Transcript Session 9

INTERNATIONAL MARKETING
MANAGEMENT
SESSION 9:
THE GLOBAL STANDARDIZATION
DEBATE
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THE GLOBAL STANDARDIZATION DEBATE
“A powerful force (Technology) now drives the world toward a
single converging commonality. The result is a new commercial
reality -- the explosive emergence of global markets for globally
standardized products, gigantic world-scale markets of previously
unimagined magnitudes.
Corporations geared to this new reality generate enormous
economies of scale in production, distribution, marketing, and
management. When they translate these into equivalently reduced
world prices, they devastate competitors that still live functionally in
the disabling grip of old assumptions about how the world now
works.”
LEVITT (1983)
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BENEFITS OF STANDARDIZATION
COST SAVINGS
 Economies of Scale in Production/Marketing
 Minimizes Product/Advertising Development Costs
UTILIZATION AND TRANSFER OF KNOW-HOW
 Experience Transfer
 Idea Transfer
UNIFORM IMAGE OF QUALITY AND SERVICE
 Global Customers
 International Communication
EASIER CO-ORDINATION AND CONTROL
 Uniform Standards
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BARRIERS TO STANDARDIZATION
EXTERNAL
DIFFERENCES IN CUSTOMER CHARACTERISTICS
AND RESPONSE PATTERNS
 Socio-cultural values and life-styles
 Perception and associations
GOVERNMENT REGULATION AND RESTRICTIONS
 Product/Advertising regulation
 Tariffs, buy local
DIFFERENCES IN MARKETING INFRASTRUCTURE
 Media
 Distribution
LOCAL COMPETITION
 Type of competitors
 Competitive behavior
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BARRIERS TO STANDARDIZATION
INTERNAL
 LOCAL MANAGEMENT OPPOSITION
 EXISTING NETWORK OF OPERATIONS
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DIMENSIONS OF GLOBAL MARKETING STRATEGIES
DEGREE OF MODIFICATION
No
Modification
Minor
Modification
Major
Modification
Positioning
Product
Brand Name
Packaging
Pricing
Advertising
Consumer Promotion
Trade Promotion
Public Relations
Distribution
Company A
Company B
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SUMMARY
 Issue is not whether to standardize or adapt but
how far to adapt.
 Some mix elements (e.g. product, positioning)
easier to standardize than others (e.g. distribution).
 Often need to adapt more in some regions than
others (e.g. emerging markets).
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