Stefan Greaves

An
Analytical
Take on
How Local
Culture
Effects
Internation
al
Exporting
International Marketing

Stefan Greaves

20651717

This essay looks to analyse whether or not companies looking to export

internationally, will need to alter from their national marketing strategy in order
to suit local culture. In recent years, particularly since the recession, the world
has seen a huge focus on global and international marketing. In Literature, this
has led to a revival of the debate over whether companies are better to
standardise or to adapt their product or service. From my research, it would
suggest that this is an argument which yet to receive a unanimous outcome.
Although standardisation and adaptation are processes which conflict one
another, it is often thought necessary to apply them to the marketing mix in the
same way. In the sense that whichever process is chosen, it must be all inclusive
of each of the marketing mix variables. For example if a company decided to
adapt their product, then they would need to incorporate this strategy for the
pricing, the placement and the promotion of the product. Dimitrova and
Rosenbloom (2010, p. 2-5). That being said, the essay will focus on how
exporting globally effects each variable of the marketing mix.
Ryans (2003) states that over the last forty years, the process of standardisation
has been heavily researched by academics. Since then, due to increased market
competition and the variation in foreign markets, it has now become clear that
lowering costs of exporting, is not enough to increase market share. Companies
now adopt the philosophy that to be successful, it is important to focus on the
customer, through market research etc. Vrontis et al. (2009). Multinational
companies looking to expand their business on a global scale, are continually
looking for opportunities to grow, as they will be able to gain a competitive
advantage and increase their profits Vrontis et al. (2009). Vrontis (2006) States
that if a company is looking to export its products internationally, their first
concern should be which global strategy are they going to use. Are they going
keep the same marketing mix which they use for their national market or are
they going to adapt variables of the marketing mix to suit local culture? The main
difference between standardisation and adaption strategies is that, companies
who employ the standardisation strategy are viewing the world as one single
market, where as companies looking to adapt believe the market to be more
diverse and complex. Cateora and Graham (1999).
According to Buzzell (1995) in many cases exporters have been known to have
completely rethink their whole marketing strategy due to cultural differences,
meaning more resources expended. Although he later changes his stance and
now sees how companies can profit from adopting a standardisation strategy.
Chung (2007) backs this up by stating that the promotion variable of the
marketing mix is greatly impacted by culture. This could imply that if a company
is exporting to country that has a culture dissimilar to its own, then applying an
adaption strategy may be the best course of action Vrontis et al. (2009, p.3), also
that each of the other six variables of the marketing mix are not as effected by
culture. Backhaus and Van, J (2007) looks at the choice between the approaches
as a decision between saving on cost through standardising or increasing levels
of performance through adapting to the demands of local culture.
Exporters who believe in the standardisation strategy are of the opinion that the
modern customer should be seen as a global consumer, rather than one who
simply relies on their own country to provide them with products. They also
argue that the customers needs and wants are now extremely similar globally

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Vrontis et al. (2009); Dicken (1998). According to Levitt (1983) Global

Corporations now often find it more beneficial to standardise their products to
make them cheaper, dependable and authentic, instead of modifying products.
Levitt also states that becoming fixated on the tastes of the consumer can cause
multinational companies to become disillusioned and lose an overall perspective.
Levitt suggests that by focusing on what the larger part of the global market
wants, standardisation will play a huge part in gaining competitive advantage
Levitt (1983).
This is supported by Papavassilou and Stathakopoulos (1997) who state that by
standardising, it enables multinational companies to keep their global brand, as
well as having consistency in how their company is viewed throughout the world.
Also by keeping the product the same, it also makes it less likely for a customer
who is out of their own country to view their product differently. By doing this it
gives opportunity for companies to lower the costs of production. According to
Levitt (1983) when a company is deciding its strategy with a global market,
standardisation is imperative. He also expresses the view that the world can be
seen as one individual market, therefore firms can keep their international export
strategy the same as their national one. This theory is backed up by Keegan and
Green (2000) who say that standardising in national and foreign markets, is not
to dissimilar to mass marketing, in the sense that it is able to broadcast its
product to the largest amount of people possible.
The adaption school of thought is promoted by academics who are against
standardising each of the element of the marketing mix. According to Vrontis et
al, 2009 researchers who back the adaption strategy feel that standardisation is
contradicted by facts." Jain, (1989, p. 71) discusses the difficulties companies
looking to keep their national strategy for a foreign market, describing it as
impractical.
Ruigrok and Tulder (1995) claims that the concept of Globalisation in general is a
process which is over estimated by most. Ruigrok and Tulder (1995) continues to
say that by standardising each variable of the marketing mix across the globe, it
puts companies in a position where they cannot leverage their product in the
best possible way. Helming (1982) and Youovich (1982) question the
fundamental values of a standardisation strategy. They highlight that although
the idea that consumers across the world having similar buying patterns is
seemingly straightforward, is extremely risky theory to rely on Vrontis et al.
(2009, p.3). Therefore, researchers who back the adaption school of thought
argue that for companies to be successful in foreign markets, it is important to
adapt each of the variables of the marketing mix. Researchers from this field
believe that the key to entering various foreign markets is heavily dependent on
the micro and macro environment of a particular country, therefore keeping a
national market strategy is not possible.
If the marketing mix which is applied globally would need to encompass all seven
variables of the marketing mix. That would suggest that culture and other
external factors are not an issue. Many companies do apply a standardisation in
national and foreign markets. Although, research shows a need a requirement to
adapt to local culture. Through thorough evaluation of market segmentation in
different regions this can be obtained Semenik et.al. (1995). According to
Hassan, Craft and Kortam (2003) market segmentations has three key drivers to

