Page 71 - GLOBAL STRATEGIC MARKETING

1.10 Criticisms of international marketing strategy

International strategy has been criticised for the following drawbacks:

• The management cost of co-ordination, reporting and staff is high

• Product standardisation can result in a product that does not entirely
satisfy customers

• Uniform marketing can reduce adaptation to local customer behaviour

• Integrated competitive moves can mean sacrificing revenues, profits
or competitive position in individual countries, particularly when the

subsidiary in one country is asked to attack a global competitor in
order to send a signal or to divert that competitor’s resources from

another country.

A standardised international strategy offers the same products using the

same marketing strategy in all markets. Companies take advantage of
scale and location economies by producing entire inventories or

components in a few optimal locations. They perform product research
and development in one or a few locations, and design promotional

campaigns and advertising strategies at headquarters. The benefit is cost
savings due to product and marketing standardisation; lessons learned in
one market are shared in others. Yet a standardised strategy may cause

a company to overlook differences in buyer preferences. It does not allow
modification except for small add-on features. Competitors can step in and

satisfy local needs, creating a niche market and clear competitive
advantage. Porter (1985) introduced his theory on gaining competitive

advantage through careful positioning of a company and the selection of
a generic strategy. At the time he argued for one clear strategy, low-cost
leadership, differentiation or focus.