International companies must decide how much to adapt their marketing strategy to local conditions. At one extreme are companies that use a globally standardized marketing mix worldwide. Standardization of the product, communication, and distribution channels promises the lowest costs. The chart given below shows one end as standardizing the marketing program and at the other extreme is an adapted marketing mix, where the producer adjusts the marketing program to each target market.
Economies of scale in production and distribution
Lower marketing costs
Power and scope
Consistency in brand image
Ability to leverage good ideas quickly and efficiently
Uniformity of marketing practices
Differences in consumer needs, wants and usage patterns for products
Differences in consumer response to marketing mix elements
Differences in brand and product development and the competitive environment
Differences in the legal environment
Differences in marketing institutions
Differences in administrative procedures
Between the two extremes, many possibilities exist. Most brands are adapted to some extent to reflect significant differences in consumer behavior, brand development, competitive forces, and the legal or political environment. Satisfying different consumer needs and wants can require different marketing programs. Cultural differences can often be pronounced across countries. Four cultural dimensions that can differentiate countries are identified:
1. Individualism vs collectivism: In collectivist societies such as Japan, the self worth of an individual is rooted more in the social system than in individual achievement.
2. High vs low power distance: High power distance cultures tend to be less egalitarian.
3. Masculine vs feminine: How much the culture is dominated by assertive males versus nurturing females?
4. Weak vs strong uncertainty avoidance: How risk tolerant or aversive people are.
Global Marketing Pros and Cons
Even global brands, such as Pringles, Always, and Toyota, will undergo some changes in product features, packaging, channels, pricing, or communications in different global markets. Marketers must make sure that their marketing is relevant to consumer in every market.
When Walt Disney launched the Euro Disney theme park outside Paris in 1992, it was harshly criticized as being an example of American cultural imperialism. A number of local French customs and values, such as serving wine with meals, were ignored. As one Euro Disney executive noted that when they first launched there was the belief that it was enough to be Disney but now they realized their guests (clients or customers) need to be welcomed on the basis of their own culture and travel habits. Renamed Disneyland Paris, the theme park eventually became Europeâ€™s biggest tourist attraction â€“ even more popular than the Eiffel Tower â€“ by making a number of changes and adding more local touches.
Some types of products travel better across borders than others â€“ food and beverage marketers have to contend with widely varying tastes. Warren Keegan has distinguished five adaptation strategies of product and communications to a foreign market
Straight extension means introducing the product in the foreign market without any change. Straight extension has been successful with cameras, consumer electronics and many machine tools. In other cases, it has been a disaster. General Foods introduced its standard powdered Jell â€“ O in the British market only to find that British consumers prefer the solid wafer or cake form. Campbell Soup Company lost an estimated $30 million in introducing its condensed soups in England consumers saw expensive small sized cans and did not realize that water needed to be added. Straight extension is tempting because it involves no additional R&D expense, manufacturing retooling, or promotional modification; but it can be costly in the long run. Product adaptation involves altering the product to meet local conditions or preferences. There are several levels of adaptation.