Optimizing Localization Efforts: Global Online Segmentation

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Optimizing Localization Efforts Global Online
Segmentation

• Gary Muddyman
• Nitish Singh

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Rise of the Online consumer

• Global online population is expected to reach
  almost 1.8 billion by end of this decade.
• Global E-commerce is expected to reach almost 12
  trillion
• According to a recent global survey conducted by
  The Nielsen Company, over 85 percent (875
  million) of the worlds online population has
  used the Internet to make a purchase.

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The Elusive Global Online Consumer

• MNEs are struggling with the idea of how to best
  reach global online consumers.
• Some studies point to emergence of global
  consumer segments-advocating standardization
  (Batra, 1999 Hazeltine Rezvanian, 1998
  Keillor et al., 2001)
• While some studies point to the presence of
  cross-cultural differences in online consumer
  behavior, (e.g., Luna et al., 2002 Lynch Beck,
  2001 Simon, 2001 Singh Fassot, 2003)
• How Global and National identity affects
  consumers expectations and perception of
  international web sites is an un-explored
  challenge

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Standardize or Localize?

• The decision whether to standardize or to
  localize on the web is not dichotomous.
• Instead of having a black-and-white view, we need
  to accept a middle-of-the-road approach and
  understand degrees of international Website
  localization.

Standardized
Localized
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Why Decipher the Global Online Consumer

• Customer is only a click away from your
  competitors.
• Your online success depends on attracting and
  keeping your customers on the site.
• Studies have shown customers are much more likely
  to stay-- if a site can induce a state of Flow
• FlowCustomer retentionProfit
• Research shows that adapting the site to consumer
  expectations has been shown to increase Flow.
• Global Online Consumer Segmentation Tool Can help
• you avoid over adapting or under-adapting the
  site
• for optimal Flow generation.

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Global Consumer Identity

• The orthogonal cultural identification theory
  explains how an individual can express multiple
  identities simultaneously.
• Thus, a person can be high on national identity
  at the same time as being high on global identity
  or low on global identity at the same time being
  high on national identity

Degree of Standardization?
Degree of Localization?
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Research Premise

• Lumping all international consumers as global,
  national or ethnocentric, or under some other
  clearly defined heading might be self-limiting
  and an incomplete picture of the global consumer
  reality.
• A recent trend to equate globalization to global
  community or as some say the global village is
  to discount the proliferation of civilizational,
  continental, regional, societal, and other
  particularistic dimensions of the global human
  condition.

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Global Consumer Segments
High Global Identity/ Low National Identity
(HGLN)
High Global Identity/ High National Identity
(HGHN)
Users Global Identity
Low Global Identity/ High National Identity
(LGHN)
Low Global Identity/ Low National Identity
(LGLN)
Users National Identity

• Global Consumer Segments differ in their
  preference for different degrees of Web site
  localization!

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Globalization Process

• In the current context of globalization, to
  assume that global and national identity are two
  standalone concepts may in fact not acknowledge
  the complexity, richness, and intrinsic tension
  these concepts hold.
• In this system of complex global interactions
  individuals become a part of the globalization
  process and experience these interactions in
  relation to the tension created between their
  level of global identification and their
  adherence to their national identity

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Sample

• The sample for the study includes 93 Brazilian,
  88 French, 110 German, and 100 Taiwanese online
  consumers
• Each respondent browsed nine different websites
  belonging to American (Dell, IBM, HP, Kodak, and
  Microsoft) and Japanese B2C MNEs (Sony, Toshiba,
  Fujitsu, and Fujifilm) .
• Subsequently, a questionnaire was filled out
  measuring the perception of ease of use,
  perceived usefulness, attitude toward the site,
  cultural adaptation, and purchase intention for
  each website.

