Standardisation vs. Differentiation Flashcards
What are major decisions in an international marketing process?
- ) Market choices
- -> whether to internationalise
- -> which markets to enter
- ) Strategic decisions
- -> how to enter
- -> how to grow/exit
- ) Tactical
- -> how to integrate the international marketing plan
What are some strategies in regards to global integration and local responsiveness?
Characterise them and give industry examples
1.) Global standardisation strategy
–> Low local responsiveness/high pressure for cost
reduction
(Ex. Civil aircraft/institutional banks)
2.) International strategy
–> low local responsiveness/ low pressure for cost
reduction
(Products that opportunistic firms sell to foreign
consumers)
3.) Transnational strategy
–> high local responsiveness/high pressure for cost
reduction
(Consumer electronics)
4.) Localisation (multi domestic) strategy
–> high local responsiveness/ low pressure for cost
reduction
(Health care/food processing)
Define Standardisation.
What is a benefit/a drawback of standardisation?
Belief that removal of trade barriers and growth of global cultural values leads to single economic system (global products/uniform marketing proccesses)
Benefit -> Economies of scale and scope
Drawnack -> single global economic system not realistic
Define Differentiation.
What is a benefit/ a drawback of differentiation?
Geographic segmentation according to cultural clusters and social groups
Benefit -> differentiation according to legal and cultural
barriers
Drawback -> very expensive
What are the degree of standardisation and differentiation dependent on?
- ) Program structure
- ) Target groups structure
- ) Object program
- ) Target groups specific positioning
What are Strategic Business Units & Strategic Business Areas in regard to program structure?
SBU
–> organisational units that mostly consist of multiple
SBAs
(Example - SBUs Henkel: Home care and Personal care)
SBA
–> can be clearly differentiated from each other
according to customer needs
(Examples - SBAs Henkel within SBU Personal care: Schwarzkopf & Fa)
How can SBUs/SBAs be analysed?
Can be analysed according to BCG Matrix
- > Poor Dogs
- > Questionmarks
- > Stars
- > Cash cows
Target Groups Program - How can markets be segmented?
Markets can be segmented according to Personal characteristics or Behavioural characteristics
Name the possibilities of segmenting according to personal and behavioural characteristics
Personal Characteristics
- Geographic
- Demographic
- Psychographic (lifestyle/values…)
- Sociographic (income/purchasing power…)
Behavioural Characteristics
- Information Behaviour (media usage/communication
behaviour)
- Buying Behaviour (store- &brand loyalty/- choice)
- Usage Behaviour (intensity/time/type)
- After Buying Behaviour (complaining behaviour)
What are some commonly used international segmenting approaches?
Segmenting by:
- Geography
- Global segment (Personal/Behavioural)
- Multiple criteria
What are aims of standardisation within the distribution process?
Name a company that has standardised distribution
Aims:
- achieving economies of scale in logistics
- reduction of complexity in distribution network by
cooperating with same partners around the world
Example –> Apple
What is the aim of differentiation within the distribution process and when is this especially necessary?
Name an example for differentiation in distribution
Aim:
- adjust to local selling systems
–> necessary if national distribution system consistent of
close networks between manufacturers,
transportation firms, etc…
Example: Japan –> closed distribution networks making
market penetration for foreign companies
nearly impossible
What are different types of configurating product programs?
Name an example
- horizontal configuration (width)
- -> number of car models (product program)
- vertical configuration (depth)
–> number of different configurations of one car within
the product program
–> Example: BMW
On what 3 levels can an object (product/service) be configurated?
- ) Core Value
- ) Basic attributes (pricing/branding/packaging)
- ) Additional characteristics (guaranteeing/delivery terms)
What are the aims of product standardisation?
In what scenario ist product standardisation preferred to differentiation?
Aims:
- higher economies of scale
- higher ROI
–> preferred when customers want identical products
from world famous brands (Dior shoes)
What is the aim of product differentiation?
In what scenarios is differentiation preferred?
Aim:
- increase product’s value for customers in different
markets
–> preferred when:
- Products adapted to needs of local customers (ex.
higher income country wants higher quality)
- Products adapted to legal, economic and socio- cultural factors (ex. McDonald's focus on chicken products in china, because more popular than beef)
What are the differences between international brands and local brands in reality?
International brands
- higher economies of scale
- larger adverstising budgets
- unique brand image across countries
Local brands
- better response to local needs
- closer relationship to customers
- higher flexibility in pricing
What are 4 different international brand strategies in dependence of the brand exterior and the Brand core (basic identity)?
Name industry examples
1.) Identical (standardised) branding and brand core in all
countries (ex. Marlboro/Coca Cola)
2.) Differentiated brand core but identical branding in all
countries (ex. Honda/Nestle)
3.) Identical brand core in all countries and differentiated
branding (ex. Langnese - Germany)
4.) Differentiated brand core and branding (ex. Ariel/Tide
washing powder)
What are the characteristics of a Multinational Branding Strategy?
- has a country specific concept
- branding policy adapted to local conditions
What are the objectives of a Multinational Branding Strategy?
- optimal market exploitation
- increased national image
- flexibility
What are the characteristics of a Global Branding Strategy?
- standardised brand concept
- branding policy is internationally consistent
What are the objectives of a Global Branding Strategy?
- Synergies in communication and production
- internationally consistent brand image
What are the aims of standarised pricing?
Aims:
- avoid re-imports (ex. importing cars from US that were
exported there, just because it is cheaper)
- avoid uncertainty/frustration among customers
Why is it reasonable to differentiate prices?
Reasonable to charge differenct prices according to:
- willingness to pay
- different tax rates
- exchange rates
