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An executive summary for managers and executives can be found at the end of this article

Standardization vs globalization: a new perspective of brand strategies


Jos F. Medina
Assistant Professor of International Marketing, Division of Management of Marketing, University of Texas at San Antonio, San Antonio, Texas, USA

Mike F. Duffy
Associate Professor of Marketing, Department of Marketing, Minot State University, Minot, North Dakota, USA

Fashionable terms

Introduction The debate on standardization and globalization of international markets continues unabated. Yet, a review of the literature on the subject raises the question of what exactly these terms mean. Even the American Marketing Associations Dictionary of Marketing Terms (Bennett, 1988) does not define the word globalization. Furthermore, the meanings of adaptation and customization also come into question as they tend to mean the opposite of standardization and globalization. Fashionable terms such as global standardization do nothing but confuse readers of the marketing literature; and nobody seems to know what phrases such as think global act local really mean. One major problem appears to be that empirical studies do not provide a sufficient theoretical basis to understand the similarities and differences reported. It is not clear that these authors provide a definition or some degree of measurability of what they intend to promote. This may have led researchers astray, rendering subsequent findings potentially misleading. Without properly defining terms like standardization and globalization, it is going to be difficult to build a theory of the worlds consumer market.

Defining market technology

This paper attempts to study the definitions of standardization, globalization, adaptation, and customization as presented in the literature; and strives for a preliminary, operational definition of these terms. First, we discuss the importance of defining marketing terminology based on general assumptions of what marketing means to most academicians and practitioners. Next, we include a review of the literature on the definitions of standardization, globalization, adaptation, and customization, and provide our own definitions based on this analysis. We continue with our own conceptual framework of brand attribute strategies. This section analyzes the evolutionary process brands go through as they move from standardization to globalization. Then, we follow with a summary and discussion of the new definitions with emphasis on standardization and globalization. Finally, ideas for future research are explored. The assumptions Social science philosophers have pointed out that if a theory is to be properly tested, the researchers implicit assumptions which form the boundaries of the theory must first be understood (Weber, 1947). This notion of boundaries based on implicit assumptions is critical because it sets the limitations in applying the theory (Bacharach, 1989). To develop a theory of the globalization of products from a marketing perspective, we must start by

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delineating the boundaries of the theoretical framework within which most marketers operate. Basic assumptions The basic assumptions made by the marketing function are presented in Figure 1. These assumptions are necessary to understand the fundamental marketing realities of a market-driven economy. They will enable us to examine the key influences on product strategy from the same theoretical standpoint; and they will allow for a critical evaluation of the theory as it is being constructed. When the marketing community considers the established marketing assumptions no longer adequate to explain contemporary marketplace realities, the resulting theory will be modified as well.

Diagrammatic Representation

Assumptions

Product

The Exchange Process Marketing creates exchanges between producers and consumers by helping producers conceive a product based on consumer information (Bennett, 1988).
Consumer

Marketing

Producer

Consumer The Target Market Marketers should identify and select a target market (or group of consumers), and develop and maintain a product program that will satisfy it (Fennell and Saegert, 1990).

Target Market

Product The Product Concept A product--good or service-- offering (ie., a brand) is a bundle of both tangible and intangible attributes designed to satisfy the consumer (Kotler, 1989).

Tangible and Intangible Attributes

Producer Product Design Components


Augmented Product Design Core Product Design

Products have two design components, augmented and core. Marketers help producers determine the nature of the attributes to be incorporated in them (Levitt, 1980).

Figure 1. Underlying assumptions of the marketing function


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Creating exchanges

The first assumption about the role of marketing goes to the heart of what makes it such a dynamic discipline the exchange process. It is a widely understood and accepted tenet in economics and international trade that voluntary commercial exchanges between parties (i.e., producers and consumers) promote economic growth (Barth, 1997; Gwartney and Stroup, 1993). The marketing function centers around the idea of creating exchanges, whether thats accomplished through the advertising of a product or through developing a more efficient distribution channel (Houston, 1986). The motivation for commercial exchanges rests on the principle of mutual benefits resulting from parties acquiring differential advantages through competition for resources and specialization (Ricardo, 1953). Exchanges will not occur unless parties believe they possess something of value to trade. (Producers possess goods and services and consumers possess their income and savings.) It is the responsibility of the marketer to help the production function conceive a product consumers are willing to trade their money for. Marketers interact as mediators between production and consumption, and the consumer will demand from the firm a product that is worth their money. Marketers also have the responsibility to learn (e.g., through marketing research) what specific goals and benefits consumers seek. This will facilitate the creation of a product which will help producers and consumers consummate a transaction. To increase the chances that consumers are going to value a product, consumers must be specified identified and selected (Fennell and Saegert, 1990). This is the second marketing assumption important to understand the responsibilities of marketers. The specification of a group of consumers begins after marketers have defined the firms area of expertise (i.e., activity-domain). Defining the firms area of expertise involve identification of the product category in which the firm chooses to compete and the corresponding competitors. A group of consumers known as the target market is then identified and selected based on this area of expertise. Next, demand-creating conditions affecting prospective customers are explored within the focal activity one that corresponds to the product category such as buying a brand of toothpaste (Fennell and Saegert, 1990). Ultimately, the responsibility of the marketer is to discover customerperceived benefits such that they are matched to specific product-category attributes. For example, an underlying product benefit such as cavity protection should correspond to a specific product attribute such as fluoride content.

