8. Firms pursuing a localization strategy customize their product offerings, marketing strategy, and business strategy to national conditions.
Article chosen:
Wooten, Adam. “International Business: Size matters in global product marketing”. Deseret News, 20 May 2011, Web. 22 November 2014. http://www.deseretnews.com/article/705372972/Size-matters-in-global-product-marketing.html?pg=all
With globalisation, advancement of technology and improved communication, economies have become more liberalised. Opportunities for companies have increased. But, at the same time, challenges have increased (Armstrong and Kotler, 2008). Making considerations for the cultural aspects and socio-economic aspects is crucial for the success of companies in the international market as these factors influence the product strategies, marketing strategies and business strategies. When expanding internationally, companies often follow an adaptation (or localisation) strategy wherein the product strategies, marketing strategies and business strategies are adjusted and adapted to the cultural aspects and socio-economic aspects of the foreign market (Armstrong and Kotler, 2008).
The article chosen reflects on how the product strategies need to be adjusted based on understanding of size differences when exporting internationally. It is often found that the products fail in international markets as they are not of the size needed by the customers in the local market. The article considers the Swedish furniture retailer IKEA for explaining this. When IKEA entered the US market, it had to adjust the sizes of its products as per the needs of the North Americans as they preferred curtain lengths, sofa depths and size of the glasses to be more than the European standards that IKEA was exporting. Again, for the U.S. Latino market, as the Latino families were larger with more number of family members, demand for larger sofas and larges dining tables existed. On the other hand, the Japanese market demanded for smaller sized products. In Japanese market in the 1970s and 1980s, IKEA failed miserably to it could not meet the market demands. But, in the 2000s, when IKEA re-entered the Japanese market and adapted its product offerings to suit the smaller living spaces of Japanese houses, the company succeeded. Similarly, automobile companies, who offered large car models, that were highly preferred in the US markets, failed in the Japanese markets as Japanese preferred smaller sized cars to fit in their small parking spaces. Moreover, the size of an average person influences the product sizes they prefer (Wooten, 2011).
References
Armonstrong, G. and Kotler, P. Principles of marketing. Prentice Hall, 2008. Print.
Wooten, Adam. “International Business: Size matters in global product marketing”. Deseret News, 20 May 2011, Web. 22 November 2014. http://www.deseretnews.com/article/705372972/Size-matters-in-global-product- marketing.html?pg=all
