Sunday, April 4, 2010

Global + Local = Glocal

This post refers to my previous post on International and Global strategies. The idea to talk about Glocalization struck me when I had posted that previous note and thought it would be of high relevance to bring up this topic.

The term Glocal comes from the Japanese word "DOCHAKUKA" which means global localization. Dochakuka evolved into a marketing strategy when the Japanese businessmen adopted it during the 1980's. By definition, the term ‘glocal’ refers to any individual, group, unit, division or organisation which is ‘able to think globally & act locally’.

In today's market scenario, enterprises are forced to rethink on their decision of aiming at just globalization and ignoring localization or vice versa. It is of prime importance for marketers and other key decision-makers to develop a two-pronged go-to-market – a global marketing and product strategy combined with dedicated localization plans. An integration of the two is a must for enterprises aiming to foster a global footprint for its products or company.

Glocalization has also been much spoken about (and written) topic by the academia. Renowned authors have published white papers, books and other journal entries debating about the intricacies about this; below are a chosen few.

According to Doole and Lowe (2001), ‘think global, act local’ or in other words ‘glocalisation’ encloses the true nature of globalization. Hollensen (2004) says that in order to have a successful glocal strategy, it is necessary for it to reflect the aspirations of a global integrated strategy along with recognising the importance of local adaptations/market responsiveness. Keeping this thought in mind, major international organizations, over the last decade have adopted long-term strategies to establish a worldwide presence. Terpstra (1990) is a votary to this outlook. According to him, convergence does not mean standardization or uniformity, even though it is true that the technology, economies of scale and
internationalization are leading to a greater convergence of both products and marketing methods.

Hollensen (2004) has explained this ‘glocalisation’ or ‘glocal strategy’ through the ‘global integration/market responsiveness grid’ (below):

Making inference from the above, its apt to state that to increase the sales and venture into new markets the global products need to adapt to the local needs. Likewise, in order to increase the sales of the local products in the global market, enterprises need to adapt to the global needs of the customers.

To further aid understanding on this topic, below are some examples from the Indian marketplace. While I have tried level best to make references to commonly known brands in India, there will always be more examples which many of you might note in everyday life – please leave a comment and share some of these with me, always works well to exchange thoughts and knowledge!

NOKIA – While their products solve the same purpose all across the globe, Nokia does well to customize the marketing messages to cater to local needs and add higher relevance to their campaigns. Taking Nokia E72 as an example, while this gadget does the same job for professionals (and other users) across the Asia Pacific region (and World-wide), the company uses local languages (Chinese, Hindi, etc) to effectively communicate with the respective set of audience.

MC DONALDS – This is yet another suitable example of a glocalized strategy. Despite being a global brand, McDonalds customizes its menu to cater to domestic eating habits and also respect local traditions (if any). The "Maharaja Mac" and no beef/pork products in the company’s menu in India validate the above argument.

AYURVEDA in Western Countries – This example suits the reverse trend of globalizing strategies that have only done well in a specific (read localized) environment. While Ayurveda is a very popular line of medication in India but comparatively is still a new concept in the western countries. So for the likes of Dabur looking to launch their products in countries like UK and US, there is a critical need for marketers to identufy the unique set of challenges (including differences in purchase behaviour) they are likely to face in the world market and accordingly address them through the product and marketing strategies.

While there’s a lot more that can be discussed about this topic, it’s important for me to limit my post to ensure it does not put you to sleep! To aptly summarize the topic, glocalization means the capacity of being rooted in the local market and also to face the global challenges. It is a change in the strategy or development of a new strategy and if managed well can lead to the growth both for the local and the global markets.