Marketing Must Become Multilocal
Geopolitical shifts—brought about by the COVID-19 pandemic, looming recessions, and increasing political, social, and economic polarization—are drastically forcing global companies to rethink their digital marketing strategies, Forrester Research notes in a recent report.
In fact, of the top 10 business risks cited by CEOs, eight related to the broader geopolitical context, including overregulation, policy uncertainty, trade conflicts, cyberthreats, political unrest, protectionism, populism, and exchange rate volatility. This has prompted Thomas Husson, a vice president and principal analyst at Forrester, to conclude that global companies will be challenged to deeply understand local consumers’ needs and values.
Marketing executives should expect consumers to seek brands that reflect their local values, he says, but becoming that type of a company is not an easy task. Values differ from one country to another, he says, as they rely heavily on local beliefs about social issues, politics, and causes.
As examples, Husson notes that French and Italian consumers consider climate change as the top social responsibility for companies, while in the United States, this ranked as only the seventh most important criteria, far behind diversity and inclusion issues like gender and racial equality.
For marketers, the challenge of creating globally consistent brand messages that meet local consumer expectations is nothing new. But it becomes more important now to create a global mind-set while at the same time localizing their businesses.
Husson says that to localize their global businesses, marketing leaders should create opportunities to make global connections. One way they can do this is by creating local centers of excellence in different countries to embed a sense of global thinking into the corporate culture, he notes.
Husson further maintains that the next decade will belong to midsize companies that expand globally by prioritizing regional differences and local operations. This phenomenon is likely to happen in four stages, he says.
The first stage, which will dominate 2021, will see companies partner with local institutions to solve the COVID-19 crisis. “The decline in confidence in traditional institutions and the inability of countries and local governments to solve complex global issues like climate change will increasingly enable global brands to select and express political and societal values,” Husson says in the report. “Consumers will expect societal brands to collaborate more with trustworthy local institutions, join the fight against the pandemic, prioritize health and safety, and live up to their multistakeholder promise.”
The second stage, which will extend to 2023, will see digital platforms continue to wield tremendous economic, political, and social power. “Their ability to access citizens’ private data, control the way citizens access and share information, build infrastructure, and even create new currencies will infringe on countries’ sovereignty,” Husson predicts.
Between 2023 and 2025, governments and consumers will begin to press back against the tech titans, he adds, noting that moves by governments to regulate the global digital platforms that threaten their political foundations that have already started in some parts of the world, like the United States, Europe, and China, will intensify. “Discussions between states and intense lobbying will prevent the full implementation of new laws that limit the power of global digital platforms at a country level before 2023 or 2024,” Husson expects.
Then, between 2025 and 2030, leading companies “will finally morph into true multinationals. These firms will be able to retain the benefits of central technology management while pursuing hyperlocal business operating models.
“Marketing leaders must anticipate the impact of this new global order on their brands and revisit their marketing in light of increasingly demanding and polarized consumers,” Husson says.
As that happens, technology will reinforce hyperlocal operations, he adds, but he notes that technology is not the key success factor here. Instead, empowering local teams and building local trust is the key to morphing into a truly multinational company, he concludes.