Question

3. What does selling a standardized product imply? In what ways might a product be adapted for global markets? What factors encourage global standardization of a product? What factors encourage firms to adapt their product for a foreign market?

Answer 1

Standardized product means that a product is designed in such a way that it possesses similar aspects of production, assembly and advertisement in every export market. Standardised product implies that a firm or company is capacitated with selling its product in huge quantities coupled with lower costs per unit and also advertisement costs.

As per the research of Vrontis and Thrassou in 2007 “multinational companies should have to find out how they must adjust an entire marketing strategy and, including how they sell, distribute it, in order to fit new market demands”. The ways of adaption include promotional adaptation, distributional adaptation, cultural adaptation etc.

Factors that encourage global standardisation are a high cost associated with localisation, convergence and similar tastes in different parts of the world, economies of scale, use of the urban environment in the prospective market etc.

Factors that encourage adaptation are different technical standards, variation in the needs of the consumer and their preferences, cultural differences etc.