Studies show that 75% of consumers are more likely to purchase a product when information is presented in their native language. At the same time, 40% of customers ignore any information presented to them in a language they do not understand. These statistics alone provide a straightforward answer to the question of localization. Brands have no way to truly connect with their global customers until they take appropriate measures to localize their products or services.
Product managers responsible for expanding an international product should be aware of the gap between potential customers and the unlocalized product. Creating a truly global reach for a product is not a difficult feat in today’s technological world, but connecting with foreign cultures and consumers is a multifaceted task.
“A brand can only form the deepest connection with consumers by truly understanding their needs and by providing a product and service which can match up to those local needs and values,” Li Run, TCL’s Senior Brand Director, once said. This illustrates that working with a localization company that has extensive experience in the process becomes crucial. By properly localizing one’s products or services, a brand can finally reach its target audience and consumers, uniting global ambitions and local expectations.
Statistics show that 57% of consumers actually prefer content information provided in their language over the product’s price. 65% are even willing to read ungrammatical translations over no translation at all. It is already clear that basic translation is insufficient to satisfy the target audience, so a comprehensive and detailed localization process can be of great importance.
A professional localization company can provide a product manager with the following:
- Increased market reach: Since a significant number of potential customers are deterred by standardized products that do not align with their language or culture, a well-localized product can effectively reach those customers.
- Increased customer engagement: an evident care for and knowledge of a culture will create a better connection between the brand and the local consumers.
- Increased conversion rate: it is known that companies that have a working localization strategy grow up to 40% more than companies that only provide basic personalization.
- Increased consumer trust: an understanding of and connection to a culture and its consumers is the first step to building genuine and honest relations with them.
For a perfect example of an international brand that has localized its products, one need only look at the fast-food giant McDonald’s. In addition to the global menu that is universal worldwide, McDonald’s offers the Shaka Chiki (sandwich) in Japan, the McMolletes (toast sandwich) in Mexico, and the Chicken Maharaja Burger in India. This is a significant move towards localization, which is what made McDonald’s the largest fast-food restaurant chain in the world.
On the other hand, it’s also important to consider the potential challenges that localization can create. There are numerous examples of brands that have failed in their attempt to internationalize their products due to cultural misunderstandings or a lack of sufficient localization. For example, KFC, which once translated its slogan in China to “Eat Your Fingers Off,” had a failure as a result. Airbnb has also made several major cultural faux pas in China that it has yet to recover from, to the extent that it has even withdrawn from the Chinese market.
Product managers should choose carefully between extensive and detailed localization or another product expansion failure.
The Cost of Ignoring Culture: Lessons from Failed Expansions
Marketing misfires when expanding overseas not only damage your reputation but can also become costly to deal with. Brand giants with established portfolios often lose billions when they are forced to retreat. Walmart lost $1 billion in Germany and $1.6 billion in Japan due to these missteps. You wouldn’t enter new markets without thorough market research, so why are businesses thinking localization is optional?
The underlying fallacy behind the majority of these withdrawals is that global marketing functions effectively with uniform messaging. Cultural differences influence purchase behavior, brand perception, and priorities. Take Walmart’s experience in South Korea. Koreans sought a traditional, small-format offering that provided a curated shopping experience with personal customer service rather than the self-service concept that characterized Walmart’s big-box stores.
Some of the most notable localization failures can be found in the food and beverage industry. The Australian coffee chain Gloria Jean’s didn’t see the preference for home-grown coffee shops where Aussies order filter coffee with no syrup. McDonald’s early menus had to be overhauled to respect India’s dietary laws and religious restrictions on beef and pork.
Marketing translation errors are the most overt symptoms of failure in international expansions. Pepsi’s slogan, “Come Alive With the Pepsi Generation,” supposedly became “Pepsi Brings Your Ancestors Back From the Grave” in certain Chinese dialects. Kentucky Fried Chicken’s ‘Finger-licking’ good’ became ‘Eat your fingers off’ in Chinese markets.
Product managers should recognize that these failures aren’t due to technology or infrastructure mishaps but instead to cultural myopia. Home Depot’s $160 million loss in its China expansion was due to underestimating a crucial cultural difference: DIY store culture does not resonate with Chinese consumers, who prefer the services of professionals. A qualified localization company would have recognized this without delay.
