Published by MBA Skool Team, Last Updated: May 27, 2015
What is Glocalization?
Glocalization is an amalgamation of the words “Global” and “Localization”. It is a term used for describing a product or service whose development and distribution is done globally, but after it reaches different local markets it is tailored to accommodate the user of that particular local market. it is basically the adaptation of globally standard products done in the local markets according to the laws, consumer preference, customs etc.
The term Glocalization comes from Japanese business practices where it is called “Dochakuka” meaning global localization. The term dochukuka was originally used for referring to the adaptation of global techniques of farming in the local conditions. From there it was taken as a marketing strategy adopted by Japanese businessmen in the 1980s.
McDonalds serves as a perfect example to understand glocalization. Over the years, McDonalds has made its presence in 119 countries around the world. The product it produces around the world follows the same process and the distribution system is almost similar throughout the world but when it comes to the menu, it changes from country to country. A picture below shows the localization of its menu in different countries according to the local preferences of the consumers.
For example, McDonalds, in America, is famous for its beef burgers with the Big Mac its highest selling product. But when it entered the Indian markets the Big Mac with its beef patty was replaced by the Maharaja Mac with a chicken patty for the local preference of chicken over beef and also because of the strict laws in India regarding cow slaughter. It also provides a wide variety of vegetarian burgers that are exclusive in India with Mc Aloo Tikki as their most sold product. Just like India, McDonalds has the McSushi Burger I Japan and the Kimchi Burger in Korea. Starbucks, Disneyland and Yahoo! Are other companies that go for glocalization of their products for different countries.
Advantages of Glocalization:
• It attracts more customers by offering localization of standard products.
• Higher profits are often achieved in such practices.
• It saves the company of certain ethical issues and costs associated with the product.
• Consumer loyalty increases with the localization of products.
Disadvantages of Glocalization:
• A lot of time is spent in researching other markets.
• If unsuccessful, these researches cost a lot of money.
• Experts have criticized glocalization for ineffective in the long term stating that glocalized products show high initial sales but after sometime the consumers want their products to be of global standards.
Hence, this concludes the definition of Glocalization along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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