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Is Globalization Right for You?
by Sandy Tapper

First it was B2C, then it was B2B. Now the buzzword du jour is globalization. Here's how to break down the hype.

Investment or Blunder | Product Demand Home vs. Abroad | Competitive Stance | Pricing
Demographics | How to Build a Globalized Site: Languages : Content : Fulfillment 
The Last Word - Pros and Cons

Why all the hubbub about globalization? There's no question that the Internet is a global phenomenon, but not everyone speaks English. In fact, Idiom Technologies notes that 43 percent of today's Web users are non-English speaking; and over the next few years, Internet use is expected to grow by 79 percent in Asia, 123 percent in Latin America, and over 2000 percent in Japan.

Because this scenario (and common sense) suggests that the U.S. won't always dominate the Internet, U.S. companies have begun to realize that they can no longer build their Web sites solely for the English-speaking populations around the world. That's where globalization comes in.

An Investment, or a Blunder?

Now that e-commerce is crossing cultural and international boundaries, commerce sites will obviously be more effective if they're written in a user's native language. But there's more to globalization than translation. Beyond using the right vernacular to name and promote your products, globalization is a means of explaining your features and benefits in a way that makes sense to your target market.

Many companies that claim to provide a full array of globalization services focus primarily on translation and infrastructure services to handle transactions in a variety of foreign currencies. These services include translation software or local translator services that can easily and quickly give you the foreign language presence you want, especially if you have a very large Web site.

Such services don't come cheap; companies charge anywhere from 10 to 25 cents per word, depending upon the language. So a site with 10,000 words can easily cost $1000 per language, and that's before infrastructure costs!

Globalization is a marketing tool that will help you nurture your business around the world, but it may not be good for every business. The following points should help you decide whether it's the right move for your company:

1. Consider return on investment (ROI). As I said, going global isn't cheap. Will you generate incremental revenue that will cover the cost?

2. Review your marketing and sales goals. Explore how globalization can and should play a role in your online business. Does your product or service have market potential in other countries and cultures?

3. Budget for marketing support. You'll need to generate awareness of your globalized site. If you decide to enter the world market, how much will you be able to spend to let your target markets know that you're accessible?

The other issues to consider in the "to globalize or not to globalize" decision-making process are slightly more complex in nature.

Product Demand

Once you've answered the basic questions, the next step is to look at how target markets will use your product or service. Don't assume that all countries have the Internet or telecommunications infrastructure to take advantage of your technology-based product, for example.

There may be regulatory issues to address. Canada requires specific packaging and labeling, which means additional funds expended for localized packaging. For some products, an Underwriters Lab (UL)-type certification, known as CE, may be required to help get your product through customs. Finally, what's the market potential for your product? If you're selling gourmet tea, for example, the per capita consumption of tea is much higher in India, China, England, and Ireland than it is in the U.S. At face value, this usage pattern indicates that these four countries represent an excellent, albeit highly competitive, market for your gourmet product.

Competitive Stance

If you operate a business, you already have an idea of your competition in the U.S. However, who would your competitors be in an international market? Using the same gourmet tea example above, there may be different competitors within each country. Evaluate the product advantage you offer over these competitors and prioritize your marketing efforts accordingly.

Because competition may vary from country to country, you may need to vary your marketing message as well. As of this writing, Burger King's U.S. site focuses on "flame-broiling." However, its United Kingdom Web site stresses the size of its Whopper. Same company, same product, yet different messages localized for the competitive environment.

Price It Right

Pricing is an important part of your marketing approach. A high price can help enhance a premium product (would you buy a $2 bottle of champagne?), while a low price can provide a competitive benefit. Although it may be relatively simple to implement a currency conversion option to your site's shopping cart, an international pricing strategy presents additional ramifications.

Your pricing must cover tariffs, customs fees, or other regulatory costs. Also, what happens to your price vis--vis competition when you require the customer to pay for shipping costs? Given currency fluctuations around the world, you'll need to monitor your pricing to ensure that you're still making your stated profit margin goals without hurting sales.

From a cultural standpoint, you'll need to know how potential customers will perceive the local currency price in your chosen markets. Will it be deemed too expensive or too cheap? In some cultures, you can charge a higher price because your product carries the cachet of being "Made in the U.S.A." In others it will cause potential customers to balk.

Demographics

Don't assume that your U.S. target audience demographics will apply in a new country. For example, teens in the U.S. may have more discretionary funds to spend then their European or Asian counterparts. Also, the per capita income of a particular region may inhibit sales potential (see Infoplease.com in the "Online Resources" box for more data). But if you lose customers in one arena, you may gain them in another. The uniqueness of your product and its U.S. origin could generate a particular appeal and attract a demographic profile that differs from that of your U.S. customers.

As you build your globalized Web site, consider adding a survey or additional form fields that ask for demographic information. The more you know about who your product attracts in various locales, the more you can tailor your Web site for each country's target audience.

How to Build a Globalized Web Site

Once you've done a product and competitive analysis, you need to consider the associated globalization issues.

