What is Product Localization? Everything To Know

As global markets become increasingly competitive, companies need to step up their game when targeting local audiences. A one-size-fits-all approach may cause them to lose ground with competitors making proactive efforts to tailor their products and services to each national or regional market.

Product localization refers to the process of adapting your offering to meet the needs of a specific market. This includes language and geographic considerations and cultural factors such as traditions, customs, and social norms.

This guide will give you a detailed overview of product localization in its different variations. Moreover, we will illustrate how businesses can benefit from it and the various steps you need to implement it, as well as provide some real-life examples.

What is Product Localization?

Product localization refers to how products, services, and other offerings are adjusted to a specific country’s linguistic, cultural, legal, and commercial needs.

Localization is crucial for businesses to adequately compete in different countries against local competitors and other international companies.

Many people wrongly confuse localization with translation. However, the localization process involves more than converting product and service features from one language to another.

For example, when entering a new market, a mobile phone manufacturer must consider various factors beyond language: product packaging, manuals, and customer service procedures should be adapted to take into account the market’s regulations, customs, and consumer preferences. Sometimes, the core features of the product must be changed to better target the local audience. This may be the case of a fast food chain changing 30% of its menu to introduce specialties with a much better chance of attracting customers than those offered in the chain’s country of origin.

How It Works

Product localization typically involves a team of experts familiar with the target market and its specific needs. They will identify areas where content, visuals, and other features need to be altered to meet customer expectations in that market better.

Legal aspects and social norms are also crucial when localizing offerings. Products must meet all the new geographical area’s regulatory requirements while simultaneously appealing to the local consumer base. For example, certain countries may prohibit certain chemicals in cosmetics, food, and other products. In others, advertising your offering by demeaning or ridiculing the competition may be seen as inappropriate and go against local values.

Localization experts will also consider how messages may be interpreted differently depending on the country. For instance, colors have different connotations in various cultures and may influence people’s perception of a product.

Finally, localization also involves ensuring that products are compatible with the technical standards of the target market. This is mainly relevant to technological products, such as mobile phones and computer applications or electronic devices.

Companies can either hire an in-house localization team to perform research and develop an appropriate strategy or outsource this activity to agencies that provide localization services. The second solution is particularly advantageous for those companies that are not very familiar with the localization process and would have to sustain a considerable investment in human resources to hire a localization team from scratch.

Types

When entering a new market, adapting your offerings to the local audience requires different types of localization. Let’s explore them in greater detail.

• Linguistic Localization

Linguistic localization is the process of translating content into another language. This complex process goes beyond simply replacing words with their equivalents in the foreign language. Linguistic localization requires an understanding of how certain phrases or expressions are used in different cultures. Even countries with the same official language may use different expressions to convey certain messages. Professional localizers should be able to master local idioms and informal language to ensure that the company’s communications feel native, local, and authentic to the local audience.

• Cultural Localization

Cultural localization involves adapting products, services, and content to meet the expectations of a target market. This means adjusting visuals, product descriptions, marketing messages, and more to ensure they are appropriate for the region. For example, a clothing brand may need to change its models and imagery for different markets, as consumers in Japan may respond better to a certain type of look than those in Argentina. The way clothes are advertised on TV and online may also be different based on what is more likely to attract and engage different audiences. For instance, they may advertise their t-shirts cheerfully and energetically in the US but adopt a more somber and sophisticated tone in France.

• Hardware and Software Localization

This type of localization refers to adapting hardware and software products to meet local standards. This may involve changing the type of plug on an electrical device, adapting apps to the most popular operating systems in different countries, and ensuring that user interfaces align with regional preferences. It can also involve adjusting the product’s performance to match local demands. In a certain Asian country, the minimum speed customers tolerate for a product will probably be higher than the minimum speed accepted by customers in a European market. Hardware and software localization is becoming increasingly relevant with the spread of digital products and solutions.

