Over the past decades, we have all heard about globalisation, and T. Levitt was one of the most remarkable scholars that studied this concept in his research ‘The Globalisation of Markets’, published in the Harvard Business Review. In this context, multinational companies focused their marketing activities on promoting standardised uniform products and services all over the world, homogenising their offering and image.
This had the advantage that the products and services were to be perceived as reliable, standardised and easily-recognizable, ensuring a reasonable quality-price ratio, and an easier recognition of the brand itself. Thus, brand awareness was meant to increase and expectations and perceptions would tend to be favourable, creating a loyal customer base. Thus, the globalisation strategy was centred on creating brand image and on building brand equity, rather than focusing on the product itself. Levitt recognized this trend stating that “companies must learn to operate as if the world were one large market – ignoring superficial regional and national differences”, since they would “benefit from enormous economies of scale in production, distribution, marketing, and management” (Levitt, 1983, p. 92).
But what this strategy was not taking into account was the different social, cultural and economic conditions, as well as the changing customer needs, across different markets. Thus, consumers were not connecting to these heterogeneous offerings that were not personalised and did not speak specifically to them, with all their unique context and conditions. As Coca-Cola’s former chair Douglas Daft commented, greater flexibility, responsiveness and local sensitivity were in urgent demand.
Therefore, multinational corporations and marketing strategists shifted their approach from globalised strategies, to glocalized ones. The latter focused on product particularisation and strategies that were customised to appeal and connect with specific markets. Key to this new strategy was a correct and holistic understanding of local customers, their conditions and circumstances, and their preferences and necessities. Scholars called for a “think global, act local” mindset, where global brands adapt their products and strategies to specific regional elements and necessities.
The term ‘glocalization’ itself appeared at first in the late 1980s, in the Harvard Business Review, in an article published by Japanese scholars, and thus was derived by the Japanese word ‘dochaduka’, which refers to global localization. Thus, this concept comprises local and global approaches: considering both the aspirations of a global strategy and the necessity of local adaptations. This is why glocalization should not be considered as a replacement of globalization, but as a progression from it and an adjustment to local needs, proving a unique and innovative approach, observing local insights and in turn incorporating them to a global marketing strategy.
This new approach thus comes with new advantages, as studied by Phillip Kotler, which involve:
- Consumers feel the brand is relevant to them, and tailored to their specific needs and requirements.
- A balance of the different levels of marketing activity, namely the strategic, tactical and operative levels.
- A higher brand equity and greater market share for the brands.
Thus, brands should make sure that they have an in-depth understanding of the cultural intricacies of the different markets they are trying to get involved in prior to the design of any global strategy. Glocalization is very much aligned with the trends towards personalization and customization, a good strategy should aim to truly speak to the hearts and minds of the consumers, and create a personal connection with them.