Designed to satisfy the consumer

The third assumption about marketing is that the product is a bundle of both tangible and intangible attributes designed to satisfy the consumer (Kotler and Armstrong, 1993). Because the product possesses inherent attributes that the consumer values, the product program of the marketing mix is foundational in strategy development. In other words, there must first exist a clear definition of the product/market relationship before any other element of the mix can be seriously considered (Fennel and Seagert, 1990; Kotler, 1989). There are at least two reasons why the product program is critical from the corporate strategy standpoint. First, the marketer must decide whether the benefits sought by the targeted consumer are already offered by the firms product line. If not, the firm may need to modify its product line by creating a new brand, or an innovation. Secondly, the marketer should always be concerned with the transferability of a tested product program to other potential markets.
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Core and augmented components

Finally, the product is the single most important factor in determining whether or not it is feasible for the producer to compete within the industry. Products have two key components from a design standpoint, the core and the augmented components (Levitt, 1980). In the core component reside the key benefit-generating attributes tangible (e.g., taste) and/or intangible (e.g., brand image) expected by the consumer and perceived as critical in satisfying his/her needs or wants. The products augmented components attributes are subject to greater scrutiny by the consumer, as they become the deciding factor in the purchase decision. If an existing brand belongs to a mature product/market, which is the case of most brands in the market today, the brands core component attributes are highly similar to those of competitors, leaving the marketer with the augmented attributes of the product to achieve differentiation. Therefore, it is the responsibility of marketers to: (1) determine the brand attributes that will generate the core benefits, which in turn will ensure its acceptance; and (2) determine those brand attributes that will convey uniqueness, which in turn influence the purchase decision (Cooper and Kleinschmidt, 1987).

International context

The foregoing assumptions about the nature of marketing, while not inclusive of the entire marketing function, delineate some of the most critical responsibilities of marketers. In an international context, marketers responsibilities are compounded by the challenges presented by foreign environments (i.e., different government regulations). It appears that the key to developing a successful international product program lies on the applicability (or compatibility) of the product category to foreign environments and the firms ability to incorporate market differences in the product design. For example, consumers worldwide do not seem to have previous psychological attachments to soft drinks and toothpastes, as they serve basic needs. However, the popularity of these product categories is more likely to be linked to variations of consumer wants met by the producers (Green et al., 1975). The terminology Table I shows a listing of selected articles that have been published regarding the concepts of standardization, adaptation, customization and globalization. Marketing and management literatures were reviewed and supplemented with the Websters Seventh New Collegiate (Webster, 1971) and the 1988 American Marketing Associations (Bennett, 1988) dictionaries (henceforth, Websters and AMAs). Table I ranks in chronological order the publications that discuss these concepts, including those that discuss Levitts (1983) landmark article. The following sections analyze some of the most important findings from these sources. Standardization The standardization argument might have been engendered in Elinders (1961) widely quoted article: How international can advertising be?. In this article, Elinder (1961, p. 12) argues that: We are all moving towards a uniform European style of advertising and then towards a uniform world style. It is worth noting that while Elinder did not use the word standard, the word uniform having always the same form, manner, or degree has the same connotation (Webster, 1973, p. 1279). A few years later, the first and perhaps the only explicit definition of standardization in the marketing literature was published (see Table II):

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Standardization Kacker (1972) Britt (1974) Ronstadt and Kramer (1982) Jolson (1989) Cavusgil et al., (1993) Terpstra (1981, 1987) Krubasik (1988) Sugiura (1990) Wingo (1991)

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Globalization

Adaptation

Customization

Selected works citing Levitts (1983) HBR article Simmonds (1985) Hamel and Prahalad (1985) Friedmann (1986) Kotler (1986) Porter (1986) Wind (1986) Huszagh et al., (1986) Boddewyn et al., (1986) Walters (1986) Onkvisit and Shaw (1987) Douglas and Wind (1987) Yip (1989) Jain (1989) Baden-Fuller and Stopford (1991) Meller (1991, 1992) Kanso (1992) Samiee and Roth (1992)

Elinder (1961) Buzzell (1968) Keegan (1969) Ryans (1969) Britt (1974) Sorenson and Weichmann (1975) Friedmann (1986) Kotler (1986) Porter (1986) Wind (1986) Huszagh et al., (1986) Boddewyn et al., (1986) Walters (1986) Sheth (1986) Onkvisit and Shaw (1987) Jain (1989) Meller (1991, 1992) Kanso (1992) Samiee and Roth (1992)

