Two opposite viewpoints for developing global marketing strategy are commonly expounded. According to one school of thought, marketing is an inherently local problem. Due to cultural and other differences among countries, marketing programs should be tailor-made for each country. The opposing view treats marketing as know-how that can be transferred from country to country. It has been argued that the worldwide marketplace has become so homogenized that multinational corporations can market standardized products and services all over the world with identical strategies, thus lowering their costs and earning higher margins.

Localized Strategy The proponents of localized marketing strategies support their viewpoint based on four differences across countries:19 (a) buyer behavior characteristics, (b) socioeconomic condition, (c) marketing infrastructure, and (d) competitive environment. A review of the marketing literature shows how companies often experience difficulties in foreign markets because they did not fully understand differences in buyer behavior. For example, Campbell’s canned soups mostly vegetable and beef combinations packed in extra-large cans did not catch on in soup-loving Brazil. A postmortem study showed that most Brazilian housewives felt they were not fulfilling their roles if they served soup that they could not call their own. Brazilian housewives had no problems using dehydrated competitive products, such as Knorr and Maggi, which they could use as soup starters and still add their own ingredients and flair. Also, Johnson & Johnson’s baby powder did not sell well in Japan until its original package was changed to a flat box with a powder puff. Japanese mothers feared that powder would fly around their small homes and enter their spotlessly clean kitchens when sprinkled from a plastic bottle. Powder puffs allowed them to apply powder sparingly. Similarly, advertisers have encountered difficulty when using colors in certain foreign countries. For example, purple is a death color in Brazil, white is for funerals in Hong Kong, and yellow signifies jealousy in Thailand. In Egypt the use of green, which is the national color, is frowned upon for packaging. Socioeconomic differences (i.e., per capita income, level of education, level of unemployment) among countries also call for a localized approach toward international marketing. For example, limited economic means may prevent masses in developing countries from buying the variety of products that U.S. consumers consider essential. To bring such products as automobiles and appliances within the reach of the middle class in developing countries, for example, the products must be appropriately modified to cut costs without reducing functional quality. Differences in the character of local marketing infrastructure across countries may suggest pursuing country-specific marketing strategies. The marketing infrastructure consists of the institutions and functions necessary to create, develop, and service demand, including retailers, wholesalers, sales agents, warehousing, transportation, credit, media, and more. Consider the case of media. Commercial television is not available in many countries. Sweden, for example, lacks this element of the marketing infrastructure. In many countries, for example, Switzerland, commercials on television are allowed on a limited scale.

Suntory (a Japanese liquor company) considers the ban on advertising liquor on U.S. television as a main deterrent for not entering the U.S. market in a big way. Similarly, the physical conditions of a country (i.e., climate, topography, and resources) may require localized strategies. In hot climates, as in the Middle East, such products as cars and air conditioners must have additional features. Differences in telephone systems, road networks, postal practices, and the like may require modifications in marketing practices. For example, mail-order retailing is popular in the United States but is virtually nonexistent in Italy because of differences in its mail system. Finally, differences in the competitive environment among countries may require following localized marketing strategies. Nestlé, for example, achieved more than a 60 percent market share in the instant coffee market in Japan but less than 30 percent in the United States. Nestlé had to contend with two strong domestic competitors in the United States, namely General Foods, which markets Maxwell House and other brands, and more recently Procter & Gamble, which markets Folgers and High Point. Nestlé faced relatively weak domestic competitors in Japan. IBM, which is the leading computer company in the world, slipped to third place in the Japanese market behind Fujitsu Ltd. and NEC Corporation in terms of total revenue. Nestlé and IBM must reflect differences in their competitive environments in such marketing choices as pricing, sales force behavior, and advertising.

Standardized Strategy In contrast to the view that marketing strategies must be localized, many scholars and practitioners argue that significant benefits can be achieved through standardization of marketing strategies on a global basis. As a matter of fact, some people recommend an extreme strategy: offering identical products at identical prices through identical distribution channels and supporting these identical products by identical sales and promotional programs throughout the world. Levitt asserts that “commercially, nothing confirms this as much as the success of McDonald’s from the Champs Elysees to the Ginza, of Coca-Cola in Bahrain and Pepsi-Cola in Moscow, and of rock music, Greek salad, Hollywood movies, Revlon cosmetics, Sony televisions, and Levi’s jeans everywhere.”25 Although across-the-board standardization, as proposed by Levitt, may be difficult, it is commonly accepted that the marketplace is becoming increasingly global, and indeed standardized strategies have been successfully pursued in many cases. Among consumer durable goods, Mercedes-Benz sells its cars by following a universal marketing program. Among nondurable goods, Coca-Cola is ubiquitous. Among industrial goods, Boeing jets are sold worldwide based on common marketing perspectives. Past research shows that, other things being equal, companies usually opt for standardization. A recent study on the subject lends support to the high propensity to standardize all or parts of marketing strategy in foreign markets. For example, an extremely high degree of standardization appears to exist in brand names, physical characteristics of products, and packaging.

