Question 3, Week 3
* Summarize the standardization/customization debate in global marketing * Identify factors which promote standardization
* Identify factors which promote customization
* To what extent are consumers buying habits converging?
* Illustrate your answer with examples of markets and brands based on your own research * Give full citation of sources in Harvard format
Achieving maximum productivity through standardization of service product and service design and delivery achieving global economy of scale and lowest unit cost which is an import tenet of economics (product or production orientation)
Factors that promote standardization:
* Globalisation and the enhancement of technology - lead to international trade, easy access to communicate and travel. (Standardization is assumed to be the best method as it could give a maximum profit) * Westernization and Americanization – domination of global favourite brands or products; McD, Starbucks, KFC. (It is assumed that public will accept global products) * Convergence of consumers buying habit
Erik Elinder: 1965 ‘How International can European advertising be’ Journal of Marketing 29, 7-11 * Convergence of standards of living and improving technology – result in the standardization of advertising messages (using English as the language of European television and media) * Travel will create European consumers with similar habits
Theodoe Levitt: 1983 ‘The Globalisation of Markets’ Harvard Business Review 83 (3), 92-102 * Technology brings a world culture - a converging commonality which has proletarianized communication, transport and travel * Modernity – the worlds’ needs and desires have irrevocably homogenised * Companies can offer products that are globally identical with respect to design, function and even fashion. To foreign consumers they have American flavour and status value : the types of products and brands preferred by a large part of the developing world.
* Effective and efficient productivity
* Promotes forceful competition and enhances profitability * Minimizing the risk and additional cost for customization * Focus on improving quality of the single product
* International uniformity - Equal production and distribution – lead to product safety and liability * Attract and assure customers – increasing potential sales and widespread acceptance * Demonstrate market leadership
* Create competitive advantage
* Develop and maintain best practice.
* More benefit could be found in:http://www.din.de/sixcms_upload/media/2896/economic_benefits_standardization.pdf
* Could not meet all the local segments
* Not flexible, hard to compete with local or new market entrants * Product oriented – lack of relationship with customer
*Therefore there is a debate that customization concept is more effective especially since Levitt’s theory about globalisation has been challenged because many of the US brands that he quoted to support his globalisation theory have been customised to different marketing, environments, tastes and habits.
- Lost out to European brands; Italy’s Diesel and Spain’s Zara
- Has retained its standardises brand format; fast food in pleasant, hygienic setting - But customised its product to local taste
; Kiwi burger in New Zealand, Maharaja Mac in India, Prosperity burger in Malaysia, Vegetarian burger in India
* Coca Cola
- The concentrate or the formula for coca cola remains the same but they allow its franchised bottlers to adjust the sweetness to local tastes - Sweetness and carbonisation vary between countries
- Sweetness lowered in Greece
- Carbonisation lowered in Eastern Europe, Mexican cola...