The importance of being – or appearing – local

Globalization is a phenomenon that brings international markets closer to each other. But national boundaries and cultural mores still have an enormous part to play in marketing.

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Globalization is a phenomenon that brings international markets closer to each other. But national boundaries and cultural mores still have an enormous part to play in marketing.

That globalization isunrelenting is hardly an issue for debate. But for marketers, what is becoming increasingly important in today’s fast-paced global market environment is that people also want locally differentiated products. Some call it the backlash of globalization, and even big companies are getting involved and adapting – or finding their new markets inhospitable.

During the 2006 Soccer World Cup, Coca-Cola television advertisements in Argentina (“Everyone and everything, crazy for Argentina”) were mirrored almost word for word in neighbouring Paraguay (“Everyone and everything, crazy for Paraguay”). In theme and message, these Coca-Cola advertisements took the form of a local company rooting for the home team, and no one seemed to mind.

Current digital film technology makes it possible for a company to shoot its advertisements against something called a “blue screen,” and then digitally manipulate the hats, colours and flags to suite a country of choice.

During the same sporting event that is what Boston-based Gillette, a global manufacturer of grooming products, did for its television spots across South America.

“National boundaries and cultural mores still have an enormous part to play in consumer-to-consumer, business-to-consumer and business-to-business marketing,” says Carl-Axel Engdahl, associate professor of industrial economics at the Royal Institute of Technology in Stockholm, Sweden. “Globalization is certainly a part of the picture, but the world is not 100 percent there yet.”

Engdahl is the author of International Marketing – from a global perspective, a kind of practical handbook for companies planning a foreign acquisition or an entrance into a new market with their products. Many of his former students, such as Stefan Persson from H&M and Ulf Spendrup from the Spendrup Breweries, are now captains of Swedish industry in their respective fields.

A well-respected academic, Engdahl can rattle off any number of successful and less-successful marketing ploys, such as a very advanced interactive site that Volvo launched in North America where users could change the colour of their virtual cars. The site became an underground success but completely flopped in selling cars.


And back in the 1970s,Swedish inventor and entrepreneur Leif Lundblad showed off a prototype of an automatic bill counter at a trade fair in Germany. Within days, he had several thousand orders for these machines from banks in New York, all from just a prototype.

“Good products sometimes sell themselves,” says Engdahl.

Keeping to the argument about national borders, Engdahl says that it is important for country-specific Web sites of large multinationals to appear to be local and in the local language.

“My best piece of advice for a company is to choose the right name,” says Engdahl. “It can mean a lot for the future.”

A case in point is American auction site eBay’s venture into China, which closed its Chinese site in late 2006 to start a joint venture with one time rival EachNet. Since 1999, eBay had tried to corner the Chinese market by bringing to the country what worked in the United States. Customer satisfaction problems arose.


Then Taobao,a rival site, came along. Taobao is owned by Alibaba, which in turn is 40 percent owned by Yahoo. Taobao consistently beats eBay’s EachNet in total merchandizing value and had a total turnover in 2006 of more than 1 billion US dollars, an eightfold increase from 2005.

Alibaba, meanwhile, is the world’s largest online business-to-business marketplace, with more than 500,000 daily users. By targeting small and mid-sized companies, Alibaba enables a small toymaker in China to sell directly to a toy store in New York, for example.

“How could this happen?” asks Qing Liu, a Chinese student of Engdahl’s. “Well first of all, customers’ preferences and tastes give local players the upper hand against their global counterparts. And the name ‘Taobao’, which means ‘digging for treasures’ in Chinese, really puts more focus on the customer.”

According to iResearch, an Internet market research firm in Shanghai, Taobao boasts a higher customer satisfaction rate than eBay’s EachNet, or 77 percent versus 62 percent.

“The better customer relationships you have, the more loyal customers you have,” says Liu.

Despite the importance of a local domestic presence in a foreign market – Toyota claims it is an American company in some of its marketing – companies such as Mercedes Benz, Hewlett Packard and Walt Disney have embarked on an aggressive strategy to show one face to the world in a single-branded global advertising campaign.

“The global-versus-local debate is one of the oldest in the industry, and it has hardly been resolved,” writes Eric Pfanner of the Herald Tribune in August 2006.

Pfanner reports how Mercedes Benz asked advertising agency BBDO to develop a single global campaign for its new C-class cars to be introduced in 2007. Meanwhile Hewlett Packard started a global advertising campaign for its personal computer division in 2006, and Disney started a global campaign for its theme parks.


There is no doubtthat global campaigns, if they are done correctly, can save money and be effective. After all, one advertising agency per market with a single, different message is costly. So one possibility is to localize global campaigns with country-specific content as Coca-Cola did during the World Cup.

Some form of online presence supports most advertising campaigns these days. And the enormous popularity of social networking and video-sharing Internet services such as MySpace, YouTube and the millions of blogs and podcasts on all possible topics means that advertisements and videos quickly become global phenomenoms that can be shared, if they hit the right nerve – good or bad.

In a related piece of news, it was announced in late January 2007 that YouTube, owned by Google, would start streaming programming from the BBC, NBC and CBS. Internet video advertising is expected to reach more than 1 billion US dollars in 2008, much of which is expected to come from television advertising budgets, although it is not exactly clear how this will happen.

Will YouTube watchers be forced to watch advertisements before watching the David Letterman show, as some Internet sites do today before you can view the content you want? Stay tuned to find out.

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