Standardization of product strategies:

- Standardization means offering a uniform product on regional or worldwide base may be with minor
changes.
- Customization leverages cross-border differences in needs & wants of the firm’s target customers.
- Forces that favor a globalized product strategy are:
– Common customer needs & buying behavior
– Economies of scale in production, R&D, marketing and cost savings
– Lesser time required in introducing into new markets
– Global consumers & consumer mobility
– Home country image
– Similar technical specs for industrial & consumer products
– Operating via exports of uniform products
– Better marketing performance
– Consistency in product design & selling techniques
– Establishes a common image
– Success in one market can be duplicated in other markets
Standardization may lead to substantial opportunity lost

Adaptation of product strategies:

• Obligatory adaptation due to laws and regulations of foreign countries
• Discretionary adaptation (on the choice of the marketer)
– to better suit varying customer needs
– differing use conditions
– due to different market factors
– company’s resources / product objectives
– product life-cycle stage

International product and communication strategies:

International marketers may choose on of the flowing five product and communication strategies in the
international markets:

1. Product & Communication Extension: Dual Extension

- Early entrants often opt for this strategy.
- Small companies with few resources typically prefer this option.
- Also works for the company which targets a “global” customer with similar
needs.
- Offers substantial savings coming from economics of scale.
- The downside is that it might alienate foreign customers who may switch to
another competing brand that is more tuned with their needs.

2. Product Extension – Communication Adaptation

- takes care of difference across countries in the cultural or competitive environment.
- retains scale economics on manufacturing side, the firm sacrifices potential savings on the
advertising front.

3. Product Adaptation – Communication Extension

- local market circumstances often favor or require case of product adaptation (may
be due to Govt. regulations)
- Many companies add to their product portfolio via acquisition of local companies adding
new brands as an expansion strategy
- While product may differ, cultural similarities that stretch to consumers using the
product present an opportunity for a harmonized communication.
- Within such control, clever marketing ideas can be transferred from one country to another,
despite the product-related differences.

4. Product & Communication Adaptation – Dual Adaptation

- Differences in both cultural & physical environment across countries call for a
dual adaptation strategy.
- Many be due to different Govt. regulations regarding products as well as
communication.

5. Product Invention

- Develop new products from scratch from common need & opportunities around
the world – instead for simply adapting existing products or services to the local
market conditions.
- Produce products of global scope.
Today managers focus on degree of Globalization rather than striving for standardized or localized
products. What elements of a product should be tailored to local market needs & which ones to leave
unchanged?
Two approaches that are being commonly used in international product design are;

Modular Approach:

- This approach consists of developing a range of product parts that can be used worldwide.
- Scale economics flow from the mass-production of more or less standard product
components at a few sites.
- Popular in automotive industry

Core-Product Approach:

- Design of mostly uniform core-product
- Attachments are added to core-product to match local market needs

Balancing act between Standardization and adaptation is very tricky.

- Too much standardization (over standardization) stifles initiative & experimentation at the
local subsidiary level
- Too much customization may lose the foreigness appeal of imported brands hence
becoming me-too brands.