Updated: Oct 4, 2020
There are many different and confusing definitions of localisation, but I would like to share one that I believe captures its essence.
Localisation is a strategy to make a product or service (more easily) marketable, a brand and its communications more appealing to customers, and a business more competitive in a foreign market.
Localisation (or adaptation) is opposed to globalisation (or standardisation) which views the world as one homogeneous market. The localisation approach acknowledges the existence of differences between markets and uses that understanding to maximise the competitive advantage and minimise the disadvantage by adapting business activities to better meet customer needs.
When is localisation needed?
Martin Van Mesdag, the author of Think Marketing: Guidelines for More Effective Management Action, says that “it is prudent to assume that everything in the foreign market has to be done differently from the way it is done in the home market, unless hard proof to the contrary has been obtained”. In this article, he provides several examples that illustrate how knowledge of the subtler aspects of the host country's culture is vital for international marketing success and how that knowledge should be the basis of any localisation efforts.
Markets where localisation might be needed to market products successfully are not necessarily the ones where a different language is spoken. Language might or might not be an element requiring localisation, thus translation might or might not be part of localisation. This is because the need for localisation is driven by cultural differences and macro-environmental factors (political, economic, social, technological, environmental, legal, ethical) that impact business activities and determine consumption preferences and patterns.
Keeping the text in English but changing the visuals in marketing communications intended for the Middle East to ensure the way people portrayed in the visuals are appropriately dressed so that the audience sees what is socially acceptable, is localisation. Removing beef and pork from products offered in India to respect the population's religious sentiments is localisation.
(Image: WAY AWAY, YouTube)
How to decide what to localise?
A 100% localisation is hardly possible and might not be desirable, because companies would want to retain the main elements of their brand identity regardless of the markets they are in. Some global aspects would therefore need to stay.
Finding the balance between global and local is what can be referred to as "glocalisation" which combines the elements of both the standardisation approach of globalisation and the adaptation approach of localisation. Effectively, even when localising, "glocal" is as far as a business can go.
It is important to consider the pros and cons of both standardisation and localisation before choosing the direction for glocalisation. Standardisation may lead to low sales when it is inconsistent with the local market reality, whereas localisation introduces operational complexities, decreases the level of control and does not allow to benefit from economies of scale. A sound strategy will help minimise the disadvantages while maximising the benefits.
Having helped over 50 global brands succeed in foreign markets, I can tell that depending on the market, brand offering and context, being perceived and communicating as a foreign brand might be more beneficial than trying to come across as "more local". A cross-market assessment of brand offering and marketing communications will help identify what would appeal more to target customers in a foreign market when localised or when kept as is.
Dr. Abbott Haron from RMIT, who has over 25 years of experience in business management, provides a concise overview of how localisation differs from standardisation in this article outlining their respective advantages and disadvantages.
According to Dr. Haron, a successful global marketing strategy is the one that aims at standardising some components of the marketing mix across the world while localising others. It is therefore important to identify the value chain and marketing mix elements that would be impacted by market differences to decide which of those elements should remain global and which should be localised.
When entering a new market, a firm’s research efforts must be focused on the role of culture in the localisation or standardisation of a marketing strategy, as well as the exact elements of the marketing mix that need to be standardised or localised in each market. Exhaustive research should be carried out in relation to differences in language, distribution facilities, retail structure, climate, guidelines leading marketing and cultural features (colour, restrictions, history, political make-up, religion and education).
If your teams would benefit from an introduction to localisation, I will be happy to design and host a workshop for them.
If you need help with identifying which elements of your strategy, offering, communications or brand hinder your competitiveness in international markets or would make your brand more appealing to your customers if localised, I can conduct an assessment across your target markets and help you develop a (g)localisation strategy for each of them.