In international marketing, the marketers are required to come up with a decision as to whether they are going to standardize the product or to modify the existing products which is one of the challenging decisions that they have to make. And this decision can make impacts on the organization in terms of the Research and development expenses, finance, production, organization structure, procurement, marketing mix etc. And the decision as to which to choose depending on the attitudes towards the different cultures. So in this article, we are going to cover these two concepts so that you can have an idea about the two concepts in depth.

1. Product Standardization vs.
Product Adaptation
By :
Neetika Rao

2. • In international marketing, the marketers are required to come up
with a decision as to whether they are going to standardize the
product or to modify the existing products which is one of the
challenging decisions that they have to make. And this decision can
make impacts on the organization in terms of the Research and
development expenses, finance, production, organization structure,
procurement, marketing mix etc. And the decision as to which to
choose depending on the attitudes towards the different cultures. So
in this article, we are going to cover these two concepts so that you
can have an idea about the two concepts in depth.

3. Product Standardization

4. Product standardization refers to the process of maintaining uniformity of products and
services sold in different markets or in other words setting identical characteristics for a
particular good or a service.
For an example, if a particular company comes up with the decision of standardizing the
product then the product is being manufactured using the same materials, same processes
and even sold under the same name.
There are several examples for industries that use standardized products.
•Piston industry
•Nut and bolt industry
Standardization promotes the uniformity among the products and services and hence yields
the advantages. This does not give advantages only to the organization but also to the
customers as well.

5. Advantages of Product standardization
To the organization
• Reduction in cost – In the standardization, an
identical product is produced using the same
materials and processes etc. So that the materials
can be purchased in bulk quantities and this will lead
to have discounts in purchasing. At the same time,
this will cause less wastages in material usage as well
and reduces the cost.
• Production efficiency – When the product that we
are currently producing is being uniformed, the
production process becomes efficient due to
enabling factors such as mass production,
specialization of labour, automation of the processes
of production.
• Well established and well-strengthened brand –
When an identical product is being available in
different markets it helps the organization to
establish and strengthen the brand.
• Increase in production – When the differences
among products are reduced the production of the
company can be easily increased.
To the consumers
• Customers are enabled to choose the exact product
that they want – When the differences among the
products are reduced then the customers are not
required to confuse as to which product or service to
buy. So that they can choose the exact product
without any confusion.
• Can obtain a high-quality product – When the
products are standardized consumers can obtain
relatively a high-quality product.
• Better living standards – When the consumers are
capable of consuming high-quality products at lower
costs their living standards gradually increases.
• But there are situations where this product
standardization gives negative results as well.

6. Disadvantages of Product standardization
• Stagnation – When the organization keeps producing a uniform product for a
long time then it will cause the organization to remain in the same place in the
industry. This is not good for an organization since the rivals can take advantages
of this. So while trying to standardize the products they need to make changes to
the products as the environment changes.
• Communication failures – As the time goes the demand of the consumers can be
changed and in such situations, organizations will still try to maintain the
consistency without looking at the changes of demand of the consumers. This will
make bad consequences on the organizations’ survival.
• Less choices to consumers – Since the product is a standardized one, the
consumers do not have a wide range of choices.

7. Case Example; Positive
• Standardisation as a cost saving strategy
• For example, integrated marketing communication processes of a leading consumer
electronics company – Apple, are highly standardised and this is partially caused by the
fact that its products such as IPhone, IPad and personal computers do satisfy the same
types of customer needs to regardless of the geographical location.
• Furthermore, the practice of standardisation in marketing practices also benefits from
the concept of “world consumer” according to which increasing forces of globalisation
and role of media, and frequent travelling at the global scale have fuelled harmonisation
of values and lifestyles across the borders.
• Global image of the brand can be effectively reinforced via the application of
standardisation to integrated marketing communication strategy. The slogan of a global
sports clothing company Nike, ‘Just Do It’ can be mentioned to justify this argument. This
slogan effectively communicates the same marketing message and promotes the same
lifestyles in the global scale, and so far Nike has immensely benefited from this strategy
in terms of profit maximisation.

