Marketing mixes can be standardized (global) or they can be adapted (local). Marketing mixes of most global companies tend to be “glocal” with some amount of localization.
Standardisation vs Adaptation in International Marketing
Once the firm has decided which countries to enter and which entry modes to use the next issue concerns how to design the global marketing programme/mix.
A fundamental decision regarding the design of the marketing mix is the degree to which it should be standardized or adapted.
This decision revolves around the debate whether a standardized and global marketing approach or a country-specific and differentiated approach has the most merits for the company.
The World is a Global Village. The standardization-adaptation debate started with an influential article from Theodore Levitt: “Globalization of Markets” in Harvard Business Review (1983).
The key argument of the article was/is that marketers are confronted with a homogenous global village. Levitt advised organisation to develop standardized, high quality world products and market them around the world by using standardized advertising, pricing, and distribution; that means he advised total standardization of the marketing mix.
However, today the view has mostly changed. “Think Globally, Act Locally” is viewed as the new mantra of Global Marketing. This mantra is summarized in the term “Glocalization”.
“The essence of being a global company is to maintain a kind of tension within the organization without being undone by it. Some companies say the new world needs homogenous products – “one size fits all” – everywhere. Others say the world requires endless customization – special products for every region. The best global companies understand it’s neither and it’s both. They keep the two perspectives together simultaneously” Kenichi Ohmae.
Proponents of Standardization
Believe that the era of the global village has arrived. Believe that tastes and preferences are converging world-wide. Believe that people everywhere want the same products for the same reason. Wish to achieve significant economies of scale by unifying around the globe.Proponents of Adaptation
Are sceptical of the global village argument. Assert that consumers still differ from country to country and must be reached by solutions (advertising/products) tailored to their respective countries. Point out that most blunders occur because advertisers have failed to understand – and adapt to- foreign cultures.Advantages of Standardization
Advantages of standardization is that it offers Economies of scale, provides quicker ROI, provides easier control (e.g., over the products, etc), provides access to growing homogenous global markets, there is consistency in brand image, and easier to carry out product enhancements.
Advantages of Adaptation
Advantages of Adaptation include greater market share, motivates the local management, allows the firm to match/exceed competitive offers, accounts for cultural differences, makes it easier to respond to legislative changes, product liabilities and ethics.
The Commercial Reality
Only few marketing mixes are totally global/standardized or local/adapted. Instead, in reality, most marketing mixes of global companies are “glocal”.
So Glocal = Global plus Local.
Glocalization means being ‘global and local’ or ‘standardized and adapted’ at the same time. Local versus global is not a dichotomy, but a continuum. Global companies should have both perspectives in mind when planning the marketing mix.
Product Standardization vs. Product Adaptation
The concept can be applied to the product as well.
Product standardization refers to the process of maintaining uniformity of products and services sold in different markets or in other words setting identical characteristics for a particular good or a service. Standardization promotes the uniformity among the products and services.
Product adaption refers to the process of modifying the existing products to suit different markets. There are several product adaption strategies that a business can use such as product, target market, package and design, ingredients, language, culture, religion etc.
That means in terms of target markets, packaging and designs, ingredients, languages, culture and etc the organizations need to come up with different ways so that they can cater different markets in a way where the customer needs and requirements are addressed.
Examples of Standardisation, Localisation and Glocalisation
The best example is that of McDonalds. Here’s how the company use Glocalization for its Marketing Mix elements.
| Marketing Mix Element | Standardized | Adapted |
|---|---|---|
| Product | Hamburgers, Fries, Soft Drinks | Mc Aloo (potato) Tikka burger (India) |
| Promotion | Brand Name | Slang nicknames: Mickey D’s (USA, Canada), Macky D’s (UK, Ireland), Macca’s (Australia), Mäkkäri (Finland), McDo (France) |
| Promotion | Advertising slogan “I’m loving it” | France: “Venez comme vous etes” which means “Come as you are” |
| Place | Free standing restaurants in high traffic public areas | Mc Donald’s Switzerland operates themed dining cars on the national rail system. McDonald is served on the Stena Line Ferry from Helsinki to Oslo. |
| Price | Average Price of Big Mac is $4.20 (United States) | $6.79 (Norway), $2.44 (China) |
McDonald’s restaurant in France have a different design – the golden arch, for example, is more subtle. Some of these design elements can now be found in the States.
Another example is that of Disney theme park.
Disney’s theme parks in California and Paris are extremely successful, but when the theme park in Hong Kong was launched in 2005, Disney used the same standardized global marketing strategy which it had used for its theme parks in California and Paris.
However, this approach did not yield a similar financial performance from the Disneyland Park in Hong Kong.
As a result, the company adapted the marketing strategy for Hong Kong to suit the Chinese culture and made changes such as reduction in prices of the tickets, made changes to decors and settings, changed the local visitors' customs, and even made changes to the labor practices, in order to make the theme park look somewhat “chinese” (Matusitz, 2009).
Glocalization was adopted in order to achieve better results. Whereas globalization stresses upon the use of similar strategies and processes worldwide, glocalization is about adapting a global idea or a product to suit local differences.
Here’s another example.
Disney’s internationally broadcast Christmas advertisement “From Our Family to Yours” (2020), which depicted Filipino culture, has received positive comments from all quarters, inlcuding its target audiences as well as the general public.
Using this advertisement as an example, lets try to understand the concept of standardisation, localisation and glocalisation in international marketing.
Disney’s 2020 Christmas advertising campaign makes use of ‘glocalisation’, which means the business takes into account global as well as local considerations.
Studies suggest that cultural and national context can influence advertising strategy (Douglas Holt, Grant McCracken and other Consumer Culture Theory researchers), and Disney’s advert targets this particular cultural (ethnic and religious) group – Filipinos within a global market.
Global brands strive to remain connected to the flow of consumer cultures in order to retain vitality and relevance in the marketplace.
In this case, Disney shows their global audiences this specific Filipino cultural context and that we share the same values and traditions of gift giving, passing on heirlooms, the making of Filipino Parols (Christmas lanterns) and the relationship between grandparents and grandchildren.
Meaning and communication can also change based on culture e.g. issues of language, culture, visual representation, and so on.
Disney’s 2020 campaign manages to maintain the brand’s core value and message while addressing the localised cultural knowledge. Consequently, this advertising campaign is a very good example of how a global brand adopts glocalisation and is marketed across cultural and national boundaries.
Advertisers who are planning for glocalisation understand the cultural specificity of meaning and communication and the consequent need for localise cultural knowledge to decode advertising meaning, with the support from the application of relevant communication concepts (such as intertextuality, symbolism, polysemy, covert communication, and text and context).
These points are logically linked to cultural issues, problems of language, visual representation and regulation, in order to create successful campaigns that focus on glocalisation.
References
The Globalization of Markets by Theodore Levitt
Akgün, A.E., Keskin, H. and Ayar, H. (2014). Standardization and Adaptation of International Marketing Mix Activities: A Case Study. Procedia – Social and Behavioral Sciences, 150, pp.609–618.
Theodosiou, M. and Leonidou, L.C., 2003. Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research. International business review, 12(2), pp.141-171.
Matusitz, J. (2009). Disney’s successful adaptation in Hong Kong: A glocalization perspective. Asia Pacific Journal of Management, 28(4), pp.667–681.
BATheories.com is managed by a group of educators from Mumbai. We also manage the website StudyMumbai.com. Our panel includes experienced professionals and lecturers with a background in management. BATheories is where we talk about the various business theories and models for BA (Business Administration) students.