Glosalization

The discussion and debate on the adaptation and standardization of marketing strategy cannot be regarded as new, but there is no agreement, on which strategy appears to be better to serve the international market. The major objective of this research stands for evaluation of the existing information to see, which international marketing strategy is better. The paper will show that standardization strategy can be utilized to obtain the economies of scale and it can be applied when the target market has the analogous requirements and desires. On the other hand, adaptation strategy is relevant when the consumers have discrepant requirements, desires, and benefits and in case when there is an essential discrepancy in socio-economic circumstances of the target market. The major cause of success in the international market consists in the usage of the mix of adaptation and standardization strategy and the attempts to balance these two strategies. The literature review will help to analyze and compare two companies in the fast food industry including McDonald’s and Burger King.

Glocalisation

Starting from the beginning of the 1980s, the problem of ‘Glocalization’ has become progressively essential; the term combines the words localization and globalization. Globalization stands for the homogenizing in regard to a worldwide scope. Globalization makes discrepancies between countries despite the fact that they still exist. This progressive march of globalization and businesses internationalization has had a solid influence on how organizations observe and arrange their global marketing strategy. As a result, different studies have been conducted on whether multinational organization should adapt or standardize international marketing conduct. When firms start to market their products abroad, one significant strategic resolution is whether to utilize a standardized marketing mix and a sole marketing strategy in all firms or to adapt the marketing mix and strategies to suit the extraordinary magnitude of each local market. There is a belief that markets become more alike and increasingly more global and assume that the elucidation for survival implies the organizations’ capability to standardize. On the other hand, the other belief demonstrates the discrepancies in applying a standardized approach, and thus sustains market adaptation and customization. Nevertheless, as a constituent of replicating localization, regions attempt to secure and sustain an element of the local circumstances and local culture, without being completely swept away by the globalization forces. Thus, glocalization attempts to compensate these two approaches in regard to the local preferences and tastes at the same time endeavoring to adhere to the global corporate philosophy and company’s vision.

Standardization vs. Adaptation

Advocates of standardization assume that there is a global cultures’ unification with analogous customer and environmental demand. In fact, trade barriers get lower while technological advances and companies display a global strategy orientation. Creation of one strategy for the global market and standardization of the marketing mix constituents can obtain concordance with clients and decreased spendings. In fact, organizations, which are managed appropriately, have departed from customizing products to providing worldly standardized items, which are dependable, functional, advanced, and low-priced. Companies can obtain long-range prosperity by focusing on items, which everyone desires. On the other hand, advocates of the international adaptation approach underscore the significance of customization. The basic foundation of the adaptation approach stands for the fact that the company should consider all environmental factors and restrictions including climate, culture, language, education, race, laws, etc. before entering a foreign market. Nevertheless, researchers have defined crucial source of restrictions, which are arduous to evaluate, encompassing cultural discrepancies ingrained in education, religion, history, customs together with discrepancies in taste, requirements and desires, economies and juridical systems. In fact, multinational firms are supposed to understand how they must adapt a complete marketing strategy and how they should market, distribute products in order to suit innovative market requirements. It is crucial to change the marketing mix and strategy in order to fit local tastes, clients’ non-identical needs, and meet specific market requirements.

During the past few decades, emulation has been elevated at the international level because of glocalisation and the liberalization of the trade policy, informality of the monetary exchange procedure and increase in the regional economic collaboration and promotion in regard to communication and transportation. It is greatly complicated for the business to operate globally in such highly vibrant and dynamic business setting. In fact, global corporations encounter complicated decisions concerning the adoption of the marketing strategy. It is highly important to understand what should be the marketing strategy of the organization when it goes global. When organizations broaden their market globally and internationally, they need to consider standardization and adaptation of their marketing program. Adaptation implies adoption of the strategy concerning alteration of the marketing program meaning the company’s product, price, place, and distribution for each international target market. Thus, standardization can be described as an international marketing strategy where the company utilizes analogous marketing program for their international target markets. There is a serious discrepancy of opinions among the scholars concerning the employment of the adaptation or standardization strategy at the international level. The protectors of standardization strategy at the global level suggest that international level markets are global and homogenous in their character. The strategy is important for the company’s incessant growth and performance at the global level as it relies on the company’s capability to standardize their services and goods. The requirements and desires of the consumer do not differ essentially at the international level. The world progressively becomes more homogenous in regard to environmental agents and the requisitions of the customers regardless their geographic and regional location. On the other hand, advocates of adaption believe that it is highly complicated to utilize the standardization approach around the globe. Therefore, these advocates sustain the adaptation approach to effectively and efficiently accomplish the needs of the international markets. They believe that there are essential discrepancies in the countries and even between the various regions of the analogous country. Standardization and adaptation is one of the major problems for the international brand management that stands for the creation of the balance (meaning the trade-off) between the advantages obtained by the standardization via economies of scope and the cultural preconditions of adaptation.

