How to Conduct Market Research for Proper Localization

There are numberless reasons why expanding your business abroad can be a good idea. First and foremost, it increases your revenue potential. It also makes you less vulnerable to changes in your home market.

It also makes it possible for you to diversify your offer and access new talent.

But, what makes a successful international expansion? We could point out many factors: Market fit, competitive advantages that make this new brand a preferable alternative to its local competitors… but it all boils down to a deep understanding of the target market and the ability to turn that knowledge into a strategy.

Regardless of our home or target markets, and regardless of our industry, localization should always be an essential component of our strategy. In this post, we’ll explore how to conduct market research for proper localization. But first, let’s define our terms.

The Importance of Localization

Localization is the process of adapting a product or brand for a new market. Unlike translation, it goes beyond just words, making sure that the product or brand matches the customs, culture, and needs of its new customers.

For instance, let’s say we want to expand our online business to attract more customers from a neighboring country where another language is spoken. Aside from having our entire website translated, we’ll need to consider other factors: Can the calls to action in our buttons be as effective when translated? Or should they be rephrased? Should we make changes to our UI so the website is easier to navigate? Do the customer representations in our website match with our new customers? Are the payment methods we offer available or convenient for them? All of these factors are localization concerns.

Another example of what localization means is Diageo’s strategy for the Nigerian market. International Spirits manufacturer Diageo crafted a special “beer” for the Nigerian market. This beverage is a blend of local flavors that combines Diageo’s high industrial standards with the best local produce. The result? This beverage has a 50% market share in its category.

In a Nutshell, How to Conduct Market Research for Proper Localization

You’ll naturally need to localize your brand and products (you can’t speak to your new customers in your native language, in the same tone, and with the same cultural code). You shouldn’t just research to localize.

Profound knowledge of your target market should be the angular stone of your expansion strategy. When you’re preparing to expand your brand abroad, you’ll probably find unforeseen challenges for which localization is the solution. And then you’ll need to research specifically to localize. If you’re looking for a brief introduction to how to conduct market research, Euromonitor published a fictional example that can be very useful.

When you’re researching to expand your company to a new market, make sure you cover all your bases. As Sarah Schmidt explains on the Market Research blog, you need to look at local culture and trends, your potential customer segments, your competitors, and your potential competitive advantages and weaknesses in your context of entry. But this is not enough. You also need a high-level view of the market as a whole that considers barriers to entry, supply chain, and regulations.

Could any of the factors you analyzed motivate particular changes to your product or brand? For instance, a supply chain that makes the local production of a certain product in your line practically impossible can be an opportunity to design a new offer for the specific market, that reflects local resources, traditions, and preferences.

If you want to assess how a product might need to be localized, four initial questions should guide your research:

• Is my product culturally coherent? Or does it go against common conventions and customs?
• What do locals expect to be the message behind a product like mine? Is that my message?
• What changes do I need to make so my product’s meaning comes across just like I intended?
• What changes do I need to make so my product “says” what my brand wants to say to locals?

DIY Localization?

Localization is one of those processes that you can’t just take in your hands without prior experience. Localization always requires learning extensively about the culture of your new market. This learning process will be faster and more effective if you count on reliable resources, such as research from reputable consultants, on linguistic assistance, and insight from locals. The brands that localize the most successfully, tend to place their localization efforts in the hands of professionals from their target culture.

While some companies can assign full departments to its expansion efforts, you can grow beyond your home market even if you’re far smaller. Partnering up with a localization services provider can be the key to a smooth and successful expansion process.