Concept of internationalization

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Table of Contents

• Introduction
• Theory
• Internationalization: A Choice
• Understanding the Customer Experience
• The Role of Glocalization in the Perception
• Analysis
• The American Tourist
• Uber: A Brief Background
• Uber's Methods of Glocalization
• Results
• The American Experience with Uber
• The American Experience with Uber Abroad
• An Analysis of Customer Journeys
• Results: A Full Spectrum Comparison
• Summary & Conclusion
• Bibliography
• Appendix
• Exhibit 1
• Exhibit 2
• Exhibit 3
• Exhibit 4
• Exhibit 5
• Exhibit 6
• Exhibit 7
• Glossary of Terms

Introduction

Customer Experience, though not a new concept in and of itself, did not enter the vernacular of western business strategy until the early 1990s. Its appearance, however, marked the beginnings of an economic shift that has defined the foundations of the global economy for the last two decades.

In a 1998 Harvard Business Review publication, “Welcome to the Experience Economy,” Joseph Pine and James Gilmore were among the first to argue that the western world has undergone four main stages of economic progress. What began, they said, as a system based on the exchange of interchangeable commodities had since progressed through a goods-based industrial economy, a service economy, and, by the 1990s, had reached a stage known as the “experience economy.”

The crux of this theory, of course, lay in the belief that service economies and experience economies, though often confused for one another, were distinctly separate. This distinction was drawn explicitly a few years later when theorists Susanne H.G. Poulsson and Sudhir H. Kale (2004) asserted that:

A service is something that is done for you… [but] an experience…is a product that does something to you… and what you typically walk away with [after an experience] is a memory of the encounter.

To economic theorists of the early 21^st century, then, a consumer could easily purchase a commodity without ever receiving a good. He/she could obtain a good without ever receiving a service. And he/she could receive a service without the added value of a managed experience.

The shift was caused by a foundational evolution of humanity, propelled by the development of technology and process. Having moved beyond the commodity, the good, or the service, the modern consumer was no longer satisfied with the tangible or easily replicated. He/she wanted to feel something when making a purchase, and value had come to be defined not by what was provided, but how. Twentieth century consumers had begun to expect a unique, memorable, and desirable experience - to want to feel as though their money was buying them more.

To stand out and to differentiate themselves in a quickly commoditizing world, businesses needed to create and develop more than just a service. They needed to find a way to “stage” an experience. To create a memory. And to drive an experience powerful enough that the business could ultimately command a fee for its delivery.

And, while arguably one of the most well-known foundational texts on the subject, it is important to note that “Welcome to the Experience Economy” was not the first to argue the burgeoning existence of and need for a defined customer experience model. Pine & Gilmore's was a theory built on the foundations of such seminal texts as Carbone and Haeckel's “Engineering Customer Experience” (1994), and Schmitt & Simonson's Marketing Aesthetics (1997).

It was a developing concept that was still in a stage of immaturity at the end of the twentieth century. But, in the years that followed, the idea of customer experience creation and its place in modern economic theory would be further refined and developed by such authors as Berndt Schmitt (2003), Meyer & Schwager (2007) and Jeanne Bliss (2015). Today, it has gained enough global traction that it is being developed, marketed, and sold by such leading business consulting companies as Accenture and Bain & Company.

The boundaries of customer experience, however, remain elusive. Despite decades of research, discussion, and theory, businesses continue to struggle to define the essence and structure of a sustainable, replicable, and profit-driving experience.

In a 2004 article “The Experience Economy and Commercial Experiences,” Poulsson and Kale aptly commented that while examples of commercial experiences are prevalent and numerous, the definition of what defines that experience - and the components therein - is often vague and far less easily qualified.

And the struggle lies in the fact that customer experience is a concept that relies completely on the psychological, the memorable - the perception. It is context-dependent, emotionally-charged, and occurs between two distinct human entities: the consumer and the business (or provider).

To structure theoretical research on customer experience, then, or to seek a way to measure its effect, any researcher must distinguish between, first, consumer perspectives “which draw on psychology and sociology to explore the emotional, symbolic, and transformational significance of the experience,” and then managerial perspectives “which focus on how organizations deliver experiences as part of an added-value offer.” customer business client immaturity

Rational must meet emotional. And both the creation of the experience by management and the experience within the customer experience by the consumer must be taken into account.

In order, then, to develop a meaningful discussion around customer experience, the context of that experience must first be defined. The researcher must offer an understanding of the development and perceptions of that experience from the perspectives of the business and of the consumer, and then must offer a way to measure that experience to ensure that what is being provided meets the needs of both parties. Context must be defined and the scope limited to a particular segment or industry to ensure a comprehensive understanding of the ideas put forward.