• Customer Support Localization

Companies should also take proactive steps to localize their customer service operations. This may involve providing support in the local language, hiring customer service agents who are native to the region and offer more personalized service, as well as establishing a regional presence. This could involve setting up physical locations in the target market, having a local call center, and being active on social media in the target language. By ensuring that customers can get help and support when needed, companies will be better positioned to establish trust and loyalty with their potential customers.

Benefits

By localizing their products, companies can enjoy numerous benefits compared to those that adopt a one-size-fits-all approach and use the same product in each foreign market. Let’s analyze the benefits of product localization in greater detail.

• Higher Revenue

Localizing your offering to a foreign market can significantly boost your revenues in that geographic area. By tailoring that product to the local language, culture, regulations, social norms, and technical standards, you can make sure that it resonates better with the local audience, who will be more likely to purchase and use your product.

Implementing a localization strategy can also help companies increase the loyalty of their current customers, which can have a noticeable impact on turnover and profits.

• An Effective Go-to-Market Strategy

Localizing products can also help companies develop effective go-to-market strategies for different markets. By understanding local preferences and regulations, they can ensure their product is positioned correctly in each market.

Using the same positioning in different geographical markets is usually not the best way to approach internationalization. For example, certain cars may be perceived as luxury vehicles in certain developing countries but not in Canada or Germany. Localization will help the company define the most effective go-to-market strategy in each market and ensure they get the most out of their internationalization efforts.

• Improved Customer Experience

Product localization can also improve the customer experience by making it easier for customers to use and enjoy a product or service. By adopting the offerings to the local market’s requirements, needs, and demands, companies can provide customers with a more user-friendly and enjoyable experience, thus increasing their overall level of satisfaction.

• Improved Brand Reputation

Brands that try to respect the local characteristics of each national market in which they operate end up enjoying reputational benefits. Many local customers perceive companies that try to impose their foreign culture as arrogant and insensitive, which can lead to a significant drop in sales and erode brand loyalty. An American publishing business may be perceived better in a market like Spain or South Korea if it publishes books from local authors and not only translated versions of American books. Companies should aim for brand localization and not limit the adjustment to individual offerings.

Examples

Let’s look at some great examples of how product localization can work in practice.

• Netflix

Netflix is a great example of a business that successfully localizes its offerings for different markets. The famous movie streaming platform offers its content in multiple languages (including subtitles), customizes its pricing plans to each country, and provides adequate customer support in local languages.

Moreover, Netflix goes above and beyond by tailoring content selection to each market and creating original shows and movies that appeal to specific local audiences. Series like Barbarians (produced for the German market) and Love Alarm (produced for the Korean market) are great examples of this strategy.

• PUBG

Another example of successful product localization is PUBG, a massively popular battle royale game. The game features localized content in different languages and region-specific variations. For instance, the Japanese version includes modified characters and altered audio files to better reflect cultural norms. This approach has helped make the game appealing to players worldwide.

• Nintendo

Nintendo is an exceptional example of how localization and game design can work together. Rather than completely developing their games first, then making changes to tailor them to North American audiences, they have a team of experts who translate, create marketing/brand material, and act as guides throughout the process. This allowed for a consistent experience between the native and localized versions so that potential buyers don’t feel like they’re playing a western version of the game. Furthermore, this method ensures localization efforts are worth the return by providing gamers with what they were expecting in the first place.

• Starbucks

Starbucks is another company that has successfully localized its offerings to local audiences. The American coffee giant offers menu items that are tailored to different regions, such as the matcha cream frappuccino in Japan and taro-flavored drinks in China.

On top of that, it creates special holiday drinks that are only available in certain countries, such as the Christmas-themed Chestnut Latte in Japan. By localizing its menu items and promotions, Starbucks has been able to better cater to customers in different markets.

• WWF

Product or service localization isn’t only something traditional companies can benefit from. Non-profit organizations and supra-national institutions can also use localization to achieve their humanitarian, environmental, and other goals.

