STRATEGIES IN ACTION
Amicably, there can be various approaches and strategies that such business company can use in approaching international market as it can be true that some companies utilizes certain global strategy meaning in lieu to having applied standard approach in the markets without adjustments of such marketing mix meanwhile, some companies use idiosyncratic approach in international market as it implies alterations of such valuing of the marketing mix in order to meet the ample needs of specific market.
Standardization vs. Customization
As it is possible to market services internationally, offering highly standardized service may be problematic. Since services are performances and inherently involve some level of the human element, they cannot be standardized in the way that goods can. The heterogeneity aspect of service is therefore subject to some variation in performance, no matter how meticulously that service is performed. Similar to inseparability, heterogeneity pertains to the issue of standard delivery of the service offering (Cited from, ., 1985). Thus, services are less prone to standardization as compared to tangible goods. Previous researchers warn of the need to customize some aspects of the service offerings to reflect local or regional tastes and preferences (Cited from, , 1999). Therefore, it is probable that when internationalizing services relatively more services must need to be adapted to the host country environment. However, it may be more difficult for international service firms to standardize services to the extent that goods can be standardized and marketed globally (Cited from, , 1999; and , 1996; and , 1996). Whether, marketing domestically and internationally, service firms realize that attaining quality superiority can lead to important strategic benefits including greater customer loyalty, greater productivity and responsiveness to demand, market share improvements and building competitive advantage (Cited from, and , 1996). Businesses are increasingly recognizing the importance of identifying service quality dimensions in enhancing their competitive abilities and providing a strategic advantage in their industries in international markets.
The international marketing strategy standardization has been the central focus of academics and practitioners (Cited from, , 1995). Manufacturing mentality developed in which nations attempted to increase the amount of exports over imports, often via a minimization of production costs to enhance exports (Cited from, , 1966). As trade expanded, firms found that their ability to maintain trade imbalances in their favor by focusing solely on the minimization of production costs was no longer economically feasible. The economic and competitive circumstances had changed. Furthermore, companies began to expand globally, either via exporting or direct investment, new market strategies needed to develop as approaches needed to examine for fundamental decisions regarding firm's foreign marketing strategies basis for international marketing standardization to advance, as one must delineate the components of theory and apply those standards. When one explores international marketing strategy one immediately notes that the field has yet to develop a rigorous, consistent, conceptualization of marketing strategy as it relates to international standardization/adaptation. When examining a selection of seminal articles in the field, divergence in conceptual domains is quickly evident. For example, while (1989) defined standardization as a common marketing program on a worldwide basis, and (1994) viewed the issue under the general “degree” of adaptation, and . (Cited from, 1993, ) view marketing strategy standardization as the “standardization of the pattern of resource allocation among marketing mix variables across national markets”.
Aside, in integrating the standardization, configuration-coordination and integration views, and (Cited from, 2002, ) conceptualize global marketing strategy as level to which firm globalizes its marketing behaviors in various countries through standardization of the marketing-mix variables, concentration and coordination of marketing activities, and integration of competitive moves across markets. The effectiveness of firm's international marketing strategy standardization/adaptation efforts is measured in terms of one performance aspect or another. For instance, there argued that standardization should be based on economic payoff, which includes financial performance, competitive advantage and other aspects (Cited from, , 1989 )
Furthermore, customization can also be done simply because it attracts a higher price and, potentially, a higher profit, in a relationship closer to spot market and organizations may become involved in customized or specialized products as a way of forcing themselves to develop new capabilities. Watt learned from its experience of making one of their systems to the exacting standards of specific export market territories (Cited from, , 1995 ) as to where customization is used as an entry barrier, the relationship with and sales potential of each customer and the cumulative effect on the operation of all such customers’ needs must be carefully monitored, so that either conscious change to operations can be made to support it. Then, customization can be the vehicle for learning requires care in ensuring that lessons learned are valuable and truly transferable and that the people involved are those best placed to affect the transfer (Cited from, and , 1996 ).
Examples of Standardization and Customization
The example for standardization can take McDonald’s as well as The Big Mac being the same in the world. But standardization goes much further at McDonald's. Even the procedure within the restaurants is the same everywhere. There is even "Hamburger University" where the senior management of the company can learn the tricks of ways. This is form of standardization within the company, also called company standardization. Both the production method and the presentation to the client are standardized. McDonald's can set its own standards, but for agreements about bank cards and credit cards consultation is necessary between parties. Today enterprises are facing many forces that compel them to take a larger view of their systems. These forces include globalization, buyouts, regulatory changes, commerce, cost, multiple customer-access channels, product development cycles, changing business processes, larger systems view is creating need to break down the application silos that exist today in a cost-effective and low-risk manner. Companies are asking for help from their own internal information systems organizations as well as from external services consultants, product developers and packaged solutions vendors.