8. Case Example; Negative
• standardisation is often criticised for neglecting unique aspects of local culture in
foreign markets. Unique aspects of local culture may have huge impacts on the
perception of each component of the marketing mix in general, and the
marketing message in particular.
• This argument can be justified by mentioning the case study of Disneyland Co.
The company opened its theme park in Hong Kong in 2005 applying
standardisation strategy to a great extent, through duplication of its theme parks
in California and Paris. However, due to significant cultural differences between
Hong Kong and West, the financial performance of Disneyland in Hong Kong has
been well below the expectations.
• Standardisation critics argue that its application diminishes the levels of flexibility
of the business in new markets. In other words, global businesses pursuing
standardisation strategy are able to respond to changes in individual markets to a
lesser extent compared to local businesses or businesses using adaptation
strategy.

9. Product Adaption

10. • This is a strategy mostly used by Multi-National Companies(MNCs). This product
adaption refers to the process of modifying the existing products in order to
reach to each market.
• There are several product adaption strategies that an entity can use such
as product, target market, package and design, ingredients, language, culture,
religion etc. That means in terms of target markets, packaging and designs,
ingredients, languages, culture and etc the organizations need to come up with
different ways so that they can cater different markets in a way where the
customer needs and requirements are addressed.
• There are several reasons for such product adaption. They can be listed as
follows. Cultural factors, Usage factors, Differing consumer purchasing power,
Level of local technical skills, Local taxation policies, Technical specifications,
Climate ETC.

11. • Eg: The way the Red bull product is being sold in China and North America
are different from one another. Because the label of the Red bull which is
being sold in North America consist of red and silver for which the red bull
stands for action and the silver background stands for the youth spirituality
and spirit. Whereas in China the label is in red and gold for which the red
colour stands for good luck and the gold colour stands for wealth and
happiness.
North American red bull: Red is a symbol of action
and courage Silver-symbol of maturity Blue-symbol
of youth spirituality and peace
Chinese Red Bull: Red-symbol of good luck Gold-
symbol of wealth and happiness

12. • At the same time when the shampoo of Dove is being sold the Dove
company use different packaging to reach different markets. To
Islamic countries they use a girl with a scarf and to the other
countries which are not Islamic, a girl without a scarf is used.
Dove promo in Iran
Dove promo International Version

13. There are mainly two types of
product adaption methods.
• Mandatory Adaption – Adapting the products to a particular country’s local
requirements so that the legal and physical operations can be done by the
company in the respective country. Eg: left hand driving in the UK
• Local non mandatory adaption – Adapting a product with the intention of giving
the consumers the chance to consume a better quality product which is not a
legal requirement.

14. Strategic Adaptation to Foreign Markets
Low
High
Industrial/ Technology Intensive Consumer
Need for
Adaptation
Degree of
Cultural
Grounding
Nature of Product
Source: Adapted from W. Chan Kim and R. A. Mauborgne, “Cross-Cultural Strategies,” Journal of Business Strategy 7 (Spring 1987): 31; and John A. Quelch and
Edward J. Hoff, “Customizing Global Marketing,” Harvard Business Review 64 (May-June 1986): 92-101.

15. Case Example; Positive
• Adaptation as an effective customer-orientation strategy
• Businesses may choose to apply adaptation strategy towards certain elements of
marketing mix more than other elements For example, Nokia Corporation, a global
communications and information company based in Finland focuses on product
adaptation on new markets to a great extent, while other elements of marketing mix a
subjected to adaptation to a lesser extend.
• According to this strategy Nokia focuses on selling low-cost basic but affordable products
such as Nokia 3410 and Nokia 105 in market in African continent where customer
purchasing power is low, whereas, the same company offers smartphones with advanced
features and capabilities such as Nokia Lumia and Nokia E series in North America and
Europe.
• The strategy of adaptation allows global businesses to respond to changes in local
marketplace in rapid manner. These changes may be political, economical, social or
technological; nevertheless, relevant business processes may be subjected to
modifications in order to eliminate or at least to minimise negative impacts of these
changes.