Davidson and Harrigan (1977) Hout et al., (1982) Levitt (1983) Simmonds (1985) Hamel and Prahalad (1985) Porter (1986) Wind (1986) Douglas and Wind (1987) Yip (1989) Ohmae (1989) Patel and Pavitt (1991) Belli (1991) Nohria and Garca-Pont (1991) Pont (1991) Baden-Fuller and Stopford (1991) Guido (1991)

Table I. Chronological list of selected articles discussing standardization, adaptation, customization, and globalization, and selected works citing Levitts (1983) HBR article

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Terms A system of identification that describes products by their quality...Grade labeling leads to product standardization and ease of comparison by the buyer... (p. 86) None

Marketing literature

1988 American Marketing Association (AMA) Dictionary

Websters Third New International Dictionary

Authors proposed definition

Standardization:

Globalization:

...to compare with a standard...to bring into conformity with a standard something established by authority, custom, or general consent as a model or example... (p. 1113) ...the act of globalizing to make worldwide in scope and application.. (p. 489)

The process of extending and effectively applying domestic target-market-dictated product standards tangible and/or intangible attributes to markets in foreign environments. The process of adopting countryand target-market-dictated product standards tangible and/or intangible attributes from environments around the world to achieve a highly uniform product.

Adaptation:

...the offering of identical product lines at identical prices, through identical distribution systems, supported by identical promotional programs, in several different countries. (Buzzell, 1968, p. 103) globalization indicates international integration. It causes one to visualize firms obtaining raw materials from one national market and financial capital from another, producing goods with labor and capital equipment from another, producing goods with labor and capital equipment in a third, and selling the finished product in yet other national markets. (Resnick, 1989, p. 34) None ...adjustment to environmental conditions... (p. 13)

Customization:

None

The strategy of developing new products by modifying or improving on the product innovations of others. Contrasts with the strategies of pioneering and imitation. (p. 2) Tailoring the product to the special and unique needs of the customer. Each buyer is potentially a unique segment. (p. 51)

...to build, fit, or alter according to individual specifications... (p. 281)

The mandatory modification of domestic target-market-dictated product standards tangible and/or intangible attributes as to make the product suitable to foreign environmental conditions. The discretionary modification of domestic target-market-dictated product standards tangible and/or intangible attributes as to make it economically and culturally suitable to foreign customers.

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Table II. Definitions of standardization, globalization, adaptation, and customization from the marketing literature, the American Marketing Association (AMA) and Websters Third New International Dictionary, and the authors proposed definition

...the offering of identical product lines at identical prices, through identical distribution systems, supported by identical promotional programs, in several different countries. (Buzzell, 1968, p. 103)

Definition of standardization

Buzzells (1968) definition of standardization renders it close to impossible to obtain, as all the elements of the marketing mix must be identical having the same cause or origin (Webster, 1973, p. 568). This definition, however, was never challenged; but, in fact, implicitly and conveniently accepted by most authors (e.g., Davidson and Harrigan, 1977; Kotler, 1986; Sorenson and Wiechmann, 1975; Wind, 1986). Subsequently, and adding confusion to the argument, numerous publications used the term standardization in conjunction with or in lieu of the term globalization (e.g., Boddewyn et al., 1986; Dawar and Parker, 1994; Douglas and Wind, 1987; Friedmann, 1986; Guido, 1992; Jain, 1989; Kreutzer, 1988; Mueller, 1991, 1992; Onkvisit and Shaw, 1987; Ozsomer et al., Porter, 1986; 1991; Quelch and Hoff, 1986; Rau and Prebble, 1987; Reichel, 1989; Samiee and Roth, 1992; Sheth, 1986; Stansifer, 1989; Szymanski et al., 1993; Verhage et al., 1989; Walters and Toyne, 1989; Wind, 1986; Yavas et al., 1993). Management-oriented business publications discuss standardization in relation to product standards or formal agreements, such as those promoted by the American National Standards Institute (ANSI) and the International Organization for Standardization (ISO). For example, Bowles (1992, p. 142) defines standards as: formal agreements that define the contractual, functional, and technical requirements to ensure that a product, service, process or system does what it is supposed to do. Alternatively, Dilworth (1996, p. 99) understands standardization as: having fewer choices of components and products that must be produced...(and) the use of common components in multiple models of a product....

A dictionary definition

The AMA (Bennett, 1988, p. 86) defines standardization as: A system of identification[and] Grade labeling, which it would seem refers to the categorization of products. Websters Dictionary (1973, p. 1133) defines standardizing as to compare with a standardto bring into conformity with a standard something established by authority, custom, or general consent as a model or example. This last definition suggests that the term standardization can be applied to two different situations: (1) when a standard has been effectively applied; or (2) when a standard has been achieved. Further, it would seem that this definition implies that a standard is established by an authority over and above the standardizing entity (e.g., the firm). In sum, what started as a call for uniformity on a specific marketing activity (i.e., advertising) in a specific part of the world (i.e., Europe), developed into a fully-fledged uniformization of the marketing mix product, price, promotion and distribution for the whole world. Although advertising initially appeared to be the marketing element with greatest potential for uniformization, it is the uniformization of the product element that appeals to most marketers. In fact, definitions from management-oriented publications, and the AMAs dictionary link standardization to product standards. Authority to specify agreements on these standards resides in industry organizations with sanctioning power. The proposed definition of standardization is as follows (see Table II): The process of extending and effectively applying domestic target-market-

