Adaptation vs. Standardization in International Marketing – the Country-of-Origin Effect

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Innovative Marketing, Volume 3, Issue 4, 2007

Demetris Vrontis (Cyprus), Alkis Thrassou (Cyprus)

Adaptation vs. standardization in international marketing – the country-of-origin effect Abstract
The literature on international marketing presents a confrontation between two mainstream schools of thought regarding international marketing. The one supports the standardization approach and argues that multinational companies’ behavior should be uniform to minimize total costs and promote a global corporate image. The other argues for the need for adaptation to fit the unique dimensions of each local market. This research investigates companies’ practical level of adaptation and standardization in international markets. It identifies the two approaches as coexisting and subsequently distils the findings of an extended literature review to determine the degree and nature of the country-oforigin effect in the process. The conclusions are that the effect has a universal and diachronic existence, though its manifestation into actual consumer attitudes and preferences varies considerably. The dissimilarity of consumer behavior both between and within individual markets is a result of specific combinations of collective and personal parameters. The findings are extrapolated and ultimately integrated in the Internationalization Factors Model to provide a more comprehensive understanding of the internationalization process. Keywords: international marketing, country of origin, adaptation, standardization, adaptstand, consumer behavior.

Introduction Multinational companies (companies that compete in more than one country), in their aim to develop their business practices, increase profitability and overcome any problems related with the saturation of existing markers, expand their operations to overseas markets. 1 Within the field and literature of international marketing, when a company decides to begin marketing products abroad, a fundamental strategic decision is whether to use a standardized marketing mix (product, price, place, promotion, people, physical evidence, process management) and a single marketing strategy in all countries or whether to adjust the marketing mix and strategies to fit the unique dimensions of each local market. Some people see markets as becoming more similar and increasingly more global and believe that the key for survival is companies’ ability to standardize. Others point out the difficulties in using a standardized approach, and therefore support tailoring and market adaptation. However, literature quoting practical evidence suggests that companies make contingency choices, which relate to key determinants in each circumstance. This research aims to investigate the practical complex relationship of the two extreme approaches (adaptation and standardization) and suggest methods and ways in determining the right level of integration. This will increase the understanding and knowledge of the integrated approach and develop models to guide multinational companies compete effectively and efficiently within the international marketing arena. Subsequently, the research will distil the findings of an extended literature review to determine the degree and nature of the country-of-origin effect in © Demetris Vrontis, Alkis Thrassou, 2007.

the process. The conclusions are that the effect has a universal and diachronic existence, though its manifestation into actual consumer attitudes and preferences varies considerably. The dissimilarity of consumer behavior both between and within individual markets is a result of specific combinations of collective and personal parameters. The findings are extrapolated and ultimately integrated in the Internationalization Factors Model to provide a more comprehensive understanding of the internationalization process. 1. Background literature and statement of the problem As we look around us, all we seem to see in the wider marketing environment, is the confusion of...
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