16. Case Example; Negative
• Low speed of implementation of adaptation strategy in practice marks one
of the main disadvantages of this strategy The process of gaining in-depth
knowledge about specifications of the local market, and adjusting elements
of marketing mix accordingly can last many months, and during this period
the market may become saturated by local businesses or foreign
businesses pursuing standardisation strategy.
• Adaptation strategy implemented at extreme scale may compromise core
competitive advantage of a global brand causing disparity of image of the
company. As it was discussed above, Nike brand image is associated with
dynamism and active lifestyle effectively communicated though its slogan
‘Just Do It’ to the global marketplace. Decisions by Nike strategic
management to increase the level of adaptation of its marketing message
for international markets might negatively affect its core brand identity
compromising its chances for further growth.

17. Compromise between
standardisation vs. adaptation

18. Basis of Difference Adaptation Standardisation
1) Application in
Marketing Means
It is supported by strong
market variety
especially by market
individualism and
market uniqueness.
Companies should apply the
four basic marketing
instruments (4P5) in the same
way world wide and ignore
national specialties in
individuals markets.
2) Reason for Application Almost every international
company takes into account
(in higher or lower level),
regional or local conditions
which are typical to the
differentiation.
MNC should think globally and apply
integration access world wide.
3) Product Offered Altering relevant feature of
the product in significant ways
for each and every individual
geographical market in the
product is sold.
Complete standardization would
involve designing a product that is
identical in every relevant way for
geographical market in which the
product will be sold.

19. 4) Characteristics A product is differential
from competitor’s product
and further the products
produced by particular
company.
A standard product does not need
to have all the characteristics of the
other products buyer requires.
5) Approach Adaptation is an approach of
detailing the differentiation
that exists between products
and services.
Standardization of product is the
approach for increasing commonality
of product in the supply chain
management.
6) Economics of Scale Unique aspects in product
result in different in quality
thus increasing cost of
production and lower
economies of scale.
Commonality in products results in
higher productivity due to higher
demand, having an impact on
economies of scales which lowers
the total cost.
7) Need Satisfy a particular need of
buyer.
Satisfy the heterogeneous needs of
the buyer.
8) End Result Show sense of value to the
buyer but they have to pay
more for such product.
Benefits buyer by lowering price.

20. Compromise between standardisation vs. adaptation argument can be achieved in
a way that standardisation can be applied in order to develop global marketing
strategies in general, at the same time when applying adaptation to address
unique aspects of local markets. In other words, standardisation and adaptation
strategies do not have to be mutually exclusive; however, an adequate level of
balance needs to be maintained between the two.
In this way global businesses can take advantage of benefits offered by
standardisation such as achieving economies of scale and exercising the same
competitive advantage for all markets, at the same time when taking advantage of
benefits offered by adaptation as well such as addressing unique needs of local
customers and responding to changes in local marketplace in rapid manner.

21. Case A
• McDonald's and the Marketing Mix
One company that has managed to highlight the benefits of both the standardized and
adaptation approach is McDonald’s. With more than 33,500 restaurants in 119 countries the
company skillfully manages its franchise model, delivering a remarkably consistent customer
experience and branding (I’m lovin’ It) while still allowing for locally relevant menu and
service variations in segments across the globe. Furthermore, all advertisements are shot in
12 different languages, featuring the customized products catered to each region. In 2003,
McDonald's introduced the McArabia, a flatbread sandwich, to its restaurants in the Middle
East. It also introduced the McVeggie in India and the EBI-Fillet-O shrimp burger in Japan.
• McDonald’s also chooses convenient locations for all of its franchises. This includes malls,
airports and local neighborhoods. These marketing strategies have confirmed to be
effective, indicated by the company’s 7% increase in profit margins over the past four years .
However, McDonald’s has made every effort to improve them through recent marketing
initiatives with respect to the 7Ps. McDonald’s has begun to renovate its eateries, going
from a plastic look to a more brick and wood design in an effort to maintain a contemporary
image . They have also decided to “re-image” themselves in their ads by incorporating a hip-
hop theme with teen icons such as Justin Timberlake and Lee Hom in China as a means to
attract teenagers. In addition, the company has begun to offer healthier food products, such
as oatmeal, given consumers are more health conscious.

23. Case B
• The notion of ‘Think Global, Act Local’ relates to this approach to a
certain extent. Another effective illustration of this strategy can be
observed in marketing of Unilever’s ‘Dove’ brand of soaps. Scenery,
text and other elements of ‘Dove’ television advertisement are the
same for all markets, however, models featuring in advertisements
and the language used by those models are adapted according to
local culture for each individual market.