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dictated product standardstangible and/or intangible attributesto markets in foreign environments. In a market-driven economy, standards (i.e., brand attributes) would be primarily dictated by the target-market authority. The definition implies that the circumstances and conditions faced by domestic consumers are similar to circumstances and conditions faced by consumers in foreign markets. As Levitt (1983, p. 94) puts it: the most effective world competitors incorporate...the same kind of products sold at home or in the largest export markets. In other words, standardization should be seen as a process that involves the creation of a standard to be applied rather than the creation of a standard to be achieved. This is an important difference that will be clarified in the next section. Globalization We considered Levitts landmark article as our point of departure to examine subsequent work on the meaning and definition of globalization. There are two reasons for taking this approach. First, Cavusgil and Nevin (1981) did an extensive review of the international marketing literature in the early 1980s. The term globalization was nowhere to be found or even implied in their study, indicating that the concept globalization was not relevant until Levitt (1983) brought it up a couple of years later. Second, Levitts (1983) article in the Harvard Business Review has been one of the most cited sources on the globalization issue (see Table I), indicating the importance of this article in influencing the minds of those engaged in the debate. Levitt (1983) conveyed the idea that globalization referred to all aspects of the marketing mix just what Buzzell (1968) maintained for standardization 15 years earlier. This raises the initial argument of the wisdom of using a new term to convey old ideas. Levitt (1983) confused matters further when he went on discussing terms like global markets, standardized products and global standardization in a random manner and without defining them. Although many authors erred in the same way (e.g., Huszagh et al., 1986; Sheth, 1986; Stansifer, 1989; Verhage et al., 1989; Wind, 1986; Winski and Wentz, 1986), it was Resnick (1989) who hinted that globalization and standardization might mean two different things (see Table II). While his is not exactly a definition, it gives us some idea of what he thinks globalization should mean: ...international integration...[of] raw materials...capital...laborandequipment...and selling the finished product in...national markets (p. 34). Alternatively, the Websters (1973, p. 489) definition of globalization emphasizes: the act of globalizingto make worldwide in scope or application... The AMA had not adopted a definition of the concept as of this writing. In sum, globalization is discussed, but never defined by Levitt (1983) and subsequent work based on his article. It appears that the concept of globalization was never disassociated from that of standardization. In fact, terms like global standardization created some unnecessary confusion. Resnicks (1989) implied definition of globalization rendered it as a process of integration of the factors of production from various parts of the world, which resulted in a finished product for national markets. Achieving a highly uniform product The proposed definition for globalization states: The process of adopting country- and target-market-dictated product standards tangible and/or intangible attributes from environments around the world to achieve a highly uniform product. This definition argues that a firm with global ambitions should approach the process of globalization with the idea of adopting as many attributes as possible from the products it markets around
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Influencing minds

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the world, with the idea of making them standard in a global product design. Levitt (1983, p. 94) alluded to this process when he wrote:
The global competitor will seek constantly to standardize his offering everywhere. He will digress from this standardization only after exhausting all possibilities to retain it and he will push for reinstatement of standardization whenever digression and divergence have occurred.

Here, Levitt (1983) uses the term standardization to mean the achieving of a (world) standard, as opposed to applying a (domestic) standard. Therefore, standardization and globalization appear to be stages at the ends of an evolutionary process. This makes it imperative to incorporate the transition stages in between them. Although adaptation and customization have both been characterized as representing the opposite of either standardization or globalization, this paper sees them rather as transition stages. The following sections explain why. Adaptation The previous sections have alluded to the frequent interchangeability of the terms globalization and standardization in the marketing literature. Two other terms that are commonly used interchangeably are adaptation and customization. Adaptation is generally perceived as the opposite of standardization (e.g., Dawar and Parker, 1994; Douglas and Wind, 1987; Friedmann, 1986; Peebles et al., 1978; Quelch and Hoff, 1986; Reichel, 1989; Stansifer, 1989; Szymanski et al., 1993; Walters and Toyne, 1989; Wind, 1986) or globalization (e.g., Wills et al., 1991). While discussed by many authors, adaptation has never been formally defined (e.g., Boddewyn et al., 1986; Davidson and Harrigan, 1977; Dawar and Parker, 1994; Douglas and Wind, 1987; Friedmann, 1986; Hill and Still, 1984; Quelch and Hoff, 1986; Reichel, 1989; Stansifer, 1989; Szymanski et al., 1993). Other similar terms that have been used in lieu of adaptation, but also never defined and now fallen out of usage, include localization (e.g., Onkvisit and Shaw, 1987; Peebles et al., 1978; Wills et al., 1991), modification (e.g., Sorenson and Wiechmann, 1975; Walters and Toyne, 1989), specialization (e.g., Meller, 1991, 1992; Storper, 1992), and differentiation (e.g., Douglas and Wind, 1987; Wind, 1986). AMA defines adaptation as: The strategy of developing new products by modifying or improving on the product innovations of others. Contrasts with the strategies of pioneering and imitation (Bennett, 1988, p. 2). Similarly, Websters (1993, p. 13) definition of adaptation states: adjustment to environmental conditions. While both definitions do not exactly convey the idea that adaptation is an opposite of standardization, they share the implication that some form of modification to an original (standard) is required. A number of studies suggest that the most common type of product modifications made by managers of international firms are usually those over which they have no choice (e.g., Buzzell, 1968; Hill and Still, 1984; Sorenson and Wiechmann, 1975) in other words, modifications that cannot be circumvented, such as a countrys labeling and packaging requirements (Hill and Still, 1984) Suitable for foreign environmental conditions The proposed definition for adaptation states: The mandatory modification of domestic target-market-dictated product standards tangible and/or intangible attributes as to make the product suitable to foreign environmental conditions. This definition implies that the domestic firm will most likely be obligated to change its corporate structure model to one which is more consistent with the changes required in the new environment.
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The opposite of standardization

