Standardizing & Adapting for International Market Expansion: Challenges & Solutions - Essay Sample

Introduction

Standardization and adaptation are two marketing strategies that global companies use to enter the international market. Whenever companies think of maximizing their revenue, and remain competitive, they have to adopt international market expansion strategies that will enable them to fit in the new target markets. However, globalization is faced with a plethora of challenges that require a precise decision-making process (Weber, Tarba, and Bachar 2012). In this regard, products intended for sale in the new market have to feature the characteristics of the country. Hence, the expansion marketing strategies such as the standardization and adaptation are critical success factors for companies venturing in global or international operations (Rosenbloom and Larsen 2008). The market is heterogeneous and more than one strategy is important to ensure that the market becomes homogenous. Both standardization and adaptation are used to ensure that the heterogeneous market is transformed into homogenous. The elements of the marketing mix must be standardized and adapted to certain degrees that favor the new products in the new market. Although the standardization and adaptation are used in a global marketing context, they show various notable differences that make each of them unique.

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Global Marketing

Big companies always yearn to operate globally and reach many customers throughout the world. Operating oversees compels the companies to develop business practices that will and in an increment of profit and curb saturation problem. Hence, the desire to operate oversees is motivated by the need to increase the sales and consequently the profit of the company. However, going to global subjects the company to many issues relating to cultural diversity, advanced technology, and changing customer needs, preferences, attitudes, and behavioral patterns. Globalization puts together people from different parts of the world and hence people with different cultural behaviors. The difference in cultural diversity, advanced technology, and customer needs, preferences, attitudes, and behavioral patterns affects the choice of certain products. According to Vrontis and Thrassou (2008), the marketer is confronted with a completely new continuum of macro-environmental factors such as race, taste, climate, education, topography, language, occupations and conflicts among others. Leaders must, therefore, ensure that the company operates in unison with the cultures and the customer paradigm. Companies are, therefore, compelled to develop strategies, and come up with decisions that will allow the company benefits maximally from the global business. In this regard, companies use the standardization and adaptation strategies to bring their global operations to unison with the new environment and population that form the customer base. The smooth operation of a company that goes global is dependent on its ability to integrate well with the new customers. According to Vrontis and Thrassou (2008), the creation of uniform behavioral patterns aids in minimizing total costs and promotes the global corporate image. Standardized products are customized, advanced, reliable, functional and low priced to suit the market conditions. Through standardization, global companies operate as though they are a single entity.

Standardization Versus Adaptation

Standardization

Kamel, Mehmet, Cavusgil, and Wade (2010) posited that standardization implies that similar marketing modes be applied in all the markets. In another study, standardization is also seen as the use of connatural marketing programs in different regions or market to promote a product at an established price and using the distribution process. The proponents of standardization argue that standardization is a concept that describes a world that is attaining homogeneity due to technology and communication advancement. As technology and communication become homogenous the consumers' tastes, preferences and cultures are also becoming homogenous (Brei, D'Avila, Camago and Engels, 2011). In a homogenous market, consumers share similar needs, desires, preferences, and demands and this, in turn, lowers the barriers that would hinder the company from executing its operational mandate. In such a market the company sells products that are more standardized using standardized marketing programs. In this regard, the economies of scale, and segments are consistent with the promotions and this aids in the achievement of sizable savings, reduction in uncertainty and preservation of the corporate image (Brei et al. 2011).

However, the degree to which the company implements the standardization is dependent on both the environmental and organizational factors. The environmental factors determine the number of product changes. The simplification of the product is determined by the reduction in the technical skills of the customers while the simplification of the instruction and the product are determined by the limited knowledge the customers possess. When there are low-income levels the price of the products and their specifications are also changed. Conversely, when the inflation problems emerge, alternatives pay means are adopted. Environmental factors such as usage of small areas trigger changes in the improvement of the production capacities, while various funding sources triggers the resizing of the production (Madar and Neacsu 2010).