One good example of customization involves services consulting business as proficient in building custom solutions through green field development and systems integration. Services consultants that deploy enterprise resource planning packaged solutions often do extensive customization. Services and solutions businesses of the future will be focused on fitting and altering existing assets, components, and solutions to meet customer requirements. Thus customizability in the fullest extent means being configurable, extensible, and open and supporting interoperability with legacy and other systems through messaging and architectures such as Microsoft's Distributed Component Object Model or the Object Management Group's Common Object Request Broker Architecture. Other examples of customization include: application installation, configuration of solutions from parts, gluing the parts together with scripting languages, instantiating variability points, and adapting models that describe the assets and solutions. Customization must also be considered from architectural and nonfunctional perspectives such as factory pattern supports mapping objects and data to interoperate with legacy data and applications, for example. The development of customizable systems requires specification of a generic architecture for multiple integrated applications in enterprise with specifications for the common components used to build these applications and configuration rules for developing applications and solutions the center of development and deployment of customizable systems is the notion of commonality and variability analysis and a customization life-cycle method.
The conceptualization of ethnocentrism were used predominantly within the discipline of anthropology, where the concept was used to describe the inability to conceptualise reality from any viewpoint other than that of one’s own particular culture or social group (Cited from, , 1995). Within these conceptualisations, ethnocentrism is seen as a conceptual scheme or frame of reference, through which individuals who lack internal knowledge and an appreciation of other cultures’ meaning systems will inescapably interpret such cultures as having similar meanings to that of their own culture (Cited from, , 1995; ., 1991; 1990). As ethnocentrism is seen from an evaluative perspective, as an attitude of judging all other cultures by the standards of one’s own culture with the maturation of domestic markets due to the intensification of inter-firm competition, which resulted in increasing the need to find and penetrate new overseas markets, the notion of ethnocentrism has been put centre stage within contemporary management thinking. This is so because the global diffusion of consumer culture, along with the increasing empowerment of ethnic groups and rising multi-culturalism, has now forced organisations to cater to the needs of these once marginalised groups, in order to successfully penetrate these new markets. Consequently, the concept of ethnocentrism is increasingly being used by marketing academics and practitioners, as a means to describe particular managerial orientation which, because of their implicit assumptions of “superiority” at the subconscious level, in their perceptions of overseas cultures, and as a corollary of overseas markets, is preventing their organisations from successfully penetrating these markets. Within the marketing and management literature it is now being increasingly recognized and advocated, that a pluralistic or relativistic approach is needed to successfully penetrate the increasingly fragmenting domestic markets, and the culturally diverse overseas markets.
The case companies had begun foreign investment at different times, and as might be expected, there was often more parent company influence on subsidiaries in the newer foreign investors. The management developed sales and operational strategies appropriate to their own markets and product development was also carried out in some subsidiaries (Cited from, and , 1998). Moreover, fresh investors were more ethnocentric, neither the extent or forms of parent control were uniform nor some recent investors operated with polycentric orientation. The mode of acquisition was an influencing factor and where established firms were taken over, corporate head offices seemed to have identified and aimed for standardization only of those aspects of the business that were critical to their objectives (Cited from, and , 1998). Then, companies may be multi-domestic/polycentric rather than global because such a strategy suits their industry sector. However, if the impact of international competition is growing, it would be expected that the greater pressure would be towards global standardization and therefore structural integration. Although the extent to which there was global integration differed, as it seemed to recognize pressure to move in a more globally orientated direction. The informants reported that their companies were in dynamic situation, in which structures and practices would not remain the same, indeed were already changing the need for and response to, globalization was common concern (Cited from, , and , 1991 ). It could be argued therefore that what is represented here is a trend that may well be gathering pace, and will alter organizational forms in many multinational manufacturers. The pendulum is swinging from differentiation to integration, in response to changes to market conditions, but facilitated by developments in communication technology. The evidence from this sample of companies was consistent with the view that strategy and structure are more affected by the period when internationalization occurred, by industry sector and by the role of subsidiaries than by the stage in growth cycle (Cited from, , and , 1991 ). However there was socio-cultural dimension to these developments since several contributors spoke of moving away from either past practice of trying to impose parent company norms on subsidiaries, or from a totally differentiated polycentrism that lead to unnecessary duplication of learning.
