Standardization of International Marketing strateg.docx

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1、Standardization of International Marketing strategy ： Some Research HypothesisTwo aspects of international marketing strategy standardization are process and program standardization.A framework for determining marketing program standardization is introduced. Factors affecting program standardization

2、 are examined critically. In an attempt to establish a research agenda on the standardization issue, the author develops research propositions for each factor.Global marketing is much on the minds of academicians and practitioners today. It has been argued that the worldwide marketplace has become s

3、o homogenized that multinational corporations can market standardized products and services all over the world, by identical strategies, with resultant lower costs and higher margins. Interestingly, the standardization issue is not new. Whether to standardize or to customize has been a vexing questi

4、on with which international marketers have wrestled since the 1960s. The world went on without the issue being fully resolved.Recent resurgence of interest in the international standardization issue is attributed to such global influences as TV, films, widespread travel, telecommunications, and the

5、computer.Though much has been said and written lately on globalization of marketing, we are nowhere close to any conclusive theory or practice. This situation is not surprising, as empirical studies in the area of international marketing are limited. Because empirical detection requires a theoretica

6、l base, this article is an attempt to provide a conceptual framework for gaining insights into the standardization issue. Hypotheses are presented in the form of propositions. Ideas for testing these hypotheses are given. In brief, an attempt is made to establish a research agenda on the standardiza

7、tion issue.Literature ReviewAs used here, standardization of international marketing strategy refers to using a common product, price,distribution, and promotion program on a worldwide basis. The issue of standardization first was raised by Elinder (1961) with reference to advertising. He stressed t

8、hat emerging similarities among European consumers make uniform advertising both desirable and feasible.Interestingly, advertising continues to be the leading standardization concern (Killough 1978; Miracle 1968;Peebles, Ryans, and Vernon 1977, 1978). In the last 25 years, of the 34 major studies on

9、 the subject, 14 have been on advertising. In addition, almost 55% of these studies have been conceptual. Though the subject of standardization has not been researched conclusively, an examination of these writings leads to the following conclusions.There are two aspects of standardization, process

10、and program (e.g., Sorenson and Wiechmann 1975).Across-the-board standardization is inconceivable (e.g., Killough 1978).The decision on standardization is not a dichotomous one between complete standardization and customization. Rather, there can be degrees of standardization (e.g., Quelch and Hoff

11、1986).A variety of internal and external factors impinge on the standardization decision. Among these, product/industry characteristics are paramount (e.g., Wind and Douglas 1986).Generally standardization is most feasible in settings where marketing infrastructure is well developed (e.g., Peebles,

12、Ryans, and Vernon 1978).The preceding observations, taken as a whole, seem to suggest that standardization at best is difficult and impractical. However, we do know that the marketplace is becoming increasingly global and indeed there are global products. Among consumer durable goods,the Mercedes ca

13、r is a universal product. Among nondurable goods, Coca-Cola is ubiquitous. Among industrial goods, Boeing jets are sold worldwide as a global product. How do we explain this phenomenon conceptually?This article is an attempt to establish a research agenda on the standardization issue. The article is

14、 organized into four sections. In the first section a framework for determining marketing program standardization is introduced. The next section critically examines various factors that affect standardization. Research propositions for establishing a research agenda on the standardization issue are

15、 developed around these factors. The degree of standardization feasible in a particular case and its impact on performance in program markets are discussed in the third section. In the last section, managerial implications are provided.Standardization FrameworkAs noted before, standardization has tw

16、o aspects:marketing program and marketing process. The termprogram refers to various aspects of the marketing mix and process implies tools that aid in program development and implementation. A company may standardize one or both of these aspects. Inasmuch as the current controversy pertains to prog

17、ram standardization, this article addresses only that aspect.Figure 1 is a framework for determining the degree of standardization feasible in a particular case.The following key concepts underlie the rationale for this framework.Likelihood of program standardization depends on a variety of factors

