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Should companies which want to export all around the world adapt their products or standardize them?

This subject deals with the penetration of a product in a market, so obviously it will depend on what the company offers. Coca-Cola, Ford, Sony, Hewlett-Packard, Microsoft are already everywhere and do not have to adapt their products to the different markets except for some details. Whereas Nike, McDonald’s and many other international brands of food or clothes have to adapt their products if they want to penetrate the markets abroad.

When a company launches a product in a market and has much more sales than expected, it sometimes decides to spread it all over the world. This choice might be debatable but here is not the point. If it does so, the company must be aware that each country has its own values, norms and customs, that strongly depend on their geographic position. Beyond the legal aspect of the product, a long and deep research must be led in order not to do mistakes about the product toward the population. Simple example: a car made for all the countries has less chance to be successful, but if you take into account the spending power, the tastes, options, power etc. and you adapt it according to each country you want to penetrate, your sales will considerably increase. This demands a good knowledge of the market and a study about the customers’ expectations.

McDonald’s is the perfect example adaptation: their products are not the same at all depending on the countries, the ingredients are chosen locally and the recipes are made according to the expectations of the customers.

However, Kellogg’s didn’t care about the adaptation of their cereals and launched the same product all over the world. It also worked a lot and it became a new demand for some markets such as in France.

Globally, it costs more for the company to adapt its products to many countries, because it involves a modification of the product and the purchase of other components or raw material.

Among the most important parts of the product that the company has to change, the cultural symbols must be thought at first, such as colours, forms, letters, figures, pictures and the global design.

Many companies didn’t search deeply for the cultural things to avoid according with the country of distribution. Puma, for example, launched new shoes for the Iraqi market in which we could see the flag of the country. Actually, they did it for many countries but did not know that wearing the flag in your clothes or shoes is really inappropriate and a sign of disrespect in Iraq. That’s why it was a total failure and a scandal into the country.

Now, I am going to introduce the arguments for the adaptation of a product to a country. Sometimes, (but probably less than with a standardization) the production costs are lower. In Japan, trucks have to be lighter because of the demand, and so you have less components. The policy of the products (after-sales services, distribution) vary according to the country and this should be enforced to satisfy the customers. Besides, the cultural specificities of the country are much different and a same picture, symbol or design can mean several things from a country to another. The fact to show in the advertisement or in the product a piggy bank can be interpreted differently: in Germany it is symbol of chance whereas in France it is astonishing and in Muslim’s countries it is shocking.

Let’s see the good aspects of the standardization. The first argument we could spell is the economy of scales that represents a huge saving of time, efforts and money. Indeed, the more you produce the less you pay production costs and raw materials. That is interesting to see how much a company can save regarding the price per unit by producing twice as much. It needs an important investment but it will be quickly amortised in the case everything is sold and the company has enough open stocks. The standardization is also good for companies offering a product which has a good image due to its origin such as shoes and suits in Italy, fragrance in France, cars in Germany etc. In this case your product might be well sold, if prices are adapted to the market as well.

Some brands even change their name, products’ name or logo depending on which country the product will be displayed. Opel, American car brand of the group General Motors mainly sells its cars in Europe, Africa and Asia but has other brands of General Motors for the American market. So, they even created a brand especially for occidental and European countries. They adapted the name for the United-Kingdom which is “Vauxhall”. To be precise, the explanation of this difference of brand for the English is that the American giant bought Vauxhall in 1925, which was created in London and then bought Opel (created in Germany). As the German cars were and are still reputed as strong and sign of good quality, they decided to take advantage of this to commercialize Opel cars all around the world except in the UK. Indeed, the demand in the UK was more important for Vauxhall as it was created over there. They distribute the same cars with a different logo and options that depend on the countries as it is adapted for the local demand.

As a conclusion, we can understand that the adaptation to local demand can be a good way to enhance the sales when the products has not a specific good image for the foreigners. A deep research about the customers and the demand is needed beforehand, in order not to do cultural mistakes. In case the company offers recognized products, for instance because of their country of origin, the standardization may be a better way of penetration, since it is less expensive and reinforces the image of the brand or of the product.

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