The marketing concept holds that consumer needs vary and that marketing programs will be more effective when they are tailored to each target group. This also applies to foreign markets. Yet in 1983, in a groundbreaking article in the Harvard Business Review, Harvard Professor Theodore Levitt challenged this view and supplied the intellectual rationale for global standardization: The world is becoming a common marketplace in which people â€“ no matter where they live â€“ desire the same products and lifestyles.
The development of the Web, the rapid spread of cable and satellite TV around the world, and the global linking of telecommunications networks have led to a convergence of lifestyles. The convergence of needs and wants has created global markets for standardization products, particularly among the young middle class.
Global corporations are favored by most marketing wizards that try to sell the same product the same way to all consumers. They focus on similarities across world markets and â€œsensibly force suitably standardization products and services on the entire globe. These global marketers achieve economies through standardization of production, distribution, marketing, and management. They translate their efficiency into greater value for consumers by offering high quality and more reliable products at lower prices.
Coca-Cola, McDonaldâ€™s Marlboro, Nike, the NBA and Gillette are among the companies that have successfully marketed global products. Consider Gillette: Some 1.2 billion people use at least one Gillette product daily, according to the companyâ€™s estimates. Gillette enjoys economies of scale by selling a few types of razor blades in every single market.
Many companies have tried to launch their version of a world product. Yet, most products require some adaptation. Toyotaâ€™s Corolla will exhibit some differences in styling. McDonaldâ€™s offer a ham and cheese â€œCroque McDoâ€ in France, a variation of the French favorite croquet monsieur. Coca- cola is sweeter or less carbonated in certain countries. Rather than assuming that its domestic product can be introduced as it is in another country the company should review the following elements and determine which would add more revenue than cost:
* Advertising execution
* Sales promotion
* Advertising themes
* Advertising media
Consumer behavior can dramatically differ across markets. Take annual beverages consumption. One of the highest per capita consumers of carbonated soft drinks is the United States, with 203.9 liters per capita consumption; Italy is among the lowest. But Italy is one of the highest per capita drinkers of bottled water with 164.4 liters, whereas the United Kingdom is only 20 liters. When it comes to beer, Ireland and the Czech Republic lead the pack with over 150 liters per capita, with France among the lowest at 35.9 liters.
A company can produce a regional version of its product, such as a Western European version. Finnish cellular phone super star Nokia customized its 6100 series phone for every major market. Developers built in rudimentary voice recognition for Asia, where keyboards are a problem, and raised the ring volume so the phone could be heard on crowded Asian streets
A company can produce a country version of its product. In Japan, Mister Donutâ€™s coffee cup is smaller and lighter to fit the hand of the average Japanese consumer; even the doughnuts are a little smaller. Kraft blends different coffees for the British (who drink their coffee with milk), the French (who drink their coffee black), and Latin Americans (who want a chicory taste).
A company can produce a city version of its product â€“ for instance, a beer to meet Munich tastes or Tokyo tastes.
A company can produce different retailer versions of its product, such as one coffee brew for the Migros chain store and another for the Cooperative chain store, both in Switzerland.
Besides demand side differences, other types of supply side differences can also prevail. Flexible manufacturing techniques made it easier to produce many different product versions, tailored to particular countries. One study showed that companies made one or more marketing mix adaptations in 80% of their foreign products and that the average number of adapted elements was four. So perhaps globalization dictum should be rephrased as Global marketing â€“ â€˜yesâ€™ but global standardization â€˜not necessarilyâ€™.