Reasons for product standardization or adaptation

It offers the following advantages: savings from economies of scale, mostly through reduced media production costs strong global brand image — consumers recognize it easily when traveling increased efficiency — lower costs of advertisement preparation reduced message confusion global oversight but centralized communication one global advertising strategy Only a few products allow a totally standardized or a totally adapted marketing strategy because, most of the time both approaches have to be used to a certain degree.

These errors are primarily explained by a lack of understanding of how Standardization and Adaptation play in international markets. According on local culture in North America red colour perceived as a symbol of action and courage, whereas blue colour is associated with youth and dynamism Brown et al.

For example, Denmark has strict requirements regarding food supplements — manufacturers are not allowed to use certain words on the labels or claim that their products are better than those of other companies.

Product adaptation

Organizations worldwide use this approach for marketing purposes and legal compliance. According to this strategy Nokia focuses on selling low-cost basic but affordable products such as Nokia and Nokia in market in African continent where customer purchasing power is low, whereas, the same company offers smartphones with advanced features and capabilities such as Nokia Lumia and Nokia E series in North America and Europe. McDonald's menu, for example, varies depending on the location. Naturally, businesses that are global manufacture in many counties. Advantages of Product standardization To the organization Reduction in cost — In the standardization, an identical product is produced using the same materials and processes etc. For example, hand-powered washing machines. The truth is, marketing for multinationals does not lie in either of these two opposite approaches, as both approaches are likely to coexist, even within the same company, product line, or brand Kitchen, ; Vrontis, ; Soufani et al. Internal characteristics of antecedent factors, on the other hand, are limited to organisational and managerial factors. For example, Nokia Corporation, a global communications and information company based in Finland focuses on product adaptation on new markets to a great extent, while other elements of marketing mix a subjected to adaptation to a lesser extend. There are several reasons for such product adaption.

Adaptation approach deals with country specific markets where efforts are adjusted to the differences in the marketing environment.

Bookmark the permalink. Moreover, according to the Conceptual Model of International Marketing Strategy the degree of standardisation or adaptation in new market has direct implication on sales, profits, market share, the levels of customer satisfaction, and composite performance.

mcdonalds standardization and adaptation

On the contrary, supporters of the international adaptation approach, emphasize the importance of customization. Another is the heterogeneous preferences of the consumers as well as government policies which compels the repackaging of the product offered.

Communication failures — As the time goes the demand of the consumers can be changed and in such situations, organizations will still try to maintain the consistency without looking at the changes of demand of the consumers.

To Islamic countries they use a girl with a scarf and to the other countries which are not Islamic, a girl without a scarf is used. Since different markets have different needs and tastes, by using the standardized approach, companies can become vulnerable.

Advantages and disadvantages of product adaptation

However, this is only true for companies in which competition takes place in a global range, such as consumer durables, electronics, fashion, luxury goods, perfumes, etc. But there are situations where this product standardization gives negative results as well. Standardisation vs Adaptation in International Marketing: Conclusions Once a specific new market entry strategy is selected, the choice of extent of standardisation can be specified as one of the most important critical success factors in the new market. With standardization, however, the products are neither modified nor are the marketing approach changed. Dove promo in Iran Dove promo International Version There are mainly two types of product adaption methods. In some cases, global businesses pursuing adaptation strategy may even initiate changes in certain markets, therefore deriving first-mover advantages Kinard et al. Managerial factors impacting the degree of standardisation or adaptation relate to decision-making style in general prevalent in organisation, and decision-making orientation in relation to foreign operations which is divided by Perlmutter into four categories: ethnocentric, polycentric, regiocentric and geocentric. Red Bull in Chinese market, on the other hand, is designed in gold and red colours, because gold colour represents wealth and happiness in China and red is associated with good luck.
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Factors Affecting Product Adaptation