Question

Identify 3 pros and 3 cons of localization and standardization and explain why they are pros/cons. Give 2 examples of products that are better off with Standardization and 2 that are better off with Localization and explain why?

Answer 1

Localization is process of adapting a product and services according to the local market in which they are providing their services. It is the process of attracting more customers as the product is adaptable to local market, it feels fully native to users.They do not have to spend extra time and efforts to understand that product i.e. if a food item is imported from China to India, the ingredients mentioned over it is written in Chinese and it is difficult for Indians to understand these ingredients. If customers are not confident about buying that product, there are chances that they would not buy that product inspite of taking risk. So India would be better off if they grow these food items in India itself.

Two products which are better off with localization are:

1. First is Aaj Tak has much more viewers that CNN as a news channel in India, because they publish news in Indian language (Hindi). This is the reason viewers feel comfortable while watching Aaj Tak and are in ease in understanding news than in CNN which is English news channel.

2. Second is Baidu has more users than Google in China because it is native to Chinese speakers.

Pros of Localization:

1. Better knowledge of Customer Base: Knowing your customer is the essential part in running a business. If you are running your business in a local/specific area, you are well equipped with how your customer responds on launching a new product, how they react on changes in price of product. In this well connected world we get instant information about our products, how well they perform in market etc.

2. Adaptable: In local market we can change our product according to the demand by consumers. We are adaptable to the local customer base which gives profit to us.

3. Providing assistance to Consumers: If you are running your business locally, you are native with the language of customers, you are accustomed with their behaviour, you are well known of local laws. It is very easy to you in solving queries of your customers so that they come again to buy your product.

Cons of Localization:

1. Scope: Localized product is limited to a specific market, there is less scope of increasing profit to that extent in which you can do it if you running globally.

2. Hiring Local employees: If you deal in a specific market, you would hire local residents of there as employees which reduces diversity of views among employees. If you hire diversified employees, it would cost you to train them as local market.

Standardization is the process of constructing methods and tools to manufacture products based on the consensus of all relevant partners in industry such as customers, users, government organizations. This can help in gaining mutual benefits if everyone try to solve the complex issue which they faces. It ensures that the product is of consistent quality and comes with comparing capability with other goods.

Two products which are better off with standardization are:

1. Coca-Cola which uses the same red color uniform design to operate across all the globe to present its global image in front of audience.

2. Volkswagen manufactures same models of cars among many countries.

Pros of Standardization:

1. Reduced Uncertainty: Customers are less uncertain about buying a product. They feels confident about buying the product that they are not wasting their money in an unknown product.

2. Network: It allow same information to be shared among large network which attracts customers to use the new product which results in mass marketing of the product globally.

3. Quality: If the product is standardized and same product is used worldwide/globally, there must have many competitors of that product which helps in improving quality of all products because of if one of them does not provide adequate quality it will loose its customer base in near future.

Cons of Standardization:

1. Lack of adaptation: Since global market are dynamic and behave differently. One product may not being able to satisfy the consumer needs according to their needs.

2. Homogeneous products: Due to standardization all products are likely to be the same, there is no difference among them. Customers have no choice in choosing products.