Page 181 - GLOBAL STRATEGIC MARKETING

7.4.1 Influences affecting an international product

Influences that affect international products or services are:
standardisation and adaptation related to cultural, usage and legal factors;

product accessibility; ethical issues; environmental issues; shortening
product life cycles; the effect of different market entry modes; and changes

in marketing management.

7.4.2 Influences encouraging standardisation

Levitt (1983) sees globalisation as a successful strategy because of lower

prices, good technology, quality and service, all of which persuade
consumers to drop local preferences. Terpstra and Sarathy (2000, pp.

253–256) indicate the following factors that encourage a standardisation
strategy:

• The cost of adapting the product to the overseas market can increase
the overall manufacturing costs, which makes it difficult to sell the
product at a reasonable price. For example, the Whirlpool washing
machine is sold in Scandinavian countries with a more powerful

heating system to dry clothes completely than it is in Italy, where it is
common to hang clothes out to dry.

• Industrial products, in which technical specifications are critical, tend
to be uniform internationally. At this stage, industrial goods are more
standardised than consumer goods.

• As countries reach similar income levels and develop economies at a
similar pace, their consumption patterns are likely to converge. The
Euro, for example, has created a large single market with a growing

similarity of tastes and incomes, which has allowed a product to be
more standardised in most of Europe.

7.4.3 Influences encouraging modification (adaptation)

The modification of a product for the overseas market will give the
company the opportunity to make higher profits, because modification may

raise revenue by more than the costs of adaptation. The specific factors
that encourage product adaptation are: