Standardization versus Adaptation in International Marketing
There has been much debate over implementing a standardization strategy versus an adaptation approach across international markets. There are numerous factors to consider, along with pros and cons of both marketing plans. While standardization is equated with brand consistency, lower advertising costs, and overall synergy, adaptation is often required to address cultural differences for more effective communication and proves that cutting costs does not always facilitate higher profits1.
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For some time many researchers, such as R. D. Buzzell in 1968, have concluded that the real question is what marketing elements can be standardized and to what degree2. However, academics support the notion that adaptation is essential to prosper in global markets. 3 And in the instance of advertising to China, the necessity for adaption is ever present. China is a very appealing marketplace to many companies due to its large population and growing economy. Despite the country’s fiscal growth, there still remains a large disparity between big cities, like Shanghai and Beijing, versus the more inland provinces4.
And since the relationship of cultural, political, and economical similarities support the standardization of competitive strategy, treating China as one nation to market to would be a mistake in itself, let along trying to standardize a campaign targeting American and Chinese consumers. Some corporations, such as Coca-Cola and Proctor and Gamble, have achieved extreme success by targeting the affluent, but there is almost a 90% segment left to infiltrate. 5 This may mean lowering product price point, but many firms still deter from positioning their products to the middle or lower class due to the high advertising costs.
It is an overcrowded arena to effectively breakthrough, but this is where adaptation would hold the competitive advantage. Along with the vast disproportionate economies of scale, the psychological and cultural drivers of Chinese consumers are transforming as well. The desire to express their individuality is ever present, especially in the younger generations. Nokia has seen their cell phone sales surpass other brands because of its fashion focus that the other phones lacked6.
The want for basic consumer goods is also overlooked for ones that offer a lifestyle benefit of enjoyment. “The percentage of households reporting they have DVD players jumped from 7% in 1997 to 52% in 2004. The number of households with computers grew from 2% in 1994 to 13% in 2004, and the number of those with mobile phones jumped from 10% in 1999 to 48% in 2004” (Burkholder). Thus, consumers are more likely to spend their money on technology or fashion as opposed to a household item they may need.
Globalization is one of the reasons a new Chinese consumer has emerged. Individuality, brand attitudes, and lifestyle preferences in China are more aligned with Western markets, yet multinational corporations have been disappointed from standardized marketing strategies7. The drive to purchase Western products has greatly increased between each Chinese generation as well. In fact, generation Y (18-24) has purchased more tech-savvy devices, used the Internet, and purchased more Western brands than any Chinese age demographic before8.
This appears to be more of a reason to standardize advertising campaigns, but despite desire and acceptance of Western ideals and products, the younger Chinese demographic is still very in touch and proud of their heritage9. This dynamic consumer requires research and attention, which denotes an adaptation technique to effectively communicate a marketing plan. There seems to be a general consensus from marketing researchers and intellectuals that standardization strategies are more effective, economical, and should be applied initially.
However, consumer behavior and perceptions play an integral role in framing an advertising campaign and this is where a degree of adaptation is essential. Standardizing many parts of a marketing mix is beneficial, but there are certain areas where modification will yield the best results. In order to achieve a working model of international marketing, standardization and adaptation strategies should be applied as see fit. And since China has a particularly diverse set of consumers that makes marketing to the country alone dynamic, an adaptation approach would be advantageous in regards to an international campaign.