More than half of the products that multinational corporations sell in less-developed countries originate in the parent companies’ home markets. Of the 2,200 products sold by the 61 subsidiaries in the sample, 1,200 had originated in the United States or the United Kingdom. The arguments in favor of standardization are realization of cost savings, development of worldwide products, and achievement of better marketing performance. Standardization of products across national borders eliminates duplication of such costs as research and development, product design, and packaging. Further, standardization permits realization of economies of scale. Also, standardization makes it feasible to achieve consistency in dealing with customers and in product design. Consistency in product style features, design, brand name, packaging should establish a common image of the product worldwide and help increase overall sales. For example, a person accustomed to a particular brand is likely to buy the same brand overseas if it is available. The global exposure that brands receive these days as a result of extensive world travel and mass media requires the consistency that is feasible through standardization. Finally, standardization may be urged on the grounds that a product that has proved to be successful in one country should do equally well in other countries that present more or less similar markets and similar competitive conditions.

Conclusion Although standardization offers benefits, too much attachment to standardization can be counterproductive. Marketing environments vary from country to country, and thus a standard product originally conceived and developed in the United States may not really match the conditions in each and every market. In other words, standardization can lead to substantial opportunity loss. Pond’s cold cream, Coca-Cola, and Colgate toothpaste have been cited as evidence that a universal product and marketing strategy for consumer goods can win worldwide success. However, the applicability of a universal approach for consumer goods appears to be limited to products that have certain characteristics, among them universal brand name recognition (generally earned by huge financial outlays), minimal product knowledge requirements for consumer use, and product advertisements that demand low information content. Clearly, Coca- Cola, Colgate toothpaste, McDonald’s, Levi’s jeans, and Pond’s cold cream display these traits. Thus, whereas a universal strategy can be effective for some consumer products, it is clearly an exception rather than the general rule. Those who argue that consumer products no longer require market tailoring due to the globalization of markets brought about by today’s advanced technology are not always correct. A multinational corporation that intends to launch a new product into a foreign market should consider the nature of its products, its organizational capabilities, and the level of adaptation required to accommodate cultural differences between the home and the host country. A multinational corporation should also analyze such factors as market structures, competitors’ strategic orientations, and host government demands. The international marketplace is far more competitive today than in the 1980s and most likely will remain so as we enter the next century. Thus, to enhance competitive advantage some sort of adaptation might provide a better match between a product and local marketing conditions. Ohmae’s charges against American companies for not adapting their products to Japanese needs are revealing: Yet, American merchandisers push such products as oversize cars with left-wheel drive, devices measuring in inches, appliances not adapted to lower voltage and frequencies, office equipment without kanji capabilities and clothes not cut to smaller dimensions. Most Japanese like sweet oranges and sour cherries, not visa versa.

That is because they compare imported oranges with domestic mikans (very sweet tangerines) and cherries with plums (somewhat tangy and sour). There are several patterns and various degrees of differentiation that firms can adopt to do business on an international scale. The most common of these are obligatory and discretionary product adaptation. An obligatory, or minimal, product adaptation implies that a manufacturer is forced to introduce minor changes or modifications in product design for either of two reasons. First, adaptation is mandatory in order to seek entry into particular foreign markets. Second, adaptation is imposed on a firm by external environmental factors, including the special needs of a foreign market. In brief, obligatory adaptation is related to safety regulations, trademark registration, quality standards, and media standards. An obligatory adaptation requires mostly physical changes in a product. Discretionary, or voluntary, product adaptation reflects a sort of self-imposed discipline and a deliberate move on the part of an exporter to build stable foreign markets through a better alignment of product with market needs and/or cultural preferences. Swiss-based pharmaceutical maker Ciba-Geigy’s efforts in adapting its products to local conditions are noteworthy. Basic to the company’s adaptation program are quality circles. These circles include local executives with line responsibilities for packaging, labeling, advertising, and manufacturing. They are responsible for determining (a) if Ciba-Geigy’s products are appropriate for the cultures in which they are sold and meet users’ needs, (b) if products are promoted in such a way that they can be used correctly for purposes intended, and (c) if, when used properly, products present no unresponsible hazards to human health and safety.