Standardizing and/or Adapting International Marketing Strategy

Introduction

Taking into account the current international market, companies have considered the process of globalization and related activities as the only technique to remain competitive. Decision-making related with the best international marketing mix has remained crucial mainly due to the fact that the arrangement influences the performance. According to literature, there is close relationship between standardization and performance. However, companies strategies tends to have influence toward performance especially techniques connected with marketing mix (Viswanathan and Dickson 2007). Companies are expected to make precise decision when considering the move to expand in the foreign markets. The reason behind this is that there are various aspects that impact the decision-making process such as the internalization procedures. This paper will explore the standardization and adapting international marketing strategy.

Part 1

One crucial decision entails the marketing mix in the case of foreign market expansions. Capacity to develop relevant marketing mix, organizations is able to meet the needs of the target customers and attain the firm objectives and improve on performance. Hence, commodities that are entering the market for the very first time must be tailored to fit with the features of that country (Crane & Matten 2015). Chances are that single strategies may not suit and satisfy the consumers mainly when considering the subsisting market heterogeneity. The company must decisive on the excellent strategies suitable for the marketing mix – standardization or adaptation (Lee & Carter 2012).

The key goal of global strategy has to do with the management of differences that arises beyond the domestic boarders. The strategies adopted for the international marketing tends to have three diverse perspectives. First, there is the concentration dispersion perspective that examines the organizational structure (Cateora et al. 2016). The other perspective entails the integration-independence that deal with the competitive process that are experienced by companies. Finally, there is the adaptation-standardization perspective that relates with the level of adjustment or the standardization of the company marketing mix elements. From the time an organization makes the decision of extending its core activities to foreign markets, it needs to settle to either the adaptation or standardization of the marketing mix (Theodosiou & Leonidou 2003). Such may be accomplished when the firm consider applying a single strategy in al foreign countries or consider customizing the crucial elements in each market. The organization decisions of either adapting or standardizing its core strategies remain fundamental as the decision impacts the company crucial approach toward business and ways to compete. In all cases, the decision of adapting or standardizing has to be based upon the potential financial returns and risks that are incorporated in every alternative (Lee & Carter 2012). The decision of global standardization remains relevant only to a situation where there is optimistic influence on the company performance. Despite this, there are massive differences that are experienced between markets even in the case of developed countries (Burkitt 2012).

Standardization and global consistency has various merits. For instance, individuals may have expectation of experiencing similar level of quality for a given brand anywhere globally. Standardization process as well supports an optimistic consumer sensitivity of a given product. In case an organization holds strong brand identity and strong image, consideration of standardization process may work in its favor. Positive word of mouth will mean an increased sale all over the world (Ryans Jr, Griffith & Steven 2003). There is the advantage of cost reduction that provides economies of scale. Companies will sell large quantities of the same product, non-adapted and capacity to purchase components in large quantities which lower the cost-per-unit. Other merits attached with economies of scale incorporate increased research and development, marketing operational expenses, and low cost of investment (Rouse 2005).  Additionally, standardization is considered as clear approach at a time when trade barriers are lowering. Consideration of standardization process assists organization to focus more on creating uniform marketing mix especially in case of a single product which creates a room for quality improvement. With emphasize on one identical product, employees may be well trained toward enhancing product quality to attract manufacturers devote in technologies and equipments that have capacity of safeguarding quality of standardized product offers (Chung, 2009).

Demerits of standardization entail the fact that diverse markets would mean diverse preferences. Such tends to allow competition in gaining market shares via tailoring the products toward meeting the need of the market. The fact is that different markets have diverse tastes and needs and utilization of standardized approach means that organizations may be susceptible (Rouse 2005).

