Physical environment consists of hot or cold climate, plains or hilly areas, living environment in home etc. The Ways to Show Intelligence of Intelligent People Without Saying Anything. The reasons for this may be as under: Due to above factors, a product would require changes-to be made in the product offered in another market. This strategy is more expensive and time-consuming than product standardization but yields better results. Standardization is the process of developing technical standards, which apply in the same manner to all manufacturers and consumers. Evaluate the factors of Standardization and Adaptation of the product. Those factors are examined include political, economic, cultural, physical condition, technology, product life cycle, competitive factor, organisational factor, the nature of the product, and the Product adaptation means that the firm adapts the product to the local markets. – Benefits, Pros and Cons. Adaptions also demand the use of different marketing and selling strategies in the foreign market. Why Invest in Life Insurance? There are number of factors that may influence the decision of adaptation of Standardization or Adaptation (Jain 1989). To Islamic countries they use a girl with a scarf and to the other countries which are not Islamic, a girl without a scarf is used. Different organizations in a particular industry that offers standardized goods and services build upon the standardized product to produce a more distinct good or service that is consistent with the standards of the industry yet improved in nature. So in this article, we are going to cover these two concepts so that you can have an idea about the two concepts in depth. This is a strategy mostly used by Multi-National Companies(MNCs). While there may be a number of other factors involved, the standardization could be attributed to the similarities between the countries, such as each country’s market-oriented economic system, pattern of production, and high standard of living. Discuss the Principle Provisions of ESC. For an example, if a particular company comes up with the decision of standardizing the product then the product is being manufactured using the same materials, same processes and even sold under the same name. All export transactions are made through Export Sales Contracts. Legal Considerations. Reasons for product standardization or adaptationThere are countless reasons for which firms standardize or adapt their product, but the bottom line is that, there is no firm that is at the extreme end of thespectrum of standardization and adaptation. The adherents of standardization think that all cultures are somehow united and their environmental and customer demand is alike. It is the process of modifying products for different countries and regions or designing new products for foreign markets. Assignment #2 - Balance between Standardization & Adaptation. This process of change is known as product adaptation. Furthermore, this research presents the factors that influence the company to adapt its marketing mix while maintain its standardisation strategy. A standardized concept is used by _______An adapted concept is used by ______, Here, just add competitor both side...but if you are getting confused related to the difference between the two..you can visit this video where it explained properly...https://www.youtube.com/watch?v=Hg7iU5LfxvI. ), DOMESTIC,FOREIGN AND GLOBAL ENVIRONMENT & INFLUENCE ON INTERNATIONAL BUSINESS, COMPONENTS OF CHEMICAL GOODS & RESPONSIBILITIES ASSOCIATED, COMPOSITION & ROLE OF WTO IN AGRICULTURAL EXPORTS. Discuss the major issues involved in settlement of international trade disputes. Adaptation involves offering different product versions to meet the specific needs of each of its different global markets. Consumer Behavior (Bus 347) Uploaded by. The factors that influence the degree of standardization and adaptation are the following: language differences (translation of the message, trade names, brands, etc…) cultural differences (what do people prefer or dislike, religion, attitudes, etc…) social differences (how do people interpret statements? Second mandatory assignment. Differences in … The important factors that influence the exporting firm decision in favor of product standardization and adaptations: Customer Orientation: The most important factor influencing the exporting firm’s decision in favor of product standardization and adaptation is customer orientation i.e., customer’s response to the product. Such regulations have to be followed in all the cases. This assignment requires group members to choose a particular... View more. What are the four alternative modes of international Transactions in Services? Differences in the conditions of use of the product. Doubt about the competitors. ( Abstract- Study of the transformation of marketing solutions in the process of internationalization of a company acknowledge that the structure of marketing strategy in international markets is an evolutionary process and companies face a particular This product adaption refers to the process of modifying the existing products in order to reach to each market. Customer orientation encompasses following elements: The implications of customer orientation for product design would be as under: Also Read | The Ways to Show Intelligence of Intelligent People Without Saying Anything. All rights reserved. Based on some studies, followers of standardization consider that there is an integration of cultures with the same customer demand and environmental demands across the world. I have a doubt in the last table showing factors favouring standardization and adaptation. Exports Sales Contract or Export Contract may be ... Owlgen is the source for the latest Fashion trends, Lifestyle, Health, Fitness, Parenting, Gadgets, Dating Tips, and Celebrity News, sex tips, dating and relationship help, beauty, and more. Standardization and Adaptation remain debatable even after decades of research. Differentiate between product standardization and adaptation in international marketing. They believe that trade barriers are becoming less impedimental and technological advancements and companies are geared towards the global orientation in their strategy. knowledge about antecedent factors of standardization/ adaptation and outcomes of these strategic decisions, nevertheless, according to scientists (Katsikeas, Samiee & Theodosiou, 2006), research works of the direct link between the strategy and company performance lead to an Kotler suggests that all eleven factors should be evaluated before standardization is considered. Factors of Standardization and Adaption : Post Comments At the same time when the shampoo of Dove is being sold the Dove company use different packaging to reach different markets. Indeed, it helps in reducing the cost especially when the firm produces the identical products and uses the recognized marketing and distribution systems enabling the company to have the benefits in production and marketing of its products and its performance in the international market (Buzzell 1968). Product standardization has certain advantages in comparison to the alternative of adaptation and customization. 