Global Marketing Strategy - Standardization vs. Adaptation Essay

One of the most important “dos” is for countries to pay renewed attention to the market selection which they are competing in. More precisely, these countries should focus on maximizing their opportunities where they can find cultural, administrative/political, geographic, and economic affinities. Companies use three different techniques to compete globally. These techniques are adaptation, aggregation, and arbitrage. According to Ghemaway, companies must be able to “vary products, policies, market positioning, and so on to suit local markets.” However, this method of adaptation is intended for companies which have large success and not those who have marginally. Another, important “do” is for “companies to externalize some of the costs of adaptation via franchising, joint ventures, or other types of partnerships.” Some “don’ts” are not put adaptation above all because it would get rid of competitive advantages and not to over-rely on localization. Relying too much on localization would hinder the value of across borders for a

International marketing – Ethnocentric Orientation In this kind of orientation a firm assumes that the process of home country is superior to the rest of the world. They consider that all markets are similar and assume that products and practices that succeed in home country will be successful anywhere. Multinational Marketing – Poly centric Orientation In this kind of orientation firm believe or assume that every country in which a company does business is unique. In order to succeed, they adopt the policy of applying business and marketing strategies differently in different countries. Global Marketing – Geocentric Orientation In this kind of orientation firms view the entire world as a potential market and attempt to develop integrated global strategies. A global company can

Standardization, in case of international or multi-national businesses, broadly refers to the process of using the same strategies throughout the business operations in all of the markets. Adaptation, on the other hand, refers to the strategy of fine tuning the brand methods of a business and customizing them to suit each of the markets.

A Multicountry approach is one in which as organization’s strategies vary according to the countries in which it does business (Coulter, 2013, p.202). This approach is centered on creating an advantage through differentiation. The products, marketing, and distribution are tailored and adopted to local culture and customs. Such local responsiveness is important when significant country to country differences exist (Coulter, 2013, p.203). An example of this would be McDonald’s Corporation. To appeal to the local customers’ palates in Singapore, they added rice burgers – fried beef slices served between two pressed rice cakes, to its menu.

According to Levitt, the successful global corporation does not abjure customization or differentiation for the requirements of markets that differ in product preferences, spending patterns, shopping preferences, and institutional or legal arrangements. But the global corporation accepts and adjusts to these differences only reluctantly, only after relentlessly testing their

The article is divided into four parts. First part focuses on the traditional perspective on international marketing strategies focusing on the dichotomy between standardization and adaptation. The second part examines key assumptions underlying the philosophy of global standardization. The third part focuses on the constraints to implementation of global standardization. The last part of the article concludes on the bases of its review that a more general approach is suitable which incorporates various degrees of standardization or adaptation strategies. It is an important article as it concludes that an effective global marketing strategy does not guarantee the marketing of standardized products and global brands worldwide. It might work for some companies but cannot work for all.

List and analyze FIVE factors which Marketing Manager can apply as tools in to his /her crafting strategy, formulation and execution

However, globalization developed international contacts and made it possible to cooperate on the global scale. As a result, nowadays, basically due to the high level of development of IT and Internet, specialists physically living in different countries of the world may work on one and the same product. So, it may be said that globalization “eliminated geographical boundaries between countries” (Gomory 2002:187).

2. How would leveraging capabilities with respect to the Indonesian market differ between an Australian/New Zealand producer of computer software and an Australian/New Zealand manufacturer of automotive parts?

The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.

The Coca-Cola Company is the world’s leading beverage company, with markets in over 200 countries and over 1,100 brands under their portfolio. The company was founded in 1886 and is currently headquartered in Atlanta, Georgia, USA. This paper seeks to explain the impact of globalization on the standardization versus adaptation decision using examples from the Coca-Cola Company’s performance and strategies since their inception as a company.

Whenever a company is entering a new market it has to take into consideration the cultural differences between countries. Based on the case study analysis, the difference between the two countries in terms of eating out habits and eating preferences seem not to be understood by the Denver headquarter. Denver headquarter believes that it can enforce the same business model applied in the U.S to its stores in China, regardless of local preference. In addition, Foster seems to lack knowledge about the Chinese culture because she was not familiar with the market in China, as she had no experience working internationally. There was a lack of cross-cultural communication between Chen and Foster; even though, Chen had experienced both cultures while studying abroad in the U.S.

This confusion, change, and complexity are even greater within the international world-wide marketing environment. The debate over the amount or extent of standardisation or adaptation is of long duration. Vrontis and Vignali (1999) comment that the debate on this came under discussion as early as 1961, with Elinder (1961) considering the idea with regard to world wide advertising. The early sixties first coined the term ‘global village’ that was further discussed by Roostal (1963) and Fatt (1964). Buzzell (1968) widened the debate by stating that it would encompass not just advertising, but the whole of the marketing mix. Buzzel (1968) argues that in the past, dissimilarities among nations have led a multinational company to view and design its marketing planning in each country strictly as a local problem. However, the situation has changed, and the experiences of a growing number of multinational companies suggest that there are 7

Attitudes of geocentricism are biased toward marketing, human resource, production policies, and finance that try to synthesize local and global practices. Preeminence is given to accruing the right people and policies. For instance, a decision maker, who is geocentric, would endorse a global pricing policy that would be adapted to regional and local environments. These decision makers strive to ratify policies that fit both local differences and global commonalities. Furthermore, when one adopts a geocentric mindset, this in turn, leads to the evolution of a geocentric company.

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.