Taking Your Brand to the Middle East
Brands that do well globally aren’t necessarily universal, they’re more adaptable.
As a Lebanon native, I introduced the famous Nestle brand to the Middle East in 2010, opening its first café location in Beirut. Following tremendous success expanding throughout the United States and Canada, growing to more than 100 locations, I recognized the opportunity to develop the concept in my home country where U.S. brands are prominently recognized and thrive among consumers.
For many systems, international expansion is a natural progression once a company establishes a strong presence and recognizes potential new markets where a franchise business may also be well received. Some expansions are obvious and natural, while others need a little more thought and strategy before introducing the new concept into unfamiliar markets.
The Nestle Tollhouse Café by Chip concept launched in 2000 in Dallas, a natural hub for iconic U.S. brands. After nearly a decade of expanding the brand and growing the concept in the United States and Canada, I traveled to the Middle East to assess the market for international expansion.
Quality real estate in the Middle East is sparse and finding the ideal location is a challenge.
Adapting to Culture
Understanding the Middle East’s infatuation with American culture and notable U.S. brands, I realized the power in the brand recognition of the Nestle name. While having a globally recognized brand certainly helps in penetrating new markets, brands that do well globally aren’t necessarily universal, they’re more adaptable and that is the key principle for any successful international brand expansion.
To successfully expand a brand in any foreign market comes down to one thing: do your homework. Here are three key ways to adapt to the culture to introduce your brand in a way that resonates well with the local consumers:
1. Adjust the Menu. For restaurant and food-based concepts, it’s important to learn any cultural food preferences and guidelines and adjust your menu accordingly to fit the expectations of the consumer. For example, the Middle Eastern culture is more coffee-oriented and expects a more indulgent and rich experience. The brand adapted its menu to include more coffee products and even offers table-side chocolate drizzle. For concepts offering other products or services, the same rule applies; adjust your product to meet the cultural needs and expectations of your new market consumers.
2. Culturally Appropriate Ambiance. Again, understand the perspective of your new target consumers. How do their expectations and perceptions of your industry or type of business differ from your current market? For example, Nestle Tollhouse Café by Chip locations in the United States are typically walk-up style counters within a given venue or shopping mall and do not offer seating. To adapt to the cultural expectations in the Middle East, Nestle Tollhouse Café by Chip locations have more of a lounge feel with retail space to hold tables and seating, as well as a staff equipped with latte artists and servers.
3. Understand Legalities. Keep in mind the different processes and practices that your organization will need to follow in a foreign country, from trademarks to property and real estate to logistics and health/safety/construction codes and so other important issues.
Taking on the Market
While each market in the Middle East demonstrates qualities of strength and of weakness, the ones that stand out with the most potential are Kuwait and Saudi Arabia. Based on the large and saturated populations, both markets offer the greatest opportunities for penetration, growth and expansion.
There is tremendous opportunity for growth and expansion in the Middle East, and one of the key aspects to capitalizing on a market’s growth potential is to recruit and retain quality franchisees. It is recommended to choose master franchisees and area developers rather than single-unit owners, considering the infrastructure, logistics and system structure of franchising; multi-unit franchisees are best suited to grow a concept internationally. They are entrenched in the culture and business practices already, giving them the opportunity to grow the brand within their territory without having to take steps back to reevaluate the market. It takes some time and extra effort to find the right operators as brand ambassadors, but it is well worth the investment in the long run.
After securing qualified master franchisees, one of the greatest challenges of expanding in the Middle East is getting in the pipeline of real estate. Quality real estate in the Middle East is sparse and finding the ideal location is a challenge. Occupancy costs in the Middle East are also fairly expensive, even compared to those in the United States.
Capitalizing on Growth Potential
Taking your brand to the Middle East has proven to be an investment and a feat, but, the payoff is well worth it. The key to success in the Middle East is the same as it is in other countries: don’t cut any corners and do your homework. It may seem obvious, but it is what will make or break a company’s initiative to expand internationally. To capitalize on the growth potential in any given market, the brand needs to fit the consumer, and that overall strategy needs to be taken on a case-by-case basis. While the process may be daunting, the research in understanding each individual market is the key to growing the concept successfully in the Middle East and globally.
Ziad Dalal is the founder and CEO of Nestle Tollhouse Café by Chip. He can be reached at 214-281-8080 or email@example.com.