Standardisation vs. Adaptation A recurrent theme

Standardisation A uniform offer on a regional/global basis Minor adaptations may be made to conform to local regulations or technical requirement (e.g. electricity voltage) Capitalises on commonalities in customers’ needs across countries

Standardisation Usually considered in the context of: product pricing marketing communications;particularly advertising, branding, packaging

Standardisation The goal is to minimise costs These can be passed though to customers or taken as profit depending on the competitive environment

Product standardisation 5 forces favouring this strategy: common customer needs; global customers; economies of scale; time to market; regional market agreements

Product standardisation: common customer needs The same usage and/or perceived benefits e.g. Convergence in the car market across Triad markets: Functionally, towards 7-9 m 2 Psychologically, in terms of self-expression pleasantness of driving experience comfort

Product standardisation: common customer needs But there can be within-region variations: E.g. BMW research in Europe

BMW’s European positioning

Product standardisation: Global customers (MNCs) Result of global sourcing: a characteristic of B2B (business to business) markets E.g. MNCs often place global contracts for the supply of materials/components etc.

Product standardisation: Economies of scale Traditional reason for standardisation CAD/CAM techniques enable mass customisation and small batch production at low cost

Product standardisation: Time to market (e.g. Sony case) Innovation alone does not always provide competitive advantage Speed of launch is becoming increasingly important E.g. P&G estimate its time to market of liquid detergents is now 10% of 1980s. The key is centralisation NB Sony case - read it!

Product standardisation: Regional market agreements (e.g. EU) Encourages regional launches lower taxes within boundaries common technical standards Favours common brand names e.g. Marathon (UK) to Snickers (Cont. Euro) e.g. Raider Bar (Cont. Euro) to Twix (UK)

Product standardisation The issue is not ‘either/or’ But: What elements should be tailored to local conditions?

The costs of standardisation Stifles local initiative and experimentation High cost of failure

Standardisation of the communications strategy 2 components: message execution (visual, scripting, media Still relatively uncommon Recent examples: AXA (insurance) HSBC (banking) BA

Standardisation of the communications strategy: benefits Savings come from economies of scale Provides a consistent image Appeals to global consumer segments Shortage of creative talent Cross fertilisation of good ideas in one market to another e.g. Sony

Standardisation of the communications strategy: benefits Research amongst ad agencies suggest that: most important driver of standardised advertising is the global brand

The World’s top 20 brands -Interbrand Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Toyota 8. Disney 9. McDonald’s 10 Mercedes-Benz 11. Citigroup 12. Marlboro 13. Hewlett-Packard 14. American Express 15. BMW 16. Gillette 17. Louis Vuitton 18. Cisco 19. Honda 20. Samsung

Standardisation of the communications strategy: barriers Cultural differences: benefits sought (see BMW research)

BMW’s European positioning

Standardisation of the communications strategy: barriers Usage: Food and drink e.g. tea drinking e.g. cognac: US = stand-alone drink Europe = after dinner drink China = at dinner with water Therefore need to adapt the context to different cultures

Standardisation of the communications strategy: barriers Cultural differences: e.g. Hofestede’s masculinity index P&G in Japan showed an advert with a man walking into a bathroom when his wife was taking a shower shows disrespect for women e.g. in Japan Japan is no. 1 on masculinity index

Standardisation of the communications strategy: barriers Local advertising regulations e.g. in Malaysia foreign-made ads must not use white people. Therefore Ray-Ban were forced to shoot locally for TV ads Variations in PLC Introductory phase requires an awareness- building campaign e.g. iced tea in Europe

Standardisation of the communications strategy: barriers Finally… The NIH (Not Invented Here) syndrome: de-motivating face resistance