Samza Round-Up - 9/29/2022

This Week's Round-Up

Welcome to autumn. The first frost was on the ground this week here in Minneapolis, which is such a harsh reminder of what's to come.

This week's round-up is a little different; I'm mixing things up. I'm only including a single story in the newsletter, with a longer blurb next to it. I'm going to be honest: I didn't intend on changing things this week, but the keys were whirring and there was no reason to stop my mind. I hope it's illuminating.

The Fascinating Story of Nestlé in Japan

Hypothetical: you have a business that sells potato chips that is looking to establish a presence in a new city. Now, assume the city has historically never been a "potato chip" city. Instead, they prefer the tortilla chip. Introducing the potato chip to the general market would be a challenge, but you are convinced you can do it. How long would you estimate it would take you before you had a strong presence in the market?

I'm guessing you're thinking this story is about a mastermind in business who developed a strategy to overtake a new market, and did so extremely quickly. You wouldn't be wrong in assuming the first part. But the interesting thing about Nestlé is not how fast they accomplished a product integration, but the long-term approach they took, and how patient they were with it.

In the 70's, Nestlé was eyeing a new market: Japan. For context, the Japanese were people who had an extremely strong, pre-existing emotional and cultural connection to tea. For hundreds of years, this was THE drink. It was deep, meaningful, with a taste of heritage with every sip. Of course, this made introducing coffee extremely difficult, and it showed. Nestlé had nothing to show for their efforts, even after multiple tries with different product focuses.

The company hired a consultant, who changed the entire strategy. He determined that due to the cultural incompatibilities of coffee and the Japanese adults, introducing it to the existing population would be fruitless. His determination: coffee would need to be introduced to the children by building it into things they already consumed. In this case, that was candy. Nestlé didn't skip a beat and introduced coffee-flavored candy, and the kids loved it. There was no resistance, as the cultural resistance to coffee was not yet present in the younger population. The result? In 15 years, the new generation was growing up, and they began consuming Nestlé's instant coffee products on a large scale. Today? Japan leads ALL NATIONS in their instant coffee spending, at $22 billion a year.

Nestlé still dominates this market.

The idea of brand loyalty and "imprinting" is a well-known phenomena. Do you still have an account with the first bank or credit card company you started with? Do you have a strange love for a specific brand of clothing, even if you can't say why it's any better than the others? Do you cheer for the same horrible sport's team, year-after-year, even though you could switch loyalties at any time? Nestlé figured out that introducing a product to children at any early age would make all the difference in a decade, and they gambled big on it.

They won.

Of course, most of you aren't in a position to brainwash an entire market into liking your product, or fight against deeply held cultural values, but there are still some takeaways that the average person can takeaway for their business and/or personal lives:

1. Fully understand the background of your market/audience before presenting anything new. This applies to marketing, public speaking, making friends, and a bushel basket of other things.

2. Sometimes, the best option is to not swallow too big of a fish. In this example, the most prudent option for most people would have been to simply sell tea or switch markets.

3. Have patience. Understand that good things often take the most time. "Getting rich quick" doesn't exist in the real world. Stand back and trust the process.

Thanks for reading; I'll be back to regularly scheduled content next week (I think)! If you loved it, forward this email to your friends. And follow me on Twitter!