To achieve needed growth, many U.S. firms are focused on global expansion and improving international sales. This is especially true for U.S. food, service, and consumer product companies. China, whose middle class is expected to rival the U.S. in purchasing power within the decade, is one of the most sought after locations for international sales expansion.
Yet success in selling to the Chinese consumer can be elusive for large and small companies alike. While there is no simple and easy solution to marketing consumer products or services in China, there is an effective and proven method to increase the likelihood of success.
The Wall Street Journal recently highlighted the struggling China operations of Best Buy, Home Depot and Mattel as part of an article on selling to the Chinese consumer. All three companies tried to sell and market their brand/product without initially adapting to the local cultural environment. They failed to realize cultural localization is the key to globalization. In comparison, McDonald’s, Oil of Olay (Proctor and Gamble), and Wal-Mart are all successful, household names in China because they did localize their products and services.
Localization isn’t unique to success in China; it provides the key to selling non-luxury consumer products or services in all export markets. U.S. exporters of these types of products and services cannot expect to enter foreign markets using the same methods they have utilized at home. Establishing their brand in any export market requires intercultural awareness. This awareness and success evolves from first understanding the local consumer’s needs, perceptions, and expectations.
Globalization via cultural localization is about effectively marketing and selling a brand, product, or service in another culture while maintaining core values and quality. Some U.S. brands have immediate recognition in other countries and command a premium, while most brands are required to build local market recognition from the ground up. Brand and product recognition are, in the end, what matter most when selling internationally. Companies should be willing to change the product, the packaging, the advertising or all of the above as required by the local market.
McDonald’s has maintained global brand integrity while successfully adapting to local consumer and cultural requirements. They have adapted menus, serving styles, kitchen design, restaurants, and adverting to local conditions across the globe without abandoning the Golden Arches. A great example of this is their successful “I’m Lovin It” marketing campaign. This campaign and slogan are used across every market throughout the world. However, while the words are the same, the execution, style, and content associated with the slogan are localized to better match each markets individual consumer culture.
Success selling globally via cultural localization is not limited to large multinational companies like McDonald’s. For example, China now buys 25 percent of all U.S.-grown pecans. A large portion of these sales are direct to market by the growers, whom for the most part, lack the financial and marketing prowess of a Coca-Cola or Wal-Mart. Their success stems from the willingness to localize their marketing. Once they became aware of the Chinese interest in the product, U.S. pecan growers successfully aligned their existing health benefits-based marketing campaign to local Chinese culture.
As U.S. companies continue to look abroad to strengthen and diversify their business, understanding how to position your brands in the global marketplace is vital. In non-luxury consumer products and services, cultural localization is the most effective and cost efficient method to assure success.
The reality: globalization without cultural localization creates sub optimal outcomes, such as lost revenue, abandoned markets, and damaged brands. Researching and understanding the local consumer culture before entering a new market is the surest way to avoid these unwanted outcomes.
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