Standardisation vs. Adaptation

1
Standardisation vs. Adaptation

• A recurrent theme

2
Standardisation

• A uniform offer on a regional/global basis
• Minor adaptations may be made to conform to local
  regulations or technical requirement (e.g.
  electricity voltage)
• Capitalises on commonalities in customers needs
  across countries

3
Standardisation

• Usually considered in the context of
• product
• pricing
• marketing communicationsparticularly
  advertising, branding, packaging

4
Standardisation

• The goal is to minimise costs
• These can be
• passed though to customers or
• taken as profit depending on the competitive
  environment

5
Product standardisation

• 5 forces favouring this strategy
• common customer needs
• global customers
• economies of scale
• time to market
• regional market agreements

6
Product standardisationcommon customer needs

• The same usage and/or perceived benefits
• e.g. Convergence in the car market across Triad
  markets
• Functionally, towards 7-9 m2
• Psychologically, in terms of
• self-expression
• pleasantness of driving experience
• comfort

7
Product standardisationcommon customer needs

• But there can be within-region variations
• E.g. BMW research in Europe

8
BMWs European positioning
9
Product standardisationGlobal customers (MNCs)

• Result of global sourcing a characteristic of
  B2B (business to business) markets
• E.g. MNCs often place global contracts for the
  supply of materials/components etc.

10
Product standardisationEconomies of scale

• Traditional reason for standardisation
• CAD/CAM techniques enable mass customisation and
  small batch production at low cost

11
Product standardisationTime to market (e.g.
Sony case)

• Innovation alone does not always provide
  competitive advantage
• Speed of launch is becoming increasingly
  important
• E.g. PG estimate its time to market of liquid
  detergents is now 10 of 1980s.
• The key is centralisation
• NB Sony case - read it!

12
Product standardisationRegional market
agreements (e.g. EU)

• Encourages regional launches
• lower taxes within boundaries
• common technical standards
• Favours common brand names
• e.g. Marathon (UK) to Snickers (Cont. Euro)
• e.g. Raider Bar (Cont. Euro) to Twix (UK)

13
Product standardisation

• The issue is not either/or
• But What elements should be tailored to local
  conditions?

14
The costs of standardisation

• Stifles local initiative and experimentation
• High cost of failure

15
Standardisation of the communications strategy

• 2 components
• message
• execution (visual, scripting, media
• Still relatively uncommon
• Recent examples
• AXA (insurance)
• HSBC (banking)
• BA

16
Standardisation of the communications strategy
benefits

• Savings come from economies of scale
• Provides a consistent image
• Appeals to global consumer segments
• Shortage of creative talent
• Cross fertilisation of good ideas in one market
  to another
• e.g. Sony

17
Standardisation of the communications strategy
benefits

• Research amongst ad agencies suggest that
• most important driver of standardised advertising
  is the global brand

18
The Worlds top 20 brands -Interbrand 2006

• 1. Coca-Cola
• 2. Microsoft
• 3. IBM
• 4. GE
• 5. Intel
• 6. Nokia
• 7. Toyota
• 8. Disney
• 9. McDonalds
• 10 Mercedes-Benz

• 11. Citigroup
• 12. Marlboro
• 13. Hewlett-Packard
• 14. American Express
• 15. BMW
• 16. Gillette
• 17. Louis Vuitton
• 18. Cisco
• 19. Honda
• 20. Samsung

19
Standardisation of the communications strategy
barriers

• Cultural differences
• benefits sought (see BMW research)

20
BMWs European positioning
21
Standardisation of the communications strategy
barriers

• Usage
• Food and drink
• e.g. tea drinking
• e.g. cognac
• US stand-alone drink
• Europe after dinner drink
• China at dinner with water
• Therefore need to adapt the context to different
  cultures

22
Standardisation of the communications strategy
barriers

• Cultural differences
• e.g. Hofestedes masculinity index
• PG in Japan
• showed an advert with a man walking into a
  bathroom when his wife was taking a shower
• shows disrespect for women e.g. in Japan
• Japan is no. 1 on masculinity index

23
Standardisation of the communications strategy
barriers

• Local advertising regulations
• e.g. in Malaysia foreign-made ads must not use
  white people .
• Therefore Ray-Ban were forced to shoot locally
  for TV ads
• Variations in PLC
• Introductory phase requires an awareness-building
  campaign e.g. iced tea in Europe

24
Standardisation of the communications strategy
barriers

• Finally
• The NIH (Not Invented Here) syndrome
• de-motivating
• face resistance