Product decisions - Standardisation v Adaptation

• Three levels of product

• Global products

• Advantages/disadvantages of standardisation

• Problems with standardisation

• Brand globalisation potential

Corebenefit

or service

Installation

Warranty

After-salesservice

Deliveryandcredit

Packaging

Quality Styling

Brandname

Features

Augmentedproduct

Actualproduct

Coreproduct

Three levels of product

Global Products• Localisation of a product or service to fit local

regulation and usage requirements e.g. local voltages and safety laws

• Adaptation fits the product to buyer preferences e.g. Air-conditioning in USA

• Standardised global products are not adapted to local preferences, but must still be localised. E.g Coca-Cola obey local hygiene laws

Advantages of standardisation

• Cost reduction - e.g. economies of scale• Improved quality - resources can be focussed• Enhanced customer preference - positive

experiences lead to global brand loyalty• Global customers - uniform quality and services• Global segments - e.g. software, cameras.

Disadvantages of Standardisation• Lack of uniqueness - exclusivity may be behind

purchase decision• Off-target - miss the customer target completely• Vulnerable to trade barriers - local production may

be necessary, so economy of scale benefits are lost• Strong local competition - customisation by

competitors, lack of local knowledge

Problems with global standardisation

• Insufficient market research

• Overstandardisation

• Poor follow-up

• Narrow vision

• Rigid implementation

Polaroid SX-70

• Insufficient market research

• Used US campaign/agency in European launch

• TV testimonials from ‘unknown’ people

• hence local lack of awareness

Canon AE-1• Overstandardisation

• First ‘positioned’ as the expert’s choice in all markets

• Then endorsed by John Newcombe (Tennis Champion)

• Created a much bigger market for single-lens reflex cameras world-wide

Henkel Pritt

• Poor follow-up

• Pritt stick launched as an umbrella brand

• failed to capitalise on initial momentum

• local business units were under resourced

• weak results had to be turned around

Unilever - Domestos

• Narrow Vision

• Vision lead from HQ

• UK took lead in promoting Domestos

• In Germany positioned as dirt remover, not germ killer

• UK ignored this - consumers confused

Lego Buckets• Rigid implementation

• In US, competitor Tyco offered plastic buckets

• Danish HQ refused to act

• Denmark relented after market slide

• Now use buckets world-wide

Brand globalisation potential• Does the brand name make sense outside of the

country? Nokia from Finland is aware name sounds Japanese (same roots)

• Does the name have a positive, country specific image? E.g GM’s Opel and Chevrolet

• Is the name available legally in many countries? Dutch Philips, Phillips Oil registered in USA

• Does the brand complement other global brands in the portfolio(or not)? E.g. Sony supports Aiwa at a lower price

• Should the growth be limited to the creation of a regional brand? E.g. Strasbourg beer maker, ‘Kronenbourg’ in global markets, as ‘1866’ in S. Europe. Local brand can be difficult to remove.

Johnny K. Johansson (1999)