FINDING THE RIGHT INTERNATIONAL MIX

In these days of increasing global integration, the task many international mar­keters face is not so much market entry as managing the marketing mix in differ­ent national markets. Is it better to standardize or to adapt it across different markets?

Consumer tastes in cars are very different in North America, the UK, Germany, Italy, Japan and India. A 'global' car that does not have country-specific differentiating features will fail. The manu­facturer, therefore, has to find the balance between designing a separate car for each market – which would be exorbitantly costly – and designing one car for all markets. Nissan was a pio­neer in this area. It reduced the number of different chassis designs from 40 to 8 for cars meant for 75 different national markets.

Some companies, howev­er, do develop the same product for all markets regardless of existing local preferences. Com­panies such as Kellogg have succeeded in chang­ing consumption patterns. Breakfast cereal was unknown in France 20 years ago. Today it is common. Kellogg ignored the re­search that said cereal would not sell in France. In contrast, Coca-Cola changes the flavour of its soft drink to conform to local tastes. Coke in the US tastes differ­ent from Coke in the UK, which in turn tastes differ­ent from Coke in India.

Thus there is a spectrum of new product development strategies. Firms sometimes customize a product to every market; at other times they offer one standardised prod­uct everywhere; and some­times they compromise and settle in the middle.

New product develop­ment that co-ordinates efforts across national mar­kets leads to better products and services. Such opportu­nities are not normally available to a company that operates only in one coun­try or is only just entering a new country.

The advent of the Internet and Intranets has the poten­tial to accelerate the process of mining all markets for rel­evant information and for features that can be includ­ed in new products. Unilever has four global research lab­oratories that develop prod­ucts for their different national markets while pro­viding inputs for global products. The laboratories co-ordinate their efforts by looking at the possibilities of melding product ideas aris­ing from different countries. Motorola's software develop­ment establishments co­ordinate their efforts in working on different mod­ules of the same project.

Companies also develop products in different coun­tries in markedly different ways. Japanese companies, for example, tend to believe much more in getting new products to market and J then gauging the reaction to them. The product itself may have been developed with reference to observa­tions of present and potential customers rather than conventional market research. US companies, on the other hand, tend to use more formal market research methods. And for German companies, prod­uct development schedules tend to be more important.

Clearly, companies decide on different launch strategies for different cat­egories of products. Toshiba launched the Digital Video Disk (DVD) in Japan in November 1996, in the US in March 1997 and in Europe in autumn 1997. However, Intel launches its latest PC chips practically simultaneously in all coun­tries. The launch decision also includes marketing mix decisions. When Citibank introduced its credit card in the Asia-Pacific region, it launched it sequentially and tailored the product features for each country while main­taining its premium posi­tioning. The promotional, pricing and distribution strategies also differed from country to country.

As a contrast, consider Rolex. The genuine Rolex watch is the same certified chronometer anywhere in the world; its positioning – as the timepiece for the ele­gant high achiever – is the same around the world, as is the advertising message. One will always find a Rolex in an upmarket dis­tribution outlet and at a premium price. Or consid­er Unilever's Lifebuoy soap, which has different ingredients in India com­pared to East Africa. How­ever, Unilever positions the soap in the same way in both markets – as an inex­pensive everyday soap that has antibacterial proper­ties and protects health.

From the Financial Times