International Marketing Mix
Global Standardization of the International Marketing Mix
With increasing globalization, companies have had to enter into new markets to increase their market base, reduce challenges related to the saturation of existing markets, and increase profits. A firm can use two main international marketing approaches when expanding to a new market or culture. They include globalized standardization and adaptation of the international marketing mix. Global standardization refers to a business’s ability to apply a standard marketing approach internationally, across different cultures. This approach is used by firms that operate in more than one country (Vrontis &Thrassou 2007, p. 8). Global standardization is important for a product that has the same appeal across the world.
On the other hand, adaptation refers to changing product features to suit new customers or markets. Adaptation is also a common approach in international marketing. It is technically the opposite of global standardization, as it seeks to adapt, while standardization seeks to have uniformity of their products. They both represent product marketing in the international market arena. However, there have been debates regarding the best approach among the two. Some argue for standardized globalization, while others prefer adaptation. There are many arguments for standardization of the international marketing mix, including reduced production costs, homogeneity of products, standard quality, improved planning, control, strengthening of brand, and more convenience.
Many companies have adopted standardization globally, including Coca-Cola and Starbucks. Their marketing mix with regards to promotion, distribution, and product is similar.
There are many ways of conducting global standardization of products. Companies adopt the international marketing mix for many reasons.
Elements of International Marketing Mix
There are several components of the international marketing mix that can be standardized. Like any other marketing mix, the four major components are; product, price, promotion, and place. While all these elements can be standardized across all markets that a firm operates in, some companies may opt to standardize some elements such as the product and price and leave out the rest.
Levels of Standardization of International Mix Elements
Price standardization in international marketing implies a situation where prices for products are set as they leave the factory. Simply put, it involves setting prices of products at the headquarters. This price is then applied in all the markets in which the company operates after taking the foreign exchange rates, and variance has been put into consideration. Some companies prefer to adopt price standardization for their similar products across different markets.
Product standardization is the most common form of standardization in international marketing. This is the most important element of the marketing mix. It refers to the maintenance of uniformity of goods or services in different markets. It implies uniform features for a product, and products in different markets are identical. For example, if a company decides to standardize a product, it will be manufactured using the same processes and materials across all regions. Companies that have adopted product standardization include Coca-cola, which maintains the appearance of its products across all markets.
Promotion standardization in international marketing refers to the use of the same advertising message and packaging of products in different markets. Some companies apply this level of standardization, where they have the same advertising message or strategy for some or all of their products. An example of these companies is Apple Inc., whose advertising strategy is the same across different markets.
Placement strategy means that a company adopts different distribution strategies across all its markets and subsidiaries.
Arguments for Adopting Standardization in International Marketing
Homogeneity of Needs and Wants
One of the reasons companies adopt standardization in international marketing is that the socializing forces worldwide are similar. There has been an increase in the homogenization of needs, values, and tastes in a considerable segment of a population, which has resulted in a wider global market with similar wants and needs. The case for global standardization was made by Theodore Levitt, a Harvard marketing professor, in his article, ‘ The Globalization of Markets.’ He argued that the emergence of technology and communication across the world had triggered the emergence of global markets that are likely to receptive to globally standardized products (Levitt 1993, p. 250)
According to him, international standardization improves competitive edge in terms of effectiveness and cost. With increased technological advancement and globalization, people are getting assimilated into other cultures. Consequently, there is more worldwide demand for the same products with the same pricing and quality. The majority of modern products suit the tastes and lifestyle of most urban consumers across the world, and especially among young people. For instance, studies show that households in the USA need the same washing machine as those in Paris.
Reduced Costs of Production
Another reason why firms adopt standardization is that it reduces production costs since the firm uses the same strategies across the world. Fewer funds will be spent researching the different markets in which the company wants to venture. Existing methods are easier to implement and are likely to succeed. Logistics and other tasks are simplified, and consequently, costs are cut. Reduced production costs signify increased profits for the firm.
Moreover, standardization of the marketing mix in international marketing increases production efficiency. The production process gets more simplified when uniformity is maintained across various international markets. Less effort is wasted on production. And it gets easier to automate the production process. The same process used in one company will be used in another location (Madar & Neacsu 2010, p. 61). Since the company does not need to find new ways to innovate a particular product for every country or market, there will be increased efficiency. There is an existing production process, which streamlines production and makes it faster.
Establishment and Strengthening of Brand
A certain product can be found across different markets, especially in the international sphere. With uniform and consistent features, it becomes a recognized brand that customers can trust and identify easily (Madar & Neacsu 2010, p. 61). Notwithstanding the geographical location, the same product is delivered in the same manner and quality, which reinforces the company’s branding. Customers who have used the product are likely to recognize and choose it because they have experienced its quality in the past. For example, MacDonald can easily be identified, regardless of location, and is known for its burgers and fries. It has been able to brand itself in the international market arena through standardizing the majority of its marketing mix components.
