What is the relevance of the customisation-standardisation debate in international marketing strategy and how might this influence the market selection approach of both Small and Medium Sized enterprises (SME’s) and large scale enterprises (LSE’s)?
Use relevant and recent examples to illustrate your report.
Your response should be in the form of a written report of between 1,500 and 2,000 words.
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The learning outcomes for this assignment are:
Understand and appreciate the underlying theories of international marketing
Critically analyse international marketing opportunities
Demonstrate an ability to formulate and assess international marketing strategies
Demonstrate an understanding of both the process and the complexities associated with the implementation of international marketing programmes
Global Marketing Strategies
The international economic system comprises companies that market and sell their products globally. With the strive to maximize profits, these companies adopt marketing strategies that deem beneficial for their business. Customization and standardization are the primary global marketing strategies. Customization promotes unique production, whereas standardization advocates for the production of similar products. These strategies affect enterprises differently depending on their size; SME’s and LSE’s. With the correct marketing strategy, firms can benefit from international trade; therefore, every enterprise must pinpoint a global marketing strategy that is feasible with its organizational structure.
Overview of Customization Approach
Customization strategy involves adopting different marketing strategies for other international actors. With the plan, companies produce and sell unique products and services in the global system. Monteiro et al. explain that with customization, a company only manufactures and supplies products per the consumers’ requests (171). The strategy allows the business to make unique designs for their client. For example, if a consumer requests a thousand shoes, the company will produce only a thousand shoes with the specific requirements stipulated by the consumer. Equally, with customization, companies adopt distinct marketing strategies for every state they conduct trade. They will attempt to conform to the cultural and environmental needs in the host state. Indeed, customization strategy involves the adaptation of distinct marketing strategies in international trade.
Benefits of Customization Approach on SMEs and LSE’s
The customization approach promotes consumer satisfaction. As outlined, customization strategy involves designing products according to consumers’ needs. With the distinct design, the consumers achieve what they needed; thus, they will find value in the products (Barutcu, 402). As a result, the company will have satisfied its needs. With digitalization, SMEs can take advantage of mass customization (Katsikeas et al. 411). They can connect with the consumers and supply the customized products to them. With time, the SMEs will gain an established market base due to the quality of products they provide to the consumers. Similarly, LSEs can benefit from mass customization. As established corporations, they have sufficient resources to customize their products.
Demerits of Customization Approach on LSEs and SMEs
The Customization approach is costly as companies require resources to customize their products. With customization, companies have to use extra resources to make their products distinct. Monteiro et al. (175) discuss that SMEs may experience more difficulty than LSE’s in customizing products. Given the specific customer requirements, corporations have to build products from scratch. The process needs a lot of resources; thus, straining the SMEs financially. For illustration, since every consumer needs unique products, the company requires additional resources for them. Indeed, mass customization can be expensive.
The Customization approach leads to resource wastage. With the strategy, the firm produces specific products for its customers. Therefore, it will end up using different materials for every production. Monteiro et al. (174) aver that most companies shy away from mass customization since product wastage is highly possible. For illustration, if a customer needs different products, the corporation will have to purchase other materials. They will not use the remnants from the previous items. As a result, wasting the company’s products. Concisely, the customization technique causes product wastage.
How SMEs Can Leverage on Customization Approach
The corporations should adopt flexible production. Since customization involves distinct production, corporations should be adaptable to the changes required. Monteiro et al. illustrate that SMEs can leverage flexibility as they have a small structure (173). Their small designs will allow them to respond quickly to market changes and production demands. Equally, with a small frame, it becomes easier for the management to make conclusive decisions. As a result, they can meet market demands in time; thus, making their services convenient to consumers. Indeed, SMEs should adopt flexible production to maximize customization strategy.
Corporations should produce quality products to maximize customization strategy. Consumers prefer quality products to sub-standard goods. Therefore, if a corporation has quality customized products, it will establish trust among consumers. As a result, they will gain a stable market base. Monteiro et al. elucidate that consumers will become loyal and recommend them to potential customers (174). Summarily, corporations should ensure that they produce high-quality goods and services.
SMEs can leverage on customization approach by strengthening their technological networks. With robust technology, SMEs can study digital trends and produce goods that satisfy consumers’ needs (Katsikeas et al. 411). These trends allow them to analyze what consumers from different target markets needs. With this knowledge, they can customize their products. For illustration, SMEs specializing in apparels technology can help them identify states that require hijabs and those that do not. As a result, they can design hijabs for women who need them. Concisely, firms can leverage technology to customize their products.
Overview of Standardization Approach
The standardization approach involves the adaptation of similar marketing strategies in foreign countries. Companies that adopt the process uses the same system in marketing their products in different foreign states (Rao-Nicholson et al. 7). With the same approach, they produce similar products and sell them across the world. For example, if its main product is tea, it will export tea to all states it trades. Equally, the approach allows firms to use their home state marketing strategy in foreign states (Rao-Nicholson et al. 7). In this scenario, the firm sets up a subsidiary in a foreign state and uses home state strategies in the host country. Summarily, a standardized approach involves the use of similar marketing strategies in international trade.
