Introduction
This article first talk about the standardization of products in the international market place and the issues associated with not customizing products. The report demonstrates the necessity of shaping the product value proposition according to the needs of each market place by investigating on two real case studies; Starbucks and EuroDisney.
Secondly this article discusses in regards to the opening of foreign investments in India and the on how companies compete in the Indian market place with the help of Coke & Pepsi case study and the Fair and Lovely case study.
The case studies are analyzed and compared by applying elements of the international marketing task diagram (Cateora et. al, 2012).
Case 1 and 2: Starbucks and EuroDisney.
‘As current markets become saturated, new ones must be found. With globalization, companies would require to provide standardized goods to all countries rather than customized products for individual countries.’ as stated by Theodore Levitt (1983).
In the case of Starbucks, the domestic market in the USA and Canada were reaching its saturation point in the mid 1990s, where they began to cannibalize the sales of existing cafes with the introduction of new ones. The company operated more than 10,000 cafes across USA and Canada, which along with coffee offered high-speed internet access at 1200 of their cafes. Starbucks had successfully turned coffee into premium commodity (Vishwanath & Harding, 2000) with its $3 lattes. With regards to the down turn in economy, people started to cut back. With saturated markets and the slow economy, the company wanted to increase their revenues by expanding into the European markets.
As in the case of EuroDisney, they already had theme parks running suc...
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The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
However, at this point it is essential to note that Starbucks’ products are premium products and its customers are also the premium customers who fi...
The Millennium report advocated that the greatest challenge we face today is to ensure that globalization becomes a positive force for the entire world's people, instead of leaving billions of them behind in foulness. Inclusive globalization must be built on the great enabling force of the market, but market forces alone will not achieve it. It requires a broader effort to create a shared future, based upon our common humanity in all its diversity. Today the most significant changes in the world economy over the past decades are the upsurge in globalization of markets and industries. There are numerous forces that have greatly contributed to the rise of globalization, factors such as reductions in multilateral and regional trade barriers, mergers and acquisition that enhance assess to new markets and competition. Globalization can be claimed to have major and crucial positive implication on the businesses today.
The world is now a borderless for companies who wish to go global to offer their products or services. The most important decision a company has to make is whether they should standardize or use an adaptive strategy to enter and appeal the market. In today’s time the competition is cut throat and the it is most appropriate that a company uses a combination of both standardization and adaptation in its approach as it would integrate the companies both regionally and globally.
Jeannet, J. and Hennesey, H. (1998), Global Marketing Strategies, 3rd ed., Houghton Mifflin Company, Boston, MA.
All sizes and types of companies can take advantage of the globalization of markets with the following potential benefits such as 1) reduced marketing cost by distributing and promoting the standard products or services globally with standardized approach (e.g. Coca-Cola and McDonald’s companies, 2) bigger market opportunities to increase revenues with access to broader coverage in the global marketplace, 3) enable more stable income with diversify markets globally for better granularity to compensate the impact of certain seasonal goods or services from only one domestic market, 4) lower risk from inconsistent or unexpected short product life cycle
In a classic Harvard Business Review article, the late Theodore Levitt (1983, p. 92) lyrically expressed his views about the globalizations оf world markets:
In internationalization, the most challenging decision faced by the company to choose between standardization and adaptation in its operations, products or services. It has been one of the important and most popular research topics since 1960s to understand whether standardization is better or adaptation for marketing mix in international marketing. The increasing role of international expansion of business across the borders has also increased the focus of companies towards the international marketing strategies. It is also a biggest challenge for companies to better understand the different needs and choice of customers due to the huge differences among the cultures from various nationalities. This leads to the dilemma in the mind of marketers to understand which strategy is effective and good - standardization or adaptation. There is a significant impact of standardization or adaptation on all avenues of business such as research & development, structure, marketing mix, production, finance and marketing mix. The attitude of a company towards the culture of a particular country in which it is going to enter or start its operations decides to choose between standardization and adaptation. Consider the different views and arguments for each standardization and adaptation, this essay critically analyze which strategy is better to choose for international marketing.
Hill, C.W.L. (2005) International Business: Competing in the Global Marketplace (5th ed.), New York: Mc Graw-Hill/Irwin
The standardisation versus adaptation debate is an old one in international marketing, as the discussion timidly started more than eight decades ago, in the 1920's, was generalized in the 1960's and continues until today (Vrontis, Thrassou & Lamprianou, 2009). Standardisation and adaptation are two diametrically opposite marketing philosophies, which both have strong advocates and the debate wasn't limited to the academic world, but it also expanded to the real, business world. In other words, it is not only a theoretical dispute, but a real strategic choice for every business that operates in an international scale. Everyday companies all over the world need to make the decision to standardise or adapt their products, their price policy or their promotion methods in order to be successful.
Govil, S. K., and Jain, R. (2013). Globalization of Markets. Advances in Management, 6(6), 65.
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
Nations, like the people who inhabit them, are all different. Some, like the United States, are at the forefront of technology and development. Others exist as third world nations, where even the most basic necessities are hard to come by. And then there are those which are in the middle, such as India. In the past 20 years, India has grown in the eyes of the global community from a rural, developing nation to a burgeoning global marketing hub. While India had much guidance from the United States and other global powers, the country has still chosen to follow its own path of business and marketing development. This paper is designed to evaluate India's current marketing environment in comparison with the marketing environment here in the US, citing both nation's similarities and differences.
Globalization encourages worldwide business. Globalization is an efficient process by which all the nations of world will commonly try to set regular universal standards & regulations (both created & recommended) which will encourage business around different nations. Business around nations or elements crosswise over different fringes is called universal business.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.