Advantages and Disadvantages of Standardization 

Standardization and international consistency has numerous benefits. In fact, people can anticipate the analogous level of caliber of any particular brand anywhere around the globe. In addition, standardization sustains positive clients’ apprehension of a product or item. In the case when an organization benefits from solid brand specification and a powerful reputation, selection of a standardized approach is ideal for a company. Positive reviews can result in a global elevation in sales. Another benefit incorporates cost depreciation, which provides serious scope economies. Marketing of huge amounts of the analogous, non-adjusted products and acquisition of wholesale constituents can lower the cost-per-unit. Other benefits connected to economies of scale incorporate enhanced development and research, marketing operational spendings, and decreased spendings of investment. Furthermore, standardization stands for a well-grounded strategy at a period when trade barriers are coming down. Finally, adherence to a standardized approach assists organizations’ objective of focusing on a homogeneous marketing mix particularly concentrating on one sole product leaving enough space for caliber enhancement. By accentuating on one homogeneous product, personnel can be educated to elevate the caliber of the product appealing to manufacturers to deposit in technology and appliances, which can secure the quality of the standardized product suggestions.

Nevertheless, standardization has numerous disadvantages. It is important to understand that discrepant markets presuppose discrepant preferences. Marketing of unified products encounters the shortage of uniqueness. This allows emulation to obtain market share via adjusting their items to meet the requirement of a particular market/sector. Due to the fact that discrepant markets appear to have dissimilar requirements and tastes, by utilizing the standardized approach, companies can become vulnerable and powerless. Walmart’s failure in entering global markets is the best example of the above-mentioned situation. The retail giant encountered numerous challenges when entering such foreign markets as Brazil, Germany, Japan, and South Korea due to the fact that its formula for success in the U.S. (decreased prices, inventory controls, and a huge merchandise collection) did not actually translate to markets, which had their own discount chains and shoppers with discrepant customs. Another disadvantage consists in the fact that it relies mainly upon economies of scale, usually businesses, which appear to be global manufactures in numerous counties. This can position an issue as a number of countries including the U.S. and the EU execute trade barriers.

Nonetheless, despite the fact that the standardization approach is more recurrent, its acceptance is not absolute. In fact, standardization strategy elevates a firm’s execution. Nevertheless, this is only genuine for companies, in which emulation appears in a global range, such as fast food and beverage industry, fashion, electronics, luxury, perfumes, goods, etc. This is the case when the analogous products can be marketed across all markets. The facts demonstrate that consumer non-durables encompassing food products are the most reactive to discrepancies in national tastes and customs making them more probable to require alterations for discrepant markets.

