Localization of Global Brands in Host Countries ——An Analysis of Apple and H

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The current study aims to investigate different market and product expansion strategies of the global firms,while entering into the local host markets.Past studies in the literature deal with the form of expansion through the scope of the Ansoff matrix.In that manner,it can be seen that the major tradeoff in expanding to new host markets is to keep the balance between generalization of the products to address the needs of the customers in different markets,and the specification of products to serve the market-specific local needs.However,current study brings a new way of categorization for the contextualization strategies to new foreign markets,especially for the big global brands,which are expansion by globalization or by localization.Here,globalization strategy means entering into the new markets by impressing customers by emphasizing the global prestige and the prevalence of the brand in world markets.On the other hand,the localization strategy means entering into new markets by impressing customers by emphasizing the intimacy of the brand,and by showing that the brand conforms to the cultural/traditional standards of the host country and serves the local needs.In today’s highly globalized world,achieving change and differentiation has become an essential requirement to gain competitive advantage among the rivals.In other words,the marketing strategies put the sentence of ‘It is not what you sell,but it is how you sell which matters’ as the milestone of their philosophy.At that point,two big companies operating in telecommunications sector,one being US based Apple,and the other being Chinese based Huawei are analyzed,by comparing and contrasting their market and product expansion strategies.Those two companies are both very large corporations coming from two economic super powers,and they both evolve in the telecommunication and mobile phone manufacturing,branding and marketing.However,the culture they come from and the strategy that they chose(which is itself related to the perception that customers have of the country of origin)makes them highly competitive and very different.Studying these two giants,one from the eastern world and one from the western world makes a lot of sense.Moreover,the host country chosen is as eastern as it is western,and Turkey’s history and culture is a complex mix of European and Asian influences.This makes this research even more relevant.The current research defines and investigates two new dimensions of market expansion,one being ’growth by being global’,as Apple does,and the other being ‘growth by being local’,which means customizing until you reach the level of focus of a local firm,by forming effective contacts,cooperation and partnerships,as Huawei does.These two concepts of market expansion have been created for the current study,with the ultimate aim of further contributing to the market expansion literature.At that point,Apple regards ‘growth by being global’ strategy as spending less effort for market differentiation and customization,but rather focusing on global product innovations.This can even be understood from the fact that it has no physical office or explicit advertisements in Turkey.On the other hand,Huawei especially emphasizes creating local advertisement campaigns and local partnerships,and it does not refrain from spending extra effort to capture and dominate the local market.Here,even if currently it seems as Apple uses the advantage of its global reputation and saves its energy for global and breakthrough innovations,it is also true that Huawei’s strategy of forming correct relationships with correct timing,and personalizing and customizing according to different markets may be more stable and successful than Apple’s strategy,in the long term.The current research adds further on the existing studies in terms of comparing two global and relatively similar companies,who are operating in telecommunications sector.Therefore,the differences between market and product expansion strategies may become less salient,in a sector where the customer habits and preferences in different markets are thought to be very similar to each other.Moreover,since both Huawei and Apple are globally well-known brands,the negative perceptions,stereotypes and resistance to the foreign brands may be lower for the consumers in foreign markets.The current research is also new in the literature since it gives field data from interviews conducted on Apple and Huawei employees,and also perceptions of the active smart phone users towards these strategies,through interviews conducted on consumers.The object of the research is to investigate how a multinational companies contextualize its products or services differently in different host countries,in order to gain competitive advantage.At that point,the main research question that is aimed to be answered is,“In order to achieve its competitive advantage,how should a multinational company contextualize its products/services in host countries by considering the differences between the home country and the host country?” More detailed sub-questions are constructed from the main research question,to develop it in detail.According to the results of the interviews that have been conducted with Apple and Huawei managers and by overall smart phone users in Turkey,it is found out that Huawei engages more in market development and disruptive innovations,while Apple focuses more on product development,diversification and breakthrough innovations.Moreover,Apple Company diversifies by globally updating the physical properties of its products,while Huawei Company differentiates and contextualizes by changing its strategies,relationships and the way it presents its products,according to different host markets.Nearly half of the participants in the Turkish market are unaware of the Huawei brand.However,even for the participants who hear the brand name “Huawei” for the first time,it creates a trustworthy and intimate brand image.The fact that Huawei is a Chinese company cause customers to associate the brand with low-cost.Moreover,since there exists no negative political issue between Turkey and China,a Chinese brand does not create a negative perception in the eyes of the customers.Huawei very carefully determines its product offerings at the first time that they run these products into the marketplace,but do not increase its product offerings in the host countries much.Instead,it engages in alternative marketing strategies and local partnerships.On the other hand,Apple emphasizes product diversification and it frequently updates its product range,however it does this concurrently,in all the markets that it operates.Huawei also creates the feeling that it is an intimate brand,by supporting national projects and by forming local partnerships.Brand name of apply has a direct effect on customers.However,Huawei does not own a very strong brand name in Turkish market,so it first forms partnerships with well-known brand names in Turkey,to create an impact in an indirect way.Huawei focuses more on forming political ties,while Apple focuses more on forming business ties.Apple uses its strong brand name at the point of acquiring new customers.On the other hand,Huawei uses its strong partnerships and connections while acquiring new customers.Actually,Huawei is not a wellknown brand in Turkish market.However,Vodafone is a very well-known brand;therefore Huawei’s partnership with Vodafone increases the memorability of the brand name.Huawei spends the biggest portion of its effort to differentiate between its marketing strategies,campaigns and partnerships in different foreign markets,rather than differentiating within its own product range,when it is compared with Apple.All the answers given by the users emphasize the ‘locality’ of Huawei brand,which shows that the company has been successful in terms of creating the feelings of intimacy,belonging,relatedness,connectedness,and in terms of closing the cultural distance,which support the ‘growth by being local’ strategy of Huawei.It can be said that Apple achieves market expansion by just distributing and spreading its products to foreign markets.Apple values creativity,since it regards creativity as a requirement to preserve its global prestige,but Huawei values forming the correct relationship with the correct partner at a correct time.Apple Company does not specifically recognize Turkish market.It just applies the same strategies in all of the host markets,but does not apply a specific strategy for Turkish market.However,Huawei Company constructs its strategies specific to Turkish market.Apple Company is creativity-focused,due to the know-how and experience that comes as the result of being the global market leader of innovations,while Huawei Company is customer and relationship focused.Apple Company has a higher self-confidence and applies a more fierce competition strategy of expansion and capturing more and more customers.However,Huawei Company spreads more slowly,by separately valuing all of its business relationships.Apple Company spreads by its globally known brand name;however,Huawei Company spreads through word-of-mouth,in the long term.The researcher can state that even though Apple is advantageous as being a globally very well-known brand,this image may also have some drawbacks.For instance,even though it applies a subliminal marketing strategy in Turkey,some customers in Turkish market perceive Apple as a global,commercial and untrustworthy brand,by which they are deceived.They may also feel that Apple forces them to continuously update their smart phones in an undesirable way.Apple products also cause customers to experience choice overload.On the other hand,in Turkey,The Apple Company offers the same product range that it offers worldwide.Therefore,it wants to impress its customers by the feeling that they are immediately being aware of any kind of global innovation.In the answers of the interview questions,trend towards the word ‘global’ is apparent,which supports ‘growth by being global’ strategy of Apple.
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