Standardisation Versus Localisation Essay Example
Standardization Versus Localization
Levitt argues that because the world is shrinking – due to heaps of technology, communication and so forth – well managed companies should shift their emphasis from customizing items to offering globally standardized products that are advanced, functional and low priced for all. Coca-Cola being an international brand found everywhere in the world still has not standardized its marketing. The differences in consumer behavior still prevail across countries. Many firms have been forced to tailor products and marketing programs to different national markets as a result. McDonald’s appears worldwide but some aspects of its marketing activities are customized. It serves beer in Germany, wine in France, and coconut, mango and tropical mint shakes in Hong Kong. McDonalds’ fierce commitment to product and service standardization is one reason the retail outlets are so similar all around the world. Standardization saves costs but looses revenue. Adaptation involves making appropriate changes in a product to match the requirements of customers in specific markets. This involves tailoring the product specifically for the needs of the customer.
The fundamental international product decision after the decision to internationalize includes deciding between:
1. Adapt completely: to suit local requirements this will achieve market acceptance but may not provide global economies of scale.
2. Standardize: Make no changes at all this will achieve global economies of scale however it may limit market acceptance.
In reality the decision is not dichotomous, there is a continuum of product adaptation and standardization.
-The higher the scope of exploiting brand image in the market, the lesser the need for adaptation
-The higher the need for the product to be closes to local market expectations, the higher the need for adaptation.
The Product
The product or service can be defined as the complex combination of tangible and intangible
Levitt argues that because the world is shrinking – due to heaps of technology, communication and so forth – well managed companies should shift their emphasis from customizing items to offering globally standardized products that are advanced, functional and low priced for all. Coca-Cola being an international brand found everywhere in the world still has not standardized its marketing. The differences in consumer behavior still prevail across countries. Many firms have been forced to tailor products and marketing programs to different national markets as a result. McDonald’s appears worldwide but some aspects of its marketing activities are customized. It serves beer in Germany, wine in France, and coconut, mango and tropical mint shakes in Hong Kong. McDonalds’ fierce commitment to product and service standardization is one reason the retail outlets are so similar all around the world. Standardization saves costs but looses revenue. Adaptation involves making appropriate changes in a product to match the requirements of customers in specific markets. This involves tailoring the product specifically for the needs of the customer.
The fundamental international product decision after the decision to internationalize includes deciding between:
1. Adapt completely: to suit local requirements this will achieve market acceptance but may not provide global economies of scale.
2. Standardize: Make no changes at all this will achieve global economies of scale however it may limit market acceptance.
In reality the decision is not dichotomous, there is a continuum of product adaptation and standardization.
-The higher the scope of exploiting brand image in the market, the lesser the need for adaptation
-The higher the need for the product to be closes to local market expectations, the higher the need for adaptation.
The Product
The product or service can be defined as the complex combination of tangible and intangible