Global standardization vs localization: Choosing the right strategy for success

By Acclaro
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Global standardization vs localization: Choosing the right strategy for success

Businesses that expand globally need to decide how they’ll approach marketing to their new customers. A standardization strategy delivers a uniform message and consistent content across markets. Localization takes the opposite approach—tailoring strategies, campaigns, and resources at the local level. Both of these strategies offer advantages, but some companies may benefit more from one approach over the other, depending on the type of business, size of the organization, and globalization goals.

Standardization: Keeping things consistent across international markets

With a global standardization strategy, a company is assured that its products and the way they are marketed are largely the same everywhere around the world, across countries, cultures, and platforms. The ultimate goal is to create a universal experience of the brand while also reducing costs and complexity.

Advantages and disadvantages of standardization

Researchers have identified 4 primary advantages of standardization:

Uniform brand image: Because standardization means marketing the same products with the same packaging and services using the same marketing campaigns everywhere the company does business, this approach can help create a consistent brand image. This may be especially beneficial for larger companies that already have a global reputation. Customers know exactly what to expect, no matter where they are or what language they speak.

Economies of scale: With a standardization strategy, your company essentially treats all of its markets as if they are a single market. This allows your business to produce products and create marketing materials on a large scale, which results in lower costs.

Transferable experience: A standardization strategy means that all of a company’s marketing teams are working with the same campaigns and strategies to address the same business goals. This makes it easier for teams to work together and align their activities across different countries. The exchange of knowledge and experience between markets can help enhance performance.

Easier control and coordination: Using the same quality guidelines, best practices, brand standards, and marketing programs wherever the company does business reduces organizational complexity and enables easier monitoring and control.

At the same time, there are distinct disadvantages to a standardization strategy:

Misalignment with customers: Customer interests, habits, and preferences are shaped by their culture and lived experience, which can vary widely from one country to the next. A standardization strategy is not designed to adapt for these differences, and if the strategy is out of sync with the local market, this can negatively impact revenue.

Differences in market maturity: Markets can be at very different stages of maturity across countries, with significant variations in marketing infrastructure. There can also be differences in available media and the reach that’s possible. All of this can make a standardization strategy challenging to implement.

Lack of competitiveness: The competitive landscape can diverge wildly from one country to the next. Local companies in a particular market may offer lower prices or offerings that are better tailored to customer preferences. In these circumstances, a strict standardization strategy may hamstring your company and leave it unable to keep up with your competitors.

Challenges with local rules and regulations: In some circumstances, local trade restrictions may actually make it impossible to standardize. There may be rules prohibiting certain products, manufacturing methods, promotional approaches, or other business practices that your business relies upon for its standardized strategy.

When Is standardization the best approach?

Standardization is often favored by large enterprises with universally recognized brands. Take Coca-Cola as an example. The packaging, product, and spirit of the brand is the same everywhere in the world, giving consumers a reliable, familiar experience no matter where they pop open a can of Coke.

A standardized strategy allows companies like Apple, McDonald’s, Nike, and other global leaders to maintain their core brand and deliver a consistent message through their advertising campaigns—with some variation in details to better reach local markets—while also realizing economies of scale.

At the same time, a standardization strategy could also work for a small startup with a limited budget that needs to move slowly as it expands into new markets. The startup could employ a learn-as-you-go approach, beginning with existing offerings and marketing resources and then fine tuning for local markets as more data and customer feedback are gathered.

Localization: Adapting messaging for a new market

Localization is a strategy of considering each market individually. When marketing content is localized, every aspect of the communication is tailored to resonate with the local audience: message, language, tone, colors, images, and cultural elements. It takes into account not just the language that is spoken, but also customs, belief systems, and worldviews.

For international companies, localization is key

In the modern global marketplace, a purely standardized approach to marketing is becoming less and less feasible. Some degree of localization is almost always necessary. At the very least, communications must be adapted into local languages if a company is to thrive globally, as these stats on B2C and B2B buyers demonstrate:

Localization offers a number of advantages for global businesses:

Streamlines entry into new markets: There are a number of hurdles that can slow entry into a new market, including government regulations, logistical issues, and cultural challenges. Obviously, localization can’t remove all of these obstacles, but it can help your company surmount cultural barriers. Companies that localize faster typically grow more quickly. Localization with the right partner helps your company avoid sub-par marketing content that can turn off customers, depress revenues, and potentially damage your brand’s reputation.

Improves the customer experience: Localizing marketing content shows customers that they are important to your company, not just an afterthought. By providing in-language, culturally appropriate information and services at every stage of the customer journey, you make buyers more comfortable with your offering and increase their satisfaction with it. This is just as crucial for B2B customers as it is for consumers. As many as 80% of B2B purchasing decisions are based on “direct or indirect customer experience” compared to 20% based on price. Website localization is especially important for B2B-focused companies, given that 80% of surveyed business buyers said that a vendor’s content had a significant impact on purchasing decisions.

Leads to greater customer loyalty: If your brand provides a highly satisfying experience for your customers, they will stay loyal, even when there are lower-cost alternatives available. Localization is the key to meeting and exceeding customer expectations across all of your markets—and that’s good for business. According to 2021 research, it costs up to 7 times more to acquire a new customer than to retain an existing one, and loyal customers spend 67% more than new ones.

Increases sales and revenue: It’s only logical that people will spend more with your company when they feel their needs, interests, and preferences are truly understood and catered to. Localization allows you to do just that. As an example of what localization can mean for your business, leading apparel company VF estimates that localization boosts their sales 40% to 50%, giving the company a significant competitive advantage

Balancing standardization and localization

In the end, it may not be necessary to choose a single marketing strategy, global standardization vs localization. In fact, a balanced approach that blends the advantages of each could give your company the best of both worlds. To get started, your business will need to assess which elements to keep consistent across countries and which to adapt for local markets.

The right partner can help

The key thing to keep in mind when blending these two global marketing strategies is how they can complement one another to help your brand reach new customers and win them over. Which aspects of your marketing program can be standardized worldwide? Where will your organization see the most value from localization?

Your company doesn’t have to answer these questions on its own. The right partner for professional localization and translation services can help. Contact us today to learn how we can work with your business to create and implement a winning global marketing strategy that gives you a competitive advantage across all of your markets.

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