Solving the Problem with Global Expansion (Part 2 of 2)

by Brenna Neal

How to Balance the Need for Local Customization with the Need for Scale and Efficiency

Our last post defined and discussed the challenge faced by companies applying segmentation to an expanding global market. Companies are faced with the following questions: How can we balance our needs for scale and efficiency globally with the specific and differentiated needs of the local market? EMM has led global segmentation projects for several multi-national clients, and we offer the following specific steps for how this can be accomplished.

1 – Understand each market independently: It must begin with talking to customers in each market to understand what they are looking for in a product or service solution. Ask them to define what they need and, more importantly, why that need is currently unfulfilled. Map the purchase process; identify the participants and the key decision drivers. Speak to government regulators and local channel experts to reflect local country infrastructure.

2 – Develop a country specific segmentation: Focus on one country at a time and identify patterns that emerge that will allow you to group respondents together into segments. Cluster the customers based on needs, key success factors, pain points and competitive imperatives.

3 – Identify commonalities across countries: Step back from the “by country” view and look at the segments in aggregate. Usually you will find that there are a few core needs that are consistent across segments of all countries. Determine the core segment needs which are common across all countries and generate the core global segmentation. Next, determine the customization needs which apply to segments in one or more countries. It is often surprising the number of countries around the globe which have similar needs driven by local market inputs. Create customization package options which can be layered on top of the core segmentation to better align with local customer needs. The core segmentation and the corresponding customization bundles can be managed centrally to ensure scale efficiency is not compromised.

4 – Localize the global segmentation: On a by country basis, review the Voice of the Customer feedback from step 1 and configure the customized local segmentation based upon the core segmentation needs and the relevant segment bundles which fulfill specific local needs (i.e. regulatory, budgetary, competency, etc.).

5 – Test and validate: After rebuilding the offering and corresponding value proposition by localized segment, test the value proposition with the local market to ensure it resonates as anticipated with the target audience.

There is no magic bullet to entering a new global marketplace; however consciously managing local customization with scale requirements can drive better decisions while making the difference between success or failure.

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Keywords: Customer Segmentation, Market and Data Analysis