Localization and Its Huge Importance to Global Businesses 2024

Globalization modernizes how we consume goods and services and enjoy advanced technologies we don’t usually get in our place. We might, but the cost is prohibitive that we’d prefer to shop elsewhere. Unfortunately, visiting a website is a culture shock. The language is cryptic, and the symbols are confusing at best. You’re also puzzled about the currency and its conversion rate.

Localization empowers organizations to address the issues above. It is an integral aspect of globalization efforts and internationalization strategies that modern companies can leverage. If you’re confused about what it is and its relevance to global businesses, read on.

Understanding Localization

Most people equate localization with translation or the process of transforming one language to the dialect used in a particular geographic area.

For example, an American brand envisioning a successful launch in China might want to translate written, signed, or spoken text into Chinese. The action allows the company to convey its message to its Chinese customers.

However, localization (“l10n” in a business context) involves more than translating each word of the original language into a local dialect.  It requires a location-centric strategy that adapts services and products to a specific market. 

A case in point, McDonald’s Southeast Asian menu might have offerings you can’t get from their North American branches. For example, there’s the Kaprao Crispy Chicken and Samurai Pork Burger in Thailand, the Nasi Lemak and Thai Green Curry Chicken Burger in Malaysia, and the McSpicy Paneer and Dosa Masala Burger in India. 

The fast-food restaurant chain also has Kosher-certified food in Israel. Although McDonald’s is a global brand, it tailor-fits its offerings to the local culture where its restaurants are. It is the essence of localization.

Nike and Coca-Cola are two brands that also have exceptional localization strategies in their respective markets worldwide. You’ll see culture or region-specific branding that appeal to the customers of the local market.

Localization requires adapting and modifying brand elements to conform to local customs, traditions, consumer trends, and other factors specific to a local market. Businesses that want to localize must address the following issues.

·        Naming conventions specific to the local market

·        Date, time, and telephone number formats

·        Currency, allowing the brand to convert monetary values in local currency

·        System of measurement, including British imperial, US customary, and metric

·        Writing direction (right to left in Arabic and Hebrew, vertical for some Asian markets, and left to right in most markets)

·        Punctuation, such as the French guilemets (<<>>), German low quotes (,,”), and English quotation marks (“”).

·        Legal requirements

·        Electrical voltages, plugs, frequencies, and others

·        Pictograms and symbols, such as stop signs, check marks, and color-coded information

Global brands that want to penetrate a local market must also localize the following.

·        Product manuals

·        Product warranty materials

·        Marketing materials (including print, radio, internet, and TV ads)

·        Training materials

·        Quick-start guides

·        Online help

·        Service materials

·        User interfaces

·        Disclosure documents

Differentiating Localization from Internationalization, Globalization, and Translation

Many people cannot differentiate between internationalization, globalization, translation, and localization. We already know what the latter means. It’s time we set things straight.

Globalization

Globalization is a set of practices that improve connections and engagements with customers worldwide. It underscores the interdependence of national economies, populations, and cultures related to cross-border exchanges in products, technology, and services. Globalization also describes the efficient flow of information, investment, and people across geopolitical borders. 

Examples of globalized businesses include Amazon, eBay, McDonald’s, Netflix, and Nike. The path to globalization is never easy. However, recognized brands always start with internationalizing and localizing their operations.

Internationalization

Businesses must have a clear and comprehensive corporate strategy for making goods, services, and technology as adaptable as possible before thinking about entering and localizing national markets. For example, a global brand might want to use illustrations and diagrams only for product assembly instructions. The business doesn’t include text and other culture and region-specific attributes..

The global brand’s local branch can add culturally specific elements to the internationalized material upon entering a local market. Internationalization sets the business to localize its offerings specific to consumers in that market.

Translation 

Compared to localization, translation focuses only on the textual elements of branding materials. For example, the global brand that wishes to localize in the southern Indian market might want to enlist the services of a professional region-specific translator. The company might also want to consider using machine translation. 

Importance of Localization to Global Businesses

Localizing internationalized business elements is the crucial first step toward market globalization. It differs from translation due to its more encompassing focus. Translation focuses only on language transformation to make it relevant and appropriate to local consumers. Localizing strategies emphasize adapting or modifying original branding elements and components to fit the local market. So, why should businesses care about localization?

Facilitates Easier and Smoother Entry into New Markets

Entering a new market is never easy. Businesses must address legal issues, such as regulatory requirements, bureaucracy, and corruption. Some governments are more open to foreign investors and companies wishing to set up shops in the local scene.

Others are more restrictive, sending aspiring market entrants into a bureaucratic maze. Unfortunately, national and regional governments aren’t the only entities global businesses must face. They also have to manage local leaders and decision-makers.

Logistical hurdles can also derail a company’s entry into the local market. Figuring out the supply chain and its principal players can be tricky if businesses don’t do their homework beforehand. Cultural barriers can be a hindrance, too. It can go against the brand’s philosophy and image, making entering the local market questionable.

Communication challenges can concern new market players, especially if they aren’t from the area. Communicating with regulatory officials, local leaders, and consumers can be a headache if the business doesn’t have an exceptional command of the dialect or regional language. 

After all, more than seven out of ten (72.4%) consumers would buy a product or service with the information they understand, mainly written in their language. Moreover, more than half (56.2%) of consumers rank language-appropriate brand information higher than price. 

These obstacles can drain an organization’s resources, including financial, manpower, and time. It’s crucial for global businesses to localize their strategies before entering any market. They try to study the local culture and market issues before entering and establishing a local presence. 

For example, it’s unthinkable for McDonald’s to penetrate the Indian market if it didn’t ditch its beef-based offerings for paneer and chicken burgers. Australians also have a unique coffee preference, which Starbucks misunderstood and saw it weathering a costly failure.

