5 - product adaptation

Question 1

standardization

Answer 1

• Consists of commercializing the same product in the foreign market as in the domestic market and with the same marketing strategy
• Consumer needs, wants and demands do not tend to differ between markets and countries.
• In the past → multinational enterprises → marketing plans for each country separately
• In recent years → global companies → a standardized way of marketing mix elements and strategies

Question 2

Some reasons to use a standardization strategy:

Answer 2

• Companies can maintain the same identity and image around the world
• Minimizes the confusion that travellers can have when going abroad
• Save significantly on costs.

Question 3

standardization - advantages

Answer 3

• cost reduction /economies of scale and scope
• production efficiency
• establishment and strengthening of the brand → standard of quality
• convenience for consumer, ease of usage

Question 4

standardization - disadvantages

Answer 4

• stagnation: the firm is unable to remain competitive against some new innovations from the competition
• lack of understanding between the firm and changing customer needs.

Question 5

Factors favouring standardization

Answer 5

● economies of scale in r&D, production and marketing
● global competition
● Convergence of tastes and consumer needs
● Centralized management of international operations
● A standardized concept is used by competitors
● High degree of transferability of competitive advantages from market to market

Question 6

Factors favouring adaptation

Answer 6

● local environment-induced adaption: sociocultural, economic and political differences
● local competition
● Variation in consumer needs
● Fragmented and decentralized management with independent country subsidiaries
● An adapted concept is used by competitors
● Low degree of transferability by competitive advantages from market to market

Question 7

Product Adaptation: definition

Answer 7

Product adaptation consists of making changes to a product without changing its core idea, with the objective of reaching foreign markets and customers. These changes are usually done in the packaging, flavours… or the size.
Companies adapt their products in order to meet the legal and cultural needs of the country they want to reach.

Question 8

Factors influencing product adaptation

Answer 8

1. Customer Research - in order to offer the best product, it is important to know your potential customers
2. Exports Research - companies need to be aware of the sales channels and opportunities that the country offers
3. Legal Regulations - companies should know which legal aspects must be complied in order to be able to sell
4. Marketing - it is helpful to know how marketing campaigns work in other countries
5. Pricing - companies should be aware of the average price local customers pay for similar products.
6. Packaging - companies should adapt packaging to the locals’ preferences
7. Competition - Local competitors are a very valuable source of information

Question 9

Types of product adaptation

Answer 9

1. Tangible adaptation - it consists of making changes in physical aspects. E. g. : packaging
2. Intangible adaptation - it focuses on non-physical aspects of the product. E. g. : ingredients-flavour
3. Promotion adaptation - it refers to the different promotions in the different countries. E. g. : marketing campaign
4. Price adaptation - it is an adjustment in the price of the product. E. g. : decrease the price

Question 10

product adaptation advantages & disadvantages

Answer 10

ADVANTAGES
- Respect for local preferences and expectations
- Excellent local image
- Create in the customer a feeling of being important and preserving their identity
DISADVANTAGES
- High monetary investment
- Time consuming
- Slow process
- Difficulty to know the expectations of the customers

Question 11

Types of international strategies based on global integration & local responsiveness GRAPH

Answer 11

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Question 12

Service Standardization VS Adaptation

Answer 12

1 People-processing services that involve each customer directly in delivery of services targeted at the customer´s physical person.
- Services provider needs to maintain a local geographic presence → Health Care.

2 Possession-processing services targeted at physical objects belonging to the customer.
- Local presence is still required when the supplier must come to service objects in a fixed location. Laundry Service, House Cleaning Service

3 Information-based services targeted either at customers’ minds or at their intangible assets.
- Depending on the transmission or manipulation of data in order to create value.