1. Introduction
This paper discusses the challenge of
international marketing, specifically the challenge on whether an organisation
should use globalised or localised approaches to marketing. The market is
strongly in favour of localisation where theorists insist that differences will
always exist even in countries that appear very similar to each other
(Banutu-Gomez and Rohrer, 2013). There is overwhelming evidence in research
that localisation can yield good results for the organisation. However, there
are also many organisations that have been known to succeed while pursuing a
globalised approach to marketing. This paper considers literature evidence and
uses it to critique the marketing approaches used at Cloudreach Limited, an SME
based in the UK but with operations in 3 other countries.
2. Literature review
The main challenge for marketers in
international marketing is the choice between localisation and globalisation
approaches to marketing. Each of these choices has distinct advantages and
application ought to be dependent of factors such as cost and effectiveness as
explained in the sections below.
2.1 Theoretical perspectives
The choice between localisation and
globalisation of marketing approaches is one that international businesses are
faced with from time to time (Sayedi, Soltani and Keshavarz, 2014). In the
localised approach, the organisation seeks to understand the culture of the
local populations and factor it in marketing communication design. This is
based on the proven positive correlation between cultural fit and the
effectiveness of marketing initiatives. Cultural perceptions determine how a
marketing message is perceived. For the international business, the culture
distance between countries is the main determinant of the level of localisation
that should be embraced (Janawade, 2013). Cultures that are similar tend to
warrant the application of a uniform strategy across national boundaries. This
cannot be said of cultures that are significantly different from each other.
For instance, a common approach to advertisement can be applied across Western
Europe and the USA, where the only modification required would be translation
into the national language used in the respective countries (Janawade, 2013).
National culture is a people’s way of
life and it influences how they perceive objects and messages (Kuo and Ksiao,
2013). The marketer must be able to understand such perceptions and exploit
them to be effective. For instance, the West is comfortable with a
materialistic culture and would consume just to feel great. But in countries
like China, the tradition has for a long time been founded on Confucianism (Kuo
and Ksiao, 2013). This cultural philosophy frowns upon conspicuous consumption
where utility and necessity are the main factors for consumption. In fact, one
of the actions taken by the Chinese government in line with enforcing their
cultural philosophies has been the outlawing television advertisement for
luxury products on television (Kuo and Ksiao, 2013). As a result, consumers of
luxury products have been relying more on the internet as the primary source of
information on luxury products. In consideration of this factor, marketers of
luxury products in China would have to redefine their marketing channel design
in favour of online marketing more than it would for other markets.
The main disadvantage of localisation of
marketing strategies is that it tends to be more expensive (Gülsoy, Özkanli and
Lynch 2013). Resources have to be invested in research, marketing campaign
design and the monitoring of the impact. There is also the risk of
misinterpreting the perceptions and culture of the local populations which
could lead to negative results. The theory of localisation of marketing
approaches can be contrasted against that of globalisation. Globalised approach
to marketing is characterised by putting in place a marketing strategy that is
implemented uniformly across countries where an organisation operates
(Bandyopadhyay, Coleman and DeWolfe 2013). This approach is ideal in scenarios
where the culture differences are low. One of the main advantages of a global
approach to marketing is cost effectiveness. The fact that they do not need to
modify marketing strategy for each market makes it cheaper for them.
The case for globalisation of marketing
strategy is founded on the perception that there is a convergence of the global
culture (Banutu-Gomez and Rohrer, 2013). This means that cultural differences
are being overcome and consumers are able to relate to each other on the global
platform. The other advantage is that a globalised approach helps in
strengthening the global brand (Hajipour, Rahimi and Jafaryzadeh, 2013). This
is where customers in different markets get to perceive the brand in a common
way. With localisation, the ability of the marketer to bring out a brand image
differs and could lead to a situation where one brand means different things to
different markets. This leads to the recommendation that localisation should be
done within certain limitations where a common theme can be projected to ensure
that there is consistency in the projection of a brand image.
An additional approach is to confront
known cultural perspectives with a view to introducing cultural perceptions
that conform to the marketing message. This is a highly risky approach with
only a few organisations being able to do it with success. Unilever has been
known to carry out such a campaign in the marketing campaign done for its Dove
line of products. The campaign was dubbed Real
Women Got Curves, a message aimed at targeting big sized ladies by making
them feel beautiful (Ostrergaard, 2011). For success in implementing this
approach, one would need to position themselves in the position of an expert or
activist with an aim of changing society’s perception about something specific
(Hair et al, 2013). Cultural differences however continue to play a role with
the desired perception likely to be more acceptable in some cultures more than
others. This means that some localised approaches on how to emphasise or
project a message would still be necessary.
2.2 Market trends in marketing
International marketing is a subject
that has attracted immense attention in the recent past with a view to
determining what would provide the greatest returns on investment. The most
effective advertisements are those that conform to the cultural perspectives of
the audience (Hetsroni, 2012). A number of companies have been known to excel
by modifying their approach to marketing communication in each country or
region.