To that end, we will be confining our discussion of customer experience within the limits of two parameters: (1) the burgeoning marketing trend of glocalization; and, (2), the ways in which glocalization and the tourist industry combine to affect the perceptions of an American tourist abroad.

We choose the tourist industry because it in an industry focused heavily on experience, and one which has long been at the leading edge of service and experience development. To remain competitive, each tourist destination must leverage its network of product and service suppliers to create a differentiated experience and win over specific visitor segments. Businesses are increasingly forced to collect and interpret market data that will drive the desired visitor segment to their doors - a resource intensive task that often favors the global corporation over the native small-and-medium sized businesses.

Over the decades, a struggle has thus developed between the local and the global - between what had long been defined as a strict dichotomy of “indigenous, autochronous, and authentic,” versus “foreign, top-down, and hegemonic.” Businesses looking to expand internationally have been forced to choose within this either/or paradigm as theorists have touted the inflexible divergence of globalization and localization theories.

And while - from a pure business perspective - globalization often seems the most rational choice, the onslaught of theory around customer experience and a renewed focus on consumer perception have led global businesses that used to focus strictly on standardization and economies of scale to consider ways of accounting for local flavor. Executives have begun to look at how they can combine the financial benefits of a global experience with the emotional benefits of a more native model to drive customer loyalty and retention in international markets.

It wasn't until the 1980s, however, when sociologist Roland Robertson coined the term “glocalization,” that businesses found the international expansion strategy they had been looking for. “Glocalization,” Robertson offered, created “synergies across time and space, thus resulting in an amalgamation across cultural, national, and regional divides, as well as across historical (dis-) continuities.” In other words, strategists were no longer expected to draw a hard line between global hegemony and local autonomy. There was, finally, room for both in the boardroom and around the world.

In the decades since Robertson's radical redefinition of the global-local paradigm, “glocalization” has gained global prominence in an almost synchronous lockstep with increased customer focus. Its attraction, understandably, lies in its fusion of globalization and localization - its ability to allow for global similarities to exist alongside localized differences.

“Glocalization,” explained Drori, Hollerer, and Walgenbach (2013), “touches upon imbued meanings: global models instill agency into empowered locals who, in turn, enact and thus reinforce global scripts.” The global and local are not in conflict, they argue, but can, instead, exist in relative harmony.

Glocalization, customer experience, and tourism are thus inextricably connected, and, in the pages that follow, we will attempt to look at customer experience through a funneled and deliberately refined lens. We will look, first, to define the broader picture of glocalization and its application to business international expansion strategy. From there, we will delve into the specific ways in which international service companies leverage glocalization as they expand abroad, which will, in turn, allow us to narrow in on the relationship between glocalization and the tourist industry, as we look to how a glocalized business model affects the perceptions of American tourists abroad. And, finally, we will attempt to define how these perceptions affect the memory of (or customer experience provided by) these international service companies.

Along the way, we will outline the various major theories on measuring customer experience, explore the limits of those theories, and attempt to make order of a somewhat nebulous and chaotic field.

Our paper will conclude with an application of theory to the example of the ways in which Uber, one of the world's largest and most successful ride-sharing companies, has glocalized its service offerings abroad. Through a survey of both Uber employees and American tourists, we will present data that will allow us to measure the effects of glocalization on the customer experience, and that will give us insight into the American perception of Uber abroad.

Our goal in all of this will be to study what it is that defines a successfully glocalized customer experience strategy in the service industry, its effect on international expansion plans, and its relevance to home-market consumers living in or travelling through an international market.

Throughout our research, we will be operating from the hypothesis that glocalization actually enhances the customer experience of the American consumer abroad, and we will be looking to develop a platform upon which further research into this field can be accomplished.

The object of our research will be glocalization - its definition, theory, and application. The subject will be the effects of a company's choice to glocalize on customer experience perception.

A discussion of the known limitations of this research will also be provided, alongside a brief introduction to future paths for enhancement and validation of our theory through additional research in this field.



Theoretical Section

Internationalization: A Choice Between Globalization, Localization, and Glocalization

a. Global versus Local - An International Dichotomy

In his 1960 thesis “The International Operations of National Firms: A study of direct foreign investment,” Stephen Hymer argued that there were two main reasons for a company to invest in operations abroad: the first being to remove competition in foreign markets, and the second to maximize the assets and resources available in foreign markets through heightened control and ownership.

