Page 166 - International Marketing

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168 International Marketing BRILLIANT'S

This choice of strategy depends on the most appropriate product/
market analysis and is a function of the product itself defined in terms of
the function or need it serves, the market defined in terms of the conditions
under which the product is used, the preferences of the potential customers
and the ability to buy the product in question, and the costs of adaptation
and manufacture to the company considering these product communication
approaches.
Standardization Versus Adaptation
A crucial decision lies at the very core of the product strategy i.e.
whether the product to be marketed should be a standard product or it
should be an adopted product. Standardization means that the features
of the product should be homogeneous for all the markets. On the contrary,
Adaptation means that the product undergoes modification for different
markets depending on the taste of the consumers in those markets. A
standardized product has some advantages. They are:
(i) It is easier to achieve economies of scale, which may in turn
lead to greater profits.
(ii) Standardization is useful when consistency in the product image
is required. For example, the success of McDonald's lies in
consistent product quality and services.
(iii) In the case of some high-technology products, both the manufac-
turers and the users prefer to encourage compatibility through
industry specification. For this, standardization is required.
(iv) Some products have universal demand and thus needs
standardization. For example, watches are universally
demanded for time keeping.
These might be the reasons behind the fact than in 81 percent of
samples, products exported by US firms did not undergo any modification.
On the contrary, there are other studies which have shown that only
10% of the products made by the US firms were exported to the less
developed world without modification. The majority of the products were
modified according to the consumer's choice.
Factors Encouraging Standardization
The various factors which favours standardization are as follows:
1. High cost of adaptation: In adaptation, modification is done to
the product to suit the local needs, which may add to cost. As a result, it
weakness the competitive advantage of a firm. For example, Whirlpool
found that the Scandinavian countries are colder and thus required more
powerful heating elements to dry the clothes. On the contrary in Italy,