One remarkable marketing campaign was
the Axe Call Me Campaign, which was
designed to bring out the theme of attraction between men and women in a manner
that respects the dominant cultures in Asia (Lim, 2008). In this campaign,
features of Western romance which involve kissing were replaced by culturally
acceptable practices such as exchanging phone contacts to facilitate further
meetings. This modification was very suitable in reflecting on the Asian
culture and the result was the campaign being ranked as among the most
effective marketing campaigns by an international company in the region (Lim,
2008). An important factor that must be observed is the need to ensure that the
same theme is projected irrespective of the modification of approach. In the Axe Call Me Campaign, the theme is the
same as the one projected by cosmetics marketers in the West where attraction
to the opposite sex is an important factor.
The Real
Women Got Curves was a marketing campaign launched for Dove, a product of
Unilever (Ostrergaard, 2011). This campaign sought to challenge the concept of
beauty in the society. It was targeted at cultures that do not conform to the
Western perception of beauty where a lady was required to be lean (Naeryani,
2009). It also targeted women in the Western countries who may have been trying
to lose weight with little success. It was therefore standardised even though
delivery of the message varied to project models that represent the specific
cultures.
The extent to which standardisation is
done can also apply to the choice of marketing channels to be used. The
marketer must understand the media consumption habits of the target market
(Hetsroni, 2012). This should then be translated into marketing strategies with
emphasis on preferred communication channels. An example to quote from is the
disparity in the access to the internet between developing and developed
countries. While internet access in the developed countries is near saturation,
developing countries still have considerably low levels of access to the
internet (Carroll, 2013). Standardisation in marketing channel design is
therefore likely to be counterproductive. Studies indicate that there exist
little pure standardisation or localisation strategies. A marketing strategy
can be said to be either standardised or localised depending on the degree of
modification. Most companies will often retain the basic theme when localising.
Similarly, a standardisation approach is likely to retain the main message and
narrative while using different pictures tuned to suit different markets.
In Apple’s Think Different marketing campaign, the campaign carried the same
message across the world (Mackinnon, 2011). It was a message that inspired the
target market to seek to be different and aspire to stand out in the society.
This creative marketing campaign was highly standardised. However, there was a
minimum level of localisation where the historical icons that were displayed
varied between regions. For instance, the American advertisements featured the
likes of Martin Luther King Jr. while those displayed in China and the Asian
region featured images of Mahatma Gandhi and Dalai Lama among others
(Mackinnon, 2011). This minimal level of localisation helped in building Apple
as a leading global brand perceived the same way by customers across the world.
Its effectiveness was enhanced by their ability to use messages that each
region could identify with.
As a safety precaution, brands outsource
their marketing functions to marketing agencies (Carroll, 2013). These are
seasoned practitioners in the field of marketing and are versed with experience
in different markets after having engaged in a wide range of marketing
projects. They are therefore well equipped to know which marketing strategies
would be appropriate for specific markets (Carroll, 2013). Besides, they are
able to enjoy economies of scale where they represent a sizable number of
customers. This means that they provide organisations with innovative ideas and
cost effectiveness hence increasing the rate of return on investments made in
marketing.
2.3 Summary
The examples quoted in the literature
review above are a demonstration that the success of marketing can be achieved
whether a standardisation or localisation approach is followed. Where
standardisation is embraced, care should be taken to ensure that minimal
modifications are done to factor in the differences in customers in different
markets. On the other hand, localisation should be done within limits with an
emphasis on projecting a common brand image across different markets. While
marketing theorists find strongly in favour of localisation approaches to
marketing communication, there are no guarantees that such an approach would
yield greater fruits. In fact, localisation comes with the risk of
misunderstanding the local culture. This could not only reduce effectiveness
but even yield negative results.
3. International marketing at
Cloudreach
3.1 Company overview
Cloudreach is a provider of information
technology (IT) solutions to businesses (Cloudreach, 2014). Its aim is to
ensure that its clients are able to exploit IT to be more competitive in their
respective markets and industries. The aim is to provide businesses with cloud
computing capabilities where they are able to store all their information with
ease. The capability is also aimed at ensuring that data is easily stored and
retrieved. It also provides reliable data security features insulating the
client organisations from data theft and other cybercrimes (Cloudreach, 2014).
Some of the strategic partners working with Cloudreach are well known including
Amazon and Google (Hawke, 2014). The company’s international growth process is
highly aggressive. By the end of 2013, it was operating from different
countries within the European region and the USA including Edinburgh, New York,
Amsterdam, Munich and Paris (Cloudreach, 2014). This brings out the question of
effective international marketing.
