Standardization Versus Adaptation in International Marketing
Introduction The most challenging decision that a company may face in internationalization is the degree of standardization or adaptation in its operations. The question of standardization or adaptation affects all avenues of a business’ operations, such as R&D, finance, production, organizational structure, procurement, and the marketing mix. Whether a company chooses to standardize or adapt its operations depends on its attitudes toward different cultures. These attitudes are defined by three orientations toward foreign culture: ethnocentric, polycentric, and geocentric.
Ethnocentric Model Ethnocentrism has a socio-psychological dynamic that is broadly used to describe …show more content…
However, one can compare the models and weigh the benefits, against the disadvantages of each. Ethnocentrism is the polar opposite of geocentricism. The ethnocentric approach (standardized) to marketing, views domestic techniques as superior and most effective in global markets, and domestic operations is primary, whereas foreign markets are secondary. The ethnocentric philosophy for marketing strategies focuses on home country guidelines, and plans for the foreign markets are designed in the home country, using procedures and policies similar to those in domestic markets. The export department conducts marketing, and employees are typically nationals. R&D is not developed in foreign countries, but domestically; products are not modified extensively, and calculation for prices is the same as in the home market, with distribution costs added in. Distribution and promotional strategies are similar as the home country, as much as possible, and operations are conducted from the home office, with a strong dependence on export intermediaries. In comparison, the geocentric approach views the entire world as a possible market, knowing no boundaries. Employees are from other countries, standardized product lines are developed for global markets, and pricing is determined based on local markets. Promotional campaigns and products are developed globally, and are in harmony with the company image.