Benefits of Standardization Approach on SMEs and LSEs
Standardization approach aids in cost-saving. With this approach, companies use similar resources to produce goods in the international market. They do not require extra resources to customize their products or localize their marketing strategies. They will progress in making the same products and marketing approaches. As a result, they can focus the resources on the production process. Indeed, standardization helps companies to save on their resources.
Standardization enables companies to enjoy economies of scale. With the reduced cost of production and an extensive market base, firms maximize their profits. Established corporations such as Coca- Cola produces products that global consumers trust. As a result, the company will deliver similar goods, and its customers will consume them. Indeed, standardization enables corporations to enjoy economies of scale.
Demerits of Standardization Strategy on SMEs and LSEs
Companies that adopt standardization marketing may incur losses. The approach fails to provide value to consumers as the firms supply similar goods to the market. They fail to evaluate consumers’ needs in the international market (Grigorescu and Alexander, 70). As a result, they fail to gratify their needs. For illustration, in the shoe industry, some consumers may require special needs shoes. If the company’s production does not consider these needs, the special needs customers will not find value in the company’s products. When consumers do not find value in products, they will not purchase them. As a result, the production company will incur losses. Indeed, companies that adopt a standardization approach may incur losses.
How Companies Can Leverage on Standardization
Branding is an essential factor in standardization. Corporations that adopt standardization should ensure that they are favorable brands. Grigorescu and Alexander (70) depict that companies that standardize their products should create powerful brand images. Excellent reputation helps the companies establish solid market bases and attract potential customers. Without a brand name, these corporations will lose their competitive advantage in their niche industry. Concisely, excellent branding is an imperative condition for the standardization approach.
Discussion
The international debate on customization and standardization helps in offering effective marketing strategies to SMEs and LSEs. From the discussions on the merits and demits of both approaches, it is clear that SMEs should adopt mass customization while LSE’s can adopt both strategies. Since SMEs are start-up companies, they do not have established markets and resources. Therefore, producing unique products can help in distinguishing them from others brands and establishing a market base. They should take into consideration the proposed methods on how they can leverage the approach. LSEs that adopt standardization should ensure that they have a loyal consumer base. If they are not a good brand, they may lose their competitive advantage to firms that utilize customization strategies (Grigorescu and Alexander 70). Concisely, the international debate offers insights on the effective marketing strategies to SMEs and LSEs.
Emerging Issues in Global Marketing
The homogenous approach is the new alternative in global marketing. Organizations are adopting a combination of standardized and customized processes in their production. Monteiro et al. (174) aver that a degree of standardized output is essential in customization. Companies should have a basis of production before it personalizes its presentation. Equally, with glocalization, companies known for standardized production are slowly customizing their production. For illustration, Coca-Cola is attempting to personalize its products by offering different Fanta flavors across the world (Grigorescu and Alexander 72). Indeed, a mixed marketing strategy is an alternative in global affairs.
Conclusion
Overall, customization and standardization are the primary global strategies. The customization approach involves designing the marketing strategies and products to meet consumers’ specifications. On the other hand, companies that adopt standardization strategies utilize similar marketing strategies and product designs. Both approaches have their merits and merits depending on the enterprise size. Mass customization helps in consumer satisfaction. However, the system can be expensive as more material is required to modify the products. SMEs can take advantage of digitalization to leverage the strategy as digitalization connects companies directly with consumers. Equally, established LSEs can benefit immensely from the approach as they have enough resources and established markets.
Standardization aids companies in lowering the cost of production and enjoy economies of scale. The strategy is beneficial to established brands such as Coca-Cola as they are consumed globally. However, SMEs do not benefit from the approach. The competition from established brands makes it difficult for them to make successful entries into a foreign market. Therefore, SMEs must adopt customized strategies in their entry into the international market.
Works Cited
Barutcu, Suleyman, Abdulkadir Yaldir, and Selcuk Burak Hasiloglu. “From mass to personalized mobile marketing strategies: the new dimensions through expert systems.” European Scientific Journal 13.10 (2017): 400-409.
Grigorescu, Adriana, and Alexander Zaif. “The concept of glocalization and its incorporation in global brands’ marketing strategies.” International Journal of Business and Management Invention 6.1 (2017): 70-74.
Katsikeas, Constantine, Leonidas Leonidou, and Athina Zeriti. “Revisiting international marketing strategy in a digital era: Opportunities, challenges, and research directions.” International Marketing Review (2019).
Monteiro, Maria, and Raquel Meneses. “IS MASS CUSTOMISATION THE PATH FOR SMALL AND MEDIUM ENTREPRIISES TO GROW INTERNATIONALLY? CASE STUDY OF THE PORTUGUESE FOOTWEAR INDUSTRY.” Economic and Social Development: Book of Proceedings (2021): 169-178.
Rao-Nicholson, Rekha, and Zaheer Khan. “Standardization versus adaptation of global marketing strategies in emerging market cross-border acquisitions.” International Marketing Review (2017).
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