In ethnocentric phase of evolution, new foreign subsidiaries are managed at the top by parent country nationals and senior management succession is organized in and from the parent head office. As the subsidiary matures, and as local managers are developed within multinational enterprises culture as there can be replaced in substantial way by host country nationals. In the polycentric phase, therefore, subsidiaries independently manage development and succession plans for their own operation. This moves the planning of senior management appointments across the organization into the head office, but with the need to draw on information about people from all the operational units (Cited from, , 1987 ).
Examples of Ethnocentric Approach and Polycentric Approach
One example showing the ethnocentric approach can be about staffing for multinational company by diverse environment as it is not common to see staffing policies for the host country is written with the parent's viewpoints. The subsidiary management will not directly point at the problem in the company's HR policies as the companies must learn that the HR policies followed at home may not be applicable in the host country as HR policies will be localized which meets the goals of global corporation.
When the organization sends its employees to some other country, it takes over the responsibilities besides the basic functions of human resource management. For example, functions of staffing, training and development are especially emphasized in this organization. They do not deal merely with the selection of the best employees for work in foreign countries but also have to be aware of the needs of the whole family that will accompany the employee to the new cultural environment home country practice prevails with the approach headquarters from the home country makes key decisions, employees from the home country hold important jobs and the subsidiaries follow the home country resource management practice. Polycentric that each subsidiary manages on local basis one example can be that, local employee heads a subsidiary because headquarters’ managers are not considered to have adequate local knowledge. Subsidiaries usually develop human resource management practices locally. The polycentric is in direct opposition. In the company that applies it, the assumption is that each country is different from all the others and that the subsidiaries in each country should develop locally appropriate practices under the supervision of local managers. In company with an ethnocentric approach, parent country nationals usually staff important positions at headquarters and subsidiaries. With polycentric way, host country nationals generally work in foreign subsidiaries while parent country nationals manage headquarters positions.
Home Replication Strategy:
For example, in the field of fashion marketers, clothing theorists and consumer psychologists all study fashion innovativeness in order to better understand the behavior of fashion innovators and the process of fashion diffusion. Fashion innovators, comprise a unique and important segment of the clothing market. They are among the first buyers of new fashionable apparel when these styles appear in the marketplace, and their reactions to new fashions may be crucial to the eventual success or failure of new styles. The earliest buyers provide much of the revenue needed by clothing manufacturers to fund development costs associated with bringing new fashions to market (Cited from, and , 1997, ). They also spread word-of-mouth information about new styles and legitimize them when they adopt, thereby influencing the larger number of later adopters who look to them for information and influence (Cited from, ., 1996; and , 1996). Consumers frequently buy products that are congruent with or enhance either their actual or ideal self-concepts (Cited from, , 1988; and , 1987). Self-image may be an especially important concept to study in the context of fashion behavior because of the importance clothing has in the formation and exhibition of self (Cited from, , 1985; , 1989).
Companies that have multi-domestic structure assigned certain expatriates to management roles in subsidiaries, because of the difficulty of finding suitable people in some countries in order to establish corporate systems, or to use assignments for personal development and although there is multi-domestic strategy, top appointments in subsidiaries are determined at the head office. The companies with clearer strategy of globalization have introduced worldwide management succession planning, partly to increase the selection pool for each vacancy, but also because the view in all of them is that the top manager of the future will have had to have had international experience (Cited from, , 1987 ). The globalizing companies are concerned to achieve high performance through the application of best practice or world class standards. What also seems to be recognized is that this cannot be imposed, and that parent companies have to be wary of managerial imperialism. So although some companies have explicit statements of values and utilize top-down planning systems, good practice comes about through dialogue and persuasion. Whilst this is the aim, it is difficult to know whether the outcome will actually be ethnocentric, promoting the parent company ways of working, or whether multinational groups of managers can develop something that is genuinely geocentric.
