Standardization Vs Adaptation Of Products In International Marketing

Standardization and Adaptation in International Marketing

Companies that are marketing their goods or services out of the country are confronted with decision whether they should standardize or adapt their offerings of product. This decision is a matter of concern for companies that are marketing their products in overseas nation along with those that are functioning globally and considering expansion in new markets.

Standardizing the products across the nation is largely turning into a vital issue which the managers of international companies are currently facing. As the cross-border selling in 21^st century gets noteworthy attention for exploration, it appears that the benefit of cost and management of standardization approaches has abridged the approach of marketing and turning into an attractive choice for several firms.

While product adaptation strategies are also considered as highly influential feature of multinational corporation (Xuan et al. 2016). In current world of globalization, the decision of standardization versus the adaption of overseas products are not anymore considered as inflexible choice, rather it is a combination of two options provided that the dependent factor at a given point of time is present in the given market.

Common business all through the nation-wide borders wants that the product is marketed to meet the needs of world-wide target markets. This means that the products are sold on the basis of social fondness. As per Griffith et al. 2014 culture is regarded as collective program of thoughts, which differentiates the affiliates of one group of individuals from another. The cultural dimensions are treated as the basic concept which helps in understanding how more than one culture may be different of identical based on each dimension. As purchase of products and service is largely determined by social aspects, habits, customer taste and preference, habits and income, the research completely emphasis on the product component of marketing mix. The term marketing mix as per Akgün, Keskin and Ayar (2014) comprises of 4 Ps. Namely, “product, price place and promotion”. For several years, it has been the main foundations based on which the plans of marketing is created. The elements which is greatly impacted by adaptation in the overseas market represents quality, features and its design.

As stated by Wei and Yazdanifard (2014) the appearance of product, its function and support make up of what customers would eventually purchase. Consequently, it makes important for managers to focus on the taste and preference of their product packages in meeting their customer needs both present and possible. This suggest that, decisions must be taken relating to product range, branding, packaging, labelling and other aspects of the product. In the present debate of whether to adapt or standardize, a product that is produced for the selling should be as per the wants and anticipation of the customers.

The Importance of Product in Marketing Mix

As suggested by Rao-Nicholson and Khan (2017) that the product forms the core of entire marketing mix and the product might form as the highly important competing component of marketing mix in the marketing manager hands. Hence, if the product is unattractive, then no sum of sales promotion, suitable distribution channel or lowering of price would help in attaining the marketing goal. From the marketing view point, brand name, product design, packaging durability, services and taste that are attached to the product is vital.

Corporations frequently adapt their strategies of marketing when penetrating into the international markets, in spite of the globalization era where several products and brands of liquid refreshment and fast food outlets are commonly present. The decision of adaptation is combined to an adaptation strategy which may affect the competitive point of a company and may change its performance in the overseas marketplaces. Researchers have proposed that the strategy of adaptation is more effective with the varying needs of customers across different cultures. As per Sousa and Novello (2014), firms in majority of the areas of world is looking forward to different manner of expanding their international operations. For example, Montgomery (2017) talks regarding three aspects that may have impact on the global adaptation approach. Countries such as US, Japan and Korea consider the market resemblance between the domestic and overseas markets.

A study by Montgomery (2017) stated that, an agenda of research was established in what way the outside environs impacts the company’s standardization and adaptation approaches. It was noticed that wide variety of matters namely, “political, social, cultural and economic” factors impacted different markets. Therefore, it is important to adjust the products to meet the needs of consumers.

Standardization is regarded as the practice of setting up the similar characteristics for a specific products and services. The issue of whether there must be standardization or adaptation of the product in the overseas marketing has attract wide attention in last forty years. Both standardization and adaptation presents positive argument and serious disadvantages. As noticed, standardization of goods across cross-border culture is mainly becoming vital issue for the global managers (Sales 2014). It appears that management of standardization strategies and cost benefits has helped in simplifying the global marketing approach and also forms an eye-catching choice for several companies. From international perspective, it appears that the approach of standardization should be employed as it helps managers in presenting a constant image across cross-border.

