GLOBAL MARKETING:

STANDARDIZATION OR
ADAPTATION?
Michele Fedor, USA
International Marketing Specialist
16 November 2012

VUZF University

Business Strategies Class of Prof. Evgeni Evgeniev

Globalization
: the act or process of globalizing : the state of being
globalized; especially: the development of an
increasingly integrated global economy marked
especially by free trade, free flow of capital, and the
tapping of cheaper foreign labor markets

Globalization

The trend toward a single,

integrated and interdependent world

Economists: emergence of global

markets
Sociologists: convergence of lifestyles
and social values
Political scientists: reduction of national
sovereignty
CEO/Marketing Manager?

Global Business
Framework

Global Business

EPRG Framework (Dr. Howard V. Perlmutter, Wharton)

"The more one penetrates into the living reality of an

international firm, the more one finds it necessary to
give serious weight to the way executives think about
doing business around the world.

Organizational world views shaped by how company

was formed, CEO's leadership style, administrative
processes, myths and traditions

These orientations determine the way strategic

decisions are made and relationship between
headquarters and affiliates

Global Business

EPRG
Ethnocentric (Home Country orientation)
Domestic

strategies are superior, applied to foreign

markets

Polycentric (Host Country Orientation)

Decentralized

management, affiliates manage their market

Geocentric (World Orientation)

Integration

of worldwide marketing with no bias towards

home or host country

Regiocentric (Regional Orientation)

Region

viewed as a single market

EPRG Characteristics

Ethnocent
ric

Polycentric

Regiocentric

Geocentric

Source: Multinational Organization Development, 1979, Perlmutter, H.D.

Global Business/EPRG

Does not exist in the purist form

Only geocentric organization decides

on marketing adaption or
standardization?

Ethnocentric with surplus product?

Regiocentric uses same ads?
Polycentric insists on branding standards?

Global Marketing Strategy

Definitions

Global Marketing Strategy

Marketing Mix

4 Ps
Product/Service
Price
Place/Distribution
Promotion

Global Marketing Strategy

The Oxford University Press defines global
marketing as on a worldwide scale reconciling
or taking commercial advantage of global
operational differences, similarities and
opportunities in order to meet global objectives.
Steps before entering a market

Assessment of the economic, political, legal & cultural

environment
Selection of appropriate markets
Market entry strategy
Marketing Mix

Global Marketing Strategy

Standardization or Adaptation?

Global Village

Globalization implies
we are becoming
more alike, one
global village

Global Village

Global Village
Bulgaria and Macedonia are the
same?
British English and American
English?
Womens role in car buying?
Bathing suits in different countries?

Global Village

Global Village

Globalization

Does not imply homogenized

markets
Does imply that we are
interconnected

Standardization or
Adaption?

Standardization or
Adaption?

Standardization

Assumes homogenous markets and in

response offers standardized products and
services using a standardized marketing
mix

Adaption

Takes into account the inherent diversity in

the global marketplace and adapts the
marketing mix to fit the local culture,
preferences, laws and rules, infrastructure
and competition

Standardization

Transfer of companys best, proven ideas

Economies of scale

Learning curve
Production, Marketing, R&D/development

Simplification
Greater control
Consistency

Easier to maintain uniform brand identity

Standardization

Millward Brown study found that just over one in 10

successful ads did equally well in another country
truly cost efficient cross-border campaigns?

Marketing Science Institute study showed

distribution and price sensitivity across European
countries
Commodity product
More mass communication, more price sensitive
Increased distribution of high quality product
effective in less economically developed areas

Standardization Blunders

Workers in an
African port saw the
Fragile symbol
and presumed it
was broken glass,
threw it all in the
sea

Standardization Blunders

Golf ball manufacturer

packaged golf balls in
packs of four; four in
Japanese sounds like
death and items in fours
are unpopular

www.kwintessential.co.uk

Standardization Blunders

Sportswear manufacturer
Umbro named a running
shoe Zyklon; the same
name as the lethal gas
used in extermination
camps in WWII

Yunker, 2002

Standardization Blunders

The American beer

company Coors used the
slogan Turn It Loose in
its marketing campaign
Translated into Spanish,
it read "Suffer From
Diarrhoea."

Yunker, 2002

Standardization Blunders

Dutch Company Neerlandia

exports milk powder in tin boxes
to African countries; switched to
alu-packs made of aluminum foil
Local customs officials became
suspicious, believing they
contained illegal drugs
Customers stopped buying the
product; they had been using
the tins as vessels for boiling
water and preparing food, and
even as building material
Neerlandia reverted back to the
reusable tin box packaging
http://www.deseretnews.com/article/705374644/Cultural-tastes-affect-internationalfood-packaging.html?pg=all

Adaption

Specialization

Directly address consumer preferences

Allows for consideration of cultural, legal,

social, economic issues
Use local marketing knowledge

More targeted advertising

Strategize against competition
Aware of logistical opportunities

Adaption Blunders

In its 2013 catalog,

Ikea, in a bid to
localize for the
Saudi Arabian
market, removed
women from its
catalog
Ended up being
called sexist and
lost face

Standardization or
Adaption?

Standardization or
Adaption?

Under what circumstance can a

company in Country X sell its
product in Country Y without
changing product, price, place,
or promotion and earn a suitable
return?

