International Marketing Strategy: Standardization, Adaptation or Integration?

International Marketing Strategy: Standardization, Adaptation or Integration?

Globalization and openness of international markets have made companies seek to internationalize their activities as a way to remain competitive and obtain their share of international markets. Therefore they must establish an appropriate international marketing strategy. Vrontis et al. distinguish 3 different international strategies:

1. STANDARDIZATION STRATEGY (Globalization): Company is providing the same product lines, at the same prices, through the same distribution systems, and the same promotion program in many different countries. This means the same marketing program is used in different countries or regions. The advances in technology and communications led to the gradual erosion of the cultural differences between individuals, and thus the homogeneity of consumer's needs, preferences, tastes, demands, and lifestyles in the international markets. Therefore, companies are now able to adopt a global, standardized marketing strategy, whereby the company can achieve economies of scale in production and marketing. The companies' adoption of a standardized marketing strategy depends on the strength of the existing barriers between international markets, which are represented by different consumer preferences, legal restrictions, and economic returns expected from adopting this strategy. Where the company's orientation towards adopting this strategy increases in the case that the conditions of the targeted external markets are similar to the local market conditions in terms of economic characteristics, consumer behavior, the company's competitive position, external environmental factors.
   The standardization marketing strategy can have certain benefits:
   - Reduce marketing costs and achieving significant economies of scale;
   - Preserve a consistent image and identity throughout the world;
   - Quality improvement by using a uniformed marketing mix particularly concentrating on one single product;
   - Develop a single advertising campaign for different markets;
   - Reduce uncertainty among buyers who travel frequently.
2. ADAPTATION STRATEGY (Localization): This involves compulsory modifying a set of specific standards in the domestic market, in order to make the product appropriate to external markets conditions. The basis of the adaptation strategy is that when a company enters an international market, it needs to take into consideration all environmental aspects, constraints, and factors, such as societies, cultures, different laws, taste, education, climate, and language. Companies going global must learn how to alter their whole marketing strategy to match the new international market demands. It is also important to adjust the marketing strategy and mix to fit local preferences. The company's orientation towards this strategy increases in the case in which: there is an intense competition, compelling differentiation of products; there is a considerable variation in consumer wants and needs; to meet essential host country requirements, including legal, technical, and packaging issues; customer lifestyle, and consumer's income level.
   The adoption strategy can also have several benefits:
   - Increasing sales in international markets by highly meeting the wants and needs of the consumers;
   - Long-term profitability through higher sales accrued from better exploitation of the different consumer needs across countries;
   - Gain an increased competitive advantage;
   - Increase loyalty as customers feel noticed;
   - Excellent local image.
3. INTEGRATION STRATEGY (Glocalization): this strategy means that the company implements the two previous strategies together (standardization and adaption). The company unifies the elements of the marketing mix of its products when dealing with the local (national) market, and that it modifies, adds and improves the elements of the marketing mix of products especially for the international market to take advantage of both strategies by maintaining an adequate balance between the two.

Source: Vrontis, D., Thrassou, A. & Lamprianou, I, (2009). "International Marketing Adaptation versus Standardisation of Multinational Companies", International Marketing Review.