Localization in Marketing
Adding local flavour to global brands
Localization in Marketing refers to the adaptation of a product, service or offering to meet the language, cultural and other requirements of a specific target market by business. Globalization and standardization of products were common trends across the globe in the 20th century to leverage scale economies. But as far as consumer products are concerned, the era is drawing to a close due to what are seen as diminishing returns. It was said that standardization is essential to retain the values and identity of a brand. However, standardization restricts customization, innovation and differentiation. Today, injecting local flavour into products is popular among marketers.
In order to enhance the consumer experience and expand the reach of one’s brand, ‘localization’ is very important. It gives a business an opportunity to target a new consumer group. Whether to localize global-brand marketing programs remains one of the most contentious debates in multinational organizations. On the one hand, local brand managers typically argue that there is a difference in consumer habits, purchase behaviour, preferences and tastes in their local market, the media and the retail trade are also different, and, therefore, their customers require unique, tailored, and delicate handling. The top management, meanwhile, takes the position that achieving scale justifies losing some local customers in return for global efficiencies.
Faced with this trade-off, local management, often to the dismay of their superiors, spend inordinate amounts of effort demonstrating that national boundaries are an excellent segmentation variable that consumers are sufficiently different across markets to justify adapting products and marketing programs. To defend their position, they’ll whip out the latest in a series of market research reports conclusively showing regional customer differences which justify altering the product packaging, scent, and advertising execution for their market.
How much localization is enough?
Global brands have been practicing some degree of localization for some time. For instance, some kinds of McDonald’s meals in India and some makes of Volkswagen cars in China are unavailable outside of those countries. But there is a dawning realization that too much localization can erode the product’s global identity, degrading their “global brand” tag.
Even in cases where international brands try to localize their value proposition, they grapple with balancing the needs of localization with preserving the integrity of their global brand.
Limitations of localization in marketing by business and service
But a marketing team can’t simply copy and paste marketing campaigns. Every region/state/province has its own culture-specific behaviors. One needs to be careful when entering into another market. Extensive research is required that may involve localizing the taglines and slogans.
Nokia failed miserably when launching its Lumia phone in Spanish-speaking countries. The product name is slang for “prostitute” in Spanish. As a result, the brand received negative publicity.
“Even when dealing with industries or product categories that do not seem to need localization, there is a chance that a certain element of the marketing mix may need adaptation if the products will be marketed internationally,” writes Dr. Nitish Singh, a cross-cultural digital media adviser. And it’s more than just delivering the right message. Sometimes, the distribution channel may be totally different.
“If one is planning to use social media, he/she won’t want to market Russian users on Facebook, but one would rather go for V Kontakte, Which ranks first among the top social network sites in Russia,” says Serena Pasqualetto, an e-commerce marketing specialist.
How does localization create conversions?
Despite living in a global economy, many customers only care about what’s happening in their neighbourhood and cities. Brands must connect with consumers on their playing fields. And that means understanding people’s languages, cultures, and traditions.
Marketing with location at the forefront offers some remarkable benefits. According to Nieman Journalism Lab, “geo-targeted [social media] posts were 6 times more successful than posts shared globally.” “Localization goes beyond merely having to translate website content, and it connects with consumers on a personal level, builds the brand image in a way that is both accessible and unique. In short, localization in marketing by service or business is about building trust,” writes Danyelle C. Overbo, a Smartling contributor.
Importance of localization in marketing by business or service?
But what if these brand managers are wrong? What if consumers are actually more similar across markets than the research shows? A study has been conducted on so-called “marketing universals,” consumer behaviours within a segment of the ‘skydiving market consumers’ and towards a particular product category of ‘solo skydiving’ that don’t vary across culture – things like how consumers measure quality and how they respond to price promotions. Among the findings, and it is not alone in demonstrating this, is that while it’s straightforward to show differences it’s really hard to show similarities with any statistical precision.
Cross-cultural research is awash with findings of difference, due in part to methodologies and publication preference for positive findings. Most organizations nowadays are more interested in finding the difference between people divided by borders and various cultural and traditional aspects, enabling them to focus their marketing push based on these variances. Findings of similarity across cultures, or universals, are rare, not least because identifying universals poses a host of methodological obstacles.
Modern market research studies are more focused on the significance tests i.e. it shows that there is a significant difference in people divided by national boundaries and cultures. Upon designing the questionnaires to observe the attitude towards a product’s packaging between consumers from Nepal and Eastern Europe, one already knows the answer i.e. there will be a difference. It will always show that the two populations are different, that’s how the whole thing works. If one conducts a study on significantly different population to show their differences, it will always give the same result. But suppose one wanted to examine if consumers in Nepal and Europe are the same or similar. What statistical test would he/she use?
How To Perform Localization in Marketing by business and service
One would be out of luck. The most common tests are only design to show differences. Let’s examine this more closely. He/ She might think that a lack of difference on a statistical significance test is evidence of similarity. But, in fact, any statistician would point out that statistical tests design do not demonstrate the absence of difference. Thus, consumers may be far more similar across national and cultural boundaries than the research shows.
Indeed, there’s good reason to think this is the case; when it comes to universal human needs, the desire for security, a sense of belonging, to provide for one’s family, ample social science research shows that it has the same fundamental aspirations. Offerings that address these needs, it follows, will be embraced even without excessive localization. Parents of infants the world over want a dry (and therefore comfortable) baby who sleeps through the night; diapers that help with that probably don’t need a lot of localizing beyond labelling in the local language.
Fortunately, several organizational correctives to this statistical bias towards difference exist.
First, statistical tests of difference should be (and often are) interpreted pragmatically rather than dogmatically. Any decisions based on findings of statistical difference should still be subject to the hard-nosed business hurdles.
Second, multinationals thrive on scale. And scale favours standardization across markets. Even if statistical tests base in difference, multinational organizations base toward similarity. Higher hierarchy’s preference is to only allow adaptation for the more obvious differences such as language and retail format.
Finally, with markets and media becoming more global, similarities are now more visible if still hard to measure statistically. And statistical tests are beginning to emerge that can at least demonstrate that consumers’ tastes and preferences are converging.
Whether to standardize or localize marketing programs remains one of the most enduring debates in global firms. It will continue to be a point of friction because it is about trading off locally optimal programs versus globally optimal ones. This is an important debate, but it should not be settle only by significance tests.