14 May 14 Customer intelligence for successful localization
Localization is “the process of carrying out an activity only in a particular area of the world, or the process of changing it to make it suitable for a particular area of the world”. With increased globalization, localization has become a buzz word in India.
When the Indian market was opened to foreign companies, initially foreign companies simply imported and sold their existing products in India. Subsequently, they started translating their brochures, manuals, etc. into Indian languages. Companies also selected models from their own product portfolios that they felt were more “appropriate” for the Indian market (read low end models).
Companies that have actually created products to suit the local needs have had the most success in India. This is most apparent in food and beverages. Just comparing Kellogg’s’ experience with that of McDonalds … Kellogg’s’ entry into India was bumpy when it initially came in with its home products. They tasted some success only after they tweaked the product recipe to suit Indian tastes. McDonalds on the other hand did a lot of homework on local food preferences and created a whole new menu for the Indian market – and this has been successful.
Successful product localization has been done in other sectors too. For example, the success of Micromax in the mobile handsets space in India is attributed to its superior product design suited to local conditions. In less than 3 years of launching its first product, Micromax became the third largest player in India after goliaths like Nokia and Samsung. Micromax’s most talked about winning idea was introduction of phones with longer battery lives of 30-days in standby mode. This immediately appealed to rural Indian consumers who face long electricity outages.
In consumer durables too, global and Indian brands are localizing to gain market acceptance. Most of them are launching products specifically targeted at the less wealthy consumers. LG, for example, is launching a sub – Rs 10,000 LED TV. Panasonic has developed an India specific innovation Cube AC which is a split AC in a window AC form – keeping in mind space restrictions in Indian homes and a rise in the apartment lifestyle.
Localization is the buzz word for not just the B2C products, but also B2B products. For example, GE Medical Devices used to initially import their Lullaby Baby Warmer at $30,000. Subsequently they started manufacturing a model specially customized for the Indian market and the cost came down $ 3,000. Another successful localised product is their portable ECG machine. They came up with a localized stripped down version with a longer battery capacity for half the price of the original model. The longer lasting battery was suitable for rural areas where the power supply is unreliable.
The Indian market has come to expect a high degree of localization and this has become a must for companies that want to succeed in India. And for effective localization, what is needed is a deep understanding of what the market needs and the need behind the need – customer intelligence.