A comprehensive localization strategy empowers businesses to facilitate new marketplace entry, allowing them to establish a foothold on the local market and work their magic from there. Localizing branding might not address all issues facing new market players. However, it facilitates a smoother, easier, and quicker entry.

Delivers a Competitive Edge

The tricky part about entering a new market is navigating the cultural obstacles. People might have different beliefs, practices, and preferences than what a global business normally serves in its home region.

For example, McDonald’s is popular for its beef burgers. Introducing that to consumers in the Indian subcontinent can be challenging because they revere cattle. It’s sacrilegious to offer beef burgers.

Unfortunately, providing paneers and chicken burgers might also be insufficient without understanding the complex flavors of Indian cuisine. The brand must incorporate these regional variations in its offerings to succeed in this market.

Sadly, local restaurants serving paneers and chicken sandwiches are often better than foreign-branded offerings. These establishments know what local diners want and might have a robust relationship with the community.

Although localization doesn’t guarantee success against well-established local market players, it levels the playing field for foreign businesses. It allows them to compete with local brands by offering a different take on what consumers love.

Moreover, global organizations can rely on their branding to convey an image of trustworthiness, quality, and other desirable organizational attributes.

Foreign brands entering a new market will find it challenging to compete against well-entrenched, family-run local businesses without localizing their approaches. Local consumers will find their services or products odd or contradictory to their values and beliefs.

Although some people might be curious enough to try the offerings, the number of customers is often insufficient to stay afloat in a competitive marketplace.

Localizing your global brand empowers you to communicate with your local customers. You can integrate local elements and attributes in your products and services to reflect an understanding and appreciation of the local culture. They don’t feel lost when they enter your local branch, feeling welcome when they step inside. 

Increases Customer Satisfaction

No business organization exists for itself. It can only thrive with happy and satisfied customers. Unsurprisingly, customer satisfaction is one of the most crucial indicators of a company’s success. Satisfied and happy customers tell the business it’s doing an excellent job.

According to Zendesk’s Customer Experience Trends Report, one out of two consumers will ditch one brand for another because of a single instance of bad customer experience. It doesn’t matter if your business belongs to the elite Fortune 500 club or a tiny, family-run shop at the corner of the road. Fifty percent is a significant number that can potentially lead to substantial losses.

Unfortunately, it’s not only the customer that businesses must be wary of. The dissatisfied customer can share the experience on social media.

Forbes says three out of ten consumers won’t hesitate to share their negative customer experiences on Facebook, Twitter, and other social media platforms. Sadly, it doesn’t end there. The recipients can also share the post to their social network, potentially losing future customers.

Giving your customers a pleasant experience will also make them want to share the interaction on social media. Forbes explains that almost half (49%) of happy and satisfied consumers will share their positive customer experiences on Twitter, Facebook, and other social media sites. 

Suppose each customer has a hundred social contacts, and each has 100 social media friends of their own. Assuming ten percent of these people will want to have the same positive experience with your brand, a single customer you satisfy can bring your business 1,000 potential customers.

Localization is one of the most effective ways to earn local consumer trust, ensuring customer satisfaction and happiness. They’ll never feel your brand doesn’t belong in the community because all your business elements embody their culture and tradition. 

Increases Brand Loyalty

All organizations want their businesses to grow. They can do this by continuously looking for new customers. However, building trust and establishing brand loyalty among existing customers are more effective in expanding the business.

Localization can play a significant part in building trust and credibility in a new market. Customizing your offerings to reflect the local people’s customs, traditions, beliefs, and other social norms shows you respect them. In turn, customers will value your efforts and learn to trust you.

The same happens when your brand communicates with locals in their native tongue. You’ll generate more productive customer engagements, strengthening trust and confidence. Providing them with positive customer experiences also boosts brand image. 

Earning customer trust is crucial to building enduring brand loyalty. New markets are exceptionally volatile. You’ll never know how stable the local economy and politics are. Your entry into the market might be smooth, but a change in regulatory policy can undermine everything you’ve worked hard for.

Your local customers will stand by you, regardless of what the future brings. That’s what brand loyalty brings to the table – security and stability. People won’t mind standing a few days outside your shop waiting for you to start selling your much-publicized product. Customers will deflect any criticism some customers might have against your brand. Why? They are loyal.

Increases the Bottom Line

Did you know that localizing your global business strategies can increase your revenues? According to the Localization Industry Standards Association, every €1 (about $1.06) a company spends on localizing its website generates €25 in profit. And we’re only talking about websites here, which is only one of the many aspects of localized strategies. Localizing processes can give your business the much-needed boost in its bottom line.

Entering a new market smoothly, quickly, and easily can save your business money. You can overcome barriers and obstacles and navigate the complex bureaucracy without exceeding your company budget. Localizing your strategies make you competitive while ensuring local customers’ satisfaction and happiness. The happier they are with your products and services, the more they are inclined to tell social contacts about your business.

Customer satisfaction also translates to trust and loyalty. You might have to increase your prices to meet changing global dynamics, and your loyal customers will never complain. They know it’s for their benefit. The best part? You get to grow your bottom line and make your stakeholders and employees happy.

Final Thoughts

Localization involves more than translating words from one dialect or language to another. It requires adapting or modifying a global business’ internationalized strategies to conform to local markets. Localizing approaches empower a global company to overcome cultural obstacles and facilitate brand entry and establishment into new markets. 

It would be wise to start with a localized strategy if you’re eyeing a new local market. Investing in appropriate technologies is beneficial for such goals and allows you to realize the many benefits of localizing approaches in advancing your global business.

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