How important is product regionalization??

“ I expect 10% growth in revenue” “ Your target is revised. Please check mail for final target sheet” Sounds familiar……. Isn’t it ?? I am sure if you are in marketing you must have heard these words from your managers. This follows the marketing plan to achieve the target. But how do we achieve these steady targets ??? What different approach should we take to make customers buy our products?? One of my suggestions would be product “regionalization with customization”.

Regionalization is an important aspect of today’s business environment. Globalization and regionalization are two aspects of the same coin. How successful will be our product depends on many factors, one of them is regionalization. Although product managers develops different marketing strategy for different geographic regions of a country for years, regional marketing received boost in Indian Telecom sector after evolution of Value added service ( still I will say VAS in Indian Telecom is in premature stage).

People are different in different parts of the country For eg. Customers of Tamil Nadu would like customer service executives, marketers, sales guys ..etc should communicate with them in regional language i.e. Tamil. Interest in regional marketing derives from number of factors: the realization that mass market are splintering, the availability of sales data from new BI tools, that reveal pockets of sales strengths & weaknesses in different parts of the country and opportunity to employ marketing communications that permit more focused targeting of consumer groups defined along virtually any lines. The shift from national advertising to sales promotion, to direct mailers, in particular has necessitated more market-by-market planning. Any market segment – however we define it – may require specialized marketing and branding program. For example demographic dimensions such as age, income, gender, race – as well as psychographic considerations-often are related to fundamental differences in shopping behaviors or attitudes about brands. These differences force marketers to create separate marketing and branding program. The decision ultimately rests on the costs and benefits of customized marketing efforts versus those of less targeted focus. It is very critical and important for marketers to customize the product before launching it in the market.

Coming back to globalization - The first and most fundamental guideline is to recognize that international marketers can vary in terms of brand development, consumer behavior, marketing infrastructure, competitive activity, legal restrictions and so on. Virtually every top global brand and company adjusts its marketing program in some way across some markets but holds the parameters fixed in other markets. Also success in one country does not necessary mean that you will be successful in other country as well. Understanding consumer behavior, political, social environment is must before entering into any new market. Indeed one key to global success is to understand and take advantage of local consumer behavior. E.g When MTV made major push for its cable channel overseas beginning in the 1990’s, it initially kept much of the same programming it played to U.S. audiences. In most markets the music, film and cultural tastes were very different and MTV quickly realized that it needed much greater proportion of locally relevant programming in its mix. Now MTV international channels such as MTV India program as much as 80% of their content in local languages which had further enhanced their viewership. Therefore it is very important to understand consumer behavior before launching a product in new market. The experience of mobile operator Vodafone illustrates an interesting incident that reflects how important consumer behavior can be to the success or failure of any brand, even dominant brands when entering new markets. “ When Vodafone acquired J-Phone, the 3rd biggest cell phone operator in Japan, known for its cutting edge phones, in 2002 it hoped that the renamed Vodafone Japan would be a key component of its global brand strategy. Instead Vodafone lost customers and revenue fell. The problem “ by focusing too much on building a global oriented brand, Vodafone failed to give Japanese consumers what they want, chiefly a wide line up of phones with fancy features. Vodafone sought to leverage its image as global company by offering phones that consumers can use anywhere, home or abroad. Yet the heaviest cell phone users many of whom were young and not likely to go abroad were most interested in phones with advances Value added service such as video games, ringtones, digital camera’s and e mails. Japanese users also favor a broad selection of phones that is constantly updated but Vodafone offered only 15 models compared with market leader DoCoMo’s 38 models and was often late to market with new technology. Vodafone was unable to recover from its early missteps and sold Vodafone Japan to Softbank in 2006.

 Building a brand in new markets must be done from bottom up. Strategically that means concentrating on building awareness first, before the brand image. Operationally it means how to create best resources of brand equity in new markets. The way a brand is built in one market with distribution, communication and pricing strategies may not be appropriate in another market even if the same overall brand image is desired in both. If the brand is at an earlier stage of development, rather that alter it or advertising to conform to local tastes, marketers should try to influence local behavior so that it fits with the established uses of the brand, Consumer education then accompanies brand development efforts.


*Image credits creative commons