Standardization versus Adaptation in International Marketing
Standardization versus Adaptation
There has been much debate over implementing a standardization strategy versus an adaptation approach across international markets. There are numerous factors to consider, along with pros and cons of both marketing plans. While standardization is equated with brand consistency, lower advertising costs, and overall synergy, adaptation is often required to address cultural differences for more effective communication and proves that cutting costs does not always facilitate higher profits1. For some time many researchers, such as R. D. Buzzell in 1968, have concluded that the real question is what marketing elements can be standardized and to what degree2. However, academics support the notion that adaptation is essential to prosper in global markets.3 And in the instance of advertising to China, the necessity for adaption is ever present. China is a very appealing marketplace to many companies due to its large population and growing economy. Despite the country’s fiscal growth, there still remains a large disparity between big cities, like Shanghai and Beijing, versus the more inland provinces4. And since the relationship of cultural, political, and economical similarities support the standardization of competitive strategy, treating China as one nation to market to would be a mistake in itself, let along trying to standardize a campaign targeting American and Chinese consumers. Some corporations, such as Coca-Cola and Proctor and Gamble, have achieved extreme success by targeting the affluent, but there is almost a 90% segment left to infiltrate.5 This may mean lowering product price point, but many firms still deter from positioning their products to the middle or lower class due to the high advertising costs. It is an overcrowded arena to effectively breakthrough, but this is where adaptation would hold the competitive advantage. Along with the vast disproportionate economies of scale, the psychological and
There has been much debate over implementing a standardization strategy versus an adaptation approach across international markets. There are numerous factors to consider, along with pros and cons of both marketing plans. While standardization is equated with brand consistency, lower advertising costs, and overall synergy, adaptation is often required to address cultural differences for more effective communication and proves that cutting costs does not always facilitate higher profits1. For some time many researchers, such as R. D. Buzzell in 1968, have concluded that the real question is what marketing elements can be standardized and to what degree2. However, academics support the notion that adaptation is essential to prosper in global markets.3 And in the instance of advertising to China, the necessity for adaption is ever present. China is a very appealing marketplace to many companies due to its large population and growing economy. Despite the country’s fiscal growth, there still remains a large disparity between big cities, like Shanghai and Beijing, versus the more inland provinces4. And since the relationship of cultural, political, and economical similarities support the standardization of competitive strategy, treating China as one nation to market to would be a mistake in itself, let along trying to standardize a campaign targeting American and Chinese consumers. Some corporations, such as Coca-Cola and Proctor and Gamble, have achieved extreme success by targeting the affluent, but there is almost a 90% segment left to infiltrate.5 This may mean lowering product price point, but many firms still deter from positioning their products to the middle or lower class due to the high advertising costs. It is an overcrowded arena to effectively breakthrough, but this is where adaptation would hold the competitive advantage. Along with the vast disproportionate economies of scale, the psychological and
References: Burkholder, Richard, Chuanping Zhang, William McEwen, and Xiaoguang Fang. “Inside the Mind of the Chinese Consumer, “ Harvard Business Review, 2006, Chen, Yougang and Jacques Penhirin. “Marketing to China’s Consumers,” McKinsey Quarterly, 2004 p1-4. International Marketing, 2001, Vol. 9, Issue 1. T.C. Melewar, and Claes Vemmervik. “International Advertising Strategy: A Review, Reassessment, and Recommendation,” Management Decision, 2004, Vol 42, I