With the increasing trend towards rapid maturation of domestic markets, organizations are being forced to seek and expand into new markets overseas. In response to these competitive pressures, organizations are increasingly recognizing their corporate identity as a means to gaining a sustainable advantage over their competition, to facilitate the successful penetration of these overseas target markets. The key reasons behind this initiative indicate that by revealing the unique character or personality of an organization, through its symbols, communications and behaviors to key stake holders in both domestic and global markets, such an organization will be better able to create a favorable corporate image in the minds of these groups. According to (Cited from, 1992 ), such favorable corporate image will enable the organization to differentiate itself from its competitors based on the uniqueness of its own identity, as well as creating a favorable predisposition in the minds of such stakeholder groups, as a basis for developing long-term profitable relationships. However, evidence is accumulating which indicates that such strategies are finding it difficult to achieve these objectives and organizations are increasingly finding it difficult within conditions of intense competition, to effectively attract and retain customers when expanding into overseas markets. One possible explanation for this is the moderating effect of the phenomenon called ethnocentrism: this is viewing the world from one’s own standpoint only. This can undermine the organization’s ability to achieve high levels of customer recognition and affective attachment within overseas markets by distorting the effectiveness of corporate identity strategies (Cited from, , 1998).
Examples of Multi-domestic Strategy
In this strategy, there involves products being customized for every market and there implies decentralized control in reflecting to local decision making and multi-domestic is effective when large differences exist among countries and the strategy is good in terms of local responsiveness, having minimal political risk as well as the exchange rate and have better product differentiation respectively.
For example, Philips is a company that integrates a multi-domestic strategy as the outcome of the company’s innovation from local research and development along with business spirit with products tailored to individual countries and the presence of high quality due to backward integration. Thus, the challenges for the company adheres high costs because of tailored products and possible duplication, there can be research and development instead of market driven and the control applied by the company meant that national buy in required before product introduction and the time to market can be slow in the process.
The foundations of standardization centers on perception of consumer homogeneity or the movement towards homogeneity (Cited from, ., 2003 ). While, the dimensions of marketing strategy go beyond a consideration of the customer, competition plays critical role in the development of marketing strategy and in decisions on degree of standardization of marketing strategy. If the creation of competitive advantage through increased efficiencies and effectiveness is the goal of global marketing strategy, it would follow that any extension of a marketing strategy globally needs at the minimum strong focus on the issue of competitive advantage in customer response to the marketing mix. Homogeneous customers such as those that are demographically similar to each other in age or income may respond quite differently to the same marketing stimuli in which case they would not be candidates for standardized marketing strategy. However, customers of whatever nature if they respond similarly to the marketing mix are candidates for standardized marketing strategy.
The focus should be on the homogeneity of customer response to the marketing mix rather than the homogeneity of the customer, techniques of market segmentation used to identify idiosyncrasies across markets in response to any aspect of marketing mix used (Cited from, and , 1998). The degree of marketing standardization would be a function of the level of homogeneity of customer response to the marketing mix, the transferability of competitive advantage, and homogeneity of economic freedom across markets. However, at the other end of the continuum, where the homogeneity of customer response to the marketing mix is low, degree of similarity in economic freedom is low, and competitive advantage is not easily transferable, standardization is competitively irrational behavior (Cited from, , 1992) that is likely to lead to sub-par returns and adversely impact shareholder value (Cited from, ., 1999). Business Corporation is considered to possess core competence when it leads to perceived customer benefits, acts as an entry barrier to competition, and can be leveraged in a number of markets (Cited from, and , 1990). Corporations that possess core competences would be in better position to standardize their marketing strategies than corporations that do not possess core competencies. For example, Honda can capitalize on its core competency of engine design to establish technological leadership and standardize engine design worldwide. Similarly, corporations that possess high degree of market power would have better position to transfer competitive advantages across markets and follow strategies of standardization than corporations that are low in market power. The sources of market power could be many including resources that result in barriers to entry such as reputation, economies of scale and scope, patents or market share that arises due to factors such as cost efficiency and financial strength (Cited from, , ., 1999 ; ., 2002 ). The customer response to the marketing mix can be examined through customer response to marketing strategies via product, promotion, price, and place. The customer response to the marketing mix is variable that combines four other variables: homogeneity of customer response to product, homogeneity of customer response to price, homogeneity of customer response to promotion and homogeneity of customer response to place as a factor affecting the ability of company to standardize promotional strategy, pricing strategy (Cited from, and , 2001 ), product strategy (Cited from, ., 1999 ) and distribution strategy. The relationship between marketing strategy standardization and the environment may also be viewed in the context of research on comparative marketing systems. When marketing systems are similar across markets it is likely that standardization will be facilitated than when marketing systems are dissimilar across markets, this would represent useful beginning in helping us understand the impact of the environment on marketing strategy standardization. In order to understand the effect of a specific decision variable on standardization therefore, an examination of its impact on one or more of the three factors would enable us to identify the relationship between that decision variable and the issue of marketing strategy standardization.
