future thinkers update

Global reach, local scale

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Globalisation has made it easier to reach potential customers but has also highlighted the need to be more aware of cultural differences  
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Globalisation is redefining communications with customers

Why is there a trend towards globalisation?

Globalisation has been underway for many years now but was previously seen as the preserve of huge consumer brands that had the financial muscle and manufacturing, distribution and marketing capabilities to reach every key market. However, we are entering an exciting new phase where the internet allows companies of any size to achieve global reach practically from start-up. Now niche products from small companies can compete on the same level playing field as the major brands. Indeed, success is just as likely be delivered by creating a stir on YouTube as it is by a multi-million pound global advertising campaign.

Does this trend make brand building and communication easier?

In theory, it does. Products can be sold online anywhere in the world, distribution can be centralised for cost-efficiency and the rapid growth and adoption of smart phone “apps” and social media makes communication with potential customers much easier. A company’s brand values and marketing can be developed and controlled from the centre, thus achieving unparalleled levels consistency across the world. However, there is one big problem: the lack of local context in a centrally controlled, one-size-fits-all marketing and communication plan.

What are the dangers of misunderstanding local context?

Consumers in different countries have identifiable traits that influence behaviour. Without understanding those, companies risk failing to exploit their full potential or, worse, actively harming their brands. Last year we created a “Cutural Lens” with which we identified huge differences in attitudes towards customer service in Europe and found, for example, Italy and Spain prefer highly personalised service and like to engage with a ‘real person’, whereas the UK and Denmark value efficiency and speed above this. Extrapolate those findings and accentuate the cultural differences for markets in the Americas, Asia and Africa and you quickly realise that the successful global brands will be those that offer customers a number of ways to interact with them. Frustratingly, as designing and manufacturing products for a global market gets easier, serving customers is becoming more complex.

Will increased use of technology increase these cultural clashes?

There is every chance that it will thanks largely to the new generation of mobile devices. M-commerce, or mobile commerce, has been slow to take off because hand held devices were clunky to operate and expensive to buy until relatively recently. Now phones and tablets are cheap, intuitive and, with the rise of “apps”, able to deliver a host of products and services directly to the user’s handset that are specific to where they are at any given moment in time. An attractive offer on a dress in Hammersmith on a slow Wednesday afternoon might be 10% off, while in Hamburg it might be 20% on a Friday morning. Keeping track of all this and fine-tuning marketing messages to take account of local sensitivities while delivering a consistent level of customer service to this highly atomised customer base actually requires more communication and service channels, not fewer.

What are the wider implications for global businesses?

One of the biggest shifts required is greater understanding of how products are consumed in different geographic locations. At the moment developers design goods based on their technological functionality, not how they could be used in everyday life. This runs the risk of wasting many millions of research dollars on things which work brilliantly but have limited practical attraction to would-be buyers.

Researchers need to fully understand the context of their target consumers and how they interact with products at different stages in their lives, enabling product developers to focus efforts more effectively to maximise sales. Ultimately, this means the whole basis of research will have to change and take cognisance of the context products are likely to be used in rather than their functionality.

The great opportunity of the M-Age we are entering, so called because it will be dominated by young people who have never known a world without the internet and mobile phones, is the multitude of routes to market available to reach consumers. Smart phones, tablets, and internet-enabled hand-held gaming consoles all offer companies mouth-watering possibilities for opening up dynamic, instant and highly personalised routes to precisely targeted groups and individuals.

The challenge for marketeers lies in trying to maintain central control of every aspect of the brand against a range of everyday lifestyle, cultural and geographic sensitivities.

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