How global companies can market to local customers

The tables have turned. Globalism is out. Localis mi sin. What does such a vision mean for companies, especially those in Houston? Do customers pay more for only locally produced goods? Should companies try to turn their production local in a bid to raise prices? A simplistic logic goes like this: Consumers who are “localists” will pay more for locally produced goods and services out of their sense of patriotism.

According to a report by the Greater Houston Partnership, Houston shipped morethan $97.1 billion in goods and commodities overseas in 2015, leading all other metro areas, including New York and Seattle.

If localists pay more for only locally produced products and services, then Houston’ s economy maybe in trouble.

Our research, based on over 5,000 customers, shows differently. To be competitive in international markets, Houston firms do not necessarily have to have local sourcing to reduce price sensitivity among localist customers. They can maintain their globalization strategy and achieve the same result with buyers without having to take the more expensive route of local manufacturing or local sourcing. Consumers with an activated localist identity experience a sacrifice mindset, which triggers a higher likelihood to pay. Surprisingly, localist customers are willing to pay more for all goods and services, irrespective of a product’s country of origin. By activating a local identity among its consumers, companie scan reduce their price sensitivity across the board, regardless of where the product is produced. For an export-oriented economy like Houston, this is an important finding.

But global companies should remember that loca list consumers care about local issues andwill need to serve local communities through investments such as supporting local causes, education and training.