Standardization or Adaptation: Pros and Cons

Several readings have testified on comparative extent of standardization for varied rudiments of entire marketing mix. Most of the studies have suggested that pricing is one of the smallest element of standardization in marketing mix. While Ernst et al. (2015) established that absolute pricing was considered amongst the smallest standardized elements of marketing mix and relative pricing was equally standardized. On the other hand, brand, spectrum and characteristics of product appears to be the highly standardized elements of marketing mix. While Kotabe and Helsen (2014) claimed that culture may be overlooked and all goods and services can be standardized. While framing marketing plan, the nature of market us vital and the point of standardization should be considered as well. For example, McDonald being a fast food restaurant is entirely based on standardisation of products and services that is offered across the globe.

Later, Hofer (2015) specified that product standardization lays a vital role in durable and non-durable consumer products. The strategies of standardization are better off in markets which is segmented or categorized with likenesses. Companies operating in the international markets makes an attempt for success and competency in product standardization approaches, where the goods are sold in the international marketplaces at a suitable price and the similar country strategy is all fixed to be identical for every market in the world.

Considering the information regarding standardization of product, it is understood that there has been certain degree of modification in the product offered across the globe for adjusting with the customer preferences. Importantly, under the category of trade a firm operates is also plays an important part in the selection of cross-border approach for products.

Conclusion: 

On reviewing differing arguments of product standardization and adaptation, one may wonder whether standardization of product throughout different culture may be feasible. On observing the precise nature of global standardization and the probabilities of its use, it is reasonable to say that attention has shifted towards standardization of promotion and advertisement instead of international standardization of product. It offers little guidance to small and mid-size companies. From the perspective of company, it is recommended to consider both the strategies when thinking of developing an international product strategy while taking into account the market characteristics, firm’s characteristics and the industry in which it operates. To excel in overseas market, a degree of adaptation should be combined with international strategy of standardization as the vital concept.

References: 

Akgün, A.E., Keskin, H. and Ayar, H., 2014. Standardization and adaptation of international marketing mix activities: A case study. Procedia-Social and Behavioral Sciences, 150, pp.609-618.

Ernst, H., Kahle, H.N., Dubiel, A., Prabhu, J. and Subramaniam, M., 2015. The antecedents and consequences of affordable value innovations for emerging markets. Journal of Product Innovation Management, 32(1), pp.65-79.  

Griffith, D., S. Lee, H., Seob Yeo, C. and Calantone, R., 2014. Marketing process adaptation: Antecedent factors and new product performance implications in export markets. International Marketing Review, 31(3), pp.308-334.

Hofer, K.M., 2015. International brand promotion standardization and performance. Management Research Review, 38(7), pp.685-702.

Kotabe, M.M. and Helsen, K., 2014. Global marketing management. Wiley Global Education.

Montgomery, C.M., 2017. From standardization to adaptation: Clinical trials and the moral economy of anticipation. Science as Culture, 26(2), pp.232-254.

Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing strategies in emerging market cross-border acquisitions. International Marketing Review, 34(1), pp.138-158.

Sales Baptista, C., 2014. Product importance and complexity as determinants of adaptation processes in business relationships. Journal of Business & Industrial Marketing, 29(1), pp.75-87.

Sousa, C.M. and Novello, S., 2014. The influence of distributor support and price adaptation on the export performance of small and medium-sized enterprises. International Small Business Journal, 32(4), pp.359-385.

Wei, S.Y.P. and Yazdanifard, R., 2014. Comparison on the impact of standardization and adaptation on international marketing. Global Journal of Management And Business Research.

Xuan, N.N., Trung, H.N., Quang, T.B. and Cuc, N.P.H., 2016, March. Exploring Factors Affecting Marketing Adaptation/Standardization Strategies-A Study Among International Insurance Firms In Vietnam Market. In Proceedings of the NIDA International Business Conference 2016− Sustainability in Business (p. 89).