Standardization Adaptation
Pros Faster setting up time

Economies of scale

Excellent motoring process of communication

Respect for the local requirement and anticipation

Excellent domestic reputation

Customers are capable of maintain their attraction

Cons Probable loss in advertising efficiency

Little flexibility and little reactivity

Possible to cause negative reaction due to disregard of domestic needs

Higher expenses

Poor speed of execution and time consuming

Challenging to understand what customer wants

Part 2:

According to Vrontis 2003 standardization process is believed to hold a union of cultures with the same customer and environmental demand all over the world. It has been argued that trade barriers are lower and technology advancement and organization must display global orientation within their core strategies. It is maintained that, capacity to create single strategy for the entire international global markets and standardization of the marketing mix elements may attain consistency with consumers and lower costs. Vrontis, Thrassou and Lamprianou, 2009 set it out that organizations that tends to be managed well are not for customization of items but consider providing global standardized commodities that are considered as functional, advanced, low prices, and reliable. Organizations have capacity of achieving long-term success via concentration on what individuals’ desires instead getting worried on what consumers think they deserve (Vrontis and Thrassou 2007).

Centrally to this, organizations that support the international adaptation process highlight the significance of customization. The significant foundation of adaptation entails the fact that when entering the foreign markets, organizations must account for the environmental factors as well as barriers like climate, language, race, education, occupations, taste, cultures, societies, and different legislations (Bradley 2005). Organizations that consider this approach are expected find ways of adjusting all the marketing strategies incorporating the manner they market, sell, and distribute with an aim of fitting the new market demand. It is significant to modify the marketing mix and the marketing strategies to ensure that local tastes are met, special market needs are fulfilled and determining consumer non-identical condition (Sheth and Sharma 2005).

Starbuck has maintained business approach on the standardized premium positioning. Starbucks has been controlling the quality of its products and services with utilization of standardized approach. For instance, the company has been operating with the strict no smoking concept even in the smoking cultures with accusation that smoking interferes with the sweet coffee aroma. In addition, standardization by the company has facilitated level of brand awareness via corporate branding, replication of the company store concepts, and standardized services (Keegan & Green 2017). Starbuck has been utilizing the ethnocentric approach in appealing to its target customers who are on the look for “American experience.” With such a focus, Starbuck’s has been able to offer services and products in diverse local competitive markets. Ethnocentrism is considered as a reflection toward the organization self-references criteria. This approach has created biased perceptions of the foreign market conditions in favor of domestic country perceptions. Starbucks has benefited from the customer aspirations for the American lifestyles in core markets such as China, Japan, and Singapore (Navarro et al. 2010).

When Starbucks launch a in a new country, the company is dedicated toward researching more on the history, culture and local tastes before it consider partnership with other local coffee firms. It has to do and invest in research and development before it builds its own stores to serve the needs of the locals with no compromise to the signature brand that was founded in Seattle. Starbuck standardization strategy is blended with local products with the creative store design. The company owns eight design centers all over the world. Each of these centers tends to works with targets of understanding what is deemed as normal and design-speaking in a given country. In Japan for example, the building design tends to be idiosyncratic where there are low roofs, traditional and with no insinuation to the national religion, Shintoism (Doole and Lowe 2008). For recreation of such feel, Starbuck has considered partnering with other local designed to come up with the city spirit. Starbuck store located in Fukuoka in Kyushu has the 2000 interlocking wood blocks which give the intuition of a forest to suit the spirit of Shintoism of respecting nature (Akaka and Alden 2010). In addition, there is another store located in Meguro featuring local craft stores with well designed style of a customary tea house. Conversely, Japan is known for having selection of localized foods and drinks. Starbuck had to introduce the green tea referred to as “matcha” (ground tealeaves) cookies crumble with pudding, and frappucinos. The reason would be probably due to the fact that Asia customers are acclimatized to beverages with solid mixed in. At first, Starbuck launched it stores with the American foods- in which to the Japanese the taste was vast and sweeter. Since then, Starbuck has considered using the Japan local breads for downsized sandwiches and condensed sweetness (Burkitt 2012).