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analyse, countries which are similar in terms of product demand, various

countries and regions who already have the same or similar product and finally
the segment which is the same in the majority of countries.
According to market Albaum and Duerr (2011) there is no other marketing tool
which has such a major impact and instant effect on a companys profits and
foreign market positioning. If a company is directly exporting when entering a
foreign market, pricing can often become complex. Depending on the method of
entry, a price would need to be established for each level of the distribution
chain, for example the price a product is to sold a foreign wholesale retailer, will
affect then end user cost. The importance of price is reiterated by Theodosius
and Katsikeas (2001) who say exporters must consider the economic
environment of the foreign market which they are entering, as this can have
huge significance in determining price. The economic condition of a country can
also impact on the demand for a product, as the level of development of a
country may influence what is considered to be essential. For example an item
such as an Apple iPhone may be popular in the United Kingdom but not deemed
as not essential by consumers in Argentina. Obadia (2013) refers to how the
handling of an organisations export pricing policy is imperative as this dictates
the price which exporters use to offer the importers.
A main priority of any company looking to export their product internationally,
should be to make sure that the product is memorable and recognisable. This is
important at every stage of the distribution chain, right up to the point of sale to
the customer. Taking that into consideration, how a product is packaged within
different markets can be crucial between success and failure Noonan (1999, p.
380). However, Nilsson, Fagerlund and Krner (2013) discuss the difficulties
companies face when trying to keep a product/packaging the same as it is within
the domestic market, such as how well a country is developed, political and legal
forces, climate, technology, competition, distribution channels and cultural
differences. In terms of culture, its most likely to be the style, design, type or
colour of a product which is most likely to affect a product being sold in a foreign
market Albaum and Duerr (2011, p. 175). That being said, cultural factors often
have an influence on some of the other difficulties discussed by Nilsson,
Fagerlund and Krner (2013). It could be said that one of the key factors in being
successful in a foreign market, is a companys ability to be sensitive to the
culture of the market which they are entering. By being aware of cultural
differences and understanding that one culture is no better than another, can
lead to better communications and collaborative relationships Ghauri and
Cateora (2010, p. 85-86).

Due to the variation of customer characteristics, the climate of a county, culture

and buyer behaviour the idea that the world can be an individual market seems
obscure. However, to use the adaption approach effectively costs large amounts
of money and the simplistic nature of standardisation, means that this approach
may still not be used Vrontis (2005). The processes of standardisation and
adaption are two which completely contradict each other. However, in literature
the idea of simply applying or one of these strategies to each variable of the
marketing mix is rebuffed, as it is seen as too hard to put into practice. It seems
that the overall consensus for firms looking to export internationally is to apply

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both strategies at the same time to increase market share. Sorenson, R. et.al.
(1975); Prahalad et.al. (1986); Boddewyn et al. (1986); Douglas et.al. (1987);
Kim, W. et.al (1987); Choi, K., et.al (1996); Terpstra et.al. (1997); Vanaij. (1997);
Hennessey. (2001); Vrontis. (2003); Vrontis et.al. (2005).
A great example a UK company using a successful combination strategy of
standardisation and adaption is Tesco. When they looked to enter Chinas
supermarket market, they decided to keep the brand the same as the UK but
adapt slightly too local culture. By adding foods to stores which are more
commonly eaten by Chinese locals, Employing locals and introducing Tai Chi in
the mornings, this meant Tescos now related to Local culture, yet still being able
to keep that global brand consistency. Therefore, companies who adopt both
processes must make it their concern to attempt to standardise each variable of
the marketing mix first and then if required adapt if the market demands it. In
conclusion, due to the complex nature of a foreign market and financial
implications it could be said that companies feel it is easier to standardise their
product however, adaption would be the obvious choice for companies who focus
on the customer. That being said an approach which encompasses both
processes could lead to an increase in market share and profitability.

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