MarketingManagement.pdf

this time, the company is operating as a multinational company and engaged in op-
timizing its global sourcing, financing, manufacturing, and marketing.

ECIDING ON THE MARKETING PROGRAM

International companies must decide how much to adapt their marketing strategy to
local conditions. At one extreme are companies that use a globally standardized mar-
keting mixworldwide. Standardization of the product, advertising, and distribution
channels promises the lowest costs. At the other extreme is an adapted marketing mix,
where the producer adjusts the marketing-mix elements to each target market. The
Marketing Insight box, “Global Standardization or Adaptation?” discusses the main
issues.
Between the two extremes, many possibilities exist. Here we will examine poten-
tial adaptations that firms might make to their product, promotion, price, and dis-
tribution as they enter foreign markets.

PRODUCT

Keegan has distinguished five adaptation strategies of product and promotion to a
foreign market (Figure 6-3).^22
Straight extensionmeans introducing the product in the foreign market without
any change. Top management instructs its salespeople: “Find customers for the prod-
uct as it is.” However, the company should first determine whether foreign consumers
use that product. Deodorant usage among men ranges from 80 percent in the United
States to 55 percent in Sweden to 28 percent in Italy to 8 percent in the Philippines.
In interviewing women in one country about how often they used a deodorant, a typ-
ical response was “I use it when I go dancing once a year”: hardly grounds for intro-
ducing the product.
Straight extension has been successful with cameras, consumer electronics, and
many machine tools. In other cases, it has been a disaster. General Foods introduced
its standard powdered Jell-O in the British market only to find that British consumers
prefer the solid wafer or cake form. Campbell Soup lost an estimated $30 million in
introducing its condensed soups in England; consumers saw expensive small-size cans
and did not realize that water needed to be added. Straight extension is tempting be-
cause it involves no additional R&D expense, manufacturing retooling, or promo-
tional modification. But it can be costly in the long run.
Product adaptationinvolves altering the product to meet local conditions or pref-
erences. There are several levels of adaptation. A company can produce a regional ver-
sionof its product, such as a Western European version. Finnish cellular phone
superstar Nokia customized its 6100 series phone for every major market. Developers
built in rudimentary voice recognition for Asia, where keyboards are a problem and
raised the ring volume so the phone could be heard on crowded Asian streets. Or it
can produce a country version. In Japan, Mister Donut’s coffee cup is smaller and lighter

chapter 12

Designing

Global Market

Offerings^379

D

Do Not Change

Product

Adapt

Product

Product

Promotion

Develop New

Product

Straight

extension

Product

adaptation Product

invention

Communication

adaptation

Do Not Change

Promotion

Adapt

Promotion

Dual

adaptation

FIGURE 6-3

Five International Product and

Promotion Strategies