Jul 16, 2013

standard, simple, global

Standard, simple, global: sounds impossible, doesn't it?

That's my take: there is no standardization in b2b when going global. Just to be clear from the start.

In regard to the global marketing strategies, there are two main questions a company has to answer:
  • Will you standardize your product / service while extending your distribution market?
  • Will you adapt your product / service to each new country? Even create new products, if that's the case, for new markets?
I'm extremely biased towards adaptation or even creating new service from scratch, in the right market circumstances. 

It's clear enough if you read this post about adapting your products for international markets or any other labeled under 'localization'.

But there are merits to the standardization, and I want this point of view present in my blog as well.

Advocate for the standardization

There are strong arguments in favor of the standardization strategy, starting with cost reduction, better management control and activities' centralization from the Headquarters, marketing consistency, always meeting clients' expectations in service level, brand coherence, and instant recognition no matter what country you're in. 

Moreover, there are companies that start the internationalization process but maintain their focus towards the home market, or even select very similar external markets for expansion, where they can promote and distribute their product or service as is.

According to Rosen(*), you can standardize your product when:
  • your company plans to go to many or large markets,
  • the competition is weak,
  • your market position is dominant,
  • your consumer have homogeneous preferences,
  • there is a low potential for niches to grow,
  • the purchasing power is uniform,
  • the clients are not willing to pay for differentiated products,
  • you offer an industrial product,
  • the opportunities to learn from small-scale production of inovative products are low,
  • you can make scale economies in manufacturing,
  • your company's resources are limited.

It seems that the standardization strategy is usually adopted in the early stages of the international expansion process, when the national orientation of the company is still very strong. As the multinational approach develops within the company, the strategy evolvs towards adaptability in foreign markets.

--- (*)Rosen, B.N. Global products: when do they make strategic sense? Advances in International Marketing, 1990, Vol.4, p.57-71.

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