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Standardisation vs. Adaptation

Standardisation vs. Adaptation. A recurrent theme. Standardisation . A uniform offer on a regional/global basis Minor adaptations may be made to conform to local regulations or technical requirement (e.g. electricity voltage) Capitalises on commonalities in customers’ needs across countries.

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Standardisation vs. Adaptation

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  1. Standardisation vs. Adaptation A recurrent theme

  2. Standardisation • A uniform offer on a regional/global basis • Minor adaptations may be made to conform to local regulations or technical requirement (e.g. electricity voltage) • Capitalises on commonalities in customers’ needs across countries

  3. Standardisation • Usually considered in the context of: • product • pricing • marketing communications;particularly advertising, branding, packaging

  4. Standardisation • The goal is to minimise costs • These can be • passed though to customers or • taken as profit depending on the competitive environment

  5. Product standardisation • 5 forces favouring this strategy: • common customer needs; • global customers; • economies of scale; • time to market; • regional market agreements

  6. Product standardisation:common customer needs • The same usage and/or perceived benefits • e.g. Convergence in the car market across Triad markets: • Functionally, towards 7-9 m2 • Psychologically, in terms of • self-expression • pleasantness of driving experience • comfort

  7. Product standardisation:common customer needs • But there can be within-region variations: • E.g. BMW research in Europe

  8. BMW’s European positioning

  9. Product standardisation:Global customers (MNCs) • Result of global sourcing: a characteristic of B2B (business to business) markets • E.g. MNCs often place global contracts for the supply of materials/components etc.

  10. Product standardisation:Economies of scale • Traditional reason for standardisation • CAD/CAM techniques enable mass customisation and small batch production at low cost

  11. Product standardisation:Time to market (e.g. Sony case) • Innovation alone does not always provide competitive advantage • Speed of launch is becoming increasingly important • E.g. P&G estimate its time to market of liquid detergents is now 10% of 1980s. • The key is centralisation • NB Sony case - read it!

  12. Product standardisation:Regional market agreements (e.g. EU) • Encourages regional launches • lower taxes within boundaries • common technical standards • Favours common brand names • e.g. Marathon (UK) to Snickers (Cont. Euro) • e.g. Raider Bar (Cont. Euro) to Twix (UK)

  13. Product standardisation • The issue is not ‘either/or’ • But: What elements should be tailored to local conditions?

  14. The costs of standardisation • Stifles local initiative and experimentation • High cost of failure

  15. Standardisation of the communications strategy • 2 components: • message • execution (visual, scripting, media • Still relatively uncommon • Recent examples: • AXA (insurance) • HSBC (banking) • BA

  16. Standardisation of the communications strategy: benefits • Savings come from economies of scale • Provides a consistent image • Appeals to global consumer segments • Shortage of creative talent • Cross fertilisation of good ideas in one market to another • e.g. Sony

  17. Standardisation of the communications strategy: benefits • Research amongst ad agencies suggest that: • most important driver of standardised advertising is the global brand

  18. 1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Toyota 8. Disney 9. McDonald’s 10 Mercedes-Benz 11. Citigroup 12. Marlboro 13. Hewlett-Packard 14. American Express 15. BMW 16. Gillette 17. Louis Vuitton 18. Cisco 19. Honda 20. Samsung The World’s top 20 brands -Interbrand 2006

  19. Standardisation of the communications strategy: barriers • Cultural differences: • benefits sought (see BMW research)

  20. BMW’s European positioning

  21. Standardisation of the communications strategy: barriers • Usage: • Food and drink • e.g. tea drinking • e.g. cognac: • US = stand-alone drink • Europe = after dinner drink • China = at dinner with water • Therefore need to adapt the context to different cultures

  22. Standardisation of the communications strategy: barriers • Cultural differences: • e.g. Hofestede’s masculinity index • P&G in Japan • showed an advert with a man walking into a bathroom when his wife was taking a shower • shows disrespect for women e.g. in Japan • Japan is no. 1 on masculinity index

  23. Standardisation of the communications strategy: barriers • Local advertising regulations • e.g. in Malaysia foreign-made ads must not use white people . • Therefore Ray-Ban were forced to shoot locally for TV ads • Variations in PLC • Introductory phase requires an awareness-building campaign e.g. iced tea in Europe

  24. Standardisation of the communications strategy: barriers • Finally… • The NIH (Not Invented Here) syndrome: • de-motivating • face resistance

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