Abstract
The literature on international marketing provides conflicting ideas and perceptions as pertains to international marketing. On one hand, the standardization model purports that the behavior of multinational companies should be uniform to enhance a global corporate image and reduce total costs. On the contrary, the customization model argues that companies need to tailor their products to suit the unique requirements of each market. Sometimes, international companies may be forced to combine both customization and standardization models to come up with a mix strategy. This paper will delve deeper into each of these strategies, using companies such as McDonald’s and Chevrolet as examples. A thorough assessment will be conducted regarding when each of these strategies is feasible. Thereafter, real-life applications of these approaches will be analyzed, with their successes and failures evaluated. This evaluation will be used to assess the implications on management regarding which strategy to employ in specific markets. The choice between customization, standardization, or mix strategies is very crucial for the management of multinational companies as this determines the success of their products in every local market.
Keywords: international marketing, standardization, customization, mix, multinational companies
Introduction
Multinational corporations are faced with the test of continually expanding into new markets with the aim of developing their business operations. To increase profitability and ensure success, these companies have to overcome a host of problems associated with the saturation of existing companies in different local and regional markets. In international marketing, a multinational corporation seeking to venture into a new market has to make a fundamental decision regarding which marketing strategy to use for that particular market. This company has to choose between using a standardized, a customized, or a mix approach when marketing its products in new markets. A standardized marketing strategy will involve the multinational company deciding to use the same marketing strategy in this new market that it uses in other countries. As such, the same process management, product, price, promotion, and people involved will still apply in the new market.
On the contrary, when the multinational company decides to use the customized strategy, it will adjust its marketing strategy to suit the unique needs and requirements of the new market. Still, a company might decide to combine certain elements of the customization and standardization models to create the mix strategy. Some people view markets as increasing becoming more global and similar and believe that the survival of multinational companies will depend on their ability to standardize. On the contrary, others single out the challenges associated with standardization and therefore support market customization and tailoring. According to literature, however, practical evidence points to the fact that multinational companies tend to make pragmatic choices based on the unique determinants of each circumstance. Buzzell (2010) claims that in the past, vast differences between different countries necessitated multinational companies to use customized marketing strategies for each local market. Over the years, Buzzel (2010) notes that globalization has resulted in a paradigm shift from customization to standardization.
Proponents of standardization argue that customer preferences around the world are becoming more similar hence the need for similar products across the board. Despite the growing dominance of standardization in international marketing, support for customization is still rife. Opponents of globalization argue that it is merely an analytical concept and an overstatement of ideology. According to Schooler and Sunoo (2011), cultural differences that have been around for millennia are still very much in existence today. Therefore, marketing similar products in each market can drive off some customers, create a rift between employees, and blind a company to the specific needs of different clients. Both arguments are logical, sensible, and coherent. This means that each of these strategies benefits the typical multinational company in particular ways. However, it is appreciated and acknowledged that the extreme use of either approach is disastrous for any multinational company.
This paper will conduct a thorough investigation of the standardization, customization, and mix methods with emphasis on the practical applications of each strategy. The purpose of this paper will be to determine the optimum level of integration of these approaches depending on the circumstances. First of all, this paper will analyze in detail the uniqueness of each strategy by determining when each is needed. The customization strategy will be evaluated regarding its ability to increase the profitability of a company. Generally, customers are more willing to pay a premium for a customized products resulted in potentially higher returns for the company. On the other hand, standardization will be evaluated concerning its suitability to the global world. Globalization has led to the bridging of different markets in terms of preferences which means that companies need to standardize their products to remain competitive. The mix strategy will then be analyzed in relation to McDonalds’ decision to use both the standardized and customized approaches in different markets.
This paper will also examine different conditions and circumstances that favor the standardization and customization approaches. Regarding customization, various conditions such as cultural differences, environmental changes, customer demand will be analyzed in detail. On the other hand, conditions such as similarity in market needs and requirements will be used to assess the need for standardization. Due the growing dominance of standardization and negative perceptions regarding customization, a practical example of Hong Kong Disneyland will be described to evaluate the shortcomings of standardization.
This paper is built on the thesis that a proper integration of standardization and customization is necessary for a multinational company today. Excessive use of only one approach is catastrophic for any company seeking international success. As such, managers of international companies are faced with the daunting task of finding the right mix between standardization and customization for each market. Managers need to conduct extensive research of new markets, factoring in the major components such as customer preferences, demand, religion, and cultural practices. A sound knowledge of these facts will enable managers to make informed decisions regarding which approach to use or how to combine both approaches effectively. Using the right approach or the right blend of approaches will significantly determine the success of a multinational company in each local market.
References
Alwazir, W. (2013). Global Marketing Strategy - Standardization vs. Adaptation. Retrieved June 30, 2016, from http://successfulglobalmarketing.weebly.com/untitled/global-marketing-strategy-standardization-vs-adaptation .
Buzzell, R. (2010). Can you Standardize Multinational Marketing? Harvard Business Review, 34(2), 102-113.
Jiang, P. (2015). Responses to customized products: The consumers' behavioral intentions. The Journal of Services Marketing. Retrieved June 27, 2016, from http://search.proquest.com.lib-proxy.fullerton.edu/docview/1690203690/fulltextPDF/FB067F97D19F421DPQ/1?accountid=9840
Schooler, R., & Sunoo, D. (2011). Consumer Perceptions of International Products. Social Science Quarterly, 24(1), 886-890.
Vrontis, D., & Thrassou, A. (2011). Adaptation vs. standardization in international marketing - the country-of-origin effect. Innovative Marketing, 3(4), 7-20.
