant way. You have to maintain the scale of a global brand but make sure it has an intimate connection with consumers,” he said, adding, “The route to market is very different in various parts of the world. You have to figure out how to make sure your products reach the consumers and all of that kind of learning comes through experiences working in these markets.”
Mr. Polk has honed what he stressed as a “systematic and disciplined” approach to market entry over a long career that has spanned multiple continents.
The upscale pen brand Parker’s 5TH Technology pen, the first fine writing system that adjusts to each user’s unique writing style, was launched in 2012 in China taking into account both local writing preferences and the retail environment. The pen was sold in pop-up stores within larger malls in cities including Shanghai, Beijing and Guangzhou.
“All the fundamental research shows that you can enter these markets in a way that creates a sustainable growth model in the the market for the Parker pen and it could be as big as it is in the U.S,” he said. “There is a market for fine writing and the consumers there love Western brands and luxury goods. They have tons of money to invest in these high-end prestige brands.”
But the Western allure only goes so far. The product also has to be practical for the end user. Since Chinese calligraphy uses sweeping movements to create the characters, Newell Rubbermaid altered the tips design so that it can “travel,” Mr. Polk said.
The same has been done with Sharpie, another of the company’s brands markers and writing utensils, which it plans to introduce into the Chinese market along with Paper Mate in 2016.
“You have to make the product resonate in a locally relevant way, and to do that you have to appreciate the differences. You adapt your product to the local differences without compromising your brand positioning.”
As far as China goes, the company also has a line of industrial products that cut sheet metal that is used in factories building ships, automobiles and other large commercial objects. Its Lenox bandsaws have also seen a lot of success after altering messaging to focus on durability rather than the cutting experience itself.
The company is also biding its time in the baby-care business. One might think that Newell Rubbermaid’s Graco children’s products, such as car seats, would be a vast opportunity. It would and should be in the world’s most populous country — except there are car seat laws and enforcement are still developing. “There is a movement starting for car seats in 17 provinces and, when that happens, we’ll be there,” he said.
In Brazil, Newell Rubbermaid is growing at a double-digit pace despite a shaky economy.
“What’s going on with the economy doesn’t affect us because our mindset, our strategic drive, is to build our scale and look at the long term,” Mr. Polk said. “We will develop a strong growth position irrespective of what’s happening in the day-to-day world. We’re not being dissuaded by the here and now; it’s a long term view.”
His vision comes in large part from lessons learned growing brands internationally.
Prior to joining Newell Rubbermaid in 2011, Mr. Polk was president of global foods, home and personal care at Unilever, where he was responsible for the development and marketing of Unilever’s $64 billion portfolio. He also spent 16 years at Kraft Foods serving as president of the Asia-Pacific Region of Kraft Foods International.
Mr. Polk’s many takeaways from this vast experience include the idea that economic development can create social stability across markets. To him, that means a business can do good while doing well. The second is that if a business has the right mindset and philosophy, these international experiences can be “defining — both personally and professionally.”
Mr. Polk made these comments during the company’s Global Day of Service, where he spent the day volunteering and meeting with teachers and children at Boyd Elementary School in Atlanta.
Speaking at the Junior Achievement’s Chick-fil-A Foundation Discovery Center at the Georgia World Congress Center, where Newell Rubbermaid employees volunteer throughout the year, he pledged that a “Teacher Toolbox” will be donated to 106 schools comprised of more than 4,000 teachers and 50,000 students.
In partnership with the Kids in Need Foundation, the company, which posted 2013 sales of $5.7 billion, will donate school supplies including the company’s well-known Sharpie, Paper Mate, Expo and Mr. Sketch brands and other products.