In the decades that followed the publication of this theory, the international expansion of companies' operations became increasingly commonplace. Expansion into international markets was core to the majority of western growth strategies, and companies looked to foreign markets as a path to new resources, higher economies of scale, and a more diversified consumer base.

Aided by significant enhancements in information and communication technology, the 20^th century saw a dramatic increase in the number of American companies operating abroad. The result was “a new commercial reality - the emergence of global markets for standardized consumer products on a previously unimagined scale of magnitude.” Companies focused on expanding as quickly as possible on a top-down model that standardized quality, distribution, marketing, and management to the tune of lower costs and higher profits.

From this trend emerged, quickly, a theoretical split between the concepts of a multinational corporation and a global corporation. “The multinational corporation,” as observed by Theodore Levitt in his 1983 publication of “The Globalization of Markets” “operates in a number of countries, and adjusts its products and practices in each - at high relative costs. The global corporation [however] operates with resolute constancy - at low relative cost - as if the entire world (or major regions of it) were a single entity; it sells the same thing in the same way everywhere.”

It was a strategic choice between the two - a dichotomy of strategies that would come to define the final decades of the twentieth century. Theorists like Levitt argued that the world's needs were becoming inevitably and irreversibly standardized and that the only way to succeed was to ignore the local consumer (who could never be presumed to know his own wishes) in favor of a rapidly commoditizing (and more sensible) future. Multinationals, however, persisted in the belief that they could dig further into a new market by seeking to first understand indigenous needs, trends, and traditions. And although localization came at a higher cost, executives believed that the initial investment would be returned tenfold in heightened customer loyalty and retention.

But contemporary theory, backed by common sense and the bottom line, argued heavily against this locally-inclined line of thinking. The multinational company, it was argued, was naïve in failing to question whether foreign markets could be adapted to fit the mold of a standardized offering, as people were becoming more and more eager for the conveniences - and prices - of the modern world.

b. Glocalization - A Theoretical Merger

According to popular economic theory, therefore, globalization was the future, and localization a medieval, outdated past.

Until, that is, the moment when sociologist Roland Robertson coined the term “Glocalization” in the 1980s to reflect a phenomenon that was already reverberating around the world: “the simultaneity - the co-presence- of both universalizing and particularizing tendencies.”

The definition of “globalization” was, according to Robertson and other like-minded theorists, as it stood, inherently flawed. Economists, Robertson argued, were defending a simplistic and unsustainable concept of globalization as a process that completely eclipsed any iteration of the local, including the more modern concept of “large-scale locality.”

But globalization, he believed, was not so simplistic, and actually seemed to coexist inherently alongside the concept of localization as opposed to fighting against it. By forcing a divergent dichotomy between globalization and localization, Robertson feared, theorists were ignoring what was actually occurring. They were overlooking reality in favor of theory, and were making it a case of either/or instead of a powerful combination of the two.

And by 2013, Drori, Hollerer and Walgenbach were arguing this same idea in their publication of Global Themes and Local Variations in Organization and Management. “Globalization,” the authors wrote, was in reality a process that combined both the global and the local and “interlace[d] worldwide similarity with cross-national variation.”

The modern world, it seemed, had developed far beyond global or local. Instead, the local was being defined in the context of a globally homogenizing nationality, and the global was, in fact, little more than a “collage of local practices, behaviors, and tastes.” The two were inextricably intertwined, and the new reality was that of a “glocalized” international business.

In fact, by comparing the definitions of each theory (globalization, localization, and glocalization) as presented below (fig.1), we see an inherent interconnectivity and interdependency between the two extremes that once lay on either end of the strict paradigm:



(Figure 1, Differences between Globalization, Localization and Glocalization)

c. Glocalization - Its Role in Company Strategy

With this introduction of “glocalization” to the theories of international expansion, companies were now left to decide just how much they wanted to localize, and what percentage of their operations would remain standardized to drive cost efficiency.

Research showed that eighty percent of all human behavior around the world was the same. It could be predicted, relied upon, and modeled globally. The other twenty percent, however, was locally driven, and according to global market researchers at Lionbridge (a US-based company specializing in translation and localization) it is that twenty percent that makes a difference.

Some companies, however, chose to ignore the twenty percent in favor of the path of least resistance. Executives marketed the same product or service globally without taking into account local needs or preferences, believing instead that a full convergence of tastes (flavored in large part by Western influence) was imminent. These companies focused heavily on bottom-line reductions, leveraging the cost benefits of standardization while relying on the dissemination of international brand awareness to drive revenue growth. There was one brand, one product or service, and one experience no matter where in the world you chose to interact with the company.

