Question

What are standardization and adaptation of product strategies? Discuss pros and cons of each with some examples.

Answer 1

Product adaptations (also known as differentiation or localisation or customisation) come in many ways. In a country-by - country basis marketing strategies are tailored to local market peculiarities. Through this, product modifications are considered a necessary strategy for catering to the specific consumer needs in different countries. Following the "logical gradual ism" principle, it can be argued that continuous improvements can promote flexibility and experimentation. Strategic drift, however, is likely to result if the effectiveness of the management fails to keep up with the environmental change. Adaptation of the goods appears to become a reactive market response.

With this, it is possible that a high degree of adaptation would become difficult for the multinational to manage the network of activities on a global scale. Compulsory modifications include adjustments that must be made before the device can be used, for example, equipment made for the U.S. and Europe must operate at different voltages, and a major issue has been faced in the European Union when hoses for restaurant frying machines do not meet the legal specifications of various countries simultaneously.

Another distinction concerns adaptations to the physical object versus contact. Its octane must be higher in order for gasoline to be efficient in high altitude areas, but it can be marketed in the same way. On the other hand, although the same bicycle could be sold in China and the United States, it could be placed in the former as a serious means of transportation, and in the latter as a recreational device.

Standardization of products (also known as globalization) involves making one global product in the belief that the same product can be sold on all markets without significant modification. Because of the growing trend by multinational corporations to outsource components to gain economies of scale this concept has become more meaningful.
The organization gains economies of scale by providing uniform components as the goods are tailored to deliver a wide variety of models according to the needs of various market segments. The major constraints to product standardization include consumer preferences and restrictions on government and trade.

There are also benefits of standardisation and universal uniformity. For one, consumers anywhere in the world should expect the same standard of quality from any single brand. Standardization also promotes favorable expectations of customers regarding a commodity (Products and Foreign Marketing, n.a). If a company enjoys a strong brand identity and a strong reputation, a standardized approach could work to its advantage. Positive word-of - mouth can mean a rise in global sales. Another advantage is cost control with economies of scale. The selling of large quantities of the same, unsuitable product and the purchasing of components in bulk will reduce the cost per unit

Yet standardization faces a variety of drawbacks. Different markets mean different preferences, as already mentioned. It lacks individuality in selling one single commodity. This helps competition to gain market share by tailoring their goods to meet the need for a specific market / segment. Since multiple markets have different needs and preferences, businesses may become vulnerable by using the standardized approach. One example of this is the inability of Walmart to penetrate global markets.