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Consider, for example, the fact that many European roads and streets are narrow and twisting, and large American cars (such as the Cadillac and the Lincoln Continental) are difficult to maneuver and impossible to use (Samli, et al., 1993). American manufacturers of large cars must realize that their product cannot be marketed in Europe unless they are modified to suit local environmental conditions (i.e., narrow roads). This situation presumes a greater degree of involvement and flexibility on the part of the parent (domestic) company towards the local environment. Customization The idea of product customization was first brought to the academicians attention by Terpstra (1981). He argued that the idea of product appropriateness was a legitimate one, in light of the fact that many developing economies were eventual recipients of technology and innovations from a handful of nations in the developed world. Furthermore, abject economic differences between these countries rendered product offerings from affluent markets inappropriate for developing market consumers (Terpstra, 1981). Beyond the merits of the economic disparity issue, it later became evident that marked differences in beliefs and traditions would play an important role in the acceptance of many products (Samli et al., 1993). The term customization is discussed but not defined by Porter (1986), Onkvisit and Shaw (1987), Krubasik (1988), Jain (1989), and Yavas et al. (1993). Other similar terms that have been used include individualism (Kanso, 1992) and specificity (Onkvisit and Shaw, 1987). Neither of these terms, however, appears to be commonly present in the literature. The AMAs definition of customization is: Tailoring the product to the special and unique needs of the customer. Each buyer is potentially a unique segment (Bennett, 1988, p. 51). Webster (1973, p. 281) defines customize as: to build, fit, or alter according to individual specifications. The proposed definition of customization is as follows: The discretionary modification of domestic target-market-dictated product standards tangible and intangible attributes as to make it economically and culturally suitable to foreign customers. In this definition, customization appears to be similar to adaptation. However, there are two important differences. First, adaptation relates to changes attributed to mandatory requirements, whereas changes in customization are optional to the firm. Secondly, because adaptation focuses on environmental conditions, changes pertain primarily to tangible (or physical) attributes of the product. In contrast, customization appears to have deeper, intangible (or non-physical) attribute implications. In some instances, economic stagnation, and local taboos, traditions, and lifestyles, may mean building from scratch, or drastically modifying a product offering. Brand attribute strategies Figure 2 shows a framework describing the evolutionary process in brand attribute strategies ranging from brand standardization to brand globalization. As indicated earlier, brand attributes refer to standards originating from different sources, including industries, governments, and consumer markets. However, to the extent that an economy is marketdriven, brand attributes should reflect the needs, wants, and interests of consumers.
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Product appropriateness

Standards from different sources

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Standardized Brand Augmented Attributes of the core and augmented components are tailored to a domestic target market but have global appeal.

Core

Adapted Brand Augmented Core components attributes are basically the same as those of the standardized brand. But the augmented component attributes are modified to incorporate mandatory requirements from a countrys environment (e.g., legal restrictions)

Core

Customized Brand Core and augmented components attributes are tailored to a countrys target market. These attributes may be substantially different from those of the standardized brand.

Augmented

Core

Globalized Brand Attributes from all the previous brand varieties are incorporated into a compromise brand: a uniform core component, and an augmented component containing attributes added on to meet absolutely unique country (or regional) requirements and expectations.