On the opposite end of the spectrum, however, were the companies who believed in the idea that investing in and catering to the twenty percent of differentiated human behavior would be the key to successful internationalization. Instead of standardizing their products, they adapted, making changes that reflected the particular culture, language, taste, or needs of a new market, but often at high cost.

“Too often,” wrote Lionbridge content contributor Margot Lester, “we create products and expect customers will approach them in the way we think they will.” We choose the bottom line over the customer experience. The companies that chose to “glocalize,” however, subscribed to the understanding that even as social, economic and political interdependencies are making the world more global, we, as a people, are still very much emotionally embedded in the traditions of our culture and yearn for the comfort and predictability of our local surroundings.

These companies found that they could localize any part of their original offering in order to gain customer affection and drive loyalty. They leveraged a bottom-up model that allowed the company to “glocalize” through a distribution of responsibilities to local market leaders. And then they incorporated the local and the global into the heart of their business models.

d. Why Service Companies Glocalize

Service companies, in particular, found the theories of glocalization to be relevant to the internationalization of their business model.

Inherent within the service industry is the requirement for direct interaction between producers and consumers before service can be rendered. Consumers who find themselves underwhelmed or misunderstood during the initial interaction can walk away without ever making a purchase. This requirement then puts increasing pressure on service industry leadership to understand how their customers perceive the experience of a company's services abroad and to ensure they are creating the most valuable experience possible.

An immediate impediment to these perceptions is the fact that most foreign consumers tend to exhibit an inherent mistrust of global corporations. Any service provided, therefore, must not only be relevant and transferrable to the foreign market, it must also offer a sense of having provided a tailored experience, unique to the needs and wants of the target consumer.

Research shows, however, that service industry companies who can provide a successfully glocalized experience have a unique advantage in foreign markets. Localized aspects of these companies need not be costly or labor-intensive as long as the right aspects are localized from the start. Once initial barriers have been broken down, consumers have been shown to adapt the offering to fit into the context and needs of their culture, ascribing meaning to a product instead of a product to a meaning. In other words, the most successful service companies need localize just enough to penetrate a market, but retain enough global process to leverage the benefits and cost savings of a standardized offering.

Additionally, if a global service company can overcome the inherent mistrust of foreign corporations in a target market, it is often able to leverage a number of other significant advantages in comparison to fully localized offerings. Research suggests that first-moving global brands have the innate ability to set the standards for service glocalization in a new market. By sheer value of the contrast these businesses provide with local offerings, glocalized corporations can shape cultural expectations and ideals, and introduce new standards of quality, taste, and functionality beyond what was previously offered in the market. This, in turn, allows the company to carve out a niche and define customer experience before the customer knows enough to make his/her own demands.

e. When Service Companies Fail to Glocalize

Perhaps one of the strongest arguments for why service companies glocalize, however, is in the consequences around what occurs when they fail to take local market preferences into account.

Enthralled by the idea of global expansion through standardization that propagated much of the mid-to-late 1900s, many service companies initially chose a strategy of globalization when moving abroad. It was fast, efficient, and seemed to generate far less risk than a more localized approach.

The unique nature of service companies, however - and the critical need to provide a positive interaction with a customer before ever making a sale - meant that the service model, not just the product, had to be taken into account. Stepping beyond the more transactional nature of a product or good, a service was often more personal - an exchange between two people or businesses - and thus it had to be accepted by the local market, interacted with, and then leveraged to produce the eventual sale.

Consistently, brands found that the rest of the world did not always conform readily to the same expectations, buying habits, or decision-making processes as their home consumers. Cultural differentiators did not always translate appropriately in the interaction between a producer and a consumer. And an easy smile in one culture could be seen as a fake ploy in another. In other words, cultural peculiarities around how services were provided did not map as readily as a good or commodity. Marketing and sales strategy glocalization meant more. And when companies failed to recognize that fact, the results were often disastrous, and frequently resulted in the eventual exit of the business from a foreign market (or markets) altogether.

One prominent example of such a dissonance in the cultural translation of service can be found in Walmart's globalized entry into the German market in 1997. A US-based company whose entire business model was focused on cost leadership and undercutting the competition, by 1990 Walmart had grown to be the largest US retailer by revenue. Then, secure in its profits at home and hungry for more, Walmart began to turn an eye to international locales for continued expansion.

Walmart's first international location was in Mexico in 1991. From there, the company expanded into South America, and finally into Europe. By the time Walmart reached Germany in 1997, it was a company fully confident in the success of its globalized strategy.

