Standardisation vs. Adaptation

A recurrent theme

Standardisation

A uniform offer on a regional/global basis

Minor adaptations may be made to conform to local regulations or technical requirement (e.g. electricity voltage)

Capitalises on commonalities in customers’ needs across countries

Standardisation

Usually considered in the context of: product pricing marketing

communications;particularly advertising, branding, packaging

Standardisation

The goal is to minimise costs These can be

passed though to customers or taken as profit depending on the

competitive environment

Product standardisation

5 forces favouring this strategy: common customer needs; global customers; economies of scale; time to market; regional market agreements

Product standardisation:common customer needs

The same usage and/or perceived benefits e.g. Convergence in the car market

across Triad markets: Functionally, towards 7-9 m2

Psychologically, in terms of

self-expression pleasantness of driving experience comfort

Product standardisation:common customer needs

But there can be within-region variations: E.g. BMW research in Europe

BMW’s European positioning

Product standardisation:Global customers (MNCs)

Result of global sourcing: a characteristic of B2B (business to business) markets

E.g. MNCs often place global contracts for the supply of materials/components etc.

Product standardisation:Economies of scale

Traditional reason for standardisation

CAD/CAM techniques enable mass customisation and small batch production at low cost

Product standardisation:Time to market (e.g. Sony case)

Innovation alone does not always provide competitive advantage

Speed of launch is becoming increasingly important E.g. P&G estimate its time to market of

liquid detergents is now 10% of 1980s. The key is centralisation NB Sony case - read it!

Product standardisation:Regional market agreements (e.g. EU)

Encourages regional launches lower taxes within boundaries common technical standards

Favours common brand names e.g. Marathon (UK) to Snickers (Cont.

Euro) e.g. Raider Bar (Cont. Euro) to Twix

(UK)

Product standardisation

The issue is not ‘either/or’ But: What elements should be

tailored to local conditions?

The costs of standardisation

Stifles local initiative and experimentation

High cost of failure

Standardisation of the communications strategy

2 components: message execution (visual, scripting, media

Still relatively uncommon Recent examples:

AXA (insurance) HSBC (banking) BA

Standardisation of the communications strategy: benefits

Savings come from economies of scale Provides a consistent image Appeals to global consumer segments Shortage of creative talent Cross fertilisation of good ideas in one

market to another e.g. Sony

Standardisation of the communications strategy: benefits

Research amongst ad agencies suggest that: most important driver of standardised

advertising is the global brand

The World’s top 20 brands -Interbrand 2006

1. Coca-Cola

2. Microsoft

3. IBM

4. GE

5. Intel

6. Nokia

7. Toyota

8. Disney

9. McDonald’s

10 Mercedes-Benz

11. Citigroup

12. Marlboro

13. Hewlett-Packard

14. American Express

15. BMW

16. Gillette

17. Louis Vuitton

18. Cisco

19. Honda

20. Samsung

Standardisation of the communications strategy: barriers

Cultural differences: benefits sought (see BMW research)

BMW’s European positioning

Standardisation of the communications strategy: barriers

Usage: Food and drink

e.g. tea drinking e.g. cognac:

US = stand-alone drink Europe = after dinner drink China = at dinner with water

Therefore need to adapt the context to different cultures

Standardisation of the communications strategy: barriers

Cultural differences: e.g. Hofestede’s masculinity index

P&G in Japan showed an advert with a man walking into a

bathroom when his wife was taking a shower shows disrespect for women e.g. in Japan Japan is no. 1 on masculinity index

Standardisation of the communications strategy: barriers

Local advertising regulations e.g. in Malaysia foreign-made ads must

not use white people . Therefore Ray-Ban were forced to

shoot locally for TV ads Variations in PLC

Introductory phase requires an awareness-building campaign e.g. iced tea in Europe

Standardisation of the communications strategy: barriers

Finally… The NIH (Not Invented Here)

syndrome: de-motivating face resistance