Glocalization: Global vs Local or Both?
Glocalization is a term derived from merging the words globalization and localization. The term is meant to symbolize a balance between products containing both global and local components. A definition of the term often refers to glocalizing as “localizing the global” (i.e. taking a global product and adding a local element such as one incorporating an ethnic preference or local language) or “globalizing the local” (i.e. taking a local product and making it more general in order to make it more accessible to a wider audience).
In marketing, glocalization involves components such as translating communications and modifying messages to cater to the local market. It also contains considerations such as culture, religious beliefs, and social taboos.
"Going global" has become the way of doing business since companies face growing competition in domestic markets from both local and international competitors.
The term “glocalization” has its roots in Japanese business practices. It is derived from the Japanese word dochakuka, which means global localization, which originally referred to a way of adapting farming techniques to local conditions. Dochakuka evolved into a marketing strategy when Japanese businessmen adopted it in the 1980s, writing about it in the Harvard Business Review (Ohmae 1990, Robertson 1995).
What do you think? What's the best approach for internatonal products?
Global vs. Local: Which way to Go?
When entering a foreign market, a company must make a fundamental decision – to standardize or to adapt product offerings.
Advocates of standardization (global) suggest that the world is becoming homogeneous due to rapid advancements in transportation and communication technologies (Levitt 1983; Ohmae 1985). This standardized profile of consumers across borders potentially provides firms with opportunities to achieve cost savings by means of economies of scales in production, marketing and other activities through standardization (O'Donnell and Jeong 2000). This approach emphasizes the financial benefits through standardization.
On the other hand, proponents of adaptation (local) argue that there are major differences across borders which need to be considered – cultural differences, differences in the physical environment, religious beliefs, languages, legal requirements, economic development, and infrastructure (Hill and Still 1984; Boddewyn, Soehl et al. 1986; Wind 1986; Cavusgil, Zou et al. 1993; Zou and Cavusgil 1996, O'Donnell and Jeong 2000). The main concern with this approach is the impact of the external environment of the host country on the international marketing strategy.
One example of a glocal product is Coca Cola. The world's number one brand varies the amount of sweetener and type of sweetener used for each market.
Nonetheless, one ought to consider whether the debate should be concerning choosing adaption over standardization or vise-versa. Why should this be a zero-sum game? Fortunately, a third approach to entering international markets has been coined - glocal. The term is also referred to as “be global, act local” and has been widely accepted as an alternative approach that combines the traditional two (Will and Jacobs 1991; Sandler and Shani 1992; Rugman 2001). Local products have limited local demand and therefore need to enter international markets to increase their sales. And many global products have just a limited global demand and therefore need some local adaptions.
Levitt, T., 1983, The Globalization of Markets. Harvard Business Review, 61(May/June), 92- 102
O’Donnell, S. and Jeong, I., 2000. Marketing Standardization within Global Industries: An Empirical Study of Performance Implications. International Business Review, 17(1), 19-33
Rugman, A., 2001. The Myth of Global Strategy. International Marketing Review, 18(6), 583-588
Sandler, D.M. and Shani, D., 1992. Brand Globally but Advertise Locally?: An Empirical Investigation. International Marketing Review 9(4), 18-31
Will, J.S.C. and Jacobs, L., 1991. Developing Global Products and Marketing Strategies: A Construct and a Research Agenda. Journal of the Academy of Marketing Science, 19(1), 1-10
Wind, Y., 1986. The Myth of Globalization. Journal of Consumer Marketing, 3(2), 23-6
Zou, S. and Cavusgal, S.T., 1996. Global Strategy: A Review and an Integrated Conceptual Framework. European Journal of Marketing, 30(1), 53-69