18、identified as target market, market position, nature of product, and environment. Explanation of these factors is given in Figure 1.Effective implementation of standardization strategy is influenced by organization perspectives.Marketing Program StandardizationWith few exceptions, most of the litera

19、ture on standardization, especially the earlier studies, addresses globalization/standardization of marketing program (Walters 1986). The term program comprises various facets of marketing mix, which can be classified as product design, product positioning, brand name,packaging, retail price, basic

20、advertising message,creative expression, sales promotion, media allocation, role of sales force, management of sales force, role of middlemen, type of retail outlets, and customer service (Quelch and Hoff 1986; Sorenson and Wiechmann 1975; Wind and Douglas 1986)Advertising (ad message and creative e

21、xpression) and, to a lesser extent, product design are two aspects of the marketing program that have been examined more often than others, in both conceptual and empirical studies. Future research should explore globalization of other aspects of the marketing program as well.Conceptually, standardi

22、zation of one or more parts of the marketing program is a function of five factors identified in Figure 1. Individually and collectively these factors affect standardization differently in different decision areas.The standardization decision is situation-specific, requiring reference to a particula

23、r target market for a particular product. Researchers have examined the globalization issue, either explicitly or implicitly, with reference to advanced countries, especially Western Europe. Elinder (1961), Fatt (1964), and Roostal (1963)considered globalization feasible because of the increasing si

24、milarity and international mobility of the European consumers. According to Ohmae (1985), the United States, Western Europe, and Japan, which constitute the major world markets accounting for the bulk of product, appear to be becoming fairly homogeneous and hence fit for globalization.Opponents of g

25、lobalization also use advanced countries as their reference point. Fournis (1962) notes that customs and traditions tend to persist and therefore the concept of the European consumer is a misnomer. Scholars observe that as people around the globe become better educated and more affluent, their taste

26、s actually diverge (Fisher 1984). Boddewyn (1981) found sharp income and behavior differences between European consumers to be discouraging for globalization.The studies cited raise an important research question: Does economic similarity (referring to per capita GNP, disposable income, quality of l

27、ife) among nations foster market homogeneity in terms of specific product needs, opening the door for globalization? The following proposition is advanced.The point can be illustrated with reference to the Organization for Economic Cooperation and Development (OECD) countries. OECD nations, which ma

28、ke up only 15% of the total number of countries in the world, account for as much as 55% of the global GNP.Markets in these countries have similarities in consumer demand and commonalities in lifestyle patterns that are explained by several factors (Nissan Motor Company 1984). First, the purchasing

29、power of OECDresidents, as expressed in discretionary income per individual, is more than eight to 15 times greater than that of residents of less developed countries (LDCs) and newly industrialized countries (NICs). Second, in OECD countries the penetration of television into households is greater

30、than 75% whereas in NICs it is about 25% and in LDCs it is less than 10%. Third,more than one-third of the OECD consumers graduate from high school or higher educational institutions,but a comparable level of education still is offered to less than 15% of the population in NICs and to an even lower

31、percentage in LDCs. Briefly, it is their education level (what they read and see), their television watching (their level of awareness), and their purchasing power that make the OECD residents similar to each other in behavior and that distinguish them from the rest of the world. Thus standardizatio

32、n maybe feasible among the OECD nations.Rather than looking at the target market in terms of rich/poor nations, it may be possible to identify segments, in both developed and developing countries, that are similar and represent a homogeneous market. Several scholars have explicitly endorsed this typ

33、e of approach (Kale and Sudharshan 1987; Levitt 1983; Sheth 1986; Simmonds 1985). Levitt states(p. 92, 94):Empirical evidence on the inter market segment concept is provided by Hill and Still (1984), who found that greater product adaptation was required in rural areas than in urban areas in the LDC

34、s. This finding can be interpreted to mean that the urban areas in developing countries may have segments that are similar in character to those in industrialized nations.As a research idea, country markets can be segmented, say on the basis of occupation, and the needs and shopping traits of a part

