Cross-cultural marketing: how it works, how it doesn't

A stronger entrepreneurial spirit and a looser regulatory system prevail in America than in France, but the dietary supplements industries in both markets offer positives worth noting. There are differences in many areas, including culture, the regulatory environment, sales channels, product mix and formulation, and particularly in expectations.

Our company, Arkopharma LLC, based in Massachusetts, is the American subsidiary of France's Laboratoires Arkopharma SA. The most important difference in our everyday working lives between the European and North American companies is the time difference—six hours later on the East Coast, nine hours later on the West Coast. This fact alone almost makes it impossible to run a subsidiary on the West Coast unless you are willing to sacrifice almost an entire business day between each communication exchange.

Most products in the US market are blends of numerous ingredients that are in most cases not even present at the therapeutic level
This situation is partially made up for by a cultural difference: The French typically start work later in the day and work later into the evening, whereas Americans like to get an early start every morning. However, a more difficult problem to overcome is vacation time, which is lengthy in France. Think of being out of contact with your key counterparts and having no access to your manufacturing site for a period of four to five consecutive weeks a year in our fast-paced and ever-changing industry!

Distance and language barriers can provide entertainment or frustration. To avoid misunderstandings, we agree that our official communication language be English, even though some of our US employees have a good knowledge of French. You quickly realize that something is wrong when you receive an e-mail that takes more than one person to interpret. This happens on a daily basis. And some employees take analysis and interpretation to extremes. I learned early on that this would be a potential issue when, on one of my first visits back to our headquarters in Carros, France, I witnessed an animated discussion between two French employees who were trying to interpret, with the help of a French-English dictionary, a memo sent by one of my US employees.

Regulations and markets
The biggest challenge to smooth transatlantic operations is the differences in the regulatory environment, and these differences affect everything from product development to retail sales. Everyone knows DSHEA and the opportunities it offers, as well as some of its pitfalls. In France, stricter regulatory controls (for a category called natural OTC remedies in the US) apply to the long-time use and acceptance of natural therapies (usually called 'alternative' in the US) as part of the arsenal used to fight disease and conditions by French pharmacists and doctors. Products can be marketed under AMMs (Autorisation de Mise sur le Marché) granted by the French Agence du Médicament, somewhat equivalent to the US FDA, as long as there is proven evidence of safety, efficacy and compliance to pharmaceutical GMPs in the manufacturing and quality processes.

Thus, natural remedies are accepted by conventional health professionals as therapeutic tools in France and most of Europe, but these same remedies in the US are mostly viewed and labeled as unproven and, at best, suitable only for prevention or relief of symptoms.

These regulatory discrepencies are directly seen in sales channels. In France, the pharmacy is the distribution cornerstone of natural remedies and/or dietary supplements, and the recommendation to use the products is made either by the pharmacist or a health practitioner. In America, the pharmacy or drugstore has merely a dispensing function, filling prescriptions written by doctors, and otherwise being a mass-market retailer of non-prescription medicines and numerous non-medical items. Most MDs in the US are not knowledgeable about supplements and herbal remedies or any substances that must have a doctor's prescription, but this is changing and increasing numbers of MDs are practising complementary or alternative medicine (CAM), otherwise known as 'holistic medicine.'

Formulas for success
In my opinion, the French/European regulatory framework and health-professional endorsement provides more credibility and legitimisation of the remedies. Since there is no such endorsement by mainstream health professionals and no provision for therapeutic claims under DSHEA, this role in the US is partially assumed, awkwardly, by health food stores. Here, consumers can obtain information on the benefits of supplements and herbal remedies, although employees in health food stores are prohibited from giving medical advice.

Nevertheless, this one-on-one interaction does go a bit beyond the bland structure/function claims on product labels, and empowers consumers to make a better-educated selection of supplements and herbals. The personal contact with the consumer is also often cited as the reason for the success of niche marketers in health food retail outlets in the US.

A French/European regulatory framework and health-professional endorsement provides more credibility and legitimisation
These differences eventually influence product formulation. Our parent company is focused on formulating well-defined, single-ingredient therapeutic products that are supported by clinical trials and/or strong existing scientific research. As an example, two of our most successful products in France, Exolise, a proprietary green tea extract, and Phyto Soya, a soy isoflavone extract, are each supported by a number of scientific and clinical studies. Our point of differentiation on the French market lies in that we have a recognized indication for Exolise in the treatment of obesity and for Phyto Soya in the reduction of symptoms associated with menopause (mainly reduction of hot flushes). These two products are then recommended and even prescribed by doctors to their patients. To that effect, we have a dedicated sales force in France to sell these two products and others directly to doctors.

On the other hand, most products in the US market are blends of numerous ingredients that are in most cases not even present at the therapeutic level. The point of differentiation becomes who has the most exotic ingredient or the most extensive list of ingredients in their product.

Formulation in the US seems to be driven by the North American philosophy of 'more is better.' Typical US formulas are considered an overdose by Europeans, while most European formulas are considered sub-potent in the US. Who's right, who's wrong? This is a conundrum with no resolution in sight.

Setting expectations
Being the North American subsidiary of a successful European company means our role is not as simple as taking the best-selling products in France and adapting the packaging, marketing materials and programmes to obtain an instant commercial breakthrough in the US. That would make my professional life a lot easier and certainly not as challenging as in the current climate.

I said at the outset that 'expectation' is an especially difficult challenge for a European company operating in the US. We must figure out, for example, why Phyto Soya is the company's No. 1 product in France but not in the US. Why doesn't the model of detailing our products to health professionals for eventual recommendation or prescription to their patients apply in the US? Why isn't what seems to be a catchy marketing tagline not appropriate for the US market?

Overall, the outlook is very positive. Although we are a relatively small company in the US, we are supported by a large parent company with a R&D staff of more than 60 scientists and more than 20 years of experience in the development, manufacturing and marketing of natural remedies and dietary supplements. It is then reasonable to have growth objectives of more than 25 per cent per year, whatever the economic climate.

We must remember at all times that we are participants in the largest dietary supplements market in the world, and success in the US can only be measured by accomplishments of a commensurate magnitude.

Robert Beland is president of the North American operations for France's Groupe Arkopharma SA, known in the US as Health from the Sun.
[email protected]

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