Cultural offenses not only result in monetary loss but also damage the brand, lead to boycotts, and even prompt government interventions. Businesses also lose out on strategic local alliances by sidelining critical cultural considerations.
Localization specialists refer to successful international expansion as Glocalisation or blending global strategies with local smart integrations. This can range from simple tweaks to taglines to entirely new products that meet local needs and interests. The right localization company will guide companies through the nuances and intricacies of cultural considerations.
Product managers driving international go-to-market strategies should make cultural intelligence an indispensable part of their approach.
Your Blueprint: People, Process, and Platforms That Scale
International expansion should be a strategic process rather than an exercise of pure ambition. Research has indicated that global businesses are 20% more likely to experience revenue growth than their domestic-only counterparts. Three key factors contribute to This success is built on three pillars: the right people, streamlined processes, and powerful platforms.
Finding the right management team is crucial. As Aseem Goyal, co-founder of Factum Global Asia, states, “Entrepreneurs need to have a management team with the right skills and experience.” The members do not need to be experts in all aspects of the desired market. Management teams should instead work alongside local partners with the proper cultural knowledge of the local environment, customer expectations, and even regulatory hurdles.
Local expertise will also accelerate speed to market. Collaborating with local consultants will also reveal nuances not available in online or second-hand sources. Local expertise can be added by “hiring three to five consultants or people who have achieved a certain degree of success in that market,” an industry expert shared with Business Advice. A company can then utilize this knowledge to develop a strategy that resonates with the local population.
Businesses should also conduct a financial audit to assess their level of preparedness. To the greatest extent possible, a complete picture of the business’s economic condition is necessary. It should allow a business to verify that it can financially support expansion efforts. It is also essential to evaluate whether the company has the resources needed to cover the upfront costs of entity setup, legal services, trademark protection, and even bank account setup. Other financial factors to consider include how well the organization can meet the needs of its customers or clients in desired markets. A business should also “look for someone who can offer a KPI-based approach to local challenges.”
Technology is an extension of any expansion effort. A single central localization technology platform should serve as the “headquarters” for workflows and translation work. Cloud-based localization software enables team members in various geographies to collaborate in real-time, regardless of their physical location. For the right fit, these platforms should have:
- User-friendly dashboards paired with seamless functionality ensure a minimal learning curve and faster adoption.
- Automation capabilities for repetitive, mundane tasks.
- Collaborative functions to enable cross-border teamwork.
- Scalability to expand with your needs.
The truth is that it is also essential to work with the right localization company. After all, the best partnerships strike a balance between technological efficiency and cultural fluency. This is because, in most cases, trust will be a critical differentiator when it comes to international partners, investors, or even clients.
A business should also constantly monitor and adapt to evolving market conditions for long-term success. Watching for new opportunities and threats and responding to shifts in customer needs will help shape strategy. Utilizing local cultural insights can provide a sustainable competitive advantage for any business in various markets.
Localization in Action: How Top Brands Win Market by Market
Global brands stand as living proof of how deep localization resonates with customers more strongly than a translated asset. In fact, research from SDL found that 76% of consumers are more likely to purchase a product when information is available in their native language. Localization is not only an expensive add-on but also a strategic necessity that can make or break a competitive advantage.
Netflix is an excellent example of brand localization done right. The streaming giant is investing billions into local productions, such as Money Heist in Spain and Sacred Games in India. Netflix is also tailoring its recommendation algorithm according to the unique viewing behavior within local markets. By adapting its library and interface to the interests of viewers worldwide, Netflix achieved a 128% increase in downloads across all regions.
Coca-Cola, on the other hand, is maintaining its universal brand logo while shifting its regional marketing efforts into the background. The beverage company is localizing its campaigns to be culturally sensitive and aligned with each market’s festivities. That way, the brand manages to maintain its international perception while keeping a foot firmly planted in local values.
McDonald’s is another excellent example that has its Golden Arches universal, while the local menu is adapted depending on the country. This includes the Teriyaki Burger in Japan, McSpicy Paneer in India, and many other localized menu options. McDonald’s perfectly demonstrates its glocal strategy by upholding consistent global brand standards while adapting menu offerings to local tastes and cultures.
