The global COVID-inspired economic crisis forces companies worldwide to go global to get new revenue streams and diversify the business. However, there is still no real “global” market; instead, companies deal with dozens of local markets that can differ greatly. As a result, even basic hypothesis testing may be too costly for the business.
But there are still some ways of cost-effective expanding strategies that are used by companies worldwide. Here is a short round-up of these approaches.
Tactic #1: Help people to think you’re local
People tend to like local brands more than international ones. The reason is simple: the local company is closer, created by compatriots, and better aligned with local customs and habits. According to Fundera, 61% of consumers shop at local businesses because they want to access a unique product selection, and 40% of them claim that they want to support local companies.
But do people understand whether the company is local or not? Can a foreign company present itself as a local in a specific country? These are great questions, and there real examples that show that people can mix things up here, which opens new business opportunities.
Take Red Bull, and the Austrian energy drinks manufacturer looks like a local brand for many Americans. The company implements a marketing strategy that fosters this image. It runs lots of events in the US and worldwide, from the Red Bull Indianapolis Grand Prix to the Red Bull Air Race in the United Kingdom.
This helps the brand to be closer to its consumers. However, the packaging itself is universal. According to Nancy F. Koehn’s analysis, the packaging of Red Bull lacks traditional details usual for American brands, like 12 ounces cans, bottles, and rich lettering (i.e., Coca-Cola logo), which, surprisingly, helps people worldwide to identify themselves with the brand.
While event marketing and sponsorships are costly tactics, working on imaging of the product or the company itself to make it look native in any environment requires less money and more research and analysis.
Tactic #2: Use a flexible pricing strategy
Lots of retailers entering new markets often use this tactic. This is incredibly efficient for developing countries. In these regions, people have lower incomes compared to Western countries. It is better to take this into account and build your expansion strategy on top of it.
For example, when Coca-Cola was entering India in the early 2000-s, the regular price for the 300ml bottle was INR.10. Back then, it was an average daily income in the country, and thus only 4% of the population could afford to buy Coke.
The company needed to cover the rest of 96% of customers. To do so, the new bottle was introduced. The cost was just INR.5 for 200ml. This move allowed Coca-Cola to achieve significant revenue growth in the country.
For tech companies nowadays, this means better research on pricing habits and opportunities local customers have. So, there can be situations when SaaS companies offer different dollar-equivalent prices for the same service. This is what even Google does – the price for the monthly YouTube premium subscription for the US-based user is $11.99, while in India, this is INR.139 only.
Tactic #3: Find local partners
This is what tons of IT companies do for years. This is a standard scheme for the B2B IT solutions vendors who want to penetrate new markets. They do not build the sales process in the new country for themselves. Instead, the company could find local partners: resellers, affiliates.
Digital marketing expert Neil Patel has shared the case study revealing the impact of a well-working partner network: his startup was able to increase revenue by 1,983% and grow the number of users by 1000% in just six months!
There are also tech startups that use the franchising model. For example, there is an app called Gmoji that allows people to send digital gifts that can then be transformed into real-world goods like a coffee cup. The company uses franchising to launch new countries, which allowed the company to get into six countries in the first year of its expansion.
Tactic #4: Use global tools to go local
Researching local markets to get some understanding of the marketing tools the company could use may be time-consuming. However, there are global tools that can be used to go local. Let’s talk about Reddit. It is called “the front page of the internet,” and this is true.
While it is a US website, I had a project where we used it to test the demand for the SaaS startup in Spanish-speaking countries. How? We created a list of subreddits used by people from Latin countries.
1. r/aprendeingles/ – a subreddit about English learning
2. /r/es/ – a sub for Spanish-speaking people, 14k users;
3. /r/argentina/ – 92k subscribers;
4. /r/vzla/ – sub for people from Venezuela, 34,5k subscribers;
5. /r/Colombia/ – 13,8k users;
6. /r/chile/ – 48k* users.
* numbers at the time of the experiment, the subscribers counts for Subreddits are constantly growing
We found a Spanish speaking translator via Upwork and ordered a translation for a couple of our blog posts previously published in English. Once we had the translations, we published them on Medium.com and shared the links to Reddit and other websites.
The result exceeded all expectations. We’ve not only got dozens of registrations and active discussions on Reddit, but editors of Spanish-speaking online media outlets got interested in the product. The project’s review published by a what’s new website gave the company around 2000 visitors in just a couple of days.
Also, you can use popular websites where your competitors list themselves, and run campaigns there—just as local companies do! Take Product Hunt, it is a globally famous website for startup launches, however, it has its core audience in the US. So, if the company wants to expand its product to the US, Product Hunt is a great place to start.
What is great about this tactic, is that the audience treats all products equally; they just do not know who are international, and who are locals. Moreover, the website includes pages of alternative products for popular tools. Here is an example of Linguix.com, an AI-based writing assistant. This tool was launched on Product Hunt three times, and became #1 Product of the Day twice. Moreover, the product is listed as one of the top competitors for Grammarly, a leading tool on the market:
A list of alternatives for the specific product at Product Hunt
Tactic #5: Research the audience’s preferences for the marketing
In Smile Bright Media, we work with tech startups worldwide and collect some stats on how people in different countries react to content. For example, in Eastern Europe, readers enjoy texts of 10k to 15k characters long.
Content length preferences of the audience in Eastern Europe |Data: Smile Bright Media Inc.
Articles of 10k to 15k words long are frequently read and appeared to be getting more comments. The business-related media outlets’ audience tends to read medium-length, with the most commented articles being those of 20k+ symbols. These people also enjoy a good long read with 20k plus symbol texts and read these quite frequently. Similarly, readers in Asia tend to fancy mid-length texts.
However, when we’ve analyzed the US market, we’ve understood that people there actually love “minor forms” and actively read short pieces of up to 5k symbols. Mid-length texts and Long-reads are less favored.
Knowing this data bundled with the statistics on the best time for publishing content may be an excellent foundation for a great local content marketing strategy. Sure, if you’re targeting the US market, there is no need to make the text shorter artificially. Our survey shows that almost every article which fits the mid-length category finds its reader, though such pieces may give way to short texts in terms of readership.
Global expansion is not an easy process, and companies should approach it wisely to get better results. Different methods and approaches may work successfully in various business segments. Here is the summary of main worldwide expansion tips:
1. It is essential to analyze user preferences. Sometimes it is better to make the product look “geographically neutral,” to make it easier for people in different countries to perceive it as a local one. Also, it is great to know how local audiences react to marketing, what content they like, when it is better to post, etc.
2. The pricing policy is one of the ways to gain a foothold in the new market. If you can give people a cheaper but better alternative to existing products, it will open the road to covering most of the market.
3. You will need local partners. If you have a B2B company, someone will have to help you with local specifics, and in the B2B segment, your franchise can help you get new users.
4. Use global marketing tools to target smaller local audiences. You can research resources like Reddit and Product Hunt and benefit by using them with your local audience in mind.