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Marketing Essay Example: Explanation of the Localization Theory

3 pages
622 words
Harvey Mudd College
Type of paper: 
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Localization theory is an integral part of the regional science, economic geography, and spatial economics hence affect the operations of the business. The localization theory addresses the question of what are the commercial activities that are located where and why. This theory is also referred to as the microeconomic theory which assumes that agents typically act in their self-interests. Therefore, the firms usually choose locations that will maximize their profits while the individuals select the locations that will maximize their utility. Localization has also been defined as the act of adaptation of a particular product or service to meet the varied needs of a specific culture, language or desired population instead of standardization.

A successfully localized product or service is one that will appear to have developed within the local culture. In addition to the idiomatic language translation, details such as money, the time zone, national holidays, gender roles, local color sensitivities, service or product name translation and the geographic references should all be considered while adopting the localization theory (Rigby & Vishwanath, 2006). The language translation is a large part of the localization process and is facilitated with automatic language translation. Additional work is however needed to fine tune the text for the syntax and idiom for the localization of the business to be successful.

A product or a service is usually developed in such a way that localization is relatively easy to achieve. The expectation of the localization needs is referred to as an internationalization effort. The process of first enabling a service or a product to be localized and then localizing it for the other different national audiences is known as globalization. The language service providers like to promote the notion that the web translation and localization can help to boost the international reputation as well as the revenue. Through localization, adaptation allows the business to reach much broader potential markets and also increase brand awareness and interest. The bigger the audience, the bigger the sales, therefore, localization takes things up a notch through addressing the cultural sensitivities as well as valuing differences to tap further into the markets (Rigby & Vishwanath, 2006).

Implications for Managers

From the chosen article there is a lot that we learn, and there are numerous points that managers should take away. We learn that managers should always strike the right balance by understanding which elements of the business are to be considered for localization, how costly are these features to customize and the impact they will have from one company to another. Therefore, the managers should know that strong localization hinges on the ability to get the balance right. However, they must also remember that too much standardization can bring stagnation hence dooming the business to dwindling market share as well as shrinking the profits.

Managers should use the information provided in this article to make their operation better by finding the right approaches to implement and share the information on localization and standardization. Managers who would like to localize their businesses should use the clustering techniques to ultimately simplify and enable smooth decision making through focusing their efforts on the small variables that usually drive the bulk of the customers purchase. The managers can implement this technique through the development of a science of analyzing the data on local buying patterns to identify the communities that exhibit similarities in demand. To ensure successful localization, the managers need to introduce more variations in their lines and work in close collaboration with the retailers to put the right products in the right places at the proper period and with the right pricing and promotion programs (Rigby & Vishwanath, 2006).



Rigby, D. K., & Vishwanath, V. (2006). Localization--the revolution in consumer markets. Harvard Business Review, 84(4), 82-92.


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