8 Insomnia Tips to Fall asleep – Get Better Sleep with these Tricks, By subscribing, you agree to our privacy policy. Discuss the Role of Trade in Services in Economic Development. n international marketing, the marketers are required to come up with a decision as to whether they are going to standardize the product or to modify the existing products which is one of the challenging decisions that they have to make. The first method under question is the standardization standpoint (suggested by Jain, 1989; Levitt, 1983). Q4.) What is General Agreement on Trade in Services (GATS) ? Customer Orientation. Climate Conditions and Physical Environment. Stage of Market Development. Whereas in China the label is in red and gold for which the red color stands for good luck and the gold color stands for wealth and happiness. Under standardization, providing a single strategy for the international market, along with standardizing the marketing mix components, can enable constancy with customers … You can’t mention adaptation without mentioning standardization; they are two sides of the same coin. Course. 41-50 Besides, it lea… How To Develop World Class Behaviors Skills? Simon Fraser University. Discuss its salient features. Stage of market development is characterized by the following factors: Stage of market development will have implications for product design in respect of product form, packing, product simplification and after sales service. They both represent a way of selling products overseas. For an example, if a particular company comes up with the decision of standardizing the product then the product is being manufactured using the same materials, same processes and even sold under the same name. Also Read | How To Develop World Class Behaviors Skills? They include social, economic, and political factors, which are dynamic, interactive, and culturally contin gent and often affect marketing strategy. What is to follow entirely depends upon the business, industry and target market, in some industries standardization is more suitable where mass production is required, needs of customers do not vary significantly and same product is required worldwide, in some industries adaptation is best to follow where customer’s need are variable is geography and diversification is required to have … 14- Figure 2 Standardization and adaptation of the international marketing mix 4. Climatic Conditions and Physical Environment: Product decisions are also influenced by climatic conditions and physical environment of foreign countries. If you have any doubts, please let me know, PRODUCT STANDARDIZATION V/S ADAPTATION AND FACTORS. Whereas, The tension between Standardization orientation of multinational companies and the necessity of localized adaptation has been identified as an enduring theme in the internationalization of human resource ... and that each has a complex of factors that effect their interaction University. Modern businesses are granted with vast opportunities in terms of revenue maximisation through entering new markets. Availability of infrastructure support facilities such as transportation, communication etc. Export Sales Contract (ESC): Because the label of the Red bull which is being sold in North America consist of red and silver for which the red bull stands for action and the silver background stands for the youth spirituality and spirit. Nestle Adaptation Or Standardization Standardization versus Adaptation There has been much debate over implementing a standardization strategy versus an adaptation approach across international markets There are numerous factors to consider, along with pros and cons of both marketing plans. I think it's incomplete. Physical environment affects the product in following respect: Also Read | Habits of Truly Intelligent People. It involves the customization of strategies for different regions, based upon assorted factors. What is Export Sales Contract (ESC)? There are several product adaption strategies that an entity can use such as. The complete guide to AVOD (Advertising Based Video On-Demand) Monetization. Do we need to enter conditions too? Shane Satar. Comparison on the Impact of Standardization and Adaptation on International Marketing August 2014 Journal of Research in Marketing Volume 14(Issue 4 Version 1.0):, pp. Implementation of international market expansion strategy involves strategic-level decision making in relation to global branding strategies, the choice of market entry strategies such as wholly-owned subsidiaries, exporting, licensing, or forming joint-ventures, as well as, deciding on the level of standardisation or adaptati… Product standardization refers to the process of maintaining uniformity of products and services sold in different markets or in other words setting identical characteristics for a particular good or a service. Master of Commerce – M.Com First Year Solved Assignments for July 2019 and January 2020 Admission Cycles, M.COM First Year Tutor Marked Solved Assignment, IBO – 02 International Marketing Management Solved Assignment for 2019-20. Product standardization refers to the process of maintaining uniformity of products and services sold in different markets or in other words setting identical characteristics for a particular good or a service. And the decision as to which to choose depending on the attitudes towards the different cultures. Academic year. 14- Figure 1 Environmental factors influencing the balance between standardization and adaptation 3. However, a product may have huge potential for export in one market yet the same product offered in another market may draw a blank. To begin with, standardization has several advantages, which include the following: the uniformity of the product in the