REASONSFORENTERINGINTERNATIONALMARKETS 129
Adopting thisglobalstrategyprovidesa competitiveadvantageincostandeffectiveness.
In co ntrasttomultinationalcompanies,standardized(global)corporationsviewtheworld
orits majorregionsas oneentityinsteadofa collectionofnationalmarkets.Theseworld
marketers competeona basisofappropriatevalue:i.e., anoptimalcombinationofprice,
quality, reliability,and deliveryofproductsthatare identicalindesignandfunction.Ulti-
mately, consumerstendtoprefera goodprice/qualityratiotoa highlycustomizedbutless
cost-effectiveitem.
Levittdi stinguishedbetwee'lproductsandbrands. Whiletheglobalproductitselfis
standardizedorsoldwith onlyminormodifications,ihebranding,positioning,andpromotion
mayhavetoreflectlocalconditions.
CriticsofLevitt's perspectivesuggestthathisargumentforglobalstandardizationis
incorrect andthateach marketstrategyshouldbecustomizedforeachcountry.Kotlernotes
that onestudyfoundthat 80 %ofU.S.exportsrequiredoneormoreadaptations.FUlther-
more, theaverageproductrequiresatleast fourtofiveadaptationsoutofa setofeleven
marketingel ements: labeling,packaging,materials,colors,name,productfeatures,adver-
tisingthemes,media,execution, price,andsalespromotion.^3 Kotlersuggeststhatalleleven
factorsshouldbeevaluatedbeforestan dardizationi"considered.
Todate, noonehasempiricallyvalidatedeitherperspective.WhilecriticsofLevitt
canofferthousandsofanecdotescontradictingthevalidityofstandardization,a morecare-
ful readofLevitt'sideas indicatethatheoffers standardizationasa strategicoption,nota
fart.Althoughglobal marketinghas itspitfalls,it canalsoyieldimpressiveadvantages.Stan-
dardizedproductscanloweroperatingcosts. Evenmoreimportant,effectivecoordination
canexploita company'sbestproductandmarketingideas.
Too often,executives viewglobalmarketingasaneither/orproposition---eitherfull
standardizationor local control.Butwhena global approachcanfall anywhereona
spectrum-fromtightworldwidecoordinationonprogramm:ngdetailstolooseagreements
ona productideas-thereisnoreasonforthis extremeview.Inapplyingtheglobalmar-
ketingconceptandmakingit work, flexibilityisessential.Thebigissuetodayisnotwhether
togoglobal,but howtotailortheglobalmarketingconcept to fiteachbusinessandhow
to make it work.
Reasons forEnteringInternationalMarkets
Manymarketers havefoundtheinternatiol"almark~tplacetobeextremelyhostile.A study
byBakerandKynak, 4 for example, foundthatlessthan20%offirmsinTexaswithexport
potential actuallycarried outbusinessininternationalmarkets.Butalthoughmanyfirms
viewin~ernationalmarketswithtrepidation, othersstillmakethedecisiontogointerna-
tional. Why?
Inonestudy, thefollowingmo~iv::ltingfactorsweregivenforinitiatingoverseasmar-
ketinginvolvement(inorderofimportance): 5
- Largemarketsize
- Stability throughdiversification
- Profit potential
- Unsolicitedorders
- Proximityofmarket
- Exc~sscapacity