The world is your oyster

With North American and West European economies starting to falter under the strain of the credit crunch, an uncertain property market and a wave of corporate profit warnings, many companies are beginning to wonder where sales growth is going to come from in the next few years. For some the answer lies in the increasing globalisation of the world economy, and specifically the dynamic booming economies of Asia.

While global marketing has traditionally been fraught with difficulties, many believe the Internet has made it a more feasible option. “The web changes everything,” says Chris Wilson, MD at marketing agency Loewy Brand Communications. “If you have a well-constructed website that does well in Google and other search engines you need to be prepared for a global audience and in all probability a global customer base.”

Digital dictation software company, BigHand, has recently discovered a global market. Loewy designed and optimised a website to promote its services and as a result, traffic has increased from all over the world. Wilson admits this presented the company with challenges in terms of delivery, but once it had resolved these it found it was a global player with an expanded market.

It is not just the Internet that is driving globalisation. Matt Kitcherside, general manager at Gyro International, says, “The global promotion of free trade, which has seen the elimination of tariffs, reduction in transportation costs and the harmonisation of many laws such as intellectual property, means barriers to global trade have been dramatically reduced. This isn’t new – it’s been going on since the Second World War, but the advent of the Internet has accelerated the opportunities for businesses of all sizes.”

While BigHand has become a global player, Hitachi has been able to use the web to convey its brand awareness campaigns and channel marketing initiatives to markets such as Russia, Turkey and Poland. Many other B2B marketers are discovering similar possibilities. While this presents many exciting opportunities, it also throws up challenges.

Evan Ivey is the planning director at AGA, a B2B marketing agency that works for companies such as BG Group, Innovex and Thales. He believes we are witnessing a second wave of globalisation. “Ten years ago the large consumer companies were the only ones building global brands,” says Ivey. “Now, companies that never thought to look beyond their own borders are finding they have global reach. Last year we won five new accounts and all of them were for global campaigns.”

This new wave of globalisation is affecting companies of all types and size. For example Nunwood is a market research agency based in Leeds with an annual turnover of £10 million. It has increased this turnover by 400 per cent in the last four years through tapping into global markets. Tim Knight, divisional director, says, “We’re a medium-sized business taking advantage of new technologies to operate in 43 countries.”

He adds, “We invested heavily in our offices in London and New York and can now conduct consultancy work on a scale that ten years ago, would have been limited to companies with 100 times our turnover. We’ve worked across the globe, from less-developed parts of Africa, through to Japan and Singapore.” The appeal of developing global reach is clear. As Wilson says, “You’re less dependent on single economies. If the credit crunch is affecting the US and UK, you can be building business in emerging European markets like Poland and Croatia. Or you can go farther afield where there may be a premium for your product or service. This is often the case in China and India, where Western expertise is valued.”

However, it is important to recognise that global marketing is not appropriate for every company. Kitcherside says, “The web is fine for more commoditised industries, but higher value business services that rely on human interaction, advice and guidance are more restricted. For example, legal services rely wholly on the expertise of highly trained individuals and whilst face-to-face interaction isn’t crucial, an organisation would need to increase its number of staff significantly to cope with expansion into regional and global markets.” Furthermore, going global is not as simple as building a website and waiting for the orders to roll in. Far from it. In any country in the world you will only succeed if you have something people want to buy at a price they are willing to pay. As Ingrid Waechter of Munich-based marketing agency Waechter & Waechter, says, “It is not the web that drives the process of globalisation; it is innovative products. The web may support, but without the right products no company can become global.”

In the same way, you will need to build a brand in those countries where you are as yet unknown. Waechter continues, “Most B2B brands overestimate their brand awareness. If a company enters a new market normally there is very little brand awareness, and the company will need to invest in building a brand among the new target audience. There are no strategies that work in all cases. It depends on the product, the company and the market.”

However, one thing is certain. Just as with marketing in the UK you need good quality data. While this can be a challenge in some regions, according to Stuart Guzinski, account manager at data consultancy Prospect Swetenhams, data that is available is developing in volume and sophistication and is catching up with US and EU standards.

He says, “We work with clients to centralise data buying across regions. Thinking globally about data strategy rather than tactically country by country can lead to cheaper data and avoids duplicating data sources. However, you must be aware of the differences in data that is available locally. Don’t expect the sophistication of data segmentation available in the UK to be replicated in other countries, and be aware of local differences. For example, in parts of the Middle East postal addresses can be in a radically different format to those in the UK – they can incorporate directions and landmarks. Similarly, fax is a useful channel in parts of the Middle East, but hardly used in the UK.”

When it comes to developing creative for your global campaigns advice from the experts is clear: invest in building an understanding of local markets. In fact a recent study by Forrester Consulting found that companies are missing out on sales of $4.7 billion because they are failing to localise global marketing campaigns.

The study compared sales of six global companies before and after they worked with SDL, a company that works with the likes of Dell, Microsoft and Philips localising their global campaigns. The study found that a properly localised campaign can add one per cent to sales. Paul Hampton, director of SDL, explains what is meant by localisation. “It’s more than just translating your material,” he says. “You need a local to spot turns of phrase that wouldn’t be used in that country. You also need to consider how different images and colours are viewed in each country.”

There is much to consider, but the potential rewards for those B2B marketers that get it right are considerable. We can expect to see further globalisation in the next few years and it is likely to become more complex and challenging. So far it has been about EU and US companies penetrating the emerging economies of Eastern Europe and Asia, but increasingly the flow of products, services and marketing will be reversed.

We are already seeing this in the B2B world with the emergence of Asian players such as Tata Consulting and looking ahead, this trend will only become more prevalent. Those marketers that have successfully grasped the principles of global marketing will be best placed to respond to the challenges of this new world order.

 

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