Entering into a new marketplace — especially when expanding globally — can bring many surprises. What can a business do to stack the odds for success? Rather than assuming that destabilising missteps won’t derail your efforts, it’s critical to identify potential pitfalls and be scrupulous in applying lessons learned from market and competitor analysis.
This article is the first in a series educating enterprise tech firms on the major mistakes that can disrupt international market entry, while highlighting core lessons to build on. Kettering International is known for educating our clients and investing in their success through high-impact planning and maintaining due diligence throughout the market expansion lifecycle. Here we will explore the multitude of problems an organisation can encounter if they fail to engage with one essential concept: localisation.
How Does Localisation Affect Global Expansion?
Localisation is the core of successful international expansion. Why? Because when you expand into a global market, you are still setting up business in someone’s home market. This reality can often be lost in the metrics, yet it is a very real driver of an organisation’s ability to take root in new soil. International customers translate a lack of localisation as a lack of commitment to their home market. This does not create sales or sustainable relationships.
The culture of the target market must influence your company’s promotion of products and services. It also needs to inform how your team approaches meetings and interactions. Convincing a client of your stellar customer service is a much harder sell absent the insight and nuance that localisation research brings to your approach. Global clients still want to feel that they are first and foremost in your service consideration, and often it’s the unspoken ways that make the difference in communicating this — whether it be through tone, pacing, sensitivity to local issues, or some other factor. It is imperative that a common language is learned to communicate your commitment abroad as you have done at home.
What Happens When Organisations Ignore Localisation in International Expansion?
Working primarily with technology clients, Kettering International has seen its share of software demos that do not clearly correspond to the new market’s local understanding of what technology should offer them. It can be terribly uncomfortable to be in a boardroom meeting that doesn’t accommodate the potential client’s needs.
For example, one tech firm did not offer diverse avatar options for its U.S.-based product users. Kettering International interceded before the pitch meeting to explain the American market’s localised expectation of a high level of personal customisation abilities — in this case, avatars that are reflective of the client’s personnel as well as the client’s end-user. This gap was bridged, so the business opportunity was not lost.
Sometimes, localisation means evolving your business to meet market needs. Both McDonald’s and Kentucky Fried Chicken (KFC) decided to enter the Chinese market. There was one major difference — KFC localised their menu to suit the Chinese consumer. McDonald’s chose to roll out the same product they sold to satisfy Western tastes and expectations. KFC outperformed McDonald’s, making China one of the few markets worldwide where they claimed market dominance.
Similarly, lack of localisation also caused Starbucks to halt their Australian rollout. Rather than localising to the Australian palate, they assumed the sweetened frappuccinos Americans craved would thrive alongside the simple, strong coffee flavours preferred by the Australian market. They didn’t, and their rollout was paused.
No matter how small or large your company is, a localisation strategy for international business is a must. If it can catch McDonald’s or Starbucks by surprise, it can catch any business. Kettering works with CEOs to develop a clear localisation strategy by reviewing their assets and how each should be applied to the target market.
The Importance of Speaking the Local Language
People prefer brands that speak to their local language, literally and figuratively. Siddath Sharma writes that 87% of consumers won’t buy items from websites with only English content. Another helpful number Sharma shares is that $25 is returned for every $1 invested in localisation. We understand that global expansion is exciting, but only if it is set up with the foundation to perform.
That means developing an understanding of your differential in your home market, as well as understanding the core considerations of your target market. When you have those two perspectives dialled in, you have set up a mutually beneficial business environment. These are the cornerstones of global expansion that Kettering International educates clients through to optimum success.
Contact Kettering International Today
Enterprise tech companies established in their home market, now looking to enter the U.S., U.K., or another foreign market, can contact Kettering International for more information on developing a localisation strategy that will optimally support your business’s international expansion. Reach out to Kettering today, and stay tuned for our next article, where we’ll explore the problems that can occur if an organisation fails to develop their market intelligence.