INTERNATIONAL MARKETING

Marketing Mix Standardization: a Cross Cultural Study of Four Countries

Richard Alan Kustin

Content

Research Objective Introduction Background Research Methodology Strengths and Weaknesses of the Article Limitations Managerial Implications

Research Objective

To determine if consumer perceptions, across diverse

countries, of a common non-durable product, chewing

gum, were more similar than dissimilar in an effort to support a standardized marketing mix program.

Kustin, 2004

Introduction

Standardizationwithin predominantly homogeneous global markets and

regions.

Customizationwithin diverse or heterogeneous markets or regions.

Akaah, 1991; Kustin, 1994; Duncan & Ramaprasad, 1995

Adorno’s Theory of Standardization

The theory: Popular culture is standardized

using the same formula to appeal to the masses.

All popular music contained a verse, chorus and bridge, and that these elements were interchangeable without damaging the song.

The applications: Standardization is applicable

among consumers that share similar culture and thoughts.

Arato & Gephardt, 1978

Introduction

Benefits of

standardizati

on

Economies of scale

Outsourcing

Developing priority locations

for manufacturingDistribution

Economies of scope

Levitt, 1983; Kotabe, 1990; Keegan &Green, 2003; Dunning, 1998; Yip, 1989

Introduction

ProgramCreation and development

of the marketing

mix components

(Price, Product,

Promotion, Place)

ProcessFocuses on

how the program side is

supported, evaluated

and implemente

d

Griffith, Hu & Ryans, 2000

Critical Components for Marketing Mix Standardization

Background and Hypothesis

H1. When consumer perceptions are more similar across national borders, then marketing mix standardization is more likely to be implemented. Not supported

Consumer perception – HQ’s market knowledge about consumers’ perception and influencing market decision

Solberg, 2000

Background and Hypothesis

H2. When intra-cultural country markets exist (culturally similar countries), then program standardization is possible within this type of similar intra-cultural country markets. Supported.

Hoftstede’s Cultural Study: Type I Countries (US, France & Australia) – low PD, low UA, individualism Type II Countries (Brazil, India & China) – high PD, high UA, collectivism

Griffith, Hu & Ryans, 2000; The Economist, 2014

$5 in US$5.05 in Australia

$2.97 in China

Background and Hypothesis

H3. When inter-cultural country markets exist (culturally dissimilar countries) then program standardization is less possible within this type of diverse country markets. Supported.

Schuh, 2000

Beef Burgers in Australia

Vegetarian Burgers in

India

Research Methodology

Respondents 824 university graduates from Atlanta, Georgia, in the

United States, Rio de Janeiro in Brazil, Fontainebleau in France, and New Delhi in India took part with the help of local professors, with 497 usable questionnaires.

Aged range from 23 to over 50 years old.

28%

26%21%

25%

Respondent Percentage US

BrazilFranceIndia

Kustin, 2004

Research Methodology

Data Analysis – Pearson Chi-square test, multivariate F-test, Regression Analysis

Questionnaire translated into French and Portuguese for

French and Brazilian respondents. Rate on closed-end 5 point Likert scale.

Variables- measure attributes Taste, Refreshing, Size/Quantity, Prefer Diet,

Artificial Flavors, Vending machine availability, Retail Store, Brand Ads, Price/Factor, Frequency

Kustin, 2004

Analysis

Kustin, 2004

Analysis

H1 is rejected H2 is supported with similarities of 7 out

of 10 from the attributes for US & France (countries in similar culture)

H3 is supported with similarities of only 4 out of 10 from the attributes for US & India (countries in different culture)

Kustin, 2004

Strength of the Article

Uses abundant theories and past studies as precedence

Emphasize the culture influence to marketing mix, and point out the way to marketers in practice.

Choice of countries for research was good.

Data sample are wide, covered different ages, gender and marital status.

Weakness of Article

Chewing gum is not a product with more product features for a more varied outcome.

Too many theories, less examples. Only four counties were involved. Only focus on ‘Program’, and lack of

‘Process’.

Limitations

Provides a limited degree of evidence supporting a low to moderate level of correlation, for similar consumer perceptions the results were not overwhelming.

Additional product features will affect the results.

Statistical bias.

Kustin, 2004

Managerial Implications

Firms operating within a global environment could achieve economies of scale by focusing on a strategy of standardization within various intra-cultural country markets.

For product producers, this research supports their efforts to continue the examination of standardized global strategies in an effort to capitalize on proposed economies of scope.

Griffith et al., 2000; Ryans & Ratz, 1987; Whitelock & Chung, 1989

Managerial Implications

Standardization may not be applicable with inter-cultural, heterogeneous markets due to cultural and economic differences.

(Ryans & Ratz, 1987; Whitelock & Chung, 1989)

Conclusion

Standardization of program (marketing mix) is applicable among culturally similar countries in order to achieve benefits such as economies of scale, economies of scope etc.

Reference

Kustin, Richard Alan. 2004. “Marketing Mix Standardization: a Cross Cultural Study of Four Countries.” International Business Review 13(2004): 637–649

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Discussion

As a consumer, in what scenario would you prefer standardization for a product? In what scenario would you prefer customization?

Discussion

Do you think companies adopting customization are bound to experience more sales and higher profits than companies that apply standardization on their marketing mix development/strategy?