Localization VS Standardization in Advertisements in Foreign

marketsGroup 8

International advertising strategyA review, reassessment and

recommendationT.C. MelewarWarwick Business School, University of Warwick, Coventry, UKClaes VemmervikForetagsekonomiska Institutet, Stockholm, Sweden

Levitt (1983) argues that “a powerful force drives the world toward a converging commonality, and that force is technology”. The existence of a global market leads to standardized products.

However, many academics disagreed with Levitt (1983) and argued against the existence of global markets.

Introduction

Boddewyn et al. (1986) argue that national differences in tastes, habits, regulations and technical requirements prevent standardization and contradict Levitt’s (1983) prediction of homogenization of markets.

The debate is typical in the standardization

debate in international marketing and advertising strategy.

Introduction (Contd.)

The first advocate of standardization was David L. Brown, Advertising Manager at Goodyear Tyre and Rubber (1923)

Stated that humanity possessed certain common attributes and concluded that it was possible and logical to standardize advertisements across countries.

Literature Review

Approaches to International Advertising –Academics VS Practitioners

Standardization• Proponents

assume due to faster communication convergence of markets and consumer are becoming increasingly similar.

Adaptation• Proponents

point to cultural differences and conclude that advertising must be adapted.

Compromise• Proponents

recognize local differences but also that some degree of advertising standardization is possible.

Advertising Strategies

Cost Reductions Consistent Brand image Sharing of experience Effective Use of advertising budget Consistency of Communication Less duplication of effort Pre-selling of company's products

Standardization-Pros

To focus on cost reduction is to ignore the target group’s need for a meaningful message.

Based on homogenous segments and unless this holds in reality, the probability for a communications breakdown increases.

Cost reduction does not automatically imply profit maximization as standardization may

make the advertising unappealing to target segments and thereby decreasing sales

Standardisation-Cons

Allows responsiveness and adaptation to culture, infrastructure and competition especially visual and verbal parts of advertising

Use of local language, models and scenery increases the probability for the advertisement to be effective.

When national markets are more similar within than between countries, adaptation results in a more accurate positioning, leading to higher prices due to price discrimination.

Adaptation-Pros

The major disadvantage of advertising adaptation is increased costs and a loss of consistent brand image.

Adaptation-Cons

(1) product variables – the degree of universality of the product;

(2) competitive variables – the structure of the competitive environment;

(3) organizational experience and control variables – the level of organizational experience in the corporation

(4) infrastructure variables – the degree of similarity of the media infrastructure, for instance, media, advertising agencies and production facilities;

(5) governmental variables – the restrictions on mass communication; and

(6) cultural and societal variables – the cultural differences between the home and export markets.

Factors affecting degree of standardization/adaptation-Harvey (1993)

Descriptive Model determining standardization/adaptation of advertising

Suggest that there are two types of coordination horizontal communication across countries and vertical communication across marketing disciplines and that the level and nature of coordination across disciplines and countries varies depending on a number of underlying factors.

The horizontal factors are target market, market position, nature of product, environment and organizational factors.

The vertical factors are the marketing mix, overall promotion mix, advertising creation, advertising media, sales promotion and public relations.

Contingency Approach-Grien & Gould (1996)

Topology for globally integrated marketing strategy

From a practitioner’s point of view, the lack of a clear definition of a standardized international advertising has most likely significantly contributed to confusion and frustration, and made the academic literature difficult to interpret and apply to real business problems.

Critique & Reassessment

Proponents of the standardization school claim that international advertisements should always be standardized and proponents of the adaptation school claim that international advertisements always need to be adapted.

This means that advocates of standardization do not recognize the existence of cultural differences and customer heterogeneity across countries. At the same time, advocates of adaptation do not recognize the existence of homogenous regional or global customer segments.

Critique & Reassessment

Problems in applying the contingency models since they do not specify what drives each element of the standardization process and the relative importance of each variable per sector over time.

Difficulties in comparing surveys over time due to sample selections, time between surveys, statistical method and analysis, and lack of definition of standardization.

Critique & Reassessment

Initially Kodak adopted the strategy of merely translating its English web pages into different languages, but it soon realized that plain translation was not enough to target and reach out to international users.

For example, Terry Lund of Kodak explains that they translated their section on, “Guide to better pictures,” (a popular link at Kodak.com) into German and found out that even though the translation was accurate, the Germans did not find it appealing and did not like the writing style.

Thus, Kodak consulted companies in web globalization business and modeled its globalization efforts on the Web into two parts; first they invested in developing global web templates (a part of the internationalization process), and then sought local country input to locally customize the content in a way appropriate for the country in questions (the localization process).

Examples: Kodak

This case is based on the study by Bodreau and Watson (2006). They provide an example of 3M implementing a transnational strategy online to tap global online markets.

Their analysis of the global and country specific web sites of 3M found that 3M is following a transnational Internet advertising strategy.

The signs of using transnational strategy were apparent because its web sites show a great deal of global integration and also local responsiveness.

The case showcases how an organization can emphasize global integration and local responsiveness.

Examples: 3M

All pictures or symbols are not interpreted the same across the world: Workers at the African port of Stevadores saw the "internationally recognized" symbol for "fragile" (i.e. broken wine glass) and presumed it was a box of broken glass. Rather than waste space they threw all the boxes into the sea

Even a simple thing like use of a number in a culturally inappropriate way can derail your product. A golf ball manufacturing company packaged golf balls in packs of four for convenient purchase in Japan. Unfortunately, pronunciation of the word "four" in Japanese sounds like the word "death" and items packaged in fours are unpopular

In August 2002, the British sportswear manufacturer Umbro was denounced as “appallingly insensitive” for naming a running shoe the Zyklon. That’s the same name as the lethal gas used in extermination camps during the Second World War

Some Localization Blunders