Standardization

Standardization refers to the efforts of companies to offer a common product, to use a common marketing approach, and to make their business activities the same or uniform throughout a particular market such as a country, a region such as Europe or western Europe, or the whole world. Companies pursuing the standardization approach tend to adopt the same or very similar strategies and marketing programs to offer similar goods and services in different markets throughout the world. The global marketing strategy refers to a plan that guides companies in how to position themselves and their products in international markets, what customers to serve, and the degree to which company activities should be standardized or adapted. Therefore, standardization is an element of the global marketing strategy. The importance of standardization for global business comes from the fact that standardization is one major strategy or approach used by companies in their international business operations; the others are adaptation and a mixture of standardization and adaptation. The term standardization is sometimes used to refer to global or global integration approach as well.

Strategies

When it comes to developing strategies streamlined for global markets, companies have three major strategy options. The first and perhaps the simplest one is standardization that comes from the geocentric view of the world that assumes that there are more similarities than differences across the markets throughout the world. Therefore, the global strategy, which is based on standardization, is the appropriate strategy to operate in international markets. Its argument is that markets throughout the world have become homogenized and thus companies can offer their goods and services through a high degree of standardization and a low degree of adaptation to meet some local market needs. The standardization approach may be appropriate for products having a high level of competitive advantage in terms of functionality and/or low price.

The second option is adaptation, which states that cultural differences exist among countries; therefore, companies should modify their strategies and offerings according to the local market's conditions and consumer preferences. Thus, multidomestic strategy, which is based on adapting different strategies for each country or region, is the appropriate strategy when operating in international markets. The last option is to use a strategy that is a mixture of standardization and adaptation to get benefits from both markets and products that require standardization and adaptation at the same time to a certain extent. [Page 1487]Which approach is better and used by companies? When we analyze the practices of companies with respect to whether they utilize the standardization or adaptation approach, we cannot determine precisely which one is mostly preferred because companies differ in their choices of the standardization and adaptation approaches.

A chronological analysis shows that during the 1950s, the adaptation approach was preferred because companies were not familiar with international markets and consumers. Lack of information as to the purchase behavior of consumers in different markets may have discouraged companies from adopting standardization because companies may have thought that consumers were not the same; therefore, companies preferred the adaptation approach. Companies got more and more knowledge about international markets and consumers as time went by and therefore they were able to see similarities among consumer preferences across markets throughout the world. This led to the replacement of the adaptation approach with the standardization approach during the 1960s. However, the adaptation approach became popular again during the 1970s because of increasing nationalistic tendencies.

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