Convenience for Customers
Standardization of products across all the markets increases convenience for its customers. There are particular product specifications with which products are developed. When a firm adheres to these standards and specifications, a customer can easily find the specific product with ease, regardless of wherever they might be situated (Madar & Neacsu 2010, p. 61). For technological products, standardization is important, as it allows compatibility of devices across the world, improves efficiency, and reduces chaos around a product.
Exploiting Good Ideas
Proponents of global standardization of marketing mix also argue that it is hard to find good ideas and people who can implement them. Thus, when one idea is found, it should be used widely since good ideas typically have a universal appeal. This perspective is mainly held concerning the creative aspect of promotional programs and advertising. It is the scarcity of significant and revolutionary ideas that encourages global standardization (Vrontis & Thrassou 2007, p. 9). It may be easy to identify innovative ideas and concepts regarding quality and other factors, but matching unique and new ideas is not easy; thus, companies opt to utilize the same strategies across various markets.
Greater Control and Management across National Borders
Since production efficiency is improved with standardization, it can be easy for management to make any plans, decisions, and sales forecasting. When operations are streamlined, management is likely to be improved, and they can have more control over the marketing process across national borders. It also improves the management structure and design since uniformity across all the branches or subsidiaries of a company. Costs can easily be determined forehand, and this may improve budgeting and forecasts.
Arguments against Global Standardization
However, opponents of global standardization, who are mainly the proponents of adopting the international marketing mix across different cultures, may argue that there are several challenges associated with this marketing program. One of the major challenges is cultural variation.
Branding a product for many countries and cultures may prove difficult since the auditory and visual signs used to express a product or brand may bring out different meanings across different cultures. For instance, the green color signifies opposition to the government in Iran, while in Ireland, it is a national color (Dimitrova & Rosenbloom 2010, p. 160). Thus, a company may pick a brand color or term that may be offensive to another group of people. It may be difficult to identify the best marketing mix that will be received well across various cultures.
They may also argue that there are other differences, such as differences in languages, race, climate, occupation, education levels, and income levels across different cultures and countries. They argue that cultural values are deeply rooted in history, education, religion, manners, and attitudes that may result in huge discrepancies among different people (Dimitrova & Rosenbloom 2010, p. 160). These factors may affect the taste and want that people have. For instance, the Hindu religion may prohibit one from wearing a certain dress or eating beef. This habit and preference cannot be changed since it is an age-old tradition. Thus, groups in this school of thought explain that it is difficult to have a consistent taste across the globe. However, the world is increasingly becoming global, and while some factors are hard to change, such as tastes, there are those people in the urban who strive to live a ‘western’ kind of life in conservative countries.
Another challenge associated with the standardization of the international marketing mix is stagnation and lack of creativity. A company will feel that it has achieved product quality and marketing and may stop looking for new ways to improve. Consequently, the company may start lagging and will fail to grow. Having different products across different cultures may stimulate growth (Rao-Nicholson & Khan 2017). Additionally, suppose the products lose confidence or have any errors. In that case, there is a risk that products in all the markets in which the firm operates will be affected or lose confidence, resulting in significant losses. If the specific process that a company has implemented fails, there is a risk that it will fail in other nations. For example, if the quality of the product fails to satisfy a certain group of consumers, the perception in the global market may change since the world is increasingly being connected by technology. Information reaches other geographic locations fast, and if the customers learn of any fault, it is hard to convince the others in another region that the products in their region are not affected.
Conclusively, there are different ways for a firm to market its products in the international market arena. The two major ways include standardization and adaptation. The two approaches are complete opposites of each other. While standardization entails uniformity of the marketing mix across different markets and cultures, adaptation entails aligning marketing to fit the needs of different markets and cultures. There are many arguments for standardization of production across all cultures and markets, including homogeneity of tastes and preferences across different markets, reduced costs, standard quality of products, strengthening of brand, and increased efficiency. There are proponents of adaptation to international marketing that argue that standardization is not applicable in other situations since there are many differences across various global markets. Nevertheless, with increasing technological advancements and globalization, people’s tastes and preferences in the urban centers are increasingly becoming similar and the gains achieved from standardizing outweigh the disadvantages.
Dimitrova, B. and Rosenbloom, B., 2010. Standardization versus adaptation in global markets: is channel strategy different?. Journal of Marketing Channels, 17(2), pp.157-176.
Levitt, T., 1993. The globalization of markets. Readings in international business: a decision approach, 249, pp.249-252.
Madar, A. and Neacsu, A.N., 2010. The advantages of global standardization. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 3, p.61.
Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing strategies in emerging market cross-border acquisitions. International Marketing Review.
Vrontis, D. and Thrassou, A., 2007. Adaptation vs. standardization in international marketing–the country-of-origin effect. Innovative marketing, 3(4), pp.7-20.
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