Analysis of Global Marketing Programs of McDonal’s and Burger King

McDonald’s is the company, which has managed to emphasize the advantages of both the adaptation and standardized approaches. This company has more than 33,500 restaurants in 119 countries and masterfully operates its franchise framework providing an extremely consecutive customer practice and branding (well-known ‘I’m lovin’ It’) at the same time permitting locally pertinent menus and service disparities in regions around the globe. Facts reveal that 62 percent of the company’s annual revenue is localized to operations conducted outside the U.S. This equips an important situation for a company, which has created the empire from producing all the food in the analogous manner. Hamburgers are of precisely the same size, the same quantity of pickles is put on each bun, and milkshakes are measured with precise accuracy. In addition, all company’s advertisements are created in 12 discrepant languages characterizing the customized products serviced to each regional segment. This is a reason why McDonald's established the McArabia (a flatbread sandwich) in its Middle East restaurants. The company also introduced the EBI-Fillet-O shrimp burger in Japan and the McVeggie in India. In addition, the burger is kosher tradition Big Macs in Israel meaning that meat and cheese are served separately. The facts demonstrate that the most expensive products including the variety of hamburgers kinds from the McDonald’s menu are similar in presentation and name. The major differences start to be visible with the non-beef sandwiches, with discrepancies essentially in the name of product. Principal dissimilarities have been observed in the entrée segment of the menu together with the beverages segment, for example, wine is proposed in France, beer is provided in Germany while tea is offered in England. The usage of local food products is recognized by clients as a positive characteristic. In addition, McDonald’s selects comfortable emplacements for all its franchises. The typically incorporate airports, local neighborhoods, and molls. These marketing strategies appear to be effective as demonstrated by the McDonald’s 9 percent elevation in profit margins over the past five years. Nevertheless, the company dedicated all efforts to enhance these ratios via latest marketing incentives concerning 7Ps. McDonald's business model is fundamentally analogous despite locations, in which it operates. Nevertheless, the company encounters some local discrepancies. Thus, McDonald’s marketing mix is an example of thinking and acting globally as the company expands on a global basis adapting to local communities. McDonald’s started renovating its restaurants changing from a plastic look to a more wood and brick design in order to sustain a modern representation. The company also decided to “re-image” themselves in their advertisements by encompassing a hip-hop theme with teen idols (for example, Justin Timberlake and Lee Hom in China) as a method of attracting teenagers. Furthermore, the firm started offering healthier food products encompassing oatmeal due to the fact that clients began adhering to more health-conscious tendencies.

Burger King appears to be the second biggest global fast food hamburger restaurant chain in regard to the overall quantity of restaurants. The company has more than 13,000 restaurants in approximately 95 states. The facts show that 46 percent of these restaurants are situated outside Canada and the U.S. In fact, practically all restaurants positioned outside these two countries are franchised. According to the facts, Burger King manufactures numerous products including hamburgers, cheeseburgers, hash browns, salads, etc. The company distinguishes the brand through Burger King’s approach “have it your way”. These products are greatly standardized specifically in regard to the caliber, brand name, and image. In addition, the company’s selected method of entry meaning the franchising appears to be one of the most standardized strategies as it requires standardizing items on the basis of the parent firms’ requirements and patents. For this reason, Burger King has serious control over its products as it delouses a decreased hazard. Nevertheless, Burger King’s product strategy could be more successful if customer’s local requirements and receptions were diligently considered. In fact, differentiated products, which meet the clients’ requirements in discrepant markets, can only help the company in elevating its profitableness. For example, McDonald’s is a good example of how to understand the clients’ requirements in different markets and adjust its items respectively. The adapted McGreek appears to be broadly desired and favored in Cyprus while McFalafel is extensively recognized in Egypt. On the other hand, it appears that Burger King’s promotional strategy makes the client feel that there is no requirement to alter the recipe of a whopper due to the fact that it has been produced appropriately from the very beginning.

Nevertheless, Burger King’s franchising strategy did not actually affect the adaptation of its products’ pricing. The company’s price is adjusted in accordance to numerous factors including the level of customer affinity, economic discrepancies and emulation. It appears unfeasible to charge a client in India the analogous whopper price as in the UK. Thus, the company succeeded in adjusting their prices. The resolutions on location of Burger King Restaurants might differ from country to country, but it appears that there is a high level of standardization concerning the entire atmosphere, decorations and setting. Similarly to McDonald’s, Burger King’s promotional campaigns are different from one country to another relying on the market circumstances and a manner, which fits the consumer perspectives, cultures, etc. For example, a company’s advertisement, in which bikini girls advertised a Texas bacon-double whopper, was forbidden in New Zealand and viewed as “too sexy”. This fact consolidates the argument regarding the fact that promotions should be adjusted in accordance to a country’s uniqueness. Therefore, it is obvious that Burger King encountered failure in regard to its promotional strategy as they have not considered cultural discrepancies and customer’s receptions.

McDonald’s example vividly demonstrates that it is important to strike the appropriate balance between the two analyzed strategies. These two approaches appear to be reasonable, logical, and rational emphasizing the benefits and advantages, which a multinational organization could obtain by utilizing either approach. Nevertheless, when multinational firms execute all their attempts on the extreme position of either approach, they frequently become unrealizable and inadequate. The analysis vividly demonstrates that marketing for multinationals does not lie in either of these two opposite approaches due to the fact that both approaches are probable to coexist even inside the same product line, brand, or company. The research paper demonstrates that standardization of particular constituents of the marketing mix and adaptations of others to discrepant market conditions is highly necessary.

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