Also known in industry jargon as "L10n", localization comprises all processes used to modify a product or service so that it can be distributed in international markets. This modification relates not only to the target market’s cultural and formal standards but also, and most importantly, to its economic, technical and legal conditions.

Localization of a product is most successful when the product is already freed from cultural norms during its development. This process is known as internationalization or "i18n". A non-internationalized product requires modifications or new developments as soon as it is localized – for example enlarging all dialogue boxes in a localized user interface because the target language is longer than the original text. Localization and Internationalization are part of the strategic corporate task, Global Content Management.

The proper processing of linguistic content (the translation) plays an all-important role in localization. The more the user has to interact with the product, the greater should be the effort required to localize it.

Essentially, as a manufacturer you have three options for localizing your products or services: you use your own personnel, employ a distributor, or contract with a Localization Services Provider (LSP). Each method has its advantages and disadvantages – choosing the right method depends on your strategy and marketing.