In time of global approach, marketing internationally has become subject by governments, private institutions and individuals alike. There is consensus that businesses are going global faster than ever; rising trade and investments are creating national wealth and consumer affluence, especially in developing countries of tastes and preferences of consumers across the globe is increasing demand for global brands and services and technological advancements, especially information technology are making the world more and more borderless (Cited from, and , 2002; , 2001; , 2002). Another challenge is ascertain consumer ethnocentric tendencies on the evaluation of services as there is growing recognition that evaluations of goods or services may be affected by what has been described as consumer ethnocentrism or consumer patriotism (Cited from, , 1988; and , 1987). Thus, and (Cited, 1987) introduced consumer ethnocentrism entailing that consumers prefer domestic goods because of strong nationalistic beliefs and feelings. Consumer patriotism or conservatism may restrain consumers from buying imported goods/services (Cited from, , 1999). Aside, people who are more open to foreign cultures seem to be less ethnocentric toward services also, better-educated and high-income consumers the degree of ethnocentrism can be expected to decrease (Cited from, , 1999). Whereas internationalization is thought to be a sequential process initiated with exporting, soft service providers entering new markets must do so in an all or none fashion. Another important aspect influencing international services delivery is the marketers’ responsiveness to demand (Cited from, and , 1993). It is found that a firm’s propensity to enter a foreign market through an owned subsidiary tends to increase with increases in the size of the market, the absence of possible partners in joint ventures and the desire of the management to maintain control over foreign operations (Cited from, , 1991). The retailing sector for instance, such as Wal-Mart and Toys R Us in pursuing international expansion, realize that managing an operation in a foreign market is significantly different from that of domestic approach to operations. The viable entry mode for these types of services is some type of foreign direct investment that enables the firm to build some type of facility through which services can be delivered (Cited from, and , 1993; , 1999).
Examples of Global Strategy
Common customer needs favor globalization as for example the facsimile industry’s customers have more homogenous needs than those of furniture industry as the needs are identified by local tastes as well as cultures as globalization may require to reach the customers in their markets as global customers often require globally standardized products. In global strategy, the product is the same in all countries with a centralized control with little decision making influence on the local level and this strategy is effective when differences among countries are small and is good in terms of coordinated activities and faster product development. A good example of global strategy is Matsushita Company as the outcomes of strong global distribution network within company wide mission statement that was eagerly followed also; there was financial control and more applications to research and development. The challenges for the company indicate problems of yen and too much dependency on one product, like the VCR and the loss of non-Asian employees due to such glass ceilings
In situations where firm intends to expand overseas, if senior management fail to gain an in-depth understanding of the more subjective and intangible aspects of such consumer recognition and behavior in overseas markets, there is a high probability that these managers will tend to perceive that their home country’s cultural beliefs, values and expectations are universally acceptable within such markets. If senior management believes that their values and expectations are universally acceptable, the efficacy of their decision making regarding the design and implementation of corporate identity strategies will inevitably be sub-optimized by their failure to account for the quintessential differences within such overseas markets. Therefore, to say, if standardized marketing strategy does not provide value to the market, it is less likely to increase sales. If the marketing strategy is unable to increase sales, the investment in the standardized marketing strategy inefficiently employs valuable corporate resources. Therefore, without validation of the economies of scale assumption, the direct influence of standardization on performance becomes suspect. The consumer has changed, becoming more accessible to marketers and, for many, becoming more affluent in their consumption of marketing strategy. He or she has also become more sophisticated, with extensive and varied marketing experience. The marketer has also changed, developing and employing more sophisticated research techniques to understand the consumer and to evaluate the effectiveness of their marketing strategies.
The value of standardization is important to business when it comes to same operational drive within various countries with the same business type such as McDonalds which have the same standards of their business in many countries while customization provides companies the chance to customize their products and services depending on the mode of business in a particular knowing what the needs of the country without considering the others for customizing value and its market applications. The notion behind ethnocentric and polycentric approach is quite different in ways for example, in such human resource policies they are of diverse mood as ethnocentric focuses on the home country as the basis for example in recruitment and selection while the polycentric approach in lieu to human resource policies can adopt to diverse cultures not just concern about the home country but other countries as well. While in terms of multi domestic and global strategy there assumes the industry in which firms must compete in the world markets of certain products in order to survive as the competitive advantage depends on economies of scale and economies of scope gained across markets as the products are standardized or customized for a normal businesses there say, adopt global strategy in global markets and a multi-local strategy in multi domestic markets.
comments powered by Disqus