Standardization of multinational marketing: A study on three multinational companies

Abstract

The worldwide marketplace has become so homogenized that multinational corporations can market standardized products and services all over the world, by identical strategies, with resultant lower costs and higher margins. This study is an attempt to provide a conceptual framework for gaining insights into the standardization issue with a systematic review of literature on marketing mix standardization in multinational corporations. The objective is to extract and synthesize ‘best evidence’ regarding marketing mix standardization practices in multinational corporations and to identify evidence regarding the performance impact of marketing mix standardization. Beyond relevance to an academic audience, this study could be useful for management practitioners in multinationals seeking to integrate operations across borders. In this context, the study seeks to make a contribution to evidence based policy and practice. It examines whether multinational companies are adapting or standardizing their marketing mix elements/7Ps (product, place, promotion, price, people, physical elements, process management) when they cross geographical borders and expand their operations to foreign markets. This study identified that both adaptation and standardization are used at the same time and that the level of integration is dependent upon a consideration of the relationship between the reasons and elements identified and an understanding of how these are affected by a number of factors. Based on the results of the analysis, this study proposes a new modelling approach, the AdaptStand Process, which outlines the different stages to be undertaken by multinational companies towards identifying the level of integration across the marketing mix elements. Consequently, this study aims to contribute to theoretical knowledge and at the same time guide marketing practitioners in deciding on implementation of marketing tactics when competing in the international marketing arena. The findings suggest that the extent to which multinationals standardize their international strategies depends on the degree of similarity between home and host countries in terms of customer characteristics, legal environment, economic conditions, and to a lesser extent stage of product life cycle. The study also reveals that standardization is inversely associated with subsidiary performance. The implications of the findings for business practitioners are highlighted and future research directions discussed, along with limitations of the study.