Within months, however, Walmart realized that the strategies that had worked well in the North and South American markets were not the strategies that would earn fiscal success in Germany. In fact, Walmart's globalization strategy seemed to have quite the opposite effect, particularly in its standardization of service.

A company that leveraged tradition and teamwork to create its Western-facing customer experience, Walmart asked its German employees to follow the same service guidelines as in other parts of the world. Two standards, in particular, would be critical to their story: (1) Walmart asked each of its employees to greet customers with a warm Walmart smile in the stores; and, (2) to start the day, Walmart asked teams to share in a ritualistic teambuilding chant.

But while smiling store clerks made a powerful impression on consumers in the Americas, German shoppers found the inauthentic smiles off-putting and overtly flirtatious. In fact, male shoppers often interpreted the smiling female clerks as having made sexual advances in the store.

At the same time, the ritual morning chant - developed in the United States to encourage teamwork and offer a sense of in-store unity - came across a “strange” and “creepy” in the German stores. It was more off-putting than inclusive, and it left many Walmart employees feeling uncomfortable and disoriented.

The advantages of full-scale globalization were falling flat when applied to the traditions and needs of the German culture. Those services that served to boost morale and drive sales in the west were actively reducing revenue and brand popularity in this new market.

By failing to take into account any local preferences, and by pursuing a fully globalized strategy, Walmart lost any advantage it may have had in cost leadership and global brand marketing in the region. And by assuming that every aspect of its business model would work anywhere in the world, Walmart eventually lost millions of dollars trying to recover its reputation in Germany before pulling out of the market completely in 2006.

In the years since this experience, Walmart has completely revised its international expansion strategy to take on a more “glocal” approach, working to understand the needs and values of local markets before entering.

And, consistently, the Walmart case has proven to be the rule - not the exception - for service companies abroad. Global success has been granted, consistently, to those companies who are willing to cede authority over certain aspects of the business to local leaders, a theme played over and over again across the likes of such global brand leaders as McDonalds, Dominos, Airbnb, Uber, and Starbucks.

f. But Does Glocalization Really Make a Difference?

But is it really glocalization that is driving these service companies to international success? Does glocalization actually have an impact on the customer experience? And if so, is that impact on customer experience driving increased revenue streams and profit margins?

And then, if that growth can be proven, is the impact large enough to justify the additional costs associated with localizing components of the business model?

These are the questions that have been troubling American boardrooms, executives, and Chief Marketing Officers as they review the possibilities for and potential of international expansion. And it is to the question of customer experience that we will turn next.



Understanding the Customer Experience

First and foremost, in order to understand the potential benefits of following a glocalized expansion strategy-- and, further, to understand the impact of that strategy on the customer experience - we must define the ever-elusive concept of “customer experience” as it applies to our research.

In “Engineering Customer Experiences,” Carbone and Haeckel defined customer experience as the “`takeaway' impression formed by people's encounters with products, services, and businesses - a perception produced when humans consolidate sensory information.” According to the authors, every encounter is made up of a series of “clues” that are meant to define how we feel about/react to/understand the impression of any given moment. These clues combine to form an overall perception of what occurred and can leave us with either a positive, negative, or neutral feeling.

In order to ensure a positive impression, and thus encourage repeat business, companies must learn to manage these “clues” from the beginning to the end of the customer experience by first “deliberate[ly] setting… a targeted customer perception” and then designing a route along which the customer travels to arrive at the “successful registration of that perception in the customer's mind.” (See Exhibit 1 for a visual portrayal of Carbone and Haeckel's path to engineering a customer experience).

And the design of this path, according to Carbone and Haeckel, comes down to three basic principles: “differentiate the essential from the optional, and what is likely to work from what is not,” create a “robust methodology,” and establish a “symbolic mechanism for communicating the customer experience design throughout the organization.” By following this formula, the authors asserted, a company could ensure that they were meeting and exceeding the minimum needs of a customer, that there would be a process for implementing a strategy to meet those needs, and that everyone in the company would be united in ensuring that that strategy was successful.

The pair's work in the early 1990's was revolutionary in its assertion that customer experience was something to be designed and implemented at the boardroom level, and would soon go on to inspire additional research and development from contemporaries in the field. In 2003, Bernd Schmitt, founder of the Center on Global Brand Leadership and Professor of International Business at Columbia Business School, set out to define his own theory of “Customer Experience Management” as a term that “represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service.” He, too, believed that customer experience was a strategy that could be managed to the differentiation and future success of businesses in any industry.

