About the Author Based in the United Kingdom, Ian Linton has been a professional writer since 1990. Packaging, advertising, and labeling requirements can all vary between markets. Adaptation as an effective customer-orientation strategy Adaptation strategy implies changing various aspects of products and services to a considerable extent in order to meet the needs of consumers in international markets taking into account their differences Chung, 2009. Even instruction or maintenance manuals should provide dimensions in centimeters, weights in grams or kilos, and temperatures in degrees Celsius. When entering new market, decisions need to be taken by strategic level management about the extent of standardisation in relation to each individual component of the marketing mix. However, the high cost related to adaptation may limit the use of the adaptation approach Vrontis, 2005.
For example, Japanese consumers tend to prefer certain kinds of packaging, leading many U. These traits are adaptations-characteristics or behaviors that give an organism an edge in the struggle for survival. In these cases, a business can opt to alter or even develop products to incorporate specific needs or cultural practices. Foreign government product regulations are common in international trade and are expected to expand in the future. This research identified the advantages and disadvantages of each method stating that the solution to a successful market approach lies between the two extreme approaches. Global Marketing Strategy: Adaptation vs Standardization.
To summarise discussions, it is important for global businesses in the twenty first century to be striving to take advantage of both strategies — standardisation, as well as, adaptation through maintaining an adequate balance between the two. Retrieved November 12, 2013, from 10 Mourdoukoutas, P. An alternative, the adaptation marketing strategy, forgoes universality in favor of tailoring marketing to appeal to the cultural or demographic particulars of customers in the new market. Low speed of implementation of adaptation strategy in practice marks one of the main disadvantages of this strategy Poulis and Poulis, 2013. In some cases, global businesses pursuing adaptation strategy may even initiate changes in certain markets, therefore deriving first-mover advantages Kinard et al. Local market circumstances often favour the case of product adaptation.
On the other hand, adaptation strategy can be applied in order to address differences associated with each individual market; however, adaptation comes for an extra cost and this fact may compromise price competitiveness of relevant products and services. In addition, the company has begun to offer healthier food products, such as oatmeal, given consumers are more health conscious. Multinational companies should not treat the world as one single market. High level of effectiveness of monitoring the outcome of marketing communications also contributes to efficiency of standardisation strategy Chung et al. Standardization is more efficient and cheaper. Although it retains the economies of scale in manufacturing, the firm sacrifices potential savings on the advertising front.
Adaptation strategies for export territories must take account of a number of factors, including cultural preferences, price, quality standards, measurement systems, service and support. When pursuing product adaptation strategy differences of specific markets can be addressed at product development stage, accommodating differences in customer wants and needs in an effective manner. Moreover, according to the Conceptual Model of International Marketing Strategy the degree of standardisation or adaptation in new market has direct implication on sales, profits, market share, the levels of customer satisfaction, and composite performance. It has been able to leverage the inherent features of the products and capitalize on its Australian heritage to differentiate itself and become an international success using the dual product and communication extension strategy. Red Bull in Chinese market, on the other hand, is designed in gold and red colours, because gold colour represents wealth and happiness in China and red is associated with good luck. Also, 'spicy' is a relative term.
For example, some brand names may sound like profane or obscene words in a foreign tongue. Retrieved November 12, 2013, from 8 Levitt, T. If your company manufactures more than one product or offers many models of a single product, you should start by exporting the one that is best suited to the targeted market. Plus, learn where to turn for more information about your specific target markets. Eg: The way the Red bull product is being sold in China and North America are different from one another.
Basis of Difference Adaptation Standardisation 1 Application in Marketing Means It is supported by strong market variety especially by market individualism and market uniqueness. According to these authors, supporters of standardization believe that there is a union of cultures with similar environmental and customer demand around the globe. Market research and contacts with foreign partners, buyers, customers, and others should give your company an idea of what products can be sold and where. Body size may also be an issue. As pointed out, adaptation involves modifying a product so as to meet the local requirements and customs. Instituting Product Adaptation The first order of business, of course, is to figure out how your domestic market differs from each foreign market you wish to enter. Benefits to Standardization includes Firms that produce a global product can obtain economies of scale in manufacturing, and higher quantities produced also lead to a faster advancement along the experience curve.
Slim-Fast adapts both product and advertising to comply with varying government regulations for weight-loss products. For instance, it developed dustproof keypads-crucial in dry, hot countries with many unpaved roads. Further more they argue that standardization will be successful when the homogeneity of customer response and the degree of similarity in economic freedom is high and competitive advantages are easily transferable. A business should weigh the financial costs against the probability of success before embarking on an adaptation marketing strategy. Organisational factors relate to organisational culture, type of ownership, the degree of international experience and the share of revenue from international markets Theodosiou and Leonidou, 2003. Price modification - adjusting the size or quantity of the product to take into account the changed price.