According to Zou and Cavusgil (2002) standardization is fueled by competitive advantage and financial gains. Conversely, adaptation is fueled by the location-specific requirements that outweigh the economies of scale. In this regard, the difference between the standardization and adaptation is enhanced value and savings cost. Hence any difference between the two expansion marketing strategies is on any of the two factors. Through the enhanced value and cost savings, the company aims at attaining homogeneity in the market. A homogeneous market necessitates the achievement of enhanced value and improved savings on the cost of operations. The common goals are similar and the

Advantages of Standardization

Standardizing the market comes with its advantages and one of them is the homogenization is the customers' needs and preferences. The company attracts customers with homogenous needs and such customers enable the company to achieve and create its global brand (Madar and Neacsu 2010). For instance, Lev's blue jeans attracted customers possessing seminal preferences and this was the determinant of the company's success in trading within a country (Madar and Neacsu 2010). The second advantage of standardization is that it intensifies the mobility of consumers. Through standardization, customers can trade from all over the world. An example is the Marriott Hotel which is located in various countries and offers customers products with similar characteristics making it possible for travels to shop at their convenience. Thirdly, the company attains the scale or experience economies. Gaining cost advantage is essential in global operations since the first reason the company decided to go global was to gain a cost advantage (Madar and Neacsu 2010).

Disadvantages of Standardization

Despite the various appealing advantages, standardization has several disadvantages to the operation of the business. One of the disadvantages of standardization is that it suggests a homogenous market which is difficult to achieve in different cultures (Alimieno, Kuvykaito 2008). Where culture, norms, tastes, and preferences exist, standardization becomes challenging since it fails to meet the market and customer needs and demands. Secondly, standardization is hence faced with various barriers such as government restriction, economic and technological development and national differences in tastes. Standardization is also undermined by the international functional fragmentation. An international functional fragmentation implies "that although marketing intermediaries in different countries, can be nominal of similar type and size, they often do not perform the same marketing functions" (Dimitrova and Rosenbloom 2010, p. 170). So, channel strategy must be adapted to accommodate the capabilities of intermediaries in different countries to perform the particular set of marketing functions needed to make products available to customers.

Adaptation

While proponents of standardization advocate for using standardization as the core marketing strategy in international operations, proponents of adaption argue against such a proposition. According to Dimitrova and Rosenbloom (2010), the patterns of usage and product purchase in the market varies across the globe. As a result, advertisement messages creates different appeals and consequently different reactions from the customers. This is because although globalizat9n has taken place there is the persistence of the traditions and the national value systems that make marketing program standardization unsatisfactory. In this regard, the managers and leaders must change the promotion and advertisement patterns and campaigns, the price and features of products, and distribution logistics (Dimitrova and Rosenbloom 2010).

While standardization seeks to homogenize products all over the world, such products may not reflect the culture of each market, the consumers' preferences and tastes. Dimitrova and Rosenbloom (2010) posited that even the highly paid people would prefer to purchase a product that reflects the cultural norms and value systems. Standardization is hence faced with various barriers such as government restriction, economic and technological development and national differences in tastes. This makes it necessary to use an adaptation strategy that will ensure that the product adapts to the culture, norms tastes and preferences of the consumers in the new market. Rather than making the product homogenous, adaptation seeks to create products that unique to each market based on the local needs and that responds to the various environmental forces existing the new market (Rao-Nicholson and Khan 2017).

Otuedon (2016) stated that many peculiarities encompass specific markets and even through certain products might appear similar, they are subject to jurisdiction-by-jurisdiction variations that hamper success. It is, therefore, the role of the managers and leaders to develop market strategies that fit the specific market requirement and in such a case, adaptation is the most preferred.

Advantages of Adaptations

One of the advantages of adaptation according to Otuedon (2016) is easy acceptability since it is focused on meeting specific cultural needs, preferences, desires and consumer tastes in the different global market. Such focus enables the company to bring out vividly the easy connections and acceptability of the product by the customers hence generating more sales, profit, and success. Secondly, adaptation makes the product responsive to the local market and customer needs. Through adaptation, the cultures, tastes, preferences and the needs of the consumers are reflected in the new product and the marketing mix strategy. Other advantages of adaptation are that it expedites local business development, and makes the local content stronger (Otuedon 2016). By adopting a marketing strategy that reflects the local market, the local content becomes developed and this uplifts the local agenda.

Disadvantages of Adaptation

Although customers have different tastes, preferences, and needs, the world has become a global village and all sought of cultures are found in most of the countries. Through intermingling, cultures have shared common identities, needs and preferences, and tastes (Dow 2006). A pure cultural identity may not exist...