Internationalmarketing Standardisation

Managing Marketing Standardization in a Global Context

Boris Sustar, Rozana Sustar. Journal of American Academy of Business, Cambridge. Hollywood: Sep 2005.Vol.7, Iss. 1; pg. 302, 8 pgs

INTRODUCTION

The evolving world of international business is witnessing the emergence of additional players, including firms from the former Eastern block. These firms are playing a game of catch-up as they attempt to learn the intricacies of doing business in today's global economy. The speed at which this process is occurring varies across nations. Firms in Slovenia, the Czech Republic and Hungary, for example, are rapidly acquiring the skills necessary to compete on the world stage. These firms have adopted both general approaches to marketing as well as targeted actions, which have been influenced by the local environment. This article will discuss the possibility of standardizing marketing programs and the factors influencing the process of cost lessening, as they apply to the case of Slovenian firms.

LITERATURE BACKGROUND

The literature in this area broadly examines the numerous variables that affect standardization. Both internal and external components impinge upon the decision to standardize the marketing program of product, price, distribution and promotion (Kreutzer, 1988). The magnitude of differences in local physical, economic, social, political and cultural environments, are being invalidated by the globalization of markets. As a result, there may be no differences between domestic and international marketing (Perry, 1990). However, a standardized marketing cannot be set once and for all. Matching firms' resources with environmental requirements, anticipating changes in consumers' needs, and forecasting competitors' behaviour (Easton, 1988; Kogut, 1988) are critical business activities for developing effective standardized export marketing initiatives (Akhter and Laczniak, 1989).

The literature concludes that economic environment (Hooley et al., 1993; Huszagh et al., 1992; Sullivan and Bauerschmidt, 1988), political environment (Kobrin, 1988) and cultural environment (Jain, 1989), effect standardization process. An objective of this study is to test environment and standardization correlation for emerging economies in order to instruct firms' management in Slovenia to pursue efficient standardization. Based on the literature we study how environmental factors result in standardization. Organizational characteristics, such as firm size, global marketing experience and the marketing strategies of management in exporting firms (Koh, 1991 ) compose the internal factors, which create the conditions for global standardization. The nature of a firm's products, markets, technological orientation, and resources (Lim et al., 1993) determine competitive advantage in international markets and possibilities for profitable standardized approaches.

Strong corporate cultures and management practices with regard to quality, innovation and product performance (e.g., the "quality, service, cleanliness and value" principle of McDonald's) are a further determinant of profitable marketing standardization (Schuh, 2000). Other studies (Michell et al., 1998) pointed out that products are much more standardized and promotion, distribution and price more localized. In contrast to this conclusion, the high price strategy seems to work well everywhere and can be standardized as well (Botschen and Hemetsberger, 1998). The efficient globalization of markets leads to global products, global brands and global advertising respectively (Ayal and Zif, 1979) however standardized advertising does often not optimally fit with the cultures (Raaij, 1997). The literature is not completely uniform that distribution practices are the least standardized elements of the marketing mix (Ozsomer et al., 1991; Botschen and Hemetsberger, 1998).

An objective of this study is in addition to test marketing strategies and standardization correlation for emerging economies in order to instruct firms' management in Slovenia to pursue efficient standardization. Marketing mix strategies are versatile internal factors of standardization in comparison to firm size and/or business experience, which are more fixed and firm internal factors of standardization. As intensive restructuring of Slovenian firms is taking place the study is giving special attention to an internal factors, which are controllable in short term. This does not diminish a need to study supplementary firm characteristics in order to explain detailed factors of standardization. Based on literature findings therefore we limit the study to a demonstration of marketing mix elements and their impact on standardization process.

DATA AND METHODOLOGY

Data sources

A written questionnaire was sent to a random sample of 1230 Slovenian exporting firms, representing approximately 18 percent of all exporting firms in the country. From this sample, 298 responses were received, for a response rate of 24.2 percent. Two (2) respondents were bankrupt firms and were therefore not used in the study. The questionnaires were addressed to general managers or executives involved in making strategic business decisions. All of the fifteen (15) questions were of closed type. Five-point and three-point Likert scales were used for the majority of the questions. Five (5) questions required yes/no responses or specific answers and two (2) questions required numerical determination. Some of the respondents were queried by phone when responses were ambiguous or incomplete. Table 1 provides more detailed information about the variables that were included in the statistical analysis.

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TABLE 1. Data information on variables

Methodology

The statistical package SAS was used to analyze the data. The dependent variable was set to be marketing standardization and the calculation of Pearson coefficients among the various variables indicated that certain responses were correlated. Principal component analysis with orthogonal rotations was then used to investigate these relationships and examine factors involved in the standardization of marketing. The Varimax method of orthogonal rotation made factors as intuitively meaningful as possible. It is considered a disadvantage to choose a rotation subjectively because the analyst may try to force the factor loadings to fit his/her own preconceived hypotheses. The selection