When dealing with international marketing one of the key points to consider is whether the product or marketing mix should be standardized or adapted to each local market. The question is one of the most debated in the international marketing literature by authors such as Levitt, Usunier and Hollensen. The focal point of this paper is the issue of standardization versus adaptation in the global marketing. As the first the theoretical perspectives are reviewed, in relation to Levitt’s controversial and much controversial article from 1983 ‘ The Globalization of Markets’, followed by an outline of the criticism against Levitt and the theory of standardization. The cases of two global companies McDonalds and Ikea are given and finally conclusions and further reading.
Teoretiske koncepter – standadisering versus adaption
According to Levitt – the most radical of the proponents of standardization thinking – there is much in favour of a standardization strategy. In Theodore Levitt’s article from 1983, where he discusses the globalization of markets and the standardization of products and production processes, Levitt stated, “Only global companies will achieve long-term success by concentrating on what everyone wants rather than worrying about the details of what everyone thinks they like” (Levitt, 1983). In his book from 1995 The Globalization of Markets in Global Marketing Management. Cases and Readings (Levitt, 1995) Levitt argues, first, that markets converge and as a follow consumer preferences worldwide becoming more more uniform. A global demand pattern emerges which can be satisfied through a global and standardized supply. Second, a standardization of products and marketing provides an opportunity to achieve economies of scale in production and lower costs. This leads to low price of the products thus freeing resources to product development. Standardization implies that you refrain from accommodating local preferences, and instead concentrate on developing the core qualities of the product. Whatever the preferences in a given time might be for a local custom product, consumers will end up preferring the global, standardized products, because of their basic quality and cheap price. If companies want to succeed in the global competition, they should assume that the needs around the world are basically alike.
The critics of standardisation in global marketing and production mean that cultural, political, and economic differences in different countries call for an adaption to local markets XXXXX (Boddewyn, Soehl and Picard 1986; Hill and Still 1984; Quelch and Hoff 1986; Sorenson and Wiechmann 1975; Wind 1986). XXXXX The thought of standardisation is an oversimplification of reality. There are variations between different countries in terms of consumer needs, purchasing power, commercial infrastructure, culture and traditions, laws and regulations, and technological progress. These factors are still to different from country to country so it’s necessary to adjust the marketing strategy for each market (Terpstra & Sarathy, 2000) (Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research)).
Common to the authors, highlighting the limitations of standardization strategy is that they point to the cultural differences as one of the key barriers to a standardization strategy. The key concept that has been used to describe the importance of culture in marketing strategy is “cultural bind.” This suggests that products can be more or less tied to the cultures they consumed, and that the degree of cultural bonding determines whether they can be standardized or not. Food and clothing should therefore be strongly culture-bound products, which are difficult to standardize, while industrial goods are more “culture free”, and therefore easier to standardize. In between you place the consumer durables, which are more “culture free” eg food but more culture bound than industrial goods XXXXX (Usunier 1993). XXXXX Tjek hvad Usinier skriver
Authors like Usunier (Usunier, 1997) argue against Levitts theory by commenting on the cultural aspects Tjek hvad Usinier skriver as one of the central elements that make standardization unrealistic. The cultural differences between markets are weighted more heavily than the proponents of globalization expresses particular in connection with marketing communication. The differences between markets outweigh the similarities. Both products and consumers should be seen and understood in their cultural context (Mooij, Marieke, 1998). The idea of one global theme for the company’s marketing communication is tempting, but may pose a risk to cultural and linguistic differences between the markets examined. Several brands have different image to different markets. For example Honda stands for reliability and quality in the U.S. while the Japanese market, where these properties are considered self-evident, they see Honda as an expression of speed, youth and energy (Aaker and Joachimsthaler, 1999). A sales argument would not necessarily have the same appeal in all markets, simply because the text is translated into the language market.
Other theorists XXXXX Robertson, Roland (1992), Globalization: Social Theory and Global Culture, London: Sage. XXXXX Robertson, Roland (1995), ‘Glocalization: Time-Space and Homogeneity-Heterogeneity’, M. Featherstone, S. Lash & R. Robertson, eds, Global Modernities, London: Sage, 25-44. XXXXX has tried to move beyond this dichotomous debate – a counterpart to the debate that has been conveyed in marketing literature on standardized or customized wine promotion (see Wind & Douglas ‘comment XXXXX Wind, Yoram and Susan P. Douglas (1988),’ The Myth of Globalization ‘, Columbia Journal of World Business, Vol 12 (Winter). XXXXX to Levite thesis). Here it is suggested that you talk about ‘glocalisation’ since both homogenizing (globalizing) and heterogeniserende (localising) processes is an essential part of globalization. Robertson emphasizes this when he sees the local (and location) as a fundamental rather than a conflicting part of globalization.
