Should global marketers focus on innovation or localization?
An article in the Financial Times this week describes the approach taken by a number of global brands seeking to develop business opportunities in emerging markets. The report’s author Emma Jacobs looks at international marketing strategies employed by established global players such as HSBC, McDonald’s and Starbucks.
HSBC, which has for many years been branding itself as ‘The World’s Local Bank’ is pursuing a strategy promoting the understanding of different cultures as key to developing successful business relations. The company has sponsored this summer’s ‘Festival Brazil’, a programme of cultural activities at London’s South Bank Centre. Running alongside the cultural event is a series of business seminars and conferences about operating in Brazil designed to help people, including foreign journalists and trade representatives to engage with the festival.
Key to successful expansion in new markets for companies such as Starbucks and McDonald’s has been research and investment in products adapted to local tastes.
Starbucks has until recently pursued a strategy trading on its all American image. However, the company is now subtly adapting products to local tastes at the same time as tailoring some outlets more closely to the local environment. The company hope to reconnect with local communities whilst maintaining its core American image.
McDonald’s wanted to develop its business in India, a country where 80% of people do not eat beef. The company decided to conduct in-depth analysis in several states to find out about local tastes, with the aim of targeting a variety of products at consumers in different markets. This resulted in vegetarian burgers and other Indian dishes served in a Gujarat restaurant, whilst meat burgers (the Maharaja Mac with lamb or chicken) for non-beef eaters were introduced in New Delhi.
But not all global companies need to adapt to different cultures says the report. Companies such as Apple compete on pace of innovation rather than localization, since it sells the same iPad worldwide. Mr Nijhoff Asser consultant at Trompenaars Hampden-Turner said, “HSBC, Ryanair and Apple’s top teams have asked themselves what makes their companies better than anyone else and added,” Ryanair does not worry about adapting its product to local markets. Its competitiveness lies in price: “Whether you decide to differentiate your market is entirely dependent on your product.”
Tags: global marketing
July 24th, 2010 at 8:25 pm
Today it’s all about offering niche products for niche markets. There’s a place for everything. IN the hotel business, for example, there are some travelers (especially business travelers) who want an American style hotel wherever they go. On the other hand, for leisure travelers in particular there’s a growing interest in hotels and resorts that are authentic and offer a sense and experience of place. And speaking of the appeal of an American product, Ralph Lauren recently opened one of his iconic stores in an converted maison in Paris. It has a restaurant serving American classics and it’s all the rage.