Global businesses are embracing the enhanced reality (AR) and virtual reality (VR) to join consumers around the world. Products provide new ways to feel for products before purchasing – from almost trying on a lipstick shade, to search for a brand world in Roblox or to see that a new couch in your living room How can you look But being right in the virtual world does not mean the same thing in every global market, finds a marketing professor. PK Kannan Robert H of Maryland in new research. Smith in the School of Business.
Culture affects how people use these innovative extended reality (XR) technologies, so the way consumer technology interacts with the country can vary from the country. Kannan says that there is an XR approach to multinational companies that work well everywhere.
In new research Published In the Journal of International Business Studies, Kannan and his co-writer (Hyoryung Nam At Yiling Lee and Jionaghe Choi) at the University of Syrackuse University and Jionaghe Choi) check the XR marketing strategy in South Korea. “They are the state -of -the -art of these applications in retail,” Kannan. “They have many locally based companies, as well as foreign companies are coming in market products.”
“If you are a firm coming in a local market, you have a liability to be a foreigner because you do not really understand cultural nuances and you may not be able to clearly communicate your value offer in this way. The way local culture will understand. Or the way you present, it may not be well aligned what they are expecting. ,
Those challenges are the same known as LOF of liability, Kannan. This is a well -established concept that explains why multinational companies often struggle and face losses against local businesses in foreign markets. But are these disadvantages still present in a world where immersive technologies are breaking traditional obstacles? Kannan and his co-writer break new land to find answers.
He worked closely with a market research company to study 257 beauty brands in South Korea over a period of three years from 2019-2022. Kannan says that he saw how XR innovation affects brand engagement, especially comparing foreign brands against local brands.
He focused on the “brand buzz” – a major indicator of brand engagement, how many times a brand is mentioned on social media. Kannan says, “If your XR is not really resonating with consumers, there will not be much brand engagement,” Kannan says. “Then we tried to determine whether the XR innovation of foreign brands is less effective in improving brand engagement than local brands.”
Kannan and his co-author confirm that LOF is present in the virtual world for foreign firms.
Why? “This is to do with cultural mismatches how people do the information process,” Kannan says.
Problems are especially clear in cases where the XR app creates highly interactive, less realistic and highly vivid experience. For example, there is a greater risk of fully cultural mismatch Fictional virtual world It does not mirror real life closely, compared to an application that uses a person’s own image to try on makeup shades or fashion accessories.
But if you are a very new brand or are introducing a new product, then you are less likely to face LOF, Kannan says. “Uncertainty about doing something new, people focus more on experiencing new brands or products rather than notice cultural mismatch.”
He says that researchers also found that companies can avoid cultural mismatched problems by taking advantage of their marketing investment in local markets. Brands that have their own platforms – which allow direct relations with local customers – is less likely to experience LOF. While all brand platforms help reduce the lof, some work better than others. Communication-based platforms, where you form your own community by sharing brand news, tips and inspiration, do better work to overcome LOF than transactions-based platforms, which mainly sell and sell and sell Focus on publicity.
Kannan has recommendations for companies who want to use XR to connect with customers in foreign markets:
1. Learn the culture. âUnderstand the cultural norms and nuances of a new market before entering. Tails your XR strategy to fit local culture, ensure that it looks relevant and attractive to local consumers. ,
2. Choose XR technology wisely: âSome XR technologies can be more challenging for foreign businesses. Highly interactive and imaginative XRs, often use more advanced techniques, can increase the risk of cultural mismatch. If you are not very familiar with the local market, start with simple XR features and gradually introduce more advanced people. ,
3. Renewing Retunction: âFor multinationals, when you are starting a new brand or a new product, which comes with a unique advantage – People are focusing more on experiencing something new This gives you some space to introduce more advanced XR in foreign markets.
4. Create a community: “Make sure you come on your own platform and start building brand communities around your product. This will help you reduce the effects of the obligation of foreignness for a long time. ,
In general, it is better than having XR, it is not, Kannan says. But adopting it comes with risks. If you come with wrong technology and wrong approach, it can harm your brand – sometimes worse than not having XR.
âWe find that companies using XR usually perform better than companies that do not use these techniques. But if you use it incorrectly, it can harm your brand, âKannan is called.
“What we are basically said is not just XR that has been developed for a market and just immediately assume that it will work in the same way in another market.”
Read research, “Liability of foreignness in immersive technologies: evidence from extended reality innovations“Published in the journal of International Business Studies.
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