35、icular segment can be examined on a worldwide basis. This suggestion leads to the following proposition.The significance of the inter market segmentation concept can be illustrated with reference to India and Kuwait. Kuwaits per capita GNP in 1983 was $18,000 and Indias $260. On the basis of these f

36、igures,Kuwait is about 70 times more attractive than India.However, Indias total GNP in 1983 was eight times greater than Kuwaits and its population was 400 times as large. If we assume that only 5% of the Indians would have the purchasing power of a Kuwaiti, the Indian market would be 20 times as a

37、ttractive as the Kuwaiti market. Thus segments for standardization may be present in both rich and poor countries.Market PositionSegmenting world markets in isolation of market-specific contexts is insufficient. Market development,market conditions, and competitive factors must be considered.Differe

38、nt national markets for a given product are in different stages of development. A convenient way of explaining this phenomenon is through the product life cycle concept. If a products foreign market is in a different stage of market development than its United States market, appropriate changes in t

39、he product design are desirable in order to make an adequate product/market match (Jain 1984; Kirpalani and MacIntosh 1980). Polaroids Swinger camera is claimed to have failed in France because the company pursued the same strategy there as in the United States when the two markets were in different

40、 stages of development. The United States market was in the mature stage,whereas the French market was in the introductory stage(de la Torre 1975)The three market conditions that influence the standardization decision are cultural differences (Arndt and Helgesen 1981; Hall 1959; Lee 1966; Ricks 1983

41、,1986; Terpstra and David 1985), economic differences (Douglas, Craig, and Keegan 1986; Henzler 1981; Luqmani, Quraeshi, and Delene 1980; Terpstra 1986), and differences in customer perceptions (Bilkey and Nes 1982; Cattin, Jolibert, and Lohnes 1982;Kaynak and Cavusgill983; Nagashima 1977; Narayana1

42、981) in foreign markets.Culture influences every aspect of marketing. The products people buy, the attributes they value, and the principals whose opinions they accept are all culturebased choices (Lipman 1988). For example, different levels of awareness, knowledge, familiarity, and affect with peop

43、le, products in general, and specific brands may result in differential attitudes toward similar products (Parameswaran and Yaprak 1987). Cultural differences influence consumer acculturation which, in tum, affects acceptance of standardized products (Schiffman, Dillon, and Ngumah 1981).Hence, where

44、 a product is culturally compatible with the society, it is likely to be more suitable for standardization (Britt 1974; Keegan 1969).Poor economic means may prevent masses in LDCs from buying the variety of products that U.S. consumers consider essential. To bring such products as automobiles and ap

45、pliances within the reach of the middle class in developing countries, for example, the products must be appropriately modified to cut costs without reducing functional quality. Finally, the decision on product standardization should be based on the psychological meaning of the product in different

46、markets (Friedman 1986). Foreign products in many cultures are perceived as high quality products. In such cases, standardization would be desirable (Aydin and Terpstra 1981). In contrast, if the image of a countrys products is weak, it would be strategically desirable to adapt a product so that it

47、could be promoted as different from, rather than typical of, that countrys products.From the preceding discussion, the following propositions are presented as a research agenda.In the absence of current and potential competition, a company may continue to do well in a market overseas with a standard

48、 product. However, the presence of competition may necessitate customization to gain an advantage over rivals by providing a product that ultimately matches local conditions precisely. Similarly, if the competitive position of the firm does not vary among markets, pursuing a global strategy may be w

49、orthwhile (Henzler and Rall 1986; Porter1986). For example, if a company has a leadershipposition (in terms of market share) in both the U.S.and select overseas markets, other things being equal,it can successfully standardize its marketing strategy in all those countries.In addition, if the firm competes with the same rivals, with similar share position, in different markets, standardization would be more likely (Copeland and Griggs 1985; Quelch and Hoff 1986). Therefore:The greater the degree of s