In Schmitt's model, however, he separated the creation of Customer Experience strategy into six major stages: Assess needs and segment customers, Map the journey for customer segments, Identify the desired experience, Design the brand experience, Structure the customer touchpoints, Measure and develop. And though many of the stages closely resembled Carbone and Haeckel's original three design principles, Schmitt expanded on several key points to create a more comprehensive path. While he, too, emphasized the importance of understanding and designing strategy around the needs of each customer segment, and disseminating that strategy throughout the organization, Schmitt also called for the mapping of the customer journey prior to the identification of the desired experience.

By understanding what customers were facing currently, Schmitt believed, executives could design a more structured and comprehensive plan moving forward that would take existing pain points and successes into account. Schmitt also encouraged executives to incorporate a way of constantly measuring the success of their customer experience strategy and developing changes or additions as customer needs and segments changed over time. By associating customer experience strategy with a more cyclical structure, Schmitt left room for future research and expansion upon his theories that was not as evident in Carbone and Haeckel's preliminary work.

Haeckel, Carbone, and Schmitt were among the first to see the field of customer experience as the building of an ongoing process. Future research would then go on to expand upon and re-create their initial definitions, developing the methodology as the theory as a whole began to gain traction in boardrooms around the world. Over the years, customer experience would come to be defined as “an interaction, or series of interactions, between a customer and a product, a company or its representative that lead to a reaction,” “events that engage individuals in a personal way,” and “the comparison between a customer's expectations and the stimuli coming from the interaction with the company and its offering in correspondence of the different moments of contact or touch points.” Each new definition stressed a unique aspect of the customer experience and hoped to provide executives with a clear way to address the needs of their individual consumers.

Today, however, we will be working from the definition provided by Forrester Research's Customer Experience Team. Simply put, Forrester has asserted that customer experience is “how customers perceive their interactions with your company.” It is a definition that is simple yet comprehensive, short but powerful, and which provides the foundations needed to discuss the glocalized customer experience in terms of the modern evolution of the experience economy. It is also one that has been received openly by other modern industry thought leaders, and has the reputation of having been provided by one of the leading research companies in the field of customer experience today.

a. Perception of Customer Experience in the Context of Glocalization

To create and manage the customers' perceptions - and thus, in adherence to our definition, the customer experience - any glocalized international expansion strategy must deliberately personalize certain aspects of the customer experience in a target market. By making a product or service offering relevant to the cultural, social, linguistic, or political needs of a market, brands create a distinctly memorable advantage over those companies pursuing a “one size fits all” global strategy.

“Global brands that can seamlessly connect with every customer in each market in an effective, authentic way, regardless of how many countries, languages, or customers they reach, hold a `glocal' competitive advantage over their simply `global' competitors,” writes Managing Director of EXLRT, a global content and language marketing technology agency.

And that connection is important. The stronger the connection, the stronger the memory, and the greater the perception of the overall customer experience. The success of those connections, however, lies almost entirely in a brand's ability to create the same natural sense of understanding and cultural empathy in a foreign market as they do at home. Multiple aspects of customer experience, including translation, visual content, functionality, and adherence to cultural sensitivities, must be taken into account. To ensure these aspects are localized authentically, however, and do not ring false in the target markets, glocalization needs cannot be determined through a top-down approach from the corporate level.

Instead, innovation must be entrusted to the local leaders in a target market - those who are on the ground, and who have a full understanding of local culture and needs. These leaders will in turn work within the parameters of an overarching global script. And it is only by thus implementing a bottom-up approach to international expansion that companies can fully glocalize the customer experience of their offerings.

Once that responsibility has been transferred, however, local leaders must be imbued with a way to measure the effects of glocalized practices on the customer experience and on the consumer's overall perception of the brand. There must be a way to determine what is working, what is not, and what should be adjusted back into a more global strategy.

Customer experience metrics, however, do not fall into the same clean boxes as sales or activity metrics. There is no “one number” that can determine how your customers perceive your brand - no easy answer as to how well you are engaging your customer or to the quality of experience you are providing.

Customer experience is based entirely on a customer's perception of your brand; the memory they take away from an interaction with your company. And each perception and memory can be influenced by a myriad of uncontrollable factors - including emotions, thoughts, and a pre-disposition to biases - that make their way onto the stage.

Forrester researcher Maxie Schmitt-Subramanian suggested that any one customer experience is made up of a combination of three different variable - and critical - categories: (1) How the customer describes the event; (2) how the customer perceives or remembers the event after it has occurred; and, (3) whether the customer's behavior is consistent with the professed perceptions and descriptions.