Starbucks provides an excellent example of a brand that successfully expanded internationally by localizing its operations in China. It started by not only translating the menu but also tailoring it according to local flavor preferences. This means that, among other offerings, the company introduced the Red Bean Green Tea Frappuccino to the Chinese market. The product launch went well because the company also localized its store size and format to an upscale, larger footprint, which suits the local market’s perception of coffeehouses as meeting places.
Product managers who seek similar results should carefully select their localization partner. These partnerships afford companies multiple benefits, including the following:
- Market research capabilities to identify localization tactics that most appeal to their target markets.
- Cultural understanding to circumvent not only expensive translation errors but also potential social faux pas.
- Technological toolkits that leverage AI-powered technology in combination with human editing to produce content that is both fast and of high quality.
Successful brands know that localization is not a one-time project. They rely on performance metrics and locally sourced feedback to inform and improve over time. This means that a brand like Spotify can localize visual assets, such as playlist cover images, to incorporate local landmarks and models that appeal to target markets.
Product managers and decision-makers in charge of these expansions must ensure that their chosen localization company aligns with their own goals and values. After all, these collaborations will play a significant role in determining how well the companies enter each market, how well local customers receive them, and whether or not their brand identity is upheld.
Conclusion: Sustainable Global Growth Starts with Local Thinking
The international market presents both opportunities and challenges for ambitious brands. Our research has shown that effective localization is more than just translation; it involves a comprehensive approach that encompasses multiple aspects. It has become a vital strategic business operation. Product managers at the helm of a company’s international growth need to have the right localization company by their side. The partnership is more than just service; it is a strategic alliance that can make or break market success.
The statistics speak for themselves: 75% of consumers expect to see products or services available in their native language. 40% of potential customers will not purchase from a website that’s not in their local language. These statistics clearly demonstrate why a literal, word-for-word translation is insufficient. Brands that invest in comprehensive localization strategies experience 20% faster growth than those that focus solely on their domestic markets.
There have been some high-profile corporate disasters when brands have entered global markets without a localization strategy. Walmart lost $1 billion in Germany and Japan and $160 million in China. These costly examples are an eye-opener for product managers on why cultural intelligence should be at the heart of any expansion strategy, not just an afterthought.
The success stories of some global brands offer us guidance on how to succeed in international markets. Netflix produces region-specific content. McDonald’s tailors its menu to local preferences. Starbucks designs store interiors that resonate with local culture. These brands have adopted the “Glocal” strategy – they remain globally consistent while maintaining a local presence. There are three key ingredients behind these brands’ success: local experts, regionally tailored processes, and enabling technology platforms that support collaborative workflows.
Product managers should view localization as an ongoing strategy rather than a one-time project. They need a localization company that has both technical expertise and cultural intelligence. The best localization partners will blend AI-powered technology with the human touch, offering unique insights into local markets that remote research can never uncover.
Success in international markets also requires close monitoring and constant fine-tuning. Markets evolve, consumer preferences change and winning brands are those that can pivot at speed. The best localization partnerships will help you monitor new opportunities and potential threats, enabling you to adjust your strategies as the market shifts.
The potential benefits are enormous: with the right localization strategy, brands can enter new markets, connect with customers, increase sales, and build trust. However, a lack of cultural awareness can result in reputational damage, alienated consumers, and a waste of money on failed market entries.
Mid-sized companies are well-positioned to capitalize on these opportunities, but will also face challenges. Limited budgets mean that these companies may not have the resources that larger multinationals have. However, a skilled localization partner can empower mid-sized companies to succeed in global markets. Agile and leaner than their global rivals, mid-sized companies are well-positioned to pivot and adapt to the nuances of a local market.
Product managers face a demanding role filled with complex challenges. It is their job to lead their brands in the localization journey, and with the right partner, the right processes, and a continuous improvement mindset, they can unlock vast new opportunities. Product managers who can navigate their brand through the complexities of the cultural landscape will not only find new markets. However, in the right hands, localization is a strategy that can foster deep connections with consumers worldwide and provide a genuine competitive advantage.
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