E-Business

235Chapter 4 E-environment

4 Highly-localized web sites.Country-specificwebsiteswith language translation; theyalso include other localization efforts in terms of time, date, postcode, currency formats, etc. Dell (www.dell.com) provides highly localized web sites.

5 Culturally customized web sites.Web sites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple web sites for that country depending on the dominant cultures present. Durex (www.durex.com) is a good example of a culturally customized web site.

Deciding on the degree of localization is a difficult challenge for managers since while it has been established that local preferences are significant, it is often difficult to balance localiza- tion costs against the likely increase or conversion rate through localization. In a survey published in Multilingual (2008), the importance of localization was seen as important with 88% of managers at multi-national companies stating that localization is a key issue, with 76% of them saying that it is important specifically for international customer satisfaction. Yet, over half of these respondents also admitted that they allocate only between 1% and 5% of their overall budget for localization. An indication of the importance of localization in different cultures has been completed

by Nitish et al. (2006) for the German, Indian and Chinese cultures, assessing localized web sites in terms not only of content, but cultural values such as collectivism, individual- ism, uncertainty avoidance and masculinity. The survey suggests that without cultural adaptation, confidence or flow falls, so resulting in lower purchase intent. A further aspect of localization to be considered is search engine optimization (SEO, see

Chapter 9) since sites which have local language versions will be listed more prominently within the search engine results pages for local versions of the search engines. Many special- ist companies have been created to help manage these content localization issues for companies, for example agency Web Certain maintains a forum advising on localization (www.multilingual-seo.com). One example of the effect of localization on conversion rates is provided by MySpace

CEO Mike Katz who stated in NMA (2008) that: ‘All the 27 sites are localised, we don’t believe that one size fits all’, says Katz. ‘We know that from the first day we localise in any language, we triple our sign-ups on original users.’ In 2008, 45 million of the 130 million MySpace users were outside the US; new sites were planned for Russia, India, Poland and Korea, each requiring a local version of the MySpace model. To explore the implications of globalization for consumer-oriented companies, refer to

Case Study4.1.

The article starts by discussing anti-globalization. It then explores the implications of variations in the characteris- tics of different cultures on businesses providing services to them. At the end of the article, research about attitudes to globalization is summarized, along with its implications for businesses trading internationally.

Globalisation, or maybe more specifically, anti-global- isation issues, are never far from the headlines, whether it’s coverage of the latest anti-WTO demonstration or news that McDonalds has replaced Ronald McDonald in France with Asterix – in a move to ‘appease anti-globalisation protesters’ (BBC News, 22 January 2002).

But what does globalisation actually mean? Stemming from the application of free market principles

it has manifested the belief that the world is small and that consumers are becoming more and more alike, thus allowing companies to use the same advertising and marketing across regions and countries. Such a doctrine has enabled companies to act global and think global, much to the distaste of the anti-globalisation lobbies. Indeed, in 1985 it was Friends of the Earth that coined the slogan ‘think global, act local’ in its desire to counter such global forces – particularly with regards to environmental issues.

However, such ‘glocalisation’ [global localisation] makes a lot of sense for multinational companies oper- ating today and planning new market entry, for a number of reasons. Firstly, the term globalisation for

CaseStudy4.1 The implications of globalization for consumer attitudes

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The implications of e-commerce for international B2B trading

Hamill and Gregory (1997) highlight the strategic implications of e-commerce for international business-to-business trading. They note that there will be increasing standardization of prices across borders as businesses become more aware of price differentials. Secondly, they predict that the importance of traditional intermediaries such as agents and distributors will be reduced by Internet-enableddirectmarketingandsales.

many Europeans is virtually synonymous with that of ‘Americanisation’. For some this has negative conno- tations of materialism, loss of native culture and the encroachment of the English language. At its extreme, it drives many of the anti-globalisation activists. Thus there is real risk that companies will damage their brand and reputation if they don’t recognise the importance of localisation when considering market entry.

Secondly, consumers are as different as they are similar – local and regional cultures have a profound effect in shaping consumer demand. These differences are potentially more interesting than the similarities, in that they can allow product and service differentiation as well as new approaches to segmentation and marketing communications. To take advantage of such opportunities, businesses have to have a clear insight into how and why consumers in one market may differ from ones in another.

Feelings of anti-Americanisation are a strong under- current in Europe. Businesses have to plan how to counter such a groundswell of feeling if planning on entering new markets – given that some 50% of Europeans believe that ‘our society is too Americanised’ and such an attitude has increased over the past 10 years. While the degree of agreement varies within Europe (e.g. 67% of Spaniards agreeing with the state- ment, as compared with 44% of Brits) it is a significant influence of customer behaviour. To compound matters, multinational companies are the least trusted of 27 en- tities when European consumers have been asked to state which they trust to be honest and fair.

As a result, not only have we seen an increase in consumer activism (such as anti-WTO protests, growth of the slow food movement in Europe etc.), but also we have seen global brands coming under threat from emer- gent local brands which are gaining in currency. We would expect this to continue. This is not to say that there is no room for global brands! Many global brands have successfully tapped into local culture and tastes and recognised the need to either modify the product/service completely or change different elements of the offer and how it is ultimately marketed. Thus companies expanding into new geographic markets have to ensure that their

strategies are based on a real understanding of regional and local markets.

Globalisation is not making the world a smaller, homogeneous place. While this presents many oppor- tunities for businesses, it also implies a need for a clear understanding of what shapes consumer needs and desires in the different nations. Not surprising perhaps that many businesses found the notion of a ‘globalised’ world compelling given the significant implications for researching a multitude of different markets in terms of time and money budgets. Similarly, it is easy to under- stand the temptation of taking well-established national stereotypes and assuming that they are representative of the truth.

Recent attitudinal studies in Europe and the US undertaken by The Henley Centre show the complexity of attempting to categorise consumers on a broad scale. Let’s take an example. At one level, results show that all consumers take pride in their family, so a global advertising campaign using the ‘family’ as a theme may feel like safe territory. To some extent it is. Dig down a bit deeper, however, and you find that different people define ‘family’ in very different ways, so what people take pride in will be subtly different. At a country level, many more differences expose themselves.

Businesses wanting to broaden their geographic reach have to consider at a strategic level what level of understanding of consumer needs they require. Generalisations are important and are a good place to start, but it is critical to then delve further – national stereotypes are too simplistic. Differences, rather than similarities, have to be considered, and interrogated in terms of how these will impact customer needs.

Source: The Henley Centre (www.henleycentre.com)

Question Based on this article and your experiences, debate the question: ‘Site localization is essential for each country for an e-commerce offering to be success- ful in that country.’

236 Part 1 Introduction

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