Taking Steps Into the US Marketplace - Marketing Strategy and Investment

Underestimating the amount of funding for marketing is perhaps one of the biggest mistakes made by organizations seeking to enter the US marketplace.

Under investment may be due to reliance on established practices in the home country or misunderstanding practices in the US. Either way, this can be detrimental to the success of a new US based venture.

The UK’s largest retailer, Tesco, attempted an entry into the US market in 2007. Five years later it admitted failure and withdrew from the US. How did this large, well established brand, with a broad range of marketing experience fail to find a market for its products in the US?

The primary reason was Tesco’s underestimation on the cost of entering the most open and broad marketplace in the world. Tesco initially invested £1.5Bn in their operation, which proved woefully inadequate. 

In addition, their marketing was based on the type and style used with success in the UK. However, US consumers were confused and uninterested in the messaging. 

And finally, much of the initial product offerings from Tesco didn’t match US consumer expectations and they lacked critical marketing execution to persuade customers. Some basic market research at the start of their endeavor could have addressed consumer needs and expectations.

The Tesco failure may now serve as a lesson for businesses looking to enter the US marketplace. Success means ensuring that communications, product or service offerings and marketing strategy with investment are aligned with the US methods of doing business rather than on perceived practices, often based on established practices from the originating country.