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Cross-cultural Marketing > C - Standardization vs. Adaptation > Flashcards

C - Standardization vs. Adaptation Flashcards

1
Q

Market Segmentation

A

Subdividing a market into subgroups which are - with respect to the market reaction - internally homogeneous and externally heterogeneous

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2
Q

Market Segmentation

Approaches for segmentation

A
  • socio-demographic
  • socio-economic
  • psychographic, life-style
  • behavioral
  • geographic-regional
  • > culture?
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3
Q

Market Segmentation

Criteria to decide on segmentation

A
  • identification of segments
  • accessibility
  • relevance (economic effect) -> only segments if it leads to higher sales
  • stability -> segments should be rather longterm

-> Fulfilled for culture?

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4
Q

Market Segmentation

Is it reasonable to segment markets by culture?

Identification of segments:
Accessibility:
Relevance (economic effect):
Stability of segments:

A

Identification of segments:
ok, but …
… concept of culture: Nation = culture? Measurement?
… not as easy to identify as gender but you can identify

Accessibility:
ok, but …
… nation = culture?

Relevance (economic effect):
ok, but …
… depends on product category

Stability of segments:
ok, but …
… value change -> culture is quite stable but it can change

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5
Q

Segmentation within a country

Ethno-Marketing

A

Adaption of the marketing mix to a target whose direct or indirect country of origin is different to the country in which they live and in which they mainly consume.

Cultural Specific Approach for different segments

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6
Q

Segmentation within a country

Ethno-Marketing

Is it always reasonable to adapt to ethnic groups within a country?

A

Whether or not ethno marketing is successful depends on the identification of the target group with their country of origin and country of living.

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7
Q

Segmentation within a country

Ethno-Marketing

Disassimilated, integrated, deculturized, assimilated

A

Disassimilated
ICO: high
ICL: low

Integrated
ICO: high
ICL: high

Deculturized
ICO: low
ICL: low

Assimilated
ICO: low
ICL: high

ICO = identification with country of origin
ICL = identification with country of living
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8
Q

Basic Strategic Decisions

Basic Problem: To standardize or to adapt?

Strategic Options

What are the two basic types of National Operations?

A

Cost leadership
- reducing costs making use of the experience curve

Quality leadership
- fulfill the specific needs of different target groups by differentiation (adjust to different consumer preferences)

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9
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Cost Leadership

Strategy, when using Cost Leadership

A
  • homogeneous marketing-mix

- “economies of scale”

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10
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Cost Leadership

Advantages of Cost Leadership

A
  • price advantage
  • market growth
  • market share
  • market entry barrier (low price level)
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11
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Cost Leadership

International operations resulting from cost leadership

A

Standardization

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12
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Quality Leadership

Strategy, when using quality leadership

A
  • target-specific marketing mix

- unique products / quality

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13
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Quality Leadership

Advantages of quality leadership

A
  • customer loyalty
  • image
  • higher willingness to pay
  • incentive for innovation
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14
Q

Basic Problem: To standardize or to adapt?

Strategic Options

Quality Leadership

International Operations resulting from quality leadership

A

Adaption

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15
Q

Standardization / Adaption Debate

Standardization

Necessary conditions and beneficial conditions for using standardization

A

Necessary conditions

  • approximation of people’s needs and behavior
  • existence of sufficiently large transnational market segments

Beneficial conditions

  • improved transport and communication options
  • international mobility
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16
Q

Standardization / Adaption Debate

Standardization

Anticipated consequences when using standardization

A
  • economies of scale
  • acceleration of the introduction of new products into international markets
  • efficient management of international businesses
  • increased handling volume
  • worldwide knowledge transfer
17
Q

Standardization / Adaption Debate

Adaption

Necessary conditions and beneficial conditions, when using adaptation

A

Necessary conditions

  • external factors (cultural behavior, legal conditions)
  • appropriate internal organizational structure (e.g. separation into divisions)

Beneficial conditions

  • “mass customization” (e.g. flexible production systems)
  • disadvantages of standardization (e.g. no USP)
18
Q

Standardization / Adaption Debate

Adaption

Anticipated consequences

A
  • higher market share in local markets
  • higher motivation of local managers
  • higher flexibility to handle unexpected changes in local markets
19
Q

Ongoing standardization

Convergence proposition (Levitt 1963)

A

(Strong influence on the globalization debate)

Price/cost advantage Proposition
(if more people can afford it, more homogeneous behavior)

-> Convergence Proposition
(If they behave more or less the same in different countries you can standardize)

-> Standadization Proposition
(if it’s standardized you can centralize the firm because you are doing the same in every market)

-> Price/cost advantage proposition
(if you centralize you don’t need people in every market -> less costs)

  • -> self reinforcing process
  • -> pro Standardization
20
Q

Ongoing standardization

Convergence proposition (Levitt 1963)

Pro and contra

A

Pro:
bigger clusters

contra:
generation can be different, only economic perspective

21
Q

External factors

Role of industry type

A

A multinational enterprise (MNE) performs somewhere in this range:
multidomestic industries global industries

22
Q

External factors

Role of industry type

What are Multidomestic industries?

Description, Examples, International strategy

A

Description:
Competition in one country is independent of competition in other countries.

Examples:
Retailing, distribution, insurance

International strategy:
Series of domestic strategies

23
Q

External factors

Role of industry type

Global industries

Description, Examples, International strategy

A

Description:
Competitive position in one country is significantly influenced by its position in other countries.

Examples:
Airlines, semiconductors, copiers

International strategy:
Must integrate activities on a worldwide basis

24
Q

Global Marketing Strategy

Glocalization

A

Mix of Globalization (Standardization) and Localization (Differentiation)

Global + Local = Glocal

Think globally, act locally.

25
Q

Global Marketing Strategy

Glocalization

Globalization (Standardization)

A
  • global low-cost production and selling
  • global roll-out of concepts/highspeed
  • low complexity
26
Q

Global Marketing Strategy

Glocalization

Localization (Differentitation)

A
  • culturally close to consumer
  • flexible response to local consumer needs
  • regional and local market penetration
27
Q

Contingency Approach

From the S / D Debate to the strategy of differentiated adaption

A

Contingency Variables:

  • macro economic
  • micro economic
  • company-specific
  • product-specific

Cultural commonalities and cultural differences determine the strategy of adapted standardization
-> with this strategy the advantages of standardization as well as the advantages of adaption can be used

28
Q

Positioning in the Dimensional Culture Space

Hofstede Culture Profiles

A

masculinity vs. femininity
collectivism vs. individualism
strong vs. weak uncertainty avoidance
strong vs. weak power distance

29
Q

Comparative Analysis

Basic Idea of the comparative approach

A
  • finding universal vs. culture-specific determinants and correlates of consumer behavior
  • comparison as the method to gain knowledge

Cross-cultural Marketing (11 decks)

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