In the below framework (fig.2), Schmitt-Subramanian further defines examples of these variables within each of these measurement categories, and offers a visual of the truly qualitative nature of the customer experience:



(Figure 2, Framework Of The Relationship Between Perception, Descriptive, and Outcome Metrics)

Given the qualitative nature of these metrics, then, the margin of error in customer experience measurement is undeniably quite high. And the ways of tracking, collecting, and analyzing this information must be systematically reviewed and adapted to ensure companies are making decisions based off of the most relevant data available.

So how do companies measure perceptions of their glocalized customer experience? How do they ensure that their spending and their trust in local leaders to innovate is truly paying off?

b. Measuring Customer Experience

Theorists have struggled for years to define the best way to measure and benchmark customer experience across industries without success.

Unfortunately, however, until customer experience can be measured effectively, it is virtually impossible for companies to prove enough value-add to qualify their customer experience as a differentiator.

Pine & Gilmore wrote, as far back as 1989, that “before a company can charge admission, it must design an experience that customers will judge to be worth the price.” The key components to this, they believed, would be excellent and differentiating elements of design, marketing, and delivery. But with revenue growth dependent upon such words as “excellent,” “differentiating” and “worth the price,” how does a company quantify the unquantifiable?

In further development of the theory, researchers Poulsson and Kale (2004) assert that the value of customer experience can be measured based upon the “intensity” of the experience, and the “feeling of enchantment associated with the experience,” and should, therefore, be assessed against an “experience scorecard.” But, though slightly more quantifiable, this theory continues to leave much to the vague notions of “intensity” and “enchantment,” an issue Poulsson and Kale address with the admittance that empirical research was needed in order to understand the impact and prioritization of each element within and across experiences.

Years later, Helder Ferreira and Aurora A.C. Teixeira (2013) took a more systematic approach to customer experience measurement in their article, “'Welcome to the Experience Economy': Assessing the influence of customer experience literature through bibliometric analysis.” Though consistent with previous theory in that the authors believed that the nature of customer experience favored a more qualitative approach, Ferreira and Teixeira chose to use more quantitative bibliometric techniques to review customer experience literature. Their goal was to find patterns in past attempts to measure customer success and to better understand the evolution of and context within those patterns.

Through their research, Ferreira and Teixeira uncovered several variations on customer success measurement, including Shostack's 1984 theory of blueprinting, Kingman-Brundage's 1991 “service mapping” technique, Stauss' 1993 “service incident analysis,” and Johnston's 1999 “service transaction analysis.” In 2009, Brakus et al developed a brand experience scale that included four different dimensions: sensory, affective, intellectual, and behavioral. And then in 2010, Chang & Horng published a “multidimensional scale of experience quality” that revolved around five core dimensions: physical surroundings, service providers, other customers, customers' companions, and the customers themselves.

The eventual conclusion, however, came down to the observation that “scholars from a wide range of fields, including marketing, philosophy, cognitive science, and management practice have categorized `experience' in various ways, leading to a multiplicity of definitions, sometimes with circular references, but none of which were really able to cover its essence holistically.”

How, then, were theorists - or board members - to quantify and benchmark the customer experience? The only true consistency across each of these measurement methods seemed to be the assertion that customer experience is qualitative in nature and, therefore, must be assessed across a variety of industry- or company-specific components.

In recent years, theorists have begun to embrace this notion of customized and non-standard application with increasingly complex scales, formulas, and survey techniques built to offer insight into the overall customer experience at an industry-specific level. And, though undeniably incomplete, and perhaps under-developed, these theories have found traction. One recent method of customer experience measurement that has been widely regarded by customer experience theorists and practitioners alike is the Forrester Research “7 Steps to Successful Customer Experience Measurement Programs.” While it, like its contemporaries, places the onus of development on the company or industry, it does differentiate itself through the incorporation of more quantitative data into the theory. It offers a comprehensive and flexible approach that allows for the summation of customer experience aspects to a final conclusion.

Because of this differentiation, as well as Forrester's current standing as a Customer Experience Industry Thought Leader, we have chosen to leverage the Forrester Research Method in the analytical portion of our paper, and thus describe its components below.

i) Forrester Research's “7 Steps to Successful Customer Experience Measurement Programs”

According to Forrester, any measurement of customer experience must take into account both qualitative and quantitative data, to be collected and analyzed by funneling the data through three refining stages

1) Choose your customer segment - A customer segment is defined by dividing a customer base into various groups based on similarities in how they should be marketed (i.e. age, gender, interests, spending habits, etc).