Augmented

Core

Figure 2. Evolution of brand strategies

Ultimate challenge

Brand standardization strategy Global trends towards technological change and modernization have induced a more accepting mindset for ideas and practices originated elsewhere. This is particularly true for trend-setting industries from modern societies. The ultimate challenge that a brand standardization strategy faces is to produce a single brand the core and augmented attributes of which are tailored domestically, yet have international appeal. This is a product offering that cuts across national market segments and can be produced in and/or exported from domestic facilities. The domestic target market constitutes the sole authority in establishing the benefit-generating attribute-standard(s) in the resulting brand. Intuitively, this strategy should provide industries such as toys and beverages with the greatest potential for long-term profitability. Mattel, for example, determined that there was a segment within countries
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that was likely to respond positively to their Barbie dolls western phenotypical features. Interestingly, the dolls sold well without modifications in 60 countries (Kotler, 1986). Universal acceptability Empirical evidence has also demonstrated that technology-intensive industries, such as scientific instruments and medical equipment, find universal acceptability (Cavusgil et al., 1993; Christensen et al., 1987). Brand standardization extends beyond the marketing of goods. Services such as live entertainment, sports, and movie-making are among the most likely to succeed with this strategy (Garca, 1995). For example, US entertainer Michael Jacksons production company sold out four 100,000 seat-capacity concerts in Mexico Citys Aztec stadium in the spring of 1994; ticket prices ranged from $15 to $120 (Fortune Magazine, 1994). Brand adaptation strategy For many industries the wider the global reach the greater the number of regional and national differences they will encounter. As long as domestic environments remain different from foreign environments, there will always be a possibility for the need to accommodate foreign country requirements to product design. As members of the target market defined in domestic market terms appear in foreign countries in increasing numbers, the domestic organization might be compelled to change some product design attributes. Also, the domestic organization necessarily becomes more multinational in scope with greater emphasis placed in adapting to the demands of local environments. These adaptations may result from unique ecological, legal, and/or infrastructural characteristics that dictate mandatory changes for companies wanting to operate in these countries. These adaptations translate into the adoption of new product standards, which will become useful to the firm to the extent it can apply them to similar environments elsewhere. United Parcel Service, a well-known worldwide package-delivery service, adapts its delivery vehicles to the conditions of the local environment: scooters (three-wheelers) in Taiwan, boats in Venice, and bicycles in China. However, it maintains the same core component attribute-standards on their delivery vehicles around the world: an easy to identify and pronounce service logo (UPS), and recognizable, culturally-compatible colors (dark brown and gold) (Czinkota and Ronkainan, 1995). Brand customization strategy Brand customization represents an extreme case of brand adaptation. Beyond the mandatory requirements for brand adaptation, brand customization involves discretionary changes that are made by the organization to please the foreign market. Discretionary changes result from studying local consumer behavior: how the product is used, how often it is used, where it is purchased, how it is purchased, etc. Brand customization heightens its importance in foreign environments where consumers have greater freedom to choose products and more products to choose from. However, negative perceptions of the product category in taste, style, or quality can in fact kill the market for brands which might otherwise be adaptable meet mandatory requirements (Terpstra, 1981). While trying to meet local customer idiosyncratic perceptions might lead to the adoption of many new attribute-standards, the core and augmented components will still maintain attributes from the domestic target market. Consider perceptions regarding colors, which are very important to consumers in Poland. Poles dont go shopping for a brand-name toothbrush,
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An extreme case of brand adaptation

they want the red one (Business Week, 1993). Consider perceptions regarding sensorial touch; most Americans prefer to drink an ice-cold beer, while British prefer to drink it nearer room temperature (Britt, 1974). Most Mexicans do not perceive important differences in taste and price between Coke and Pepsi, yet most of them prefer to drink Coke on special occasions because of its reputation (Mller, 1993). Brand globalization strategy Some industries and organizations have reached almost every corner of the world as part of their product-line evolutionary process. For some of these firms, the process has been opportunistic and haphazard (Jeannet and Hennessey, 1995). For most, the process involves the conception of a compromise product which combines, in its core, attribute-standards that are acceptable to customers around the globe. This organization focuses on pleasing the global consumer rather than the individual (e.g., domestic) country-market consumers. Unlike brand customization, firms using this strategy would hardly contemplate building from scratch anymore. Like brand standardization, they are interested in applying standards, except that their goal is to apply a world standard, not apply a domestic one. Once it is determined what common benefits (i.e., core attributes) are shared by most people around the world in the product category, specific brands (with differentiated augmented components) will be developed to cater to countrymarket idiosyncrasies. After being the consummate customizer around the world, Black & Decker (B&D) decided to listen closer to the core benefits a good drill at low prices sought by their global customers. As a result, B&D globally standardized 50 models down from several hundred and standardized world production in fewer strategically-located countries. This new globalized product line appealed to more cross-national market segments (Fortune, 1984). Similarly, Procter & Gamble (P&G) pared down its product lines around the world to find simpler, fit-all designs for a global customer. The world does not need 52 versions of Crest or 31 varieties of Head and Shoulders (Business Week, 1996). Summary and discussion In light of the extensive debate over standardization and globalization, this study investigated whether these terms had been defined in the literature; and, if defined, whether these definitions were appropriate for marketing. With the exception of one article (Buzzell, 1968), none of the articles studied made an explicit attempt to define any of these concepts. Based on widely accepted assumptions on the role of marketing in the organization, definitions found in the literature were considered inappropriate. In fact, the implied definitions of standardization and globalization are so similar that the marketing community faces a dilemma. They could argue for dropping one of these terms out of the literature; or they could argue for a clear dichotomy of meanings between them. We opted for the second choice. Because standardization and globalization could not be adequately redefined without also addressing adaptation and customization, all four terms were examined and redefined. The new definitions lead to the development of a brand strategies framework with an emphasis on the attributes of the product and their effect on the core and augmented components. Findings suggest that standardization and globalization be applied to product strategies aiming to specify key attributeJOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 7 NO. 3 1998 235

