STANDARDISATION VS ADAPTATION
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.
As we have already mentioned, the historical background of the debate is deep and it may well be the oldest debate in marketing history (Vrontis et al, 2009). As soon as globalization made it possible for a firm to sell its product in more than one country, the choice of standardizing or adapting it emerged. In the first decades of the 20th century, when mass production was the rule among businesses and cost minimization their main goal, many economists argued that people in all countries have some universal characteristics, hence standardisation was the best marketing strategy (Ryans, Griffith & White, 2003). Others claimed that all markets are not the same and therefore, a certain type of product adaptation should be applied. Later, in the sixties, businesses who aimed for cost saving opted for standardisation, whereas firms that believed that markets presented a high degree of heterogeneity choose to adapt ...
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... marketing strategies, their products or campaigns or face a hostile market, because it is not easy to “impose” a new product against consumers' special tastes and needs. In consequence, companies that tend to opt for standardisation, should also have in mind the strategy of adapted standardisation, that combines elements from both theories (Vrontis and Papasolomou, 2005). Adapted standardisation's slogan is “Think global, act local” and there are voices who argue that the best choice is to maintain the brand's core the same everywhere, allowing at the same time minor changes to the uniform marketing strategy in order to suit local preferences (de Chernatony, Halliburton and Bernath, 1995). Adaptation -at least of some sort- is more than often the key to success in “difficult” markets and it must be always considered as a viable option by all multinational firms.
Global marketing is defined as marketing on a worldwide scale, or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. Marketing managers are also tasked with the responsibility of “wringing the pennies out of the activities.” Basically, they are responsible for and add value to their activities that will contribute to a higher value in the mind of their consumers. Managers must understand the role of their salespeople as marketers – they must collaborate and support them. They must work with their supply chain functional managers to accommodate international customer preferences. Communication must flow up and down the chain quickly in order to respond to emerging international marketing threats and opportunities. It is essential to monitor the firm’s global marketing efforts in a global market.
Global products like Wacom sell internationally the same exact products. “If Europe says its consumers want a product in green, let them have it. If Japan says red, let them have red. No one wants the average.” (from “Global Products” p218) That said, people are fine with average when it comes to branded products. “The lure of a universal product is a false allure” except for some kinds of products where globalization “makes excellent sense.” (from “Global Products” p218) Japanese electronics dominate globally because many general design choices
According to Aaker (1990), two-thirds of the food product found on store shelves, are brand extension, which suggest the competitiveness of the business. It becomes imperative that marketers stay abreast of the shifts: who purchase the products; focus on the ideal target or segments; involve band loyalties on planning,
Meanwhile, the company has to respond to its growing competitors and margin pressures by cutting down costs. Therefore, the previous United Cereal’s European Vice President, Arne Olsen, came up with an idea to standardize products in the entire Europe as a single Eurobran...
“Marketing across cultures”. Various sources will be used to study and analyze the chosen topic including : internet , business magazines, journals, books, etc. From all these , information drawn will help to complete the study of the topic and draw a satisfactory conclusion
Through innovation, high quality design and production, along with effective branding, European companies have an advantage - the ability to sell products at a premium price. Europe makes it, fake it then east is how much business would phrase it. This is about ...
The adaptation of the major business strategy to all the markets where the company’s products are presented.
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.
The same can be said about a localization strategy. Localization may give a firm a competitive edge, but if it is simultaneously facing aggressive competitors, the company will also have to reduce its cost structure, and the only way to do that may be to shift toward a transnational strategy. This is what Procter & Gamble has been doing. Thus, as competition intensifies, international and localization strategies tend to become less viable, and managers need to direct their companies toward either a global standardization strategy or a transnational
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
Unilever’s Dove is part of the consumer goods company’s many brands which have historically lacked global identity amongst its many products. The lack of global identity resulted in issues such as diverse marketing standards, varied product development, and lack of brand recognition by consumers worldwide. Unilever’s solution to this problem was to group similar product lines under a few recognizable umbrella corporations. This initiative gave birth to the one of the most controversial marketing strategies in the history of business.
Theodore Levitt’s contribution to marketing is undoubtedly un-measurable in any quantity, un-describable in a matter of words and unfathomable to any one who did not have the chance to meet the legendary scholar. The German moved to America after serving in the Second World War, where he received a PhD from the Ohio State University in economics. He later acted as a Professor in Harvard Business School and went on to become an editor for the “Harvard Business Review” (1985-1989). Through the captivating articles he wrote for this, he changed the face and idea of marketing completely. What could have once been summed up in four Ps; price, product, place and promotion, now had depth, dimensions and true meaning. In a few short pages Levitt had the ability to expand, alter and moderinise marketing. The economist managed all this through his compelling article “Marketing Myopia” in which he describes how too much attention is paid to the product and not enough to the consumer. This was a foreign outlook, which no longer looked at just the physical good and maximizing profits but at who was purchasing this product and attempting to entice them to repeat purchase. He saw globalisation as a future phenomenon and saw standardisation as key to global success for a business. Theodore Levitt also had a profound impact on the lives of his students, colleagues, family and friends. He influenced them to think in new ways and to push the boundaries on how they saw the world. The German-American professor contributed greatly to the world of marketing and looked at businesses, selling products and service and where and how to sell them, in a new light.
With the advent of the Internet, decreased shipping costs, and the removal of trade barriers, the world market has shrunk in such a way that everyone can be a player. While many businesses thrive solely on serving a small local area, a globalized company has the benefits of increased customer markets, gross production, and brand awareness. Take for example Coca-Cola; this multi-national corporation offers products in countries all over the world, operates in over 200 of those countries with the help of its franchisees, and is the most well-known beverage companies. It is interesting to note however, that as positive as globalization may seem, there are many negative ramifications and a large population of detractors to this movement. While increased product availability is good for profits, if a local market is inundated with imported products, locally grown or manufactured items may be squeezed out, to the detriment of the local economy. Although it is cost effective to have your product produced in another country with low wages, you are essentially taking away jobs from the people of your own country, negatively impacting your national economy. However, if you manufacture your products in a country with higher wages, you must increase your products’ prices which may be harmful to your profits. While maximizing your companies profits is always of great importance, it is essential that you weigh the pros and cons of globalization and its effects on not only your company, but the areas in which you wish to spread.
7-Eleven employed adapted global marketing, but continued to open stores in more countries. 7-Eleven has adjusted their marketing strategy for each of the international markets they are targeting, which in turn has helped them gain a larger portion of the market. 7-Eleven has benefited by this due to them being a premier player in the market for as long as they have. People love that 7-Eleven has items that are tailored to their desires. This example of extreme localization has helped them gain a competitive advantage over their
Gogel, R. and Larreche, J.C. (1991). Pan-European Marketing: Combining Product Strength and Geographical Coverage. San Francisco, California: Jossey-Bass