These segments should be prioritized based on level of profitability, strategic growth potential, and their influence in the marketplace.

2) Choose the level of experience you are hoping to measure - Forrester divides the relationship between companies and their customers into three different levels: the overall relationship, discrete customer journeys, and individual interactions.

A visualization of these levels, as provided by Forrester in the context of defining the relationship between a customer and a generic credit card company can be found in Figure 3 below:

(Figure 3, Measure Experiences at the Relationship, Customer Journey, and Interaction Level)



3) Choose the metrics you want to report on - Once the customer segment has been defined and you have determined which level of the customer relationship you would like to explore, the final stage of the funnel is to determine what customer metrics you will use. The selection of metrics should be immediately relevant to the data you wish to obtain, should correspond to the level of information you have access to, and can be broken out into three categories: perception metrics, description metrics, and outcome metrics. A successful customer experience study will leverage a combination of all three.

A table outlining the definitions of and examples of these metrics is provided in Figure 4, below:

(Figure 4, Companies Should Use Perception, Descriptive, and Outcome Metrics in CX Measurement)

Once the measurement needs have been sorted and defined through the lens of the three filters outlined above, a data collection strategy (step 4) can be designed and implemented.

In this way, it will be possible to complete a more quantitatively relevant analysis of the customer experience, to understand and quantify the value behind the experience economy, and to provide companies with a benchmark for customer experience success at home and abroad.



The Role of Glocalization in the Perception of International Service Companies' Customer Experience

In the decades between the publication of Pine & Gilmore's “Welcome to the Experience Economy” and today, the concept of customer experience has evolved from a “nice to have” to a “must have” for many businesses in the western world. With the current speed of product and service commoditization, the ability to set the stage and provide a memorable experience has become the differentiator, the competitive edge, and the key to continued growth and customer retention.

The past three decades have also seen a significant increase in the number of western companies expanding into international markets. Driven by the commoditization and saturation of home markets, and aided by information and technology enhancements, companies are now seeking to leverage efficiencies, resources, and economies of scale in new locales.

In many respects, this trend of international expansion has been dominated by the west. And as these companies have targeted new markets around the globe, they have taken their customer-centric business strategies with them. Diverging from the standard paradigm of “globalize” or “localize,” these companies have aimed to find a way to both win customer loyalty in new markets and still maintain an efficient bottom line.

It is to this end that “glocalization” or “providing a global offer (brand, idea, product, service, etc.), while taking local related issues into account,” has allowed companies to leverage the global-local spectrum and drive customer experience in a modern, international context.

As they have glocalized, however, companies have realized that there are multiple aspects of the business, strategy, or product offering that can be localized or globalized as needed. And, while embracing customer diversity is relatively simple, understanding the impact of specific elements that are foundational to local diversity is much more difficult.

Business leaders are beginning to seek ways to measure the success of the glocalized customer experience they are providing and to better understand how they are setting the stage and creating memories for their consumers.

Theorists and board members alike are evaluating and re-evaluating the ways in which their glocalization efforts are affecting the consumer's perceptions of the brand's customer experience, and they are finding that, when done correctly and delivered in the right context, glocalization can have a powerful (and positive) effect on consumer behavior and sales.

As will be portrayed in the following analytical analysis of Uber's glocalization efforts abroad, glocalization, in fact, allows businesses to overcome the inherent mistrust of global corporations in foreign markets, and to earn customer loyalty by letting the company walk in the shoes of the consumer. It allows companies to “think global, act local,” and reap the benefits of both. And it is the truest form of globalization in the context of the modern world.

Service companies like Uber have had to learn the lessons of glocalization quickly in the quest for international expansion. A thorough understanding of local trends and their evolution within the context of global markets is not as optional as once believed. And the key to success lies in the ability to “be unique, be original, but be simple enough to scale.” It is then those companies who glocalize quickly, effectively, and from the bottom-up that will be the companies who succeed in foreign markets across the globe.



Analytical Section

In an effort to expound upon the theories presented above, our reasons behind selecting Uber as an international service company were threefold:

(1) First and foremost, in the less than a decade since its founding, Uber has transformed from a fledgling rideshare startup into a global brand that now boasts a presence in over 633 cities worldwide - an expansion that has coincided dramatically with the growing popularity of glocalization theory.

(2) Secondly, Uber's growth has been unprecedented. The company had completed over 40 million rides per month and had captured a market share of 77% in its US home market by December 2017, and continues to grow and capture market share in the global arena to this day.