1. INTERNATIONAL MARKETING MANAGEMENT SESSION 08: THE GLOBAL STANDARDIZATION DEBATE 1

2. 2 “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)

3. 3 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

4. 4 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

5. 5 BARRIERS TO STANDARDIZATION INTERNAL q LOCAL MANAGEMENT OPPOSITION q EXISTING NETWORK OF OPERATIONS

6. 6 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

7. 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). 7