Pleasing the global consumer

Definitions considered inappropriate

standards that go into the core and augmented components of the brand. In the process of creating these brands, marketers should become globally aware of production constraints in the industry and maintain an intimate communication with the target markets they intend to serve. Therefore, it would also seem that market research plays a pivotal role in identifying the underlying benefits that consumers seek and in understanding the specific circumstances in which product categories are used. If the brand is created for a domestic consumer segment, but has global appeal, we have termed that strategy brand standardization. Levitt (1983) himself alluded to this strategy when he wrote: the world is becoming more alike and hungers for technology and everything that is modern (p. 95). This strategy is based on the principle that industries (and firms) within countries should exploit their (natural) comparative advantages. Pursuing brand standardization is even more compelling for developed market economies as world consumers typically view their products more favorably (Samiee, 1994). Firms and industries in countries like Japan and the US may enjoy cultural and technological comparative advantages as perceived by groups of global consumers. Such may the case of the moviemaking industry in the US and the electronics industry in Japan (Narayana, 1981; Porter, 1990). The domestic market A brand standardization strategy relies on the standards developed in the domestic target market. The domestic organization conceives brands for domestic customers first and foremost. As a result, we have argued that brand standardization is the most profitable strategy to follow. Organizations do not have to invest as much in marketing research outside their domestic environment. The overriding strategy question would be: Why make the product elsewhere, if consumers prefer it made (or enjoyed) in the country of origin? While creating powerful images around a single brand makes a lot of sense and provides leverage for positioning your company and your products (Crainer, 1995), a standardized brand strategy program will always provide unique challenges for the domestic firm with global aspirations. In a very real sense, corporations are not just marketing themselves and their products, but ideas, concepts, and practices that are bound to their domestic cultures. In some instances, fundamental changes in behavior and lifestyles result from the marketing of these products (Terpstra, 1987). Thus, local governments and markets may erect natural barriers to the marketing of these products. These can be overcome through adaptation and customization of the product. To the extent that domestic and foreign environments are different, domestic organizations should expect their products to be modified to meet unique local environmental requirements and market expectations. Achieving uniformity of standards Can firms develop a globally standardized product in the context implied by Levitt (1983)? The answer is a resounding Yes! It means pursuing a brand strategy where the goal is to achieve uniformity (of standards) in key brand attributes worldwide. These key attribute-standards become part of the core modular design in a global brand. Differences that cannot be reconciled across markets are brought into the fold as unique attributes in the augmented component of the brand. Companies such as Black & Decker and Procter & Gamble have benefited from this strategy. Assuming a brand globalization strategy, the phrase think global act local takes on a more concrete meaning. Corporate marketers should focus on
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developing global efficiencies in upstream activities such as procurement, manufacturing, research and development, and brand design. Meanwhile, country marketers are responsible for custom-focused functions such as the definition of the firms activity-domain, the product category, the competitors, and consumer behavior, all for the local market. Market research is aimed at determining the brand attributes that must be relayed to headquarters for brand globalization. The idea of this strategy is to reduce brand customization as much as possible through the incorporation of attribute-standards from around the world. The key strategy question for the brand strategy framework developed here is simply: Does the target market the firm chooses to produce for domestically extend across national boundaries? If not, the firm can pursue consumer segments in other countries which it might address profitably through the adaptation, customization, or globalization of its brands. If yes, then the domestic firm should actively identify and select those crosscountry market segments that may respond positively to the domestic product strategy. Future research The mediating role marketers play between production and consumption appears to lean heavily toward the consumption side of the equation. This has left the marketing community with little knowledge about the needs marketers have in understanding the production challenges the firm faces. Sheth (1986) alluded to this problem only marginally when he wrote: there has been an increasing degree of international standardization of product quality and safety standards...and... (marketing) managers need to keep abreast of (these) changes... (p. 9). To the extent that the sources of supply of the tangible (physical) attributes of the brand can be anticipated (e.g., component parts presently used in other products, components which are standard for a supplier, etc.), marketers can increase their chances of successfully developing, implementing, and controlling a global product strategy program. At a minimum, marketers should be aware of international standards of quality in manufacturing. Future research should focus on investigating the interface that exists between marketers and production and/or procurement managers. It has been stressed elsewhere, and confirmed in the present work, that marketing is not the center around which the company evolves (e.g., Porter, 1986; Quelch and Huff, 1986; Wind, 1986). The proposed framework, however, offers a fresh look at the potential impact of marketing activities on other business functions during the learning curve process. In other words, as companies decide to target markets in foreign environments, the organizational structure of the company will suffer changes resulting from the decisions to adapt, customize, and globalize brands to these new environments. Future research efforts should investigate, in an interdisciplinary fashion, the impact of changes in the organizational structure as the firm moves global. Future studies should also investigate if tracking world trade patterns may help uncover opportunities for product standardization strategies in major product categories. Some product categories that have shown worldwide appeal include cigarettes (Gillespie and Alden, 1989) and beer (Morrison and Roth, 1992). On the consumer side, it would be interesting to see how rising consumer expectations good quality at low prices (Ohmae, 1989) throughout the world homogenizes mental frames of reference. This is
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Aware of international standards

