Adaptation and Standardization Strategy in International Marketing

1. Discuss the purpose of “standardisation” versus “adaptation” strategies in international marketing critically.

2. Utilize at least two examples with reference, one indicating a “standardisation” or “adaptation” strategy, and one example showing the difficulty that may arise at times when trying to clearly separate both.

3. Conclude with a critical reflection on the advantages and disadvantages typically associated with both strategies.

Please cover at least the following sections

(a) A brief contextualization of the topic from the literature (e.g., international marketing strategies, etc.),

(b) A critical discussion of the different positions based on the contextualization, and

Answer
Adaptation and Standardization Strategy in International Marketing
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Adaptation and Standardization Strategy in International Marketing
Many multinational companies aim to expand their business practices, increase their profit base and overcome different challenges in different markets and attain organization sustainability. One of the biggest challenges in marketing products in the global scene is the cultural differences between different markets (Baker, 2014). The cultural impact on consumer demand and purchasing pattern must be considered before venturing into the international market. Multinationals are often faced with the challenge of whether to adapt or standardize their products when developing a marketing mix. Culture refers to beliefs, values and learned customs that impact on consumer behavior (Schmid & Kotulla, 2011).
Standardization refers to developing a steady representation of all features of merchandise. These aspects could be the product name, packaging, quality and resources used regardless of the place of the business in the world. Adaptation, on the other hand, refers to where a company adjusts its marketing mix and strategies to fit unique characteristics of each specific market. It is paramount that international marketers to consider all the cultural elements when developing a product, marketing strategies to be employed, and implementing distribution marketing in a global setting.
Standardization of products across different markets has many significant advantages. Standardization strategy helps in reducing the cost of development and administration in international marketing. Previous researchers have established that standardization enhances the performance outcomes of multinational companies. However, it is of dire importance to note that this may not always be the case. On the other hand, adaptation strategies are also seen as one of the most influential aspects of multinational companies operating in more than once country. The reason is that adaptation enables a company to establish itself in the local market and cut out its specific niche by providing products that suit customers in such region. However, in the contemporary context, adaptation and standardization is seen as a matter of degree instead of inflexible choice. Therefore, organizations are combining the two options of adaptation and standardization marketing and product strategies.
The purpose of standardization strategy is to maintain the company image by providing products with a similar brand name, taste and quality to customers in different locations (Wedel & Kamakura, 2012). The proponents of standardization strategy believe on the notion that consumer demands want, and requirements are almost similar in different countries and markets. Their notions are based on the fact that globalization and advancement in technology have made environmental, and customer requirements are becoming similar and consumers have demanded the same products across the globe. As such, they propose a standardization strategy to maintain a consistent image across the globe and reduce product development and marketing costs.
On the other hand, the purpose of adaptation strategy is to fit specific characteristics of each unique market. International marketers often face challenges such as language difference, race, education level, different tastes and preferences depending on the different cultures, laws and society (Winston & Mintu-Wimsatt, 2013). Therefore by adapting to the specific market, a multinational company can appeal to these cultural and demographic differences between customers in different markets.
A good example of a corporation that has succeeded in the global market using standardization strategy is Coca-cola. The company markets its product across different markets using the same brand name. The company unique design, logo, and distinctive glass have remained the same over the years (Cavusgil et al., 2014). This unique and consistent distinctiveness help the company to maintain a strong and reputable brand across different cultures in the world. For example, the company sales different beverages using the same brand name across the globe such as Coca-cola, Fanta, Krest, Stoney, Sprite, Dasani among others. The company uses catchy phrases that are associated with happiness when advertising its products. The company can use standard brands, packaging, and distribution enabling Coca-cola to market its product in a similar manner to consumers across the globe. On the same note, the company can reduce the marketing and advertising costs and also maintain a strong internationally recognizable brand (Brei et al., 2011). Coca-cola believes that when it sends different communication across different markets can lead to confusion of consumers and weakening of the brand reputation.
On the other hand, one of the companies that are well known as an advocate to adaptation is McDonalds Restaurant. The Original McDonald’s operating in the United States market is much different as compared to McDonald’s in China, India, and Japan. The company adapts its menu items to include cooking’s that are admired in specific markets. The ingredients of their burgers vary depending on the cultural and societal values of people in the market. It is important to note that McDonald uses market segmentation strategy where they often study the market carefully before launching their products (Wedel & Kamakura, 2012). The purpose is to ensure that they can understand customer needs and customize their products to suit the specific market.

