PhD. Alexis Mavromatis
Researcher and teacher of Marketing Department at EADA
Scholars back in the 60s highlighted the fundamental concept behind the debate of standardization versus adaptation. According to them, technology, communication facilities, and travelling abroad, have minimized the physical and psychological distance between countries. Consequently, this has created global markets with consumers that have developed common tastes and needs for global products. The authors argued that since the process of market globalization cannot be stopped, the survival and success of companies in such markets lies in their ability to deliver a high quality product at a competitive price. The means to achieve this is through the standardisation of their marketing programme (mix), which facilitates a low-cost competitive position in the global market.
While global segments with similar interest and response patterns may be identified in some product markets, it is by no means a clear universal trend. Many scholars admit that while homogenization is increasing, there is substantial evidence to suggest also an increasing diversity of behavior within countries and the emergence of idiosyncratic country- specific segments. As a result, the debate of whether a company should standardize or adapt it is well documented.
In my opinion in order for an executive to make this decision first he/she has to know the two primary aspects of marketing standardisation strategies the company needs to adopt: process standardisation and programme standardisation. The difference between process and programme standardisation is that the former refers to the holistic organisational behaviour in management decision making, whereas the latter, to entire marketing-mix of the product. Programme standardisation deals with the extent to which individual elements of the marketing mix can be unified into a common approach in different national markets. However, as programme standardisation captures the whole marketing mix, a number of scholars view the need to focus only on specific elements of the product and how they can be standardised internationally (i.e. product standardisation).
Process standardisation is mainly concerned with the creation of a unified structure and a standardised decision making process of a marketing plan. It provides a framework within which marketing activities are conducted and specific marketing concepts are developed, implemented and controlled. In other words, process standardisation is the mechanism and in some cases a precondition, that will aid in the development of programme standardization.
Once executives have it clear what standardize strategy to adopt (or not), the next key decision they must make is, the extent their company wishes to standardise or adapt its decision making, products or brands when exported to a host market. Here, three primarily categories exist: ‘pure standardisation’, ‘pure adaptation’ and ‘neither/nor’. Evidence suggests that companies find their way between these three positions depending on the market conditions found within foreign markets.
Companies pursuing pure standardization base their argument that differences in cultures and local life styles are non-existent and belong to the past. They claim that consumers are seeking products of good quality at the lowest possible price and this is only feasible through economies of scale via standardization. As opposed to the concept of pure standardisation, a number of executives believe that the world consists of different regions, cultures, life styles, and environmental conditions forcing multinational companies to adapt their offer to local needs. Their major argument is that customers have different requirements, and to cater to their needs, companies have to modify their products. In particular, they criticize pure standardization as a new kind of marketing myopia that represents an oversimplification of reality, which contradicts the entire marketing concept. They further claim that the more companies adapt to local needs the more they can increase competitive advantage, sales and profits.
My opinion falls in the third movement, the advocates a ‘neither’, ‘nor’ philosophy. According to this group of executives, it is believed that some elements of the marketing mix can be standardised while the rest should adapt to the local needs. Executives here insist that a combination of standardisation/adaptation strategies should be selected, as no extreme position is suitable in the international market. By taking into account their resources, product and services offered, industry environment and host markets, companies should seek a balance between the degree of adaptation and standardisation of their marketing process and programme. Furthermore, they should monitor the decision over time, as a degree of modification might be required.