On the other hand, Starbuck has to consider two crucial factors in the case of Chinese market. Due to successive food scandals, Chinese have been more trusting foreign foods and drinks brands. This entails localization via branding the stores within China as Chinese core drink brands. In addition, China has been positioned as an emerging country with aspiration class (some to the class that is in Europe at the turn of 19th century) (Dow 2006). The China bourgeoisie are in search of consumables an aspect that works in the favor of Starbucks as aspired brand. Hence, Starbucks had to bump coffee prince to almost 4 Euros per cup in comparison to 2.30 Euros in the United Kingdom. Such considerations have not hindered the company from adopting such creative and innovative stores designs in the country. For example, Starbuck had to hire a famed Japanese designer Kengo Kuma with targets of designing many-tiled, geometric exterior design for the Starbuck store located in Xi’an. However, Starbuck operation in China has been faced with some serious challenges (De Mooij and Hofstede 2010). The nation American café culture failed in the Chinese culture. After undertaking market research, it was revealed that Chinese prefer going to a café in a group of more than 10 people and such was straining the western coffee house that were built only to cater for single customers and two-person group. Hence, Starbuck was forced to adopt Chinese stores to ensure they accommodated large group of people

Part 3:

Recommendation

International standardization is marketing approach that best suit for international marketing. Such marketing strategy tends to be in line with diverse cultures and countries when it comes to promotion of products. It is recommendable for Starbuck to utilize the standardization strategy through being located in almost the same places all over the world. Such a move will give the company an international reputation for working in certain areas (Keegan & Green 2017). Also, Starbuck may consider undertaking localized strategy where the company would plan certain marketing campaign for specified locations or county. This would require the company to change its brand in totality to ensure that it gains extra sales for remaining localized and specifically to an area and consumers.

Conclusion

Starbucks adoption of standardized strategy in international marketing has created a global brand that has been well recognized all over the world and seen in the same way in diverse cultures. The strategy has been suitable for Starbucks since the company has the same products which provide an opportunity to remain with the same packaging for all products. Hence, with this, consumers are capable of recognizing the company products easily regardless of where they are globally. Starbuck has been considered as “homely brand” to consumers who are around in diverse culture to theirs hence feeling more comfortable within the company environment.

Bibliography:

Akaka, M.A. and Alden, D.L., 2010. Global brand positioning and perceptions: International advertising and global consumer culture. International journal of Advertising, 29(1), pp.37-56.

Bradley, F., 2005. International marketing strategy. Pearson Education.

Burkitt, L, 2012. Starbucks Plays to Local Chinese Tastes. Available [Online]: http://online.wsj.com/article/SB10001424127887324784404578142931427720970.html.

Cateora, P., Gilly, M., Graham, J. & Money, R. (2016) International Marketing, 4th (International Edition, McGraw Hill

Chung, H.F., 2009. Structure of marketing decision making and international marketing standardisation strategies. European Journal of Marketing, 43(5/6), pp.794-825.

Crane, A. & Matten, D. 2015. 3rd Edition, Business Ethics, Oxford University Press

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Navarro, A., Losada, F., Ruzo, E. and Díez, J.A., 2010. Implications of perceived competitive advantages, adaptation of marketing tactics and export commitment on export performance. Journal of world business, 45(1), pp.49-58.

Rouse, M 2005. Localization. Available [online]: http://searchcio.techtarget.com/definition/localization.

Ryans Jr, J.K., Griffith, D.A. & Steven White, D., 2003. Standardization/adaptation of international marketing strategy: Necessary conditions for the advancement of knowledge. International Marketing Review, 20(6), pp.588-603.

Sheth, J.N. and Sharma, A., 2005. International e-marketing: opportunities and issues. International Marketing Review, 22(6), pp.611-622.

Theodosiou, M. & 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.

Viswanathan, N.K. and Dickson, P.R., 2007. The fundamentals of standardizing global marketing strategy. International Marketing Review, 24(1), pp.46-63.

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Vrontis, D., Thrassou, A. & Lamprianou, I., 2009. International marketing adaptation versus standardisation of multinational companies. International Marketing Review, 26(4/5), pp.477-500.

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