Changes in the organizational structure

particularly important in light of the integration of emerging nations consumers to the world economy. These consumers traditionally place greater value on prices at the expense of quality (Lynn, 1991).
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This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present

Executive summary and implications for managers and executives


International brand marketing made simple (well almost) Medina and Duffy provide an extremely valuable service to marketers here they give us definitions of some terms that we use widely without necessarily appreciating what we mean by them. Terms such as standardization, globalization, adaptation and customization crop up throughout marketing literature whether academic research or practitioner-oriented writing. Yet, as Medina and Duffy report, the terms are surrounded by confusion, contradiction and dual meaning. The difference between globalization and standardization described by Medina and Duffy provides us with the ability to assess our international marketing activity on the basis of a clear strategic understanding rather than (the regrettable) tendency of marketers to use the words because they sound good. Lets face it, we all prefer the word globalization because it sounds like the sort of thing our business should be heading towards. But, in Medina and Duffys terms, our globalization strategy could well be merely standardization rather than pulling together brand attributes or standards from environments around the world we are, in fact, applying our domestic standards to foreign markets unchanged. Having defined the terms, Medina and Duffy go one stage further by identifying four principal international marketing strategies brand standardization, brand adaptation, brand customization and brand globalization. This simple framework of strategic options for international marketing allows us to appreciate just what it is we are doing with our strategy and what actions might relate best to the choice made. The strategy that might have been labelled globalization may turn out to be a brand standardization approach. And our localized strategy may be better understood with the tag of brand adaptation or brand customization. This leads us, as practical marketers, to the vexed question of which option we choose. Central to this choice is the information needed to make the right decision. Too often our brand decisions relate more to convenience or prejudice rather than a rational evaluation of the different approaches open to the business. As Medina and Duffy point out, there can be no substitute for good market research prior to embarking on international branding decisions. However, since were faced with a framework of international brand strategies based on new definitions of the principal elements and options implicit in such activities, I cant resist making some observations about when firms might employ the different strategies identified by Medina and Duffy. Brand standardization I get the impression that brand standardization as defined here is rather out of vogue these days. The approach taken by the big American multinational consumer goods businesses Coca-Cola, Procter & Gamble, McDonalds has been characterized as marketing imperialism paying little or no heed to cultural variations, local traditions and national sentiments. Indeed the fact that a Big Mac is the same wherever you buy it led business magazine, The Economist, to use the product as the basis of its purchasing power parity calculations.

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In the case of McDonalds and Coca-Cola, the brand reflects certain cultural values chiefly American values. To take these elements out of the brand would cause too many problems (and probably damage) to be worth consideration. Similarly, smaller brands with close and positive cultural associations to their home country can take advantage of these links through standard international branding. Brand adaptation Medina and Duffy define adaptation as resulting from unavoidable changes to branding. You dont change the brand because it seems like a good idea but because not to do so would be illegal or stupid. Thus, GM didnt launch its European small car in Spain as the Nova since that means doesnt go in Spanish. Adaptation therefore is forced upon us in order to develop a given foreign market. However, these forced changes may provide a route towards a globalized brand strategy since we reach a position where new product standards adopted to meet, say, German packaging regulations, can provide a benefit in other markets as well. Brand customization Here the change results from market idiosyncrasy rather than regulatory or environmental requirements. Such changes may result from cultural oddities (why do Poles buy red toothbrushes?) or factors relating to eating habits and so on. What we have is essentially the same product with changes made to that core product to suit the oddities of a local market. We might change the colour of the packaging, the taste, the ambience or the size of package. In doing so we should, however, try to minimise changes so as to sustain the advantages of mass production. Brand globalization There are very few genuinely global businesses. These are firms where the original national associations have been lost in the minds of consumers. Coca-Cola isnt really a global business because nobody doubts the American associations of the brand. But Procter & Gamble is since its brands do not have national associations. For UK consumers, Ford is virtually a native brand the cars are made in the UK and have been for very many years. Furthermore, certain Ford brands of the past became icons as a result of their success. Medina and Duffys article provides a good deal of clarity by setting out simple and distinct definitions of important terms. Moreover, the resulting strategic framework provides the basis for international marketing planning and guidance to those wishing to investigate international brand strategies. Im sure we will see this new clarity improve the standard of research and practice in this important field. (A prcis of the article Standardization vs globalization: a new perspective of brand strategies. Supplied by Marketing Consultants for MCB University Press.)

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