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Results

• Analysis of Variance procedure was used to
  analyze how the global and national identity of
  online consumers from Brazil, France, Germany,
  and Taiwan interact to affect their usage and
  acceptance of highly adapted international web
  sites specifically designed for their countries.
• To test how such differences manifest with
  varying degrees of global and national
  identities, F statistics along with post hoc
  Tukey tests were conducted

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Findings

• Findings from all four of these countries show
  that in general consumers that have high levels
  of identification with national identity tend to
  expect higher levels of cultural adaptation than
  consumers who have low level of national
  identification.
• It is also interesting to see that a consumer can
  be high on national identity and simultaneously
  maintain high global identification, but still
  expect higher cultural adaptation of
  international web sites.

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Findings

• (HGHN) consistently perceive highly adapted sites
  as higher on TAM variables than consumer segments
  that were HGLN LGLN.
• Post hoc tests show that consumers high on global
  but low on national identity (HGLN) show
  significantly lower scores on ease of use,
  perceived usefulness, attitude toward the site,
  and purchase intention than LGHN and HGHN
  consumers.
• LGHN consumers showed significantly higher scores
  on ease of use, perceived usefulness, attitude
  toward the site, and purchase intention compared
  to LGLN and HGLN consumers.

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Findings

• This result shows that if consumers national
  identity is high their expectation for cultural
  adaptation is always higher, irrespective of
  their global identity.
• Consumers low on both global and national
  identity showed significantly lower scores on TAM
  variables compared to HGHN and LGHN consumers

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Implications

• These findings suggest that lumping all
  international consumers as global, national or
  ethnocentric, or under some other clearly defined
  heading might be self-limiting and an incomplete
  picture of the global consumer reality.
• A recent trend to equate globalization to global
  community or as some say the global village is
  to discount the proliferation of civilizational,
  continental, regional, societal, and other
  particularistic dimensions of the global human
  condition.

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Deliverables Strategies for Optimizing
Localization Efforts

• High on Global and National Identity (HGHN)
• Consumers in this segment are more open to using
  international web sites, reflecting their strong
  global identity, but at the same time demand a
  high level of web site localization, reflecting
  their strong national identity.
• These consumers can be a lucrative consumer
  segment provided marketers develop localized web
  sites that are in the local language and
  culturally customized.
• To meet these ends, marketers may need to
  actively involve their foreign subsidiaries or
  local partners in their web site localization
  efforts

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Web localization Strategies
KO Norway
KO China
KO Brazil
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Web localization Strategies

• High on global and low on national identity
  (HGLN)
• While this segment embraces international web
  sites, global brands, and products, it also has
  lower expectations for cultural adaptation.
• Marketers who have recently embarked on the path
  of global e-commerce and have minimal experience
  or resources for web site localization can target
  this international segment
• However, they may need to at least aim at
  translating their web content into the local
  language.

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Web localization Strategies
APPLE USA
AAPL Brazil
APPLE Denmark
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Web localization Strategies

• Low on global identity and high on national
  identity (LGHN)
• This is a hard to reach international segment for
  marketers promoting global brands, products, and
  services.
• These consumers tend to emphasize the positive
  aspects of domestic products and discount the
  virtues of foreign products and services
• Marketers would need to use the local consumer
  culture positioning In the web context, this
  strategy basically translates into emphasizing
  that the web site is locally produced for local
  consumers, and diminishing the global or foreign
  origins of the site by imbuing it with local
  cultural meanings.

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Web localization Strategies
Uniliver Netherlands
Uniliver Denmark
Uniliver India
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Web localization Strategies

• Low global and national identity (LGLN)
• This segment is unique in not identifying with
  either global or national identity.
• They are an elusive segment that needs to be
  further investigated to ascertain the type of
  lifestyle they subscribe to. This lifestyle
  information can then be used as a basis for
  targeting them on the web.
• . Research has shown that consumers in the LGLN
  segment tend to be open-minded towards foreign
  brands, but when targeting them it is important
  to use rational appeals emphasizing self-interest
  rather than localized marketing messages

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Web localization Strategies
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Acknowledgement

• We would like to acknowledge all our colleagues
  who helped us in collection of the data and some
  writing.