Products and International Marketing
Standardization versus Adaptation
As you will see from this website, product is a focal element of the marketing mix. When considering the nature of products and services in international marketing, the same models apply such as:
- Product Life Cycle (PLC) - products could be at different points in the PLC in various nations, possibly creating new opportunities.
- Ansoff's Matrix - market development could mean that an existing product is marketed in a new international market.
- Three Levels of a Product - marketers would consider the local market's need for core, actual and augmented products.
- Internet Marketing and Product - how do eMarketers make product decisions?
However, international product decision-making often centres around the standardization versus adaptation debate. Essentially, do we market the same, standard product in an international market or segment, or do we localize it, and adapted it so that it pleases local tastes? Here are some of the advantages and disadvantage of standardization.
Advantages of Standardization.
International uniformity has its own advantages. As people travel the World, they can be assured that wherever they go the product that they buy from you will be same and that it will have the same, standard benefits. This could mean the components that they buy from you in different local markets as they themselves become global.
Standardization reinforces positive consumer perceptions of your product. One of the payoffs of great quality for a single product category is that the reputation of your product will help you sell more of it. Positive word-of-mouth pays dividends for brand owners.
Cost reduction will give economies of scale. Since you are making large quantities or the same, non-adapted product - you benefit from the advantages associated with manufacturing in bulk. For example, components can be bought in large quantities, which reduces the cost-per-unit. There are other benefits relating to economies of scale, including improved research and development, marketing operational costs, lower costs of investment, and in an age where trade barriers are coming down - standardization is a plausible product strategy.
Quality is improved since efforts are concentrated upon the single product. Staff can be trained to enhance the quality of the product and manufacturers will invest in technology and equipment that can safeguard the quality of the standardized product offering.
Disadvantages of Standardization.
Since the product is the same wherever you buy it, it is wholly undifferentiated. It is not unique in anyway. This leaves the obvious opportunity for a competitor to design a tailor-made, differentiated or branded product that meets the needs of local segments. Of course products have different uses in different countries (for example cycling is a leisure activity in some nations, and a form of transport in others). Local markets have local needs and tastes. Therefore by standardizing, you could leave yourself vulnerable.
Another problem with standardization is that it depends largely upon economies of scale. With global businesses, your business will manufacture in a number of nations. However, some countries implement trade barriers (and yes - this includes the USA and the European Union). If this is the case, then localization and the resultant adaptation is inevitable.
What exactly do you intend to standardize? Is your whole product 'experience' to be standardized? Do you standardize customer service and product support, marketing communications, pricing, and channels of distribution? Then you have a standardized marketing mix - surely this cannot benefit your business.