With an increasing trend of globalization, many companies are expanding their target markets into the markets in other parts of the world, not being limited to the Republic of Korea. In this process, it became very important in terms of profit making to manufacture products that can be easily accepted in other regions, and to establish marketing strategies.
According to a survey by the KOTRA Overseas Trade Center in 2016 on the South Korean companies operating overseas, the total number of South Korean enterprises was 11,937. Among them, the number of companies in Asia (other than China) and Oceania was 5,493 while the number of companies in China was 3,639.
We need standardization and global strategy to utilize the economies of scale when companies enter overseas markets. Companies or products that have not adapted to the local market may not only reduce the consumer's preferences and satisfaction, but also have to exit the market. Therefore, the companies considering overseas expansion must analyze and manage the factors necessary for adapting to different culture, economy, and legal environment in each country.
So, what is the concept of localization?
Localization refers to the process of locally performing major corporate activities such as production, distribution, sales, marketing, finance, services, and R & D in consideration of the local culture, language, custom and natural environment of the country targeted by the company.
Localization is largely divided into the localization of resources, which means local procurement of major business resources such as people, parts/raw materials, and funds, the localization of R & D and the localization of management, which determine the processing and distribution of these resources. In addition, each localization is closely related to each other.
The corporations established in overseas are usually the subsidiaries of their parent companies in their home countries, but operate as local companies in the local markets. Therefore, when you want to enter an overseas market, you have to set up a strategy to meet the needs of consumers in marketing, advertising, and product design. In addition, you must make use of economies of scale, and, along with standardization, adapt to the different cultural and political environment of each country in consideration of the features of industry.
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