Global businesses usually set a certain standard then apply the same standard in all other local businesses. The line between success and failure of global business is how well the core concept of the business is maintained but also at the same time how well it adapts to the local market. There are three specific areas that need to be researched for a successful Global-localization.
1. What characteristics do the locals have?
2. What do the locals consider the most important factor when purchasing?
3. What are the specific attributes of local distribution?
The characteristics of locals are subjective as they are related to their personality and emotions. These subjective factors also need a scientific reasoning in order to apply these into business. A variety of observation and research methods need to be looked at in various angles to verify emotions.
For this project, we visited China ourselves and underwent two different researches within the local cities. The current distribution structure, store and product composition were observed over a long period of time and a specifically designed observational research of consumer behaviours when purchasing a tire allowed us to gain an insight into the heart and minds of the Chinese consumers.
The Chinese consumers likes to spend on things that looks good rather than functional items and have a tendency for conspicuous consumption, regarding their prestige important. The same purchase pattern applied when buying a tire; the basic functions of safety, wear resistance were looked at but their faith towards a ‘Good Brand’ had bigger influence when selecting a tire.
At that time, the growing speed of the tire market in China was astonishing with a wide variety of distribution of tire brands from all over world. Because China was such a large country, consumers wanted to sort out everything in one go and due to these needs, most brands supported this idea of Total Service of cars and tires and so there were no differentiation factor.
Tire pro was up against already well known global brands and their extensive stores hence needed to find a characterising differentiation factor. We focused on creating a package product that most suited the Chinese consumer’s conspicuous consumption and tire purchasing pattern and provided with a service that coordinated these patterns together. Even if the consumer was in for a small repair, drawing attention to the specific characteristics of their consumption pattern, the product and services provided were adapted to boost up sales.
The global standards of the brand’s S.I. and store systems were also applied with the characteristics of the Chinese culture to guide in maintaining the brand concept but also leading to successful brand localization. This strategy produced an explosive response within the Chinese market and led to extending franchise stores across China three times quicker than any other country.