Arguably, multinational companies focus on developing a global marketing strategy that will make them competitive in the marketplace. As a matter of fact, competition in the world of business is becoming too dynamic and unpredictable. The basic and general decisions is whether to focus on adaptation or standardization on the global marketing strategy. The approaches used by a company will determine how effective the products and services are in the globe. Each global marketing strategy has pros and cons; hence, the product, company, as well as the marketplace determines the directions and the strategy to use. Standardization and adaptation are two global marketing strategy that is focused on by many companies.
Standardization marketing strategy mostly applies to various discussions of international businesses, as well as the means to market a certain solution based on uniform consistency in the entire marketing mix. On the other hand, adaptation global marketing strategy is the opposite of the standardization marketing strategy. It is a strategy whereby multinational companies focus on differentiating products and adapting it so as to fit the needs of various countries. It involves changing the packaging, price, as well promotion of the product. Adaptation is applied so as to achieve competitive advantage during the first entry to foreign markets. These two marketing strategies have cons and pros especially when it is used by multinational companies.
Pros of standardization marketing strategy
Certainly one of the advantages of standardized marketing strategy is that it is cost effective. The strategy has various cost benefits since it reduces the entire costs of doing business globally. Advanced technology in transportation and communication has become a harmonizing factor in the global markets. This implies that there is the introduction of the global consumers who demand for products of high quality at low prices. The changes in the world of business has also affected the competition in the market place, leading to high quality products. In addition, standardization has also led to improved distribution and planning across borders. In fact, it is possible for business to plan on how to attain competitive advantage and applied in the entire globe. Standardization has also proved to the a key factor to success among many companies who operate in the global marketplace.
Standardization marketing strategy leads to consistency of both products and consumers. Increased globalization in the globe has led to similarities in the marketplaces; hence, 5companies are now realizing the essence of standardization marketing strategy. The use of the already established distribution and marketing systems help the multinational companies through the realization of economies of scale in buying and production. One of the examples of companies that have benefited from using the standardization marketing strategy is Starbucks. In the entire globe, Coca-Cola company has kept its products equal in the entire world, which has evoked a strong band across boarders.
Cons of standardization marketing strategy
Despite the pros of standardization, there are various potential disadvantages with a standardization marketing strategy. It is worth noting that standardization marketing strategy in the globe is only possible under specific conditions. These conditions include the existence of potential synergies, market segment in the globe, as well as availability of transport and communication structure. Therefore, this condition is not feasible in every circumstance, which weakens it. Moreover, standardization also is a product oriented strategy, instead of being competitor and customer oriented. In most cases, any strategy that is product oriented is most likely to fail. In addition, the standardization marketing strategy is a subject of external and internal constraints. Hence, in case the strategy does not respond to these constraints then the company may not be successful in the international marketplace. The application of standardization in the international marketplace may disrupt the established operations in the company. Studies show that most exporting companies in the United States have opted for an adaptation strategy to remain competitive in the international marketplace.
Pros of adaptation marketing strategy
Adaptation strategy is also advantageous in various ways. In the international marketplace, consumers have different needs and demands that have to be adhered to in order to remain relevant. Adaptation is the best strategy because it is focused on satisfying the needs of the consumer. The proponents of adoption assert that despite the issues of globalization, consumers in various nations differ in demographic, cultural, economic and geographic characteristics. It is through an adaptation strategy that each one of these consumers will be satisfied. Companies need to adapt the needs of the consumers based on the attitudes, product use education level, income level as well as purchasing patterns. Another advantage of adaptation strategy is that is puts into consideration the differences in regulations and infrastructure. Coca-Cola and other multinational companies have realized that operating under standardized strategy can impede progress.
During an instability in the company, adaptation strategy provides room to make adjustments on various aspects of the market. Foe example, during the global financial crisis multinational companies had to adjust its prices and was of packaging in order to remain relevant to the consumers. MC-Donalds for example adopted a new way of packaging products depending upon the changes of consumer demands. Coca-Cola products are standardized but there are occasions that they opt for the adaptation strategy.
Cons of adaptation markeing strategy
On the other hand, adaptation can be very expensive. As a matter of fact, adaptation may require a lot of resources in order to be able to meet the needs of every consumer in the international marketplace. In addition, adaptations calls for an extensive research on the difference that exist in the international marketplace. This research can be both time and money consuming, which may derail the profitability of the company in the long run. In general perpective, it is worth noting that using both standatdication and adoption marketing strageis are very crucial. The international marketplace is dynamic; hence, it require appropriate apporches.