For example, if you visit the WWF’s website from different locations, you will notice that the organization tailors its campaigns to local audiences. It also presents its content in ways that are meant to appeal to local audiences.

For example, WWF Canada has recently promoted an indigenous-led conservation event, while WWF Chile has developed a decade-long plan for sustainability and conservation in the Latin American country.

How to Create a Product Localization Strategy

When creating a product localization strategy, you should follow a series of steps to ensure you obtain the desired outcome. Here is an overview of the different stages of this process.

• Conduct Market Research

Conducting in-depth market research is the first step in creating a product localization strategy.

Those in charge of localization must get a clear picture of the target market, its language, culture, and social norms, as well as how these factors relate to the type of product or service that the company wants to sell in that market.

Research should be conducted without assuming that customer preferences are similar to those in the company’s market of origin. It’s also important to analyze competing offerings to understand which products and marketing tactics are proving successful in the desired market.

For example, independent street food joints may pose a bigger competitive threat to a fast food chain in certain regions or city markets abroad compared to their home market, where other fast food corporations are the only main rival.

• Study the Regulatory Environment

Companies entering a new market should develop a good knowledge of what laws and regulations are in place when it comes to producing, distributing, and advertising their offerings.

Certain products may be banned in the new market without changing core features. For example, the popular Kinder Surprise, a chocolate egg with a surprise toy inside, was banned in the US due to choking hazard rules. As a result, German producer Kinder introduced a variant (Kinder Joy egg) in the US market, consisting of an egg-shaped package in which the chocolate egg and the toy are kept separated.

Permitted advertising practices may also vary from country to country. For example, in some countries advertising certain health products may be allowed only with specific disclaimers.

These are all elements that localization experts must take into account.

• Build a Team

Creating a compelling product localization strategy requires a multidisciplinary team with expertise in different areas.

The team should bring together those with translation, marketing, and technical skills and those with a strong knowledge of the local market, culture, and language. Ideally, the team should also include representatives of the target market who can provide valuable insights into local preferences and trends.

By having all these skills under one roof, companies can create a comprehensive plan covering all aspects of localization.

• Set Goals, a Budget, and a Timeline

Before launching a localization effort, companies should set clear goals and objectives.

What exact goals are you trying to reach in the foreign market? What’s your target market share? What ROI do you expect? What kind of customer feedback do you want to receive?

You can set the path to success by clearly defining what you want to achieve.

Companies should also define a budget and timeline for their product localization efforts. Doing so will help them control expenditures and ensure they launch their products on time.

• Localize Offerings and Content

Once you have assembled your localization team, completed research, and set your goals, budget, and timeline, it’s time to proceed with the actual localization of your offerings and marketing content.

This involves adapting or creating new products or features in line with local customer requirements as well as localizing text, images, and videos.

Localization is an iterative process, so content should be tested with target customers prior to launch. This stage can also provide valuable feedback on further improving your product and content to maximize customer engagement.

• Monitor Results

Finally, companies should monitor the results of their localization efforts. This includes reviewing customer feedback, analyzing usage data, and tracking sales figures. By using this information, companies can adjust their strategy if necessary and ensure their localized products meet customer needs.

What Comes After Product Localization?

Now that companies have successfully localized their product, they must stay updated with market trends and customer feedback.

Companies should regularly review usage data and customer reviews to identify areas for improvement. They should also monitor regulatory changes in different markets to ensure their products comply with local laws. Companies can maintain an engaging and relevant presence in different markets by continuously optimizing their localization efforts.

Final Thoughts

Product localization offers companies an excellent opportunity to expand their reach and grow their customer base.

However, it is essential to remember that localization is an ongoing process. Companies should have the right team in place and consider cultural differences, regulations, and consumer preferences when localizing their products.

With the right strategy and tools, companies can launch localized products and build a successful presence in different markets.