Wednesday, February 14, 2007

Glocalize your business - look to the travel industry, by Even Aas-Eng

I first came across the term glocalization as a economic geography student. It basically means a creation of products or services that are intended for a global market but customized to suit the local business environment. In other words, its globalisation but its local!

When I started working with online marketing and business development I soon understood that the WEB is one big glocalization machine. But still very few was taking advantage of it. After all to many years this is about to change and the travel industry in particular are duly on their way.

Before WWW the travel industry worked like this: If you wanted to travel you went to your local travel agent and looked in their brochures. The items in the brochure where provided by middlemen who had taken the time to gather a lot of different hotels, airlines and car dealers in one system so that the travel agent could sell it to the customer. So you had three steps in the chain, the vendors, the aggregators and the sales agents. No wonder travel was expensive!

When the WEB took off people predicted radical changes for the travel industry and they where right but the changes that occurred really didn't change anything. What do I mean, well consumers went online to look for nice destinations and hotels and they even started to book online. So the old travel agency on your local corner went bust but instead travel agencies started appearing online. Smart people started expedia, ebookers, opodo and became a force to be recond with. So consumers went online and new travel agencies went online, but the business model was still exactly the same.

Today this is starting to change. Airlines, hotels and rental car companies want to increase their margins and they want direct customer contact. They want to drop the middleman. The solution is and has always been online. You can target your advertising by geography, by behaviour and by context in all mayor markets and you don't need an office in each country either. Your website is a shop with no cost for shelf space so low volumes is not a big issue. And you can easily make local adjustments.

In other words, companies can "glocalize"

So we can expect a lot more local versions of international hotel chains and airline sites in the time to come. And they will pay to drive traffic to those sites globally. And it makes perfect business sense. When someone in Norway searches for the four seasons hotel in NY why shouldn't they be there to handle that potential customer?
Another effect of this is that global advertising giants like Google will make even more money because hotels/airlines will spend more and the aggregators will do the same to protect their marked share. So good times ahead!

All this doesn't mean that online travel agents will disappear but the once that are not adding any value to their clients might face though times. And can other industries extract any learning from the changes taking place in the travel industry? Surely but this post is to long already, maybe next time.

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