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INTERNATIONAL MARKETING
Marketing Mix Standardization: a Cross Cultural Study of Four Countries
Richard Alan Kustin
Content
Research Objective Introduction Background Research Methodology Strengths and Weaknesses of the Article Limitations Managerial Implications
Research Objective
To determine if consumer perceptions, across diverse
countries, of a common non-durable product, chewing
gum, were more similar than dissimilar in an effort to support a standardized marketing mix program.
Kustin, 2004
Introduction
Standardizationwithin predominantly homogeneous global markets and
regions.
Customizationwithin diverse or heterogeneous markets or regions.
Akaah, 1991; Kustin, 1994; Duncan & Ramaprasad, 1995
Adorno’s Theory of Standardization
The theory: Popular culture is standardized
using the same formula to appeal to the masses.
All popular music contained a verse, chorus and bridge, and that these elements were interchangeable without damaging the song.
The applications: Standardization is applicable
among consumers that share similar culture and thoughts.
Arato & Gephardt, 1978
Introduction
Benefits of
standardizati
on
Economies of scale
Outsourcing
Developing priority locations
for manufacturingDistribution
Economies of scope
Levitt, 1983; Kotabe, 1990; Keegan &Green, 2003; Dunning, 1998; Yip, 1989
Introduction
ProgramCreation and development
of the marketing
mix components
(Price, Product,
Promotion, Place)
ProcessFocuses on
how the program side is
supported, evaluated
and implemente
d
Griffith, Hu & Ryans, 2000
Critical Components for Marketing Mix Standardization
Background and Hypothesis
H1. When consumer perceptions are more similar across national borders, then marketing mix standardization is more likely to be implemented. Not supported
Consumer perception – HQ’s market knowledge about consumers’ perception and influencing market decision
Solberg, 2000
Background and Hypothesis
H2. When intra-cultural country markets exist (culturally similar countries), then program standardization is possible within this type of similar intra-cultural country markets. Supported.
Hoftstede’s Cultural Study: Type I Countries (US, France & Australia) – low PD, low UA, individualism Type II Countries (Brazil, India & China) – high PD, high UA, collectivism
Griffith, Hu & Ryans, 2000; The Economist, 2014
$5 in US$5.05 in Australia
$2.97 in China
Background and Hypothesis
H3. When inter-cultural country markets exist (culturally dissimilar countries) then program standardization is less possible within this type of diverse country markets. Supported.
Schuh, 2000
Beef Burgers in Australia
Vegetarian Burgers in
India
Research Methodology
Respondents 824 university graduates from Atlanta, Georgia, in the
United States, Rio de Janeiro in Brazil, Fontainebleau in France, and New Delhi in India took part with the help of local professors, with 497 usable questionnaires.
Aged range from 23 to over 50 years old.
28%
26%21%
25%
Respondent Percentage US
BrazilFranceIndia
Kustin, 2004
Research Methodology
Data Analysis – Pearson Chi-square test, multivariate F-test, Regression Analysis
Questionnaire translated into French and Portuguese for
French and Brazilian respondents. Rate on closed-end 5 point Likert scale.
Variables- measure attributes Taste, Refreshing, Size/Quantity, Prefer Diet,
Artificial Flavors, Vending machine availability, Retail Store, Brand Ads, Price/Factor, Frequency
Kustin, 2004
Analysis
Kustin, 2004
Analysis
H1 is rejected H2 is supported with similarities of 7 out
of 10 from the attributes for US & France (countries in similar culture)
H3 is supported with similarities of only 4 out of 10 from the attributes for US & India (countries in different culture)
Kustin, 2004
Strength of the Article
Uses abundant theories and past studies as precedence
Emphasize the culture influence to marketing mix, and point out the way to marketers in practice.
Choice of countries for research was good.
Data sample are wide, covered different ages, gender and marital status.
Weakness of Article
Chewing gum is not a product with more product features for a more varied outcome.
Too many theories, less examples. Only four counties were involved. Only focus on ‘Program’, and lack of
‘Process’.
Limitations
Provides a limited degree of evidence supporting a low to moderate level of correlation, for similar consumer perceptions the results were not overwhelming.
Additional product features will affect the results.
Statistical bias.
Kustin, 2004
Managerial Implications
Firms operating within a global environment could achieve economies of scale by focusing on a strategy of standardization within various intra-cultural country markets.
For product producers, this research supports their efforts to continue the examination of standardized global strategies in an effort to capitalize on proposed economies of scope.
Griffith et al., 2000; Ryans & Ratz, 1987; Whitelock & Chung, 1989
Managerial Implications
Standardization may not be applicable with inter-cultural, heterogeneous markets due to cultural and economic differences.
(Ryans & Ratz, 1987; Whitelock & Chung, 1989)
Conclusion
Standardization of program (marketing mix) is applicable among culturally similar countries in order to achieve benefits such as economies of scale, economies of scope etc.
Reference
Kustin, Richard Alan. 2004. “Marketing Mix Standardization: a Cross Cultural Study of Four Countries.” International Business Review 13(2004): 637–649
Alden, D. L., Steenkamp, J. E. M., & Batra, R. (1999). Brand positioning through advertising in Asia, North America, and Europe: The role of global consumer culture. Journal of Marketing 75–87.
Akaah, I. P. (1991). Strategy standardization in international marketing: an empirical investigation of its degree of use and correlates. Journal of Global Marketing 4(2), 39–62.
Baldauf, A., Cravens, D. W., & Grant, K. (2002). Consequences of Sales management control in field sales organizations: a cross-national perspective. International Business Review, 11(5), 577–609.
Duncan, T., & Ramaprasad, J. (1995). Standardized multinational advertising: the influencing factors. Journal of Advertising, 24(3), 55–68.
Dunning, J. H. (1998). Location of the multinational enterprise: a neglected factor? Journal of International Business Studies, 29(1), 45–66.
Dunning, J. H. (1993). Multinational enterprises and the global economy. Reading, MA: Addison-Wesley, Inc.Hofstede, G. (1980). Motivation, leadership, and organization: do American theories apply abroad? Organizational Dynamics, Summer,
42–63.Jain, S. C. (1989). Standardization of international marketing strategy: some research hypotheses. Journal of Marketing Review, 53, 70–
79.Kanso, A., & Nelson, R. A. (2002). Advertising localization overshadows standardization. Journal of Advertising Research, 42(1), 79–90.Keegan, W. J. (1969). Multinational product planning: strategic alternatives. Journal of Marketing, 33(January), 58–62.Keegan, W. J., & Green, M. C. (2003). Global marketing. Upper Saddle River, NJ: Prentice Hall.Keegan J. Warren & Mark C. Green (2012), Global Marketing, Global edition, 7th Edition, Pearson.Kustin, R. A. (1993). A cross-cultural study of a global product in Israel and Australia. International Marketing Review, 10(5), 4–13.Kustin, R. A. (1994). A special theory of globalization: a review and critical evaluation of the theoretical and empirical evidence. Journal
of Global Marketing, 7(3), 79–101.Kustin, R., & Jones, R. (1995). The influence of corporate headquarters on leadership styles in Japanese and US subsidiary companies.
Leadership and Organizational Development Journal, 16(5), 11–15.Laroche, M., Kirpalani, V. H., Pons, F., & Zhou, L. (2001). A model of advertising standardization in multinational corporations. Journal of
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Discussion
As a consumer, in what scenario would you prefer standardization for a product? In what scenario would you prefer customization?
Discussion
Do you think companies adopting customization are bound to experience more sales and higher profits than companies that apply standardization on their marketing mix development/strategy?