Does standardization make sound business sense?
Standardization is a matter of degrees that cannot be applied globally to all marketing activities, but it is necessary to determine which of these marketing activities is prone to be standardized. To do so, a value chain analysis and an international segmentation must be carried out.
Key factors for standardization:
- Homogeneity and uniformity of the wishes and interests of consumers all around the world.
- The consumer at large sacrifices preferences for price and better quality.
- The possibility of achieving scale economies in manufacture/production and marketing.
Criticisms levelled against these standardization key factors:
- Lack of evidence towards homogenization.
- Increased sensibility to price.
- No preference verification.
- Positioning vulnerability.
- Price fluctuation.
- Flexibility in the manufacture/production operations.
- Decrease in total manufacture/production costs.
Pros y Cons of standardization:
Arguments in favor of the international marketing strategies standardization:
- Lower costs.
- Greater learning speed.
- Reduction of freight and distribution costs.
- Global segments appearance.
- Corporate image consistency.
- Improved planning and control stages.
- Greater optimization of human potential.
- Lifestyles internationalization and tastes homogenization – even in consumption patterns.
Barriers and limits to the international marketing strategies standardization:
- Government and institutional restrictions.
- Differences by countries according to marketing infrastructures.
- Differences between the markets attended.
- Differences in interests and purchase behavior.
- Differences in the competitive environment.
- The ethos and strategy of the company.
- Organizational structure.
- International operations which are already in existence.
- Managers motivations and attitude.
Under which circumstances are the application of standardization most effective?
- Existence of global market segments.
- Synergies associated with standardization.
- Proper international communication and distribution infrastructure availability.
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