Entry Methods and International Marketing Decision Making: An Empirical Investigation
Vrontis, Demetris, Kitchen, Philip J., International Journal of Business Studies
This paper investigates levels of adaptation and standardisation in international marketing tactics, and examines whether multinational companies are adapting or standardising their marketing mix elements in international markets. It is based on empirical research with some of the largest UK-based multinational companies. The research shows that both adaptation and standardisation are used at the same time within the respondent group. Levels of integration are dependent upon consideration of the relationship between the rationale for internationalisation 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 here).
Keywords: International marketing planning, standardisation, adaptation, integration
Within the field of international marketing the debate over the extent of standardisation or adaptation is of long duration. Vrontis and Vignali (1999) indicate that this debate commenced as early as 1961, when Blinder considered it with respect to worldwide advertising. During that period, advertising and the need for international standardisation, was at the heart of the debate (see Kanso and Kitchen, 2004). International advertising standardisation would have necessitated a common advertising approach for promotional campaigns of multinational organisations. This debate then expanded from advertising to the promotional mix, and now encompasses the entire marketing mix (see Schultz and Kitchen, 2000; Kanso and Kitchen, £004; Kitchen and De Pelsmacker, 2004).
Remarkably, nearly half a century later the debate on standardising marketing internationally is ongoing. Even a cursory review of the literature identifies two main approaches with remarkable longevity and robustness, namely - adaptation and standardisation of international marketing tactics.
Supporters of standardisation view markets as increasingly homogeneous and global in scope and scale and believed that the key for survival and growth is a multinational's ability to standardise products and services (Fatt, 1967; Buzell, 1968; Levitt, 1983; Yip 1996). On the other hand, proponents of adaptation such as Kashani (1989) indicate difficulties in using a standardised approach, and therefore support market tailoring and adaptation to fit the 'unique dimensions' of different international markets.
More specifically, supporters of the international adaptation school of thought argue that there are insurmountable differences between countries and even between regions in the same country (Papavassiliou and Stathakopoulos, 1997). It is argued that marketers are subject to a set of macro-environmental factors, such as culture, climate, race, topography, occupations, taste, law, culture, technology, and society (Czinkota and Ronkainen, 1998). Paliwoda and Thomas (1999) expand this list to include consumer tastes, disposable income, taxation, nationalism, local labour costs, literacy, and levels of education. Followers of this school stipulate that multinational companies should find out how to adjust marketing tactics and strategy and the accompanying marketing mix in terms of how they sell and distribute, in order to fit market requirements.
On the other hand, supporters of standardisation stipulate that consumers needs, wants and requirements do not vary significantly across markets or nations. The overall conceptual argument is that the world is becoming increasingly similar in terms of environmental factors and customer requirements, and irrespective of geographical locations, consumers have the same demands. For example, Theodore Levitt (1983) - in a milestone paper, argued that standardisation of the marketing mix and creation of a single strategy for the entire global market offers economies of scale in production and marketing and moreover is consistent with what he described as the 'mobile consumer'. …