Thus in one sense, such as Levitt argues a homogenization of demand – but it is a demand for differences rather than according to uniform, standardized Western products. Levite mistake is to have considered culture as something that exists independently of the market, an “external factor”, whose consequences (special preferences, etc.) could and would be overcome by so-called objective product qualities. Rather, it shows above that culture is something that is demanded and also very much created the market. In the following we will therefore argue that culture is not such a market external factor, but something that is reflexive. This means that culture is not something that can be taken for granted – as if it had an unchanging essence
XXXXXXX Contingency Theory: from Product and Promotion adaption in Export Ventures XXXXXXX
Levite argumentation that companies can gain competitive advantage by exploiting economies of scale XXXXX Levitt, Theodore (1983), “The Globalization of Markets’, Harvard Business Review (May-June), 92-102. pp 92]. XXXXX On the one hand it is true that globalization leads to new market conditions, where such is impossible for companies to sit international market development ignored, though they only operate domestically. On the other hand, it has demonstrated how local companies can push their global competitors precisely by emphasizing their local roots. The fact that the local should be a quality in itself, completely overlooked by Levitt XXXXX Ger, Güliz and Russell W. Belk (1996), ‘I’d Like to Buy the World a Coke: Consumption-scapes of the’ Less Affluent World “‘, Journal of Consumer Policy, 19 (3), 1-34. XXXXX
The usual argument for standardization is still out on that brand names and products have a defined meaning which affects the customer when he / she meets these products or brands. But as so aptly demonstrated, is even Coca-Cola (king of global brands) importance universe subject to local interpretations. And even Coca-Cola’s management has said it is a multi-local rather than a global product XXXXXAskegaard, Soren & Fabian Csaba (2001), ‘The Good, the Bad and the Jolly: Taste, Image and Symbolic Resistance To The Coca-Colonization of New Zealand ‘, S. Brown & A. Patterson, eds, Imagining Marketing, London: Routledge, 124-140 .. XXXXX also express statement that Coca-Cola is “welcomed by alle XXXXX ‘Levitt, Theodore (1983),” The Globalization of Markets’, Harvard Business Review (May-June), 92-102. pp 93, a XXXXX oversight of the global on Coca-Cola are both preference for and resistance to brand as expressed through the concept of ‘Coca-Colonization’ which conceals the fact that the American / western lifestyle brand represents, not welcomed by everyone.
Stadardisation and adaption are two extremes in marketing. In his article Kellogg’s – internationalisation versus globalisation of the marketing mix (2001) Claudio Vignali cites Terpstra, V. and Sarathy, R. (1994) for writing that when adopting a “completely” localized marketing strategy only coincidental similarities exist. Completely standardised marketing is identical in all markets. Neither extreme i usually used. Coming up are some examples of how two multinational companies engaged in or have used the global market. The examples are taken from international journals, and each of them gives an insight into situations that underpins the complexity in a global marketing manoeuvre. The two cases chosen are, respectively, McDonalds and IKEA. These cases are particularly interesting because it has two large companies whose basic concept is tight concept management and standardizing for obtaining economies of scale in marketing, sales and production. These descriptions provide examples of how, despite their overall standardization strategy, they have had to have to adapt to local markets to be succesfull.
McDonalds is the world’s largest fast-food restaurant chain. It has more than 30,000 restaurants in over 100 countries. McDonald’s Corporation is the world’s largest seller of hamburgers and other fast foods. Although largely an American operation, and one of the best known American symbols, most of income from activities outside the USA. In its 2000 annual report XXXXXXXX, states that 62 percent of their annual revenue is allocated to operations outside America. This provides an interesting situation for a company that has built his empire from doing all the food produced – the same way. Hamburgers are exactly the same size, the same amount of pickles are put on each bun, and milkshakes are measured with extreme precision.
McDonald’s business model is basically the same regardless of which country it goes to, but there are local differences, the company must face. The case of McDonald’s is described in the article “McDonalds: “Think global, act local” – the marketing mix (Vignali XXXXXXXX). McDonald’s expand globally but adjusting local communities. McDonalds is standardised in large scale, but they have allso adapted to the local markets because of religious laws and culture. In Israel the burger is kosher tradition Big Macs, cheese and meat are served separately. In India they serve vegetable McNuggets and mutton-based Maharaja Mac (Big Mac) as Hindus do not eat meat. Muslims do not eat pork and McDonalds has been rewarded with a halal certificate that advocates total absence of pork on the restaurants. In its 2000 annual report is based on three elements: A) Adding restaurants, B) Improve revenue and profit existing restaurants, and C) to improve international profitability in a culturally sensitive way. This implies that a McDonald’s opening in a foreign country does more than just change its menus. It adapts its operating manual for the convenience of the local franchisee. Quote from report: Maximizing sales and profits at existing restaurants will be done through better management, reinvestment, product development and refinement of effective marketing and lower development and operating costs. Improved international profitability will be realized as economies of scale are achieved in different markets, and since it is covered by the global infrastructure. … ..
Another case of a largely standardised company is IKEA. In the article ”A standardized approach to the world? IKEA in China”,( Johannson, U. and Thelander, A., 2009), the authors give an insight into the challenges IKEA has had with global marketing in a case description of their introduction and marketing in China. IKEA has successfully standardized all marketing and roll out in large parts of the world, but China was a special challenge as the standardising concept was not possible to effectuate due to the market, and in particular, cultural.
