Global
Marketing in Israel: An Interview with Alumnus Benji Karsch
Benjy, could you give
us some background on your education and work experience in the U.S. and in
Israel?
I graduated from
Wharton as an undergrad in 1990. During the summer between my junior and senior
years, I interned at a small plastics company in Israel. I realized after that
summer that there was a need to create a network for students who want to work
as summer interns in Israel. In response to that need, I worked with another
Wharton student named David Sokolic and the Israeli Forum to start a network
called Gesher. Gesher offers foreign students the opportunity to work as paid
summer interns at Israeli companies, and it has been quite successful. After
graduating from Wharton, I worked for a summer at an Israeli consulting company
as part of the Gesher program.
Following that
summer, I was hired by P&G in Cincinnati where I worked for four years. I
gained a lot of experience in marketing and brand management at P&G and
later at Kraft foods in New York where I worked from 1994-1996. In 1997, I
moved to Israel after landing a job at Johnson & Johnson
in their new
Israel office, where I worked for the next five years. In 2001, I transferred
to McKinsey in Israel and I’ve been working there for the past two years both
in Israel and in the U.S. Currently, I am working for McKinsey in New Jersey
where I live with my wife and two children.
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That has certainly
been an exciting career path…Was the transition from working in the U.S. to
working in Israel difficult? I personally did not find the transition to be too difficult. I spoke Hebrew, which made things easier, but I found that I could usually choose to speak English or Hebrew both within J&J and with my business partners. The only time Hebrew was essential was when I needed to communicate with my sales force. In general, it’s very helpful to speak Hebrew because one can miss out on important details. However, I’ve certainly seen successful managers who barely spoke any Hebrew. |
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What type of work
does J&J do in Israel?
J&J has three
divisions in Israel, all located in Kibbutz Shefayim: a consumer products
company, a medical company, and a pharmaceutical company. Recently, J&J
acquired a company called Biosense, which has offices near Haifa. Like other
international consumer products companies, J&J does not develop any
products specifically for the Israeli market because the Israeli market is too
small to justify new product development. J&J will take new products that
were developed for the U.S. or European markets and market them in Israel. Its
staff consists of about 130-140 people of whom about 15-20 are foreigners.
Did you find there to
be major differences between marketing packaged goods in the U.S. compared to
marketing them in Israel?
Although there are
more similarities than differences, I did notice a number of key differences
and I believe that those differences stem from two things: infrastructure
differences and cultural differences. I’ll begin with the differences in
infrastructure.
Israel is a much
smaller and younger country than the U.S. and as a result, its entire business
infrastructure is less developed and less organized than the U.S.’s business
infrastructure. When a global company considers launching a new product in the
U.S., it will usually base its decision on extensive marketing research and
syndicated data. In Israel, however, there is very little marketing research
and syndicated data available. Additionally, companies in Israel typically do
not have the financial resources to spend $100,000 on new marketing research
project. As a result, most marketing decisions in Israel are based on data
collected from larger markets like the U.S. or Europe. Obviously the Israeli
market is very different from the U.S. or Europe, so the ultimate marketing
decisions are made by the marketing manager who relies heavily upon his own
judgment. If the manager has good judgment, then the company has a good chance
of success, but in general, relying on one manager’s judgment is far from
ideal. It usually hurts both the company trying to market in Israel and the
consumers whose needs are not necessarily being met.
Another important difference between the U.S. and Israel is the role of the marketing manager. A manager in Israel will typically have many more executional responsibilities than a manager in the U.S. As the marketing manager at J&J’s consumer products division, I was responsible for a lot of the work that I did as a brand manager or brand assistant in the U.S. The reason for this difference is mostly because companies in Israel do not have as many people working for them to distribute the work.
Yes, I do believe
that Israel is becoming more like the U.S. and Europe mostly because of
economic forces. Anyone in Israel notices that more and more companies are
privatizing and that privatization will lead to greater overall efficiency.
Currently, however, some private Israeli companies do not generally trust each
other enough to share information and help increase overall efficiency. I
believe the lack of trust between companies really hinders Israeli business
development.
You just mentioned that
there is a lack of trust amongst Israeli businesses. Could you explain what you
mean by lack of trust?
The lack of trust
relates back to the other difference that I noticed between marketing packaged
goods in the U.S. compared to Israel: the cultural differences. Israel is very
different than the U.S. People are much more skeptical and less trusting about
doing business with each other. Every company seems to worry only about its own
short-term profits.
I think this lack of
trust can be attributed to two things. Firstly, Israel is a younger country
with a less developed economy. Secondly and more importantly, it relates to the
fact that Israel has a distinct population demographic. The majority of its
Jewish citizens originate from the Middle-East and Russia, and they come from
very different backgrounds, cultures and sensitivities than Americans. The ways
that businesses are run in the Middle-East and Russia are very different than
the way businesses are run in the U.S.
I’ll give you an
example of a time when I really encountered this lack of trust first-hand. When
I was working at J&J, we developed a new approach to optimize a key
business process with one of our key business partners. The new approach was
intended to increase the profits for both J&J and our business partner. I
proposed the change, and attempted to explain that by implementing it, we could
achieve more combined profit. Unfortunately, our business partner did not trust
me enough to even consider the idea. There is a similar situation today with
retail scanner data in Israel, since the retailers do not trust A.C.Nielsen
enough to protect the confidentiality of their data.
Did you find that
working at J&J in Israel offered room for career growth? Or did growing in
a global company mean moving back to the company’s headquarters?
The answer to this
question totally depends on what an individual’s goals are. If someone has a
“fast-track” U.S. career goal, I don’t believe that it is a good idea to move
to Israel with the intention of staying there long term. It might, however, be
valuable to work in Israel for a year or two to gain international experience.
With that being said, there are personal benefits that one has in Israel beyond
of career development, and for me those benefits outweigh the drawbacks. While
I would have “moved up the ladder” faster had I stayed in the U.S., I’m very
happy with my decision and I also learned a lot while working at J&J in
Israel.
What skills are
international companies like J&J looking for in their foreign employees?
International
companies are really looking for specific skills or relevant industry
experience. They want employees who have a proven track record either in the
U.S. or in Europe. At J&J, we were looking for people who had the basic
skill sets for marketing packaged goods, such as how to create advertising, how
to evaluate pricing, and how to develop packaging.
Was
J&J looking to hire more foreigners or were they focusing on hiring local
Israeli talent?
When a company like
J&J launches as a new company in Israel, they tend to hire from overseas
because they feel more comfortable with managers with global company
experience. As Israelis get more experience with international marketing
strategies, however, J&J will certainly hire more Israelis, because it
costs them significantly less than bringing in foreigners.
What advice do you have for Americans seeking to make
aliyah- is it more rewarding to work for an international company or an Israeli
company?
The answer to this
question is that it depends on the industry. If someone wants to work in
established “old-economy” companies (packaged goods, manufacturing and others),
I believe that it is preferable to work for an international company for two
reasons. First of all, the pay is higher. Secondly, foreigners who work for
Israeli companies may encounter cultural issues for which they might not be
prepared. However, if someone wants to work in venture capital or hi-tech, he
will probably feel very comfortable at an Israeli company.
Finally, what advice
do you have for Americans seeking aliyah with regards to work experience?
If someone has worked for a number of years and has completed his MBA, he could probably make Aliyah straight from school. If, however, someone is finishing his undergraduate degree and he has very limited work experience, it is a lot more beneficial to start out in the U.S. for two reasons. Firstly, he will learn a lot in the U.S. because of the extensive training programs. Secondly, Israelis will really appreciate his work experience.