Advantages and Disadvantages of Standardization
Advantages of standardization of products include the uniformity of the quality of the brand all over as there is no difference in the product contents. This feature enables a multinational organization to build and maintain brand reputation (Kaynak & Herbig, 2014). The attitude of the consumers towards the products also tends to be positive. Furthermore, the cost of production of is reduced when goods are bought in large quantities. Research development is also improved and the cost of investment lowered. Standardization is also useful in the absence of trade barriers. To companies, it aids in the quality improvement of the product as the focus is placed on one product only (Terpstra et al., 2012). The staff is also trained in improving the quality of the single uniformed product, and this eventually leads to investment in technology that maintains the quality of the standardized product.
Standardization of products also has several disadvantages. First is the diversity of preferences in the different market. Different markets have different tastes, and this is not catered for when the product is standardized. This results in loss of market if a competitor product is tailored to the specific needs of the consumers (Yap & Yazdanifard, 2014). An example is the failure of Wal-Mart to infiltrate global market due to their standardized approach in marketing. Secondly it is highly dependent on the economies of large scale. This leads to a challenge where trade barriers are implemented. A negative reaction can arise where its specific needs are not catered for the market.
Advantages and Disadvantages of Adaptation
Adaptation also has its advantages and disadvantages. The advantages include the ability to cater for a market’s specific needs. This is because adaptation works with the specific preference of the consumers. Therefore, a company will be able to develop customized goods and services that suit specific market and thus increase the demand for such goods and services because customers will want goods and services that satisfy their requirements (Mueller & Taylor, 2013).
Furthermore, adaptation strategy enables a company to improve its local image of the organization as its goods and services are consumer oriented. The customers of the product also feel noticed as their specific needs are catered. Customers often like to associate with organizations that can meet customer specific demands. Therefore, an organization that can adapt its products and services can promote the local image of the organization.
The disadvantages of adaptation are first that it is costly. The company spends a lot in producing products for the consumers’ specific needs. To produce a product that is tailored to the market’s preference is also time-consuming. A firm must undertake extensive market research to understand different dynamics within the market environment to understand and know what a customer needs to the specifications is also difficult (Tan & Sousa, 2013).
In conclusion, multinational companies are often faced with the challenge of whether to adapt or standardize when launching, marketing or promoting their products at the international level. This challenge arises because of the different advantages and disadvantages associated with standardization and adaptation strategies. Standardization strategy has proved to be efficient when an organization aims at maintaining its brand image across the globe (Schmid & Kotulla, 2011). Using standardization strategies also enables organizations to reduce cost of marketing, product development and promotion in different regions. However, standardization strategy has its disadvantages such as it is not able to gather for all the different preferences in the market.
On the other hand, adaptation has its advantages such as the ability to gather for markets specific needs. However, this strategy is a bit costly as it requires rebranding in each different market. Therefore, in today’s competitive market, organizations tend to employ both standardization and adaptation strategies so as to obtain the best of both strategies (Czinkota & Ronkainen, 2012). On the same note, minimize the disadvantages of each strategy by complementing each other so as to attain organization sustainability.
References
Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper Press.
Czinkota, M., & Ronkainen, I. (2012). International marketing. Cengage Learning.
Schmid, S., & Kotulla, T. (2011). 50 years of research on international standardization and adaptation—From a systematic literature analysis to a theoretical framework. International Business Review, 20(5), 491-507.
Tan, Q., & Sousa, C. M. (2013). International marketing standardization.Management international review, 53(5), 711-739.
Mueller, B., & Taylor, C. R. (2013). Convergence in Global Markets: The Great Standardization Versus Localization Debate Is (Finally) Put to Rest. In Media and Convergence Management (pp. 89-105). Springer Berlin Heidelberg.
Yap, S. P. W., & Yazdanifard, R. (2014). Comparison on the Impact of Standardization and Adaptation on International Marketing. Journal of Research in Marketing, 3(1), 250-259.
Kaynak, E., & Herbig, P. (2014). Handbook of cross-cultural marketing. Routledge.
Brei, V. A., d’Avila, L., Camargo, L. F., & Engels, J. (2011). The influence of adaptation and standardization of the marketing mix on performance: A meta-analysis. BAR-Brazilian Administration Review, 8(3), 266-287.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Wedel, M., & Kamakura, W. A. (2012). Market segmentation: Conceptual and methodological foundations (Vol. 8). Springer Science & Business Media.
Winston, W., & Mintu-Wimsatt, A. T. (2013). Environmental marketing: strategies, practice, theory, and research. Routledge.
Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.