IKEA expanded to China in 1998. The main target group are women, because they were considered those who make decisions at home. IKEA believes its core customer to be around 30 years old. This target group
are the generation born under the one child policy and they are believed to be impulsive, easy to influence, very social and committed to leading international consumer brands. In most countries image of IKEA is a company with low prices. In China the opposite is true. The main strategy has been to reduce prices and make the IKEA in China for the low cost concept (roughly) as known in the rest of the world. IKEA stores in China are closer to town than stores in other parts of the world where they are usually located well outside city centres. In China, consumers have less access to cars and the shops have to be near public transport routes. Nevertheless, IKEA built 700 parking spaces under a shop in Shanghai in anticipation of that shopping patterns would change. Another challenges for IKEA was that in China there is not a “Do It Yourself” culture. In addition China’s consumers are using the store as social venues. For them it is a pleasant environment and a completely different from other furnishings stores in China where you do not have permission to feel and touch the product. People in Shanghai shop may still be seen apparently sleeping in beds and on sofas and read a book with their feet on the tables. Rather than address the issue, IKEA staff hopes that these same people will later return as customers.
While IKEA is often seen as a model for standardization among retailers, it is clear that it has had to make significant adjustments in China. Offers an attractive and unusual product was never alone will be enough. IKEA claims that the “worst” is now getting established in China, and that experience will stand it in good
Instead, as it expands into other culturally-different markets.
IKEA will argue that it has adapted, while remaining true to its business concept. But its experience also shows that there are limits to how far a company can go with standardization, and how far along this road consumers are willing to be taken.
Standardization versus adaptation of international marketing strategy: an integrative assessment of the research empirisk To overcome the above polarization, a third group of researchers offer a contingency perspective on the standardization / adaptation debate. In their view: (a) standardization or adaptation should not be viewed in isolation from each other, but as two ends of the same continuum, where the degree of corporate marketing strategy standardization / adaptation can vary between them (b) the decision to standardize or adapt marketing strategy is tailored to the specific situation and this should be the result of a thorough analysis and assessment of relevant contingency factors prevailing in a particular market at a given time and (c) the appropriateness of the chosen level of strategy standardization / adaptation shall be assessed on the basis of its impact on company performance in international markets (Quelch & Hoff, 1986; Onkvisit & Shaw, 1987, Jain, 1989; Cavusgil & Zou, 1994) . Therefore, the challenge for the international firm is to determine what specific elements of the strategy is possible or desirable to standardize or adapt the conditions under which and to what extent.
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Konklusion og videre læsning
Konklutionen I To what extent should a consumei goods
vary its marketing
from country to countryl
â€¢ Should marketers attempt to standardize their products and marketing communications so as to minimize the costs of doing business internationally? Or should they adapt their products and messages depending on the market in which they wish to operate?
XXXXXStandardization/Adaptation of Marketing Solutions in Companies Operating in Foreign Markets: An Integrated ApproachXXXXXX
I denne artikel har vi prøvet at efterkomme opfordringen til at komme ud over at »pjaske rundt på overfladen af søen«, når det drejer sig om at studere relationen mellem marketing og kultur .Inden for marketing er indstillingen til kultur, måske ikke overraskende, dybt forankret i den vestlige modernismes tendens til at »ændre forskel til essens« [20: 80]. Imidlertid minder »skaberne« (etnoskaber, teknoskaber osv.) os om, at kultur praktiseres og konstitueres ud fra praksis ; ; [20: 81]. Endvidere bliver vi mindet om marketings rolle som et globalt system, der frembringer forskellige identitetsrum: livsstil, kultur, subkultur, etnicitet, hybridisering, kreolisering osv. I lyset af dette bliver markedsførte varer til materielle manifestationer af ideen om kultur, af »det kulturelle ideoskab«, som vist ved eksemplet med belizisk madkultur . Dette bør ikke lede os til at forveksle væsentliggørelse med væsen. Det er ikke, fordi mange forbrugere enten søger efter eller har en opfattelse af deres egen faste kulturelle identitet, at vi som forskere kan konkludere, at en sådan eksisterer, og markedsanalytikere har hidtil været tilbøjelige til at ignorere de indviklede forhold, der gælder inden for kulturelle udviklingsprocesser.
»Så længe kulturel mangfoldighed bliver forstået som en mangfoldighed af kulturer, kan kulturstuderende kun se tværkulturel kommunikation og tværkulturel sammenligning som et af deres centrale problemer« [6: xlv] . For et marketing- og forbrugerforskningsmiljø, der interesserer sig for den kulturelle dimension i international marketing, betyder dette, at komparativ analyse ikke længere er det mest indlysende mål for forskningsaktiviteter, men snarere et udgangspunkt. Kultur, snarere end en forklarende struktur af væsentlige træk, bliver et paradigme, på basis af hvilket marketingpraktikeres og forbrugeres praksis og tilgang får betydning for forskerne. Kultur er ikke et studieobjekt, men et nødvendigt perspektiv for at få indsigt i det menneskelige samfunds struktur og forandringsprocesser.