3.2 Marketing strategies and
implementation
The marketing strategy for Cloudreach is
designed to project the company as a partner for helping them become more
competitive in the market (Pinsan, 2012). They project themselves as the
experts in the field as partners capable of understanding both the client
organisations and their clients with the goal of helping them generate the
solutions that they need. Their marketing strategies are implemented in line
with the need to project this image. The company therefore doesn’t engage in
push strategies that are most common among organisations. Instead, they focus
on providing important insights that client companies can exploit to their
advantage (Hawke, 2014). Naturally, the expectation is that a company that
finds some insights positive would contract them to provide them with the
services.
The focus on being partners for
competitiveness is at the heart of their marketing initiatives. Firstly, the
company uses minimal television advertisements (Cloudreach, 2014). Instead, it
focuses on business strategy magazines, newsprint, and online communication
forums. These are platforms that are commonly used by decision makers within
organisations. Business managers are expected to be keen on learning about
market developments and be keen to take note of business solutions that can
make their organisations perform better. Using these channels is therefore very
strategic for Cloudreach.
Online communication is an important
part of the company’s marketing communication strategy (Cloudreach, 2014). It
uses its official website to inform the market about the services offered as
well as important developments within the market and the company. Event
marketing and publicity mostly take the form of trainings where business
executives are provided with training on the capabilities of cloud computing
and how businesses can exploit them to become more competitive in the market.
Some of the planned trainings include one in Paris on 1st July 2014;
26th June 2014 in Munich; and one in New York in 10th
July 2014 (Cloudreach, 2014a).
Cloudreach also relies on word of mouth
where they expect that customers who are very satisfied with their services
will provide referrals and recommend them to organisations within their spheres
of influence. Relationship marketing is also very important where they focus on
deepening their relationship with existing clients (Cloudreach, 2014). They do
this by learning more about the organisation and its clients and providing
regular updates on new solutions that can be created to keep their clients
competitive.
The level of standardisation is very
high. The marketing approaches are very similar across the different markets
and modifications are very slight to accommodate the differences in cost in
exploiting the different marketing communication channels (Cloudreach, 2014,
Cloudreach, 2014a; Cloudreach, 2013; Hawke, 2014). This is informed by the fact
that the company views the market needs as being similar across markets being
served. The company also presides on its own marketing strategies and does not
outsource any elements of it. The level of centralisation is extremely high
with decisions on marketing planning and employee recruitment being done
entirely at the headquarters in London (Cloudreach, 2014). The impact of this
globalised approach is evaluated in the section below.
3.3 Critique of marketing
approaches
The presence of Cloudreach is symbolised
by the presence of its offices in Edinburgh, New York, Amsterdam, Munich and
Paris (Cloudreach, 2014). These are markets that can be summed up as the
Western cultures. The culture distance between these markets is quite low. This
means that a globalised strategy is feasible. This approach is useful in
building a global brand. The company can benefit significantly by exploiting
the close economic ties within the region occupied to establish a strong brand
and be able to grow its market share.
The company’s adoption of a globalised
strategy can be justified by the fact that there is a low risk of failure as
there are few cultural differences that would warrant misunderstandings
(Ferrell and Hartline, 2011). The markets are almost equally competitive with
each client organisation likely to seek innovative ways through which they can
be more competitive. The company can therefore uniformly focus on these needs
and channel its resources into implementing a common strategy. The use of the
television is minimised and this is probably due to cost factors and the view
that the company would like to avoid push strategies in marketing. However, it
is important to appreciate that the television continues to play an important
role in each of the markets occupied (Carroll, 2013).
The approach to event marketing and
training is likely to yield fruit for the company. Irrespective of the level of
standardisations, activities such as trainings are interactive in nature and a
good trainer should be able to satisfy the students through their approaches. The
same factor applies to communications through the internet and the social
media. However, it is important for the organisation to focus more closely on
the need to adopt certain levels of localisation. There is little evidence of
the organisation conducting any market researches to identify the unique needs
of the market in different countries served. Their approach is focused on
developing a strong message based on their capabilities and marketing it to
prospective customers. This is based on the understanding that all the markets
occupied are likely to be very similar to the UK. Such an assumption can be
very risky and likely to make Cloudreach less successful in the market. This
forms the basis of recommendations as detailed below.
4 Conclusion and recommendations
Cloudreach implements a highly
standardised approach to marketing communications in the markets served which
include France, UK and USA. These countries are considered to have similar
cultures and macro-economic factors. As has been noted from 2.1 above, the
standardisation can only yield success if the culture distance is low. However,
it is important to ensure that decisions made on marketing strategy are founded
on market research and not on generalisations. This leads to the following
recommendations.
1. Market research needs to be done
regularly in different markets to establish if there is need to embrace
localisation of the marketing strategies.
2. Direct marketing approaches should be
included in the promotional mix of the company. The findings of the
recommendation 1 above would then play a role in determining whether
localisation should be done in the direct marketing strategy.
3. Trainings and events must be
localised. Irrespective of the low culture distance between the markets served,
it is expected that subtle differences in learning methodologies are likely to
impact the success of such activities.
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