Some sites retain all of their foreign language pages as subpages of the main site; others obtain new domain names, usually ending with the country name extension. Here are a few different ways to indicate the availability of your Web site's foreign-language versions, with examples:

1.  List language options on the site itself.
(Go to www.worldpoint.com for an example).

2.  List both country and language on the site itself (www.techdata.com).

3.  List individual URLs and individual Web sites by country (www.bosch.com; www.bosch.fr; www.boschindia.com;www.bosch.pl; and so on).

It may be prudent to get your own foreign language domain name if your site content varies dramatically by country. Also, this prevents anyone else from using it, and you can use it as another domain name entry on search engines. With a marketing investment of $60 each, separate domain names are a bargain among Internet marketing tools.

More significant ancillary investments include building a customer support system and setting up a proper payment system for your site.

Language Options

Once you've identified your profit potential by market, the next step is prioritizing the languages you'll use. As I mentioned earlier, translating a Web site can be expensive. And, the more languages you want to offer, the more expensive it will be. Prioritize your choice of languages by market potential, competition, and regional differences.

We've already discussed market potential and competition, but selecting the correct language is imperative because language is so closely tied to culture. For example, the Portuguese spoken in Brazil is different from that spoken in Portugal. And in some cases, one country can have several official languages (Switzerland has four: German, French, Italian, and Romansch).

Research the number of people online using each language you're considering. Sites like Global Reach provide detailed information about online users by language and country, so start there. Remember that even in the U.S., there are regional language differences. For example, Chicano/Latino communities in New York City primarily speak Puerto Rican Spanish, while their Southwest counterparts speak Tex-Mex Spanish. In Miami, Cuban Spanish is the local vernacular.

As you can see, the more you refine your market, the more direct bearing it has on the languages you should use for your site. Take a look at your site's access logs (check with your Web host) to determine if it's already getting hits from foreign domains. (For list of country domains, see the Internet Assigned Numbers Authority site). This information may give you additional insights and an initial benchmark to help determine your language priorities.

Content

When it comes to translations, don't forget to consider the impact of text, graphics, and navigation.

Text: Make sure that the tone of your English-language site will make sense when translated. A hard-sell approach, for example, may not come across positively. Make sure that not only the correct verbiage but also the right "attitude" greets your customers.

Graphics: Be wary about using graphic animator programs or video streaming products, because they may not work in certain parts of the world. Some areas lack the telecommunications infrastructure or bandwidth to support their populations' use of such programs and downloads.

Make certain that any graphic symbols you use are universal in nature. Worldpoint.com, a globalization vendor, notes that the use of a U.S. mailbox graphic as a symbol for "mail" may not mean anything to online users in certain countries. For more information on Web site design as it relates to culture, see this month's "Integrated Design."

Navigation: Don't assume that your navigation system can be easily adapted for a new audience: Culture, education, business practices, and thought processes vary worldwide. You may need to tweak your navigation so that it seems logical to your end user. Certain languages are read right to left instead of left to right. So be sure your page flow and next-page and previous-page notations make sense.

Fulfillment

Order fulfillment can be a major logistical nightmare, and certain products are more problematic than others. Shipping and fulfillment costs can also significantly impact your profit margin. In some cases, customs and tariffs can exacerbate the situation even more.

There are several approaches that will let you remain competitive and still account for overseas shipping costs. You can negotiate volume deals with shipping companies like FedEx or UPS. Or take advantage of the U.S. Postal Service's relatively inexpensive international shipping service. Find a centralized distribution or manufacturing point, preferably one overseas, that can handle your key international markets. In addition to keeping shipping costs down, this approach may help eliminate import taxes and other tariffs.

The Pros and Cons of Globalization

There's no question that globalization presents a new opportunity. Market statistics suggest that globalization is inevitable, which means you might have to globalize your site as a defensive tactic to keep competitors from stealing your business.

But it's important to keep in mind what globalization can't do: Globalization doesn't compensate for a poorly built English-language Web site. If your site's infrastructure and marketing approach aren't already fine-tuned, don't expect a translated version to work any better. Globalization is not a substitute for spending marketing dollars to promote your existing site.

If your funds are limited, focus what you have on generating the highest levels of awareness and traffic that you possibly can for your existing site. Then, if you can afford to do so, promote the foreign language version(s) of your site in supplemental marketing efforts.

Globalization is not a guaranteed source of incremental revenue. The only guarantee about globalization is that implementing it on your site will incur costs. As time goes on, and as more and more non-dot-com sites appear online, you may need to globalize to protect yourself against competitive inroads through foreign markets. If you can afford to be among the first in your particular field to globalize, you'll be taking a proactive step toward securing your market.


Sandy Tapper is a marketing evangelist and Internet consultant who focuses on creating marketing-driven Web sites. Visit her site at http://www.tappernet.com or contact her at stapper@tappernet.com.

This article originally appeared in the September 2000 issue of WebTechniques magazine. Reprinted by permission.


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