What affects levels of localization?

Scholars and practitioners have been arguing for years about whether advertising should be standardized across the globe or localized for each market. Many have argued for alternative strategies such as regional localization, glocalization, or segment localization.

But assuming you do opt to go down the partially localized path, how should you determine when, where, and how much to localize. Melewar and Vemmervik (2004) identified six variables that should be considered when making standardization vs. localization decisions:

Product variables – You need to determine the degree of universality of the product. In B2C, this examination seems more obvious due to the cultural differences in every market. But even B2B products should be looked at equally closely. For example, my company makes equipment for the rail industry. Our standard products can only be used in countries that use standard gauge rail; for countries that use narrow or wide gauge rail, we would have to re-engineer our products for those markets.

Competitive variables – In this case, you need to look at the competitive environment to determine how your product category is perceived by customers in those countries. For example, a mid-price (in the home market) restaurant chain may find that similarly priced restaurants in the target market are considered low-end, casual choices primarily geared towards young families. This could considerably alter how this chain advertises in this market.

Organizational experience – In this case, you need to look at the level of organizational experience in handling standardization/localization. For example, in my company, we are just starting to have a global digital presence. Since we are at the first phase of expanding globally, we will likely keep our localization to a minimum until we understand our target markets better.

Infrastructure variables – For this variable, you need to look at the degree of similarity in media infrastructure. Again, using my company as an example, we have found great success using digital channels in the US, but we will turn more to standard trade publications for our advertising in markets that don’t have as a robust internet infrastructure.

Governmental variables – For this variable, you should examine any possible restrictions on mass communication that may exist. For example, in several European countries, television advertising is either forbidden or strictly regulated. If your global marketing plan relies on television advertising, this will have to re-visited for these countries.

Cultural and societal variables – This is the variable that most people do actually consider when debating standardization vs. localization. Quite often, this requires significant market research to understand what benefits are considered critical in a particular region; the results can often indicate that at least some degree of localization is in order.

Again, there is no definitive answer on when, why, or how much to localize, but considering the variables above could help in making these decisions.

References:

Melewar, T., Vemmervik, C. (2004). “International advertising strategy: a review, reassessment and recommendation.” Management Decision. 42 (7) pp. 863-881.

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