Page 267 - E-Bussiness and E-Commerce Management Strategy, Implementation, and Practice

M04_CHAF9601_04_SE_C04.QXD:D01_CHAF7409_04_SE_C01.QXD 16/4/09 11:11 Page 234

234 Part 1 Introduction

Language and cultural understanding may also present a problem and a smaller or medium-
sized company is unlikely to possess the resources to develop a multi-language version of its
site or employ staff with sufficient language skills. Similarly, Quelch and Klein (1996) note
that the growth of the use of the Internet for business will accelerate the trend of English
becoming the lingua franca of commerce. Tailoring e-commerce services for individual
Localization countries or regions is referred to as localization. A web site may need to support customers
Tailoring of web site from a range of countries with:
information for individual
countries or regions. different product needs;
language differences;
cultural differences.
The importance of localization is highlighted by a report by Common Sense Advisory
(2002). According to them, for many US Fortune 500 firms, non-US revenue – or what they
refer to as ‘xenorevenue’ – accounts for 20 to more than 50 per cent of their global income. A
similar situation is likely to exist for non-US multinational organizations.
Don Da Palma, the author of the report, adds:
This fact alone makes it easy to see the value in catering to buyers in global markets with
localized products and services in their language. Still, localization expenditures are
minuscule – 2.5% and lower of non-US revenue – compared to the benefits of gaining
market share and customer loyalty.
It may be necessary to vary:
The language that content is provided in.
Tone and style of copy.
Site design – certain colours or images may be unsuitable or less effective in some countries.
Range of product offerings.
Product pricing.
Promotional offers used to encourage acquisition of customer e-mail address (see Chapter 9).
This may be affected by local data protection, taxation and trading laws.
Local contact points.
Localization will address all these issues. It may be that products will be similar in different
countries and localization will simply involve providing a local-language version of a web site.
However, in order to be effective, this often needs more than translation, since different pro-
motion concepts may be needed for different countries. An example of a business-to-consumer
site with extensive localization is Durex (www.durex.com) and a business-to-business site is

3M (www.3m.com). Durex localizes content for many countries since language and the way in
which sexual issues can be discussed will vary greatly between different countries. 3M, however,
only localizes content in local language for some countries such as France, Germany and Spain.
Consider large multinational companies such as 3M, Ford and GlaxoSmithKline for which
localization is a significant strategic issue for e-commerce. The decision on the level of localiza-
tion will need to be taken on a regional or country basis to prioritize different countries
according to the size of the market and the importance of having localization. Since the cost of
localization is high it may only generate a return on investment for the largest markets.
Singh and Pereira (2005) provide an evaluation framework for the level of localization:
1 Standardized web sites (not localized). A single site serves all customer segments (domestic
and international).
2 Semi-localized web sites. A single site serves all customers; however, there will be contact
information about foreign subsidiaries available for international customers. Many sites
fall into this category.
3 Localized web sites. Country-specific web sites with language translation for international
customers, wherever relevant. 3M (www.3m.com) has adapted the web sites for many
countries to local language versions. It initially focused on the major web sites.