The Virtual World: A New Frontier for Businesses, but with Cultural Nuances
Global businesses are increasingly using augmented reality (AR) and virtual reality (VR) to provide potential customers a feel for his or her products before buying. Whether virtually trying on lipstick shades, exploring a brand’s world in Roblox, or seeing how a brand new couch might look in your lounge, these technologies are changing the best way we shop. However, a University of Maryland marketing professor has found that getting it right within the virtual world does not imply the identical thing in every global market.
Cultural Mismatches within the Virtual World
Professor P.K. Kannan, Dean’s Chair in Marketing Science on the Robert H. Smith School of Business, led a study on XR marketing strategy in tech-savvy South Korea. The research team found that cultural mismatches in how people process information can result in a liability of foreignness (LOF) for foreign firms within the virtual world.
The Liability of Foreignness within the Virtual World
"This is a well-established concept in international business, where multinational firms often struggle to compete against local businesses in overseas markets," Kannan explained. "We found that the identical disadvantages can apply to immersive technologies intended to interrupt down traditional barriers."
The Study: XR Marketing in South Korea
The researchers teamed up with a market research company to review 257 beauty brands in South Korea over a three-year period from 2019-22. They focused on "brand buzz" – how often a brand gets mentioned on social media, a key indicator of name engagement. The team confirmed that LOF does exist within the virtual world for foreign firms, because of cultural mismatches in how people process information.
Avoiding Cultural Mismatch Problems
According to Kannan, firms can avoid cultural mismatch problems through strategic marketing investments in local markets. Brands which have their very own platforms that allow direct connections with local customers are far less more likely to experience LOF.
Recommendations for Companies Seeking to Use XR in Foreign Markets
- Know the Culture: Understand the cultural norms and nuances of a brand new market before entering it. Tailor your XR technique to fit the local culture, ensuring it feels relevant and interesting for local consumers.
- Choose XR Technology Wisely: Some XR technologies might be more difficult for foreign businesses. Highly interactive and imaginative XR, which frequently use more advanced technology, may increase the chance of cultural mismatches. If you are not very accustomed to the local market, start with simpler XR features and steadily introduce more advanced ones.
- Leverage Newness: For multinational firms, once you’re a brand new brand or introducing a brand new product, that comes with a singular advantage – individuals are more focused on experiencing something recent. This gives you some room to introduce more advanced XR in foreign markets.
- Build a Community: Ensure that you just get onto your personal platform and begin constructing brand communities around your product. This will aid you in the long term to cut back the impact of the liability of foreignness.
Conclusion
While having XR is best than not having it, adopting it comes with risks. If you give you the unsuitable technology and the unsuitable approach, it could possibly harm your brand – sometimes even worse than not having XR in any respect. By understanding the cultural nuances of a brand new market and selecting the precise XR technology, firms can successfully navigate the virtual world and connect with customers globally.