Reality

It is rare to find a completely

standardized marketing mix

The theory of standardization works on a

strategic level, often not suited for the detail
required on an operational and tactical level

Standardization and adaption should be

evaluated as two ends of a spectrum

Which marketing mix elements should be

standardized or adapted and to what extend

Reality

Perspective of Contingency

Instead of total standardization or total

adaptation, this perspective seeks a balance
The

degree of standardization is determined by the

external environment and internal organizational
factors

Companies that operate in foreign markets

should have eclectic abilities to seek integration,
sensitivity and learning on the global scale at the
same time, and standardization and adaption
should not be evaluated as approaches that
cannot be coordinated.

Source: Jain, 1989; Cavusgil et al., 1993

Glocalization

Objective of Glocalization

Find the optimal combination of integration

and rationalization of operations in a global
market
Find

synergies, adapt for the rest

Think Global, Act Local

Most important is to decide which strategic

elements should or must be standardized
or adapted and to what extent, under what
conditions and when

Global Marketing Strategy Framework

Standardized Localized
Communicatio Communicatio
n Strategy
n Strategy

Standardized
Product/Service

Global Strategy

Glocal Strategy

Localized
Product/Service

Glocal Strategy

Local Strategy

Glocalization

McDonalds offers beer in Germany, wine in

France, mutton pies in Australia, Veggie
McNuggets in India, Teriyaki Burger in Japan,
McLaks in Norway
Nokia offers an anti-dust keypad for its phones
that was made specifically for India
Proctor & Gamble offers Ariel detergent in small
sachets that are affordable in the Nigerian market
PepsiCos most popular Lays Chips are: cheese
onion in the UK, lemon in Thailand, Paprika in
Germany, seafood in China

Glocalization - Kraft

Kraft Oreos

Brand turned 100, with

$2 billion in sales in 2011
(25% increase)
Emerging markets
account for half of the
brands sales
Maintains the fun, family
oriented twist, lick,
dunk communications
strategy
Product adapted to the
market
http://youtu.be/QHIAHJ6
nw0k

Glocalization - Kraft

Oreo was
underperforming so
badly in China, Kraft was
on the verge of pulling it
Reformulated cookie to
be less sweet and added
flavors/wafer options and
used Yao Ming in ads
Today, China is the
second largest consumer
of Oreo products after
the U.S.

Glocalization - Kraft

In India, the cookie was

too bitter; reformulated
and added flavors,
tailored ads to local
consumers, Oreo India
website, social
networking
Lower pricing strategy
(5 and 10 packs), and
local distribution
Between Jan-Sept
2011, sales grew 40%

Glocalization - Kraft

Glocalization - Kraft

Showing
breastfeeding
Sugary cookie in
babys hand
Pulled off
Facebook, labeled
NSFW (not
suitable for work)
Censored in other
media

Glocalization - Mattel

Mattels Barbie

Sales rose in
Japan from near
zero to 2 million
after Mattel
allowed its
affiliate to change
Barbies features
(closed mouth,
rounder face,
bigger eyes)

Glocalization - Mattel

Mattels Barbie

Flagship store
opened in China in
2009 on Barbies
50th birthday

Ambitious
marketing push into
worlds most
populous region

http://youtu.be/Ys3
xDCEfTkc

Glocalization - Mattel

Mattels Barbie

2 years later, the

store is closed
Was

it the
strategy?

Mattel insists it is
not giving up on
Barbie; still sold in
more than 1,000
retail outlets

Standardization or
Adaption?

Reality is that pure standardization and

pure adaption dont really exist, and they
shouldnt

Global marketing is too complex for

simplistic answers

Most important is to decide which

strategic elements should or must be
standardized or adapted and to what
extent, under what conditions and when

Strategy and execution are equally

important

Thank You!

mocheafedor@yahoo.com

References

Cadbury India Records 40% Growth on Aggressive Marketing Drive, The Economic Times, January
4, 2012
Global Marketing :Contemporary Theory, Practices and Cases, Ilan Alon and Eugene Jaffe, 2013,
McGraw Hill
Global Standardization-Courting Danger, Journal of Consumer Marketing, Vol 3, No 2, Spring 1986
The Glocal Strategy of Global Brands, Dumitrescu and Vinerean, Studies in Business and
Economics, 2010, vol. 5, issue 3, pages 147-155
Guidelines for Developing International Marketing Strategies, Wind, Douglas, Perlmutter, Journal
of Marketing, vol. 37 (April 1973, pp 14-23
Kraft Foodss Brand New World. Chicago Magazine, June 2011
Pink Escalators & Spa Cant Save Mattels Barbie Megastore, Investorplace.com, March 7, 2011
Strategic Insights: to Standardize or Localize www.globalizationexecutive.com/articles/Chapter3.pdf
Standardization/Adaption of Marketing Solutions in Companies Operating in Foreign Markets: An
Integrated Approach, Engineering Economics, 2008 No 1 (56)
Standardization of International Marketing Strategy by Firms from a Developing Country,
International Marketing Review, Vol. 14 No. 2, 1997, pp. 107-123
To Standardize or Not to Standardize: Marketing Mix Effectiveness in Europe, Marketing Science
Institute, www.msi.org
Want Some Milk with Your Green Tea Oreos?, Bloomberg Businessweek, May 7-May13, 2012