globe as well as the cost savings from having identical products. Summary of thesis Title: Standardizing or adapting the marketing mix across culture Authors: Ingrid Bernier and Elise Meyer Supervisor: Jean-Charles Languilaire Level: Bachelor Thesis in Business Administration, Marketing Key words: Culture, international marketing, marketing strategies, standardization and adaptation Purpose: Compare two strategies, standardization and adaptation, to … An example is McDonald’s vegetarian burgers in India. The product to be successful in other markets must be capable of the suitable changes in its design, color, size, taste, packaging etc. under which each of them is suitable. © 2020 Owlgen India. As pointed out, adaptation involves modifying a product so as to meet the local requirements and customs. Difference # Product standardization: Product standardization refers to marketing a product in the overseas markets with little change except for some cosmetic changes such as modifying packaging and labelling. In the process of standardizing a product, there are certain guidelines to be used and such guidelines should be followed by the company who is willing to standardize the product and the guidelines will be applicable to one organization or to one industry and will be conformed in the national level or international level. Environmental factors are external conditions beyond the con trol of the firm. Or is this answer is sufficient? Factor in the advantages and disadvantages of adaptation in international marketing. Yes, it is correct because product adaptation means making modifications in the product according to the needs and desire of consumer of that particular market. Pros and cons of AVOD (Advertising Based Video On-Demand) Monetization. The way the Red bull product is being sold in China and North America are different from one another. Evaluate the various factors of standardization and adaptation, and suggest the conditions under which each of them is suitable. Different levels of skills and levels of technical development. Visit the channel...IGNOU eapathshala if you are facing any difficulty in understanding some concepts. 1. Following are the important factors which necessitate adaptation: Differences in the consumer tastes, consuming habits etc. Standardization involves offering a common product on a worldwide basis. Followers of Standardization approach stress that the managers should implement homogeneous strategies because markets across globe is homogenous and converging. Legal considerations include the following: Legal considerations affect the product in terns of brand name/mark, label, language, measurement units and sizes, packaging and instructions for use. What is product standardization and adaptation? The major constraints on product standardization include the consumer preferences and the governmental and trade restrictions. Atom product, target market, package and design, ingredients, language. Furthermore, the average product requires at least four to five adaptations out of a set of eleven marketing elements: labeling, packaging, materials, colors, name, product features, advertising themes, media, execution, price, and sales promotion. General Agreement on Trade in Services(GATS) refers to a multilateral treaty containing rules, disciplines and commitments for progressive ... Trade in services has increased in importance over the last two decades with the advent of globalization. With standardization, however, the products are neither modified nor are the marketing approac… Sands (1979) defines adaptation as the use of marketing strategies with no common elements. For example, the safety of a certain brand of lighters can be a debatable issue, as what is unsafe for a consumer may be completely practical for another. Evaluate the various factors of standardization and adaptation, and suggest the conditions Climate Conditions and Physical Environment. has extended the last day of submission of IGNOU Assignments for session June 2020 to 30th April 2020. It makes it easier to increase your market share, achieve legal compliance and meet customers' needs. Legal Considerations: A number of countries have specified product, packaging, and labeling standards for certain commodities. 5 Things Emotionally Intelligent People Do & Don’t Do. And this decision can make impacts on the organization in terms of the Research and development expenses, finance, production, organization structure, procurement, marketing mix etc. Stage of Market Development: Another factor affecting the firm’s decision in favor of standardization or adaptation is stage of market development. Specifically, we showed that the main causes of adaptation are cultural differences, customer preferences and market characteristics, but on the other hand, the main causes of standardization are to provide brand recognition and equity. Product Standardization and Adaptation in International Marketing: A case of McDonalds 2 1.2 Problem discussion When MNCs expand their products to international markets they have to consider the two approaches of standardization and adaptation in order to formulate their global product strategy. Product innovation: The availability of a basic template to work with increases the possibility of innovation. 2016/2017 ADVERTISEMENTS: This article will help you to differentiate between Product Standardization and Product Adaptation. By having standardized components, economies of scale are achieved by the firm while products are adapted to offer a wide range of models in accordance to the needs of various country segments. 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Product standardization and adaptation, and labeling standards for certain commodities at the time. Which apply in the process of modifying products for different regions, Based upon assorted.... Plains or hilly areas, living environment in home etc this assignment requires group members to choose on! ( 1979 ) defines adaptation as the use of marketing strategies with no common elements reach each! S decision in favor of standardization approach stress that the managers should homogeneous. Standardization involves offering a common product on a worldwide basis any difficulty in understanding some.! Group members to choose a particular... View more local markets alternative modes of international transactions Services. Involves the customization of strategies for different countries and regions or designing new for.