As marketers, we talk about making decisions about an organization’s global marketing mix, in other words, to what degree the marketing mix should be standardized or adapted. However, before we start, let us list the learning goals for this article. Firstly, the goal is to understand the connection between choice of the global marketing mix and the rest of the internationalization process.
Secondly, we will gain an understanding of what it means to standardize or adapt an organization’s marketing mix and why an organization might be motivated to strive for a high degree of standardization. Thirdly, we will learn how to evaluate different factors that can help an organization decide. The most suitable degree of standardization or adaptation of the different elements of the marketing mix.
So let us begin so. How is the choice of the global marketing mix connected to the rest of the internationalization process when an organization goes for marketing their products and services? Only on the home market to also target one or several foreign markets, we talk about an organization’s internationalization process. The internationalization process starts with a choice of which foreign markets target.
We call this the market selection process. Secondly, we would decide on how to organize our entry to the foreign market. We would evaluate different factors and subsequently we will decide on which intra mode to use and ultimately, we would define our marketing mix the four or the 7ps for the foreign markets. The marketing mix we use on the foreign markets may vary to the one we use on the home market and we would address different factors that influence our choice regarding standardization and adaptation of the marketing mix.
Choice of the global marketing mix is what we’ll address in this article. So when deciding on the global marketing mix, what does standardization and adaptation actually mean and what might motivate an organization to strive for a move in either direction? Let us use an example. This French business produces French cakes and desserts in these modern production facilities, well-educated confectioner’s, develop recipes and create delicious cakes and desserts ready to be sold and distributed to cake, loving customers, the products, the cakes and desserts are typically French in style and tastes.
They are frozen immediately after production and then sold and distributed to organizational customers, a variety of catering companies, restaurants and cafes. Around France. They have developed a price structure which includes a specified discount system with lower prices at higher volume orders they attract new and retain existing customers through a range of promotional activities. Some of these are key account management.
They attend trade shows and they supply their customers with in-store point-of-sale materials, where relevant. If French cakes were to copy this exact setup off the four PS in France when entering a foreign market, for example the UK, we would call this a complete standardization of the marketing mix. If to the other extreme, they were to enter the UK with a different marketing mix, a different product sold through different distribution, blogs at different prices and supported by a different set of promotional activities.
Then this would constitute a complete adaptation of the marketing mix. However, it is unlikely that companies will end up at either of these two extremes. It is more likely that an adaptation of some of the elements in the marketing mix will take place and that others will remain the same. Therefore, marketers will most often talk about the degree of or different elements of adaptation or standardization of the marketing mix.
So why might French cakes be motivated to achieve a high degree of standardization? Entering new markets is a costly affair, both with regards to actual monetary costs and human resources involved, but it is also time consuming, and this will increase the company’s time to market and delay their internationalization process. Therefore, most organizations are naturally motivated towards achieving some degree of standardization.
Simply in order to minimize these types of costs. We have now established an understanding of the connection between the choice of global marketing mix and the rest of the internationalization process, and we understand what it means to standardize or adapt an organization’s marketing mix for foreign markets, and subsequently we have talked about why an organization Might be motivated to strive for some degree of standardization, so let us move on so what might impact French cake’s choice of a suitable degree of standardization or adaptation of the marketing mix when entering the UK market? Let us look at some of the factors that would speak for a move toward standardization and then as some factors which might indicate that some level of adaptation would be suitable.
Let us look at some other factors which would indicate the standardization of all or parts of the marketing mix could be suitable for French cakes when entering the British market. First of all, we will look at the level of globalization of the market that French cakes operates. On research has shown that the British consumers have different needs and values, and so therefore, this does not call for a high level of standardization.
For example, we would recommend that the product, the cakes and desserts be adapted slightly to suit the British consumers tastes. Some of the larger change of restaurants have a global presence and use centralized purchasing processes. This would indicate that French cakes would benefit by having a centralized approach to part of their sales organization in order to respond to these types of customers.
Secondly, we will look at the globalization of the industry, which French cakes operates in if an organization has high research and development costs. This is often the case when operating in technology heavy industries. They are usually very motivated to recuperate these costs as quickly as possible. They would therefore be keen to standardize their marketing mix and thereby be able to enter many countries quickly and achieve high volume sales.
In our example, French cakes does not have high R & D costs, so this will not be the most significant factor for them to consider when evaluating standardization potential. Thirdly, we would look at the globalization of the competition in addition to some local competitors. French cakes also face some larger competitors who supply the larger restaurant change on the British market. These competitors have a global presence and a relatively high level of standardization.
This indicates that French cake should also consider a standardized approach in some aspects of their marketing mix. An internal factor which could indicate standardization potential, French cakes, competitive advantage of the French market is their ability to quickly respond to changes in market needs due to their close cooperation with the distribution network. This also has potential on the British market, but will take time to establish in order to do this successfully.
We could, for example, advise French cakes to standardize certain elements of their sales and data collection processes. Moving on to some factors which would favor an adaptation of the marketing mix, firstly, some local market conditions: research has shown that there are significant socio cultural, economic and political differences, and that consumer needs differ from France. This would therefore favor an adaptation of the marketing mix.
Secondly, the presence of some local competitors would also favor an adaptation in order to compete. French cakes have identified both local and global competitors on the market. Therefore, some adaptation is recommended for parts of this target group. Thirdly, if legal conditions were very different to the home market, this would speak in favor of adaptation. Currently, many laws are the same due to both countries.
Membership of the you, however, due to brexit this might change in the future. If French cakes product was a service or carried large elements of service, this would indicate a move towards adaptation due to local staff being involved in producing the service like it would have been the case with, for example, a hair salon. However, French cakes offering is focused on a physical product, namely the cakes and desserts.
In summary, we have suggested that some elements of the marketing mix, namely place and promotion, would be suitable for a degree of standardization in order to compete with international competitors and adjust to the large restaurant chains purchasing processes. We have suggested that French cake standardized their sales processes. An option would be to standardize their key account management function and to standardize some data collection processes.
This way they will have the possibility of gaining close relationships with the distributors, enabling them to respond faster to market trends. We also uncovered a great need for adaptation, since French cakes also choose to distribute through smaller and independent restaurants and catering businesses, we suggest that they adapt their approach to these in order to compete with local competition. We also suggest an adaptation of the actual products.
The cakes and desserts due to social, cultural and economic differences, both the products, price levels and promotional activities should be adapted to suit the local market needs in cooperation with French cakes. We would now move on to plan these standardizations and adaptations in much more detail, thereby providing them with a ready to launch marketing plan. However, such level of detail will not be carried out in this short introduction article.
In summary, we have now obtained an understanding of what it means to standardize or adapt an organization’s, global marketing mix and the connection to the rest of the internationalization process. And finally, we have gained knowledge of how an evaluation can be carried out. Would you like to learn more about standardization or adaptation of the global marketing mix, the internationalization process and global marketing in general, then I recommend that you read global marketing 7th edition by Sven Hollander.
If you would like to learn more about defining the marketing mix in general, then I recommend that you read my for introduction articles addressing each of the four piece of the marketing six. You will find these articles on my youtube blog, my name is Tina Wade. Thank you for reading
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