Introduction to Augmented Reality and Virtual Reality in Business
Global businesses are embracing augmented reality (AR) and virtual reality (VR) to attach with consumers around the globe. The technologies offer recent ways to get a feel for products before buying—for every part from virtually trying on a lipstick shade, exploring a brand’s world in Roblox, or seeing how a brand new couch might look in your front room.
Cultural Influences on AR and VR
But getting it right within the virtual world does not imply the identical thing in every global market. Culture influences how people use these modern prolonged reality (XR) technologies, so the best way consumers interact with the technology can vary by country. That makes it tough for multinational corporations to have an XR approach that works well all over the place.
Research on AR and VR in South Korea
In recent research published within the Journal of International Business Studies, marketing professor P.K. Kannan on the University of Maryland’s Robert H. Smith School of Business investigates XR marketing strategy in tech-savvy South Korea. "They are on the leading edge of those applications in retail," Kannan says. "They have many locally based corporations, in addition to foreign corporations coming into market products." The researchers teamed up with a market research company to check 257 beauty brands in South Korea over a three-year period from 2019–2022.
Liability of Foreignness
The challenges faced by foreign corporations in a neighborhood market are referred to as liability of foreignness (LOF). It’s a well-established concept that explains why multinational corporations often struggle and face disadvantages against local businesses in foreign markets. Kannan and his co-authors confirm that LOF does exist within the virtual world for foreign firms. The problems are especially apparent in cases where the XR applications create highly interactive, less realistic, and highly vivid experiences.
Overcoming Cultural Mismatches
But for those who are a really recent brand or introducing a brand new product, you might be less more likely to face LOF. "The uncertainty about something recent takes over, making people more focused on experiencing the brand new brand or product quite than noticing cultural mismatches." Companies can avoid cultural mismatch problems by leveraging their marketing investments in local markets. Brands which have their very own platforms—which permit direct connections with local customers—are far less more likely to experience LOF.
Recommendations for Companies
Kannan has recommendations for corporations who need to use XR to attach with customers in foreign markets:
- Know the culture. "Understand the cultural norms and nuances of a brand new market before you enter it. Tailor your XR technique to fit the local culture, ensuring it feels relevant and fascinating for local consumers."
- Choose XR technology correctly: "Some XR technologies could be more difficult for foreign businesses. Highly interactive and imaginative XR, which frequently use more advanced technology, may increase the danger of cultural mismatches."
- Leverage newness: "For multinational corporations, while you’re a brand new brand or introducing a brand new product, that comes with a novel advantage—persons are more focused on experiencing something recent."
- Build a community: "Ensure that you simply get onto your personal platform and begin constructing brand communities around your product. That will assist you to in the long term to scale back the impact of the liability of foreignness."
Conclusion
In general, having XR is healthier than not having it, says Kannan. But adopting it comes with risks. If you give you the fallacious technology and the fallacious approach, it will possibly harm your brand—sometimes even worse than not having XR in any respect. "We find that corporations that use XR generally perform higher than corporations that do not use these technologies. But for those who use it within the fallacious way, it will possibly harm your brand." The secret is to know the local culture and tailor your XR technique to fit the market, ensuring it feels relevant and fascinating for local consumers.
