Question

What is your view on "standardized versus localized" advertising? Which do you think is more effective? Why?

Answer 1

When a firm wants to expand and enter other markets including the international markets, it may have to choose the right marketing strategy, which can be standardized (also called a globalized strategy), or a localized strategy (also called adaptation or customization strategy). The strategy should provide for improved business practices, overcoming difficulties, an increase in operations and greater profitability, among other desirables.

Standardization

The homogenization of markets worldwide may be facilitative towards the adaptation of standardization strategies. In this stage, a business may apply the domestic product standards and marketing strategies to the new and foreign markets, successfully. Improved communication, new technologies, and marketing incentives also provide for the adoption of the strategy. Consumer needs are converging while the global business rivalry and competition is increasing, some conditions that again create a preference for the standardization strategy.

Advantages and Disadvantages of Standardization Strategy

The strategy may help businesses reap the benefits of economizes of scale and a more uniform and standard image for the business is created. Experience can be transferred easily while monitoring, coordination, and control also improve (as the same product, and marketing and advertising strategies are used).

But regardless of the benefits, the standardization strategy may also cause lesser sales, because of a lesser degree of adoption to the local environment. Because the same tactics get repeated, the entrepreneurial spirit and efforts are reduced. There may be certain differences in customer preferences, which the competitors would be serving better, and trade/government restrictions may also not allow full-scale standardization. Further, because different countries have different degrees of development (including infrastructural development), the marketing infrastructure may not be the same at all places.

Localization

The localization strategy involves the changes or alterations that a business may make to the product/service when it is sold in some other market. The optional alternation will make the product more suitable for a given market and the qualities altered may include both tangible or intangible properties. Alterations may be made in other areas as well, including the areas of marketing and advertising. Localization may be carried out due to certain macro-environmental factors and certain constraints including occupation, language, society and culture, education and others.

Advantages and Disadvantages of Localization Strategy

Because different countries and regions vary in their social, cultural, and legal structures, and also in their development/growth, localization may be necessary. Localization helps a firm better respond to the local desires and needs, expedite the development of the business in the new region and increases market share. However, there are no benefits due to economies of scale, control decreases, and the expertise may not be well transferred.

In my point of view, a business needs to carry out market research before entering a market and the outcomes will suggest the best course of action. The elements of the marketing mix and the 4Ps (product, price, place, and promotion) may require more specific attention, and the cultural, legal, economic and political aspects of the new market should also be evacuated. This will help businesses better know which of the elements of the product/service and the marketing and advertising strategies should be standardized and which ones should be localized.

Assuming anything can be a cause of loss. The Radio Shack Company assumed that customers in Europe and the USA will behave the same way, as both the regions are westernized. The company focused its marketing and advertising efforts on 25th December as it assumed that people in the Netherlands also exchanged Christmas gifts on 25th December, as people in the USA do. However, people in the Netherlands exchange gifts on 6th December. This caused losses for the company. The larger the differences in areas including culture, political environment, economic scenario and income level among others, the more localizations would be required. Hence it can be said that the best approach is to be knowledgeable in all areas through making research and to take advantage of both the strategies wherever possible.