The Use of Entry Methods in Identifying Multinational Companies' AdaptStand Behavior in Foreign Markets

Article excerpt

Abstract

This research investigates some of the largest UK multinational companies, to examine their levels of adaptation and standardization of international marketing tactics. It examines whether these companies are adapting or standardizing their marketing mix elements in international markets. This research determined that both adaptation and standardization are used at the same time. The level of integration is dependent upon considerations of the relationship between the reasons and elements identified, and an understanding of how these are affected by a number of factors (one of them being Entry Methods, the factor under consideration).

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Introduction

Within the field of international marketing, there has been a longstanding debate over the amount or extent of standardization or adaptation. Vrontis and Vignali [13:26] state that the question came under discussion as early as 1961, with Elinder [5] initially considering the idea with regard to world wide advertising. This debate then expanded to consider promotion and today encompasses the whole of the marketing mix.

The fundamental basis of the adaptation school of thought is that the marketer is subject to a new set of macroenvironmental factors, as well as different constraints such as language, climate, race, topography, occupations, education and taste; in addition, there are frequent conflicts resulting from different laws, cultures and societies [4]. On the other hand, supporters of standardization believe that consumers' needs, wants and requirements do not vary across various markets and countries. They believe that the world is becoming increasingly more similar in both environmental and customer requirements [7].

However, it is suggested that the absolute use of either approach is too extreme to be practical. The truth lies in neither of these two polarized positions, because both processes coexist. This research aims to investigate the practical complex relationship of the two extreme approaches (adaptation and standardization), and suggests methods and ways to determine the right level of integration. More specifically, this research will investigate the level of integration in relation to the different entry methods, with a particular focus on Exporting (direct and indirect).

Literature Review

Within the field and literature of international marketing, when a company decides to begin marketing products abroad, it has to make a fundamental strategic decision whether to use a standardized marketing mix (product, price, place, promotion, people, physical evidence, process management) and a single marketing strategy in all countries, or whether to adjust the marketing mix and strategies to fit the unique dimensions of each local market.

Buzzel [1] and Buzzel et al [2] state that in the past, dissimilarities among nations have led a multinational company to view and design its marketing planning separately for each country, treating each one strictly as a local problem. However, it is believed that in recent years the situation is changing, and the experiences of a growing number of multinational companies suggest that there are real potential gains for a company willing to consider standardizing the marketing mix elements and strategies. This has been one of the critical points in history concerning the huge debate on standardization and adaptation.

Supporters of global standardization believe that we live in a globalized world in which nation-states are no longer significant actors or meaningful economic units; in which consumer tastes and cultures are homogenized and satisfied through the provision of standardized global products created by global corporations. Levitt [7] asserts that well-managed companies have moved from emphasis on customizing items to offering globally standardized products that are advanced, functional, reliable and low priced. …