Globalization of Consumer Markets

Structures and Strategies

Salah S. Hassan, Erdener Kaynak

• Publisher: Routledge
• Year: 2014
• Print ISBN: 9781560244295
• eBook ISBN: 9781317939894
• Topic: Business
• Subtopic: Business General
• Index: Business

The concepts, strategic frameworks, and cases in Globalization of Consumer Markets provide managers of global firms with new ideas for growth and keep them current with state-of-the-art global marketing strategies and management tools. With an increased understanding of the structure of today's consumer markets, readers will find they have the key to success and survival in the global marketplace.The contributing authors present managerially oriented chapters, each of which is based on research or practical experience. These are designed to advance the reader's knowledge of the globalizing consumer market. Focused around structure--how consumer markets on a global scale are being shaped--and strategy--successful methods necessary to global competitive marketing and how these strategies work--are the two main themes around which the book is organized.To further enable marketing professionals'success in the global marketplace, Globalization of Consumer Markets details actual strategies, action programs for competitive management, and exemplary cases. There are new ideas from expert marketers on opportunities for growth in the global marketplace and, most importantly, state-of-the-art marketing strategies and management tools. For professional marketers, this book is a must for prosperity in marketing consumer products and services on a global level.This is an ideal book for professional education in marketing of consumer products and services on a global level. Professionals will find a progression of chapters taking them through degree of globalization; market behavior and development; standardization of marketing programs and processes; managerial implications; and extensive references for further study.

SECTION IV.

STANDARDIZATION OF MARKETING PROGRAMS AND PROCESS

Chapter 9

Consumer Nondurable Products: Prospects for Global Advertising

John S. Hill

William L. James

SUMMARY. This 15 MNC-120 subsidiary study of multinational advertising practices shows that there are few differences between various types of consumer nondurable products in their transfer and adaptation of international advertising messages. Food/drink and pharmaceutical products are more likely to adapt sales platforms than cosmetics or general consumer goods, but there were no significant differences among creative context adaptations. Reasons for standardizing messages were classified into external and internal factors, with corporate factors accounting for about one-third of standardized messages.

Compared to consumer durable and industrial products, nondurable consumer goods have acquired reputations over the years for being sensitive to change when transferred into foreign cultures. This sensitivity has also been noted in the international advertising arena. Killough (1978) reported that messages promoting food/drink and other “personal” products were more susceptible to having their sales platforms and creative contexts changed than other types of goods.

But can consumer nondurable products be treated as a group and generalizations made about them? The products that make up the nondurable category-food/drink, cosmetics, pharmaceutical, and general consumer goods (e.g., laundry detergents, household clean-ers)-all have varying characteristics. For example, food/drink and general consumer goods arc household products, whereas cosmetics and pharmaceutical products appeal to particular individuals (those wishing to be beautiftil and those wishing to be healthy).

There are also some empirically charted differences among nondurable products. In a study of adaptations made to consumer goods in lesser-developed markets, Still and Hill (1984) noted significant differences in nondurable adaptation strategies. They found foody drink and general consumer goods to be more sensitive to environmental differences than cosmetics or pharmaceutical products.

The problem is that there has been very little empirical evidence about transnational advertising. There is even less about differences in transnational advertising strategies within particular industries. The aim of this chapter is to shed light on standardization-adaptation issues within the consumer nondurable industry, using information from a 15 MNC-120 subsidiary study of international advertising practices

LITERATURE REVIEW

The international advertising area has attracted many academic commentaries over the years. Jain (1989) noted 14 studies between 1963 and 1988, over half of which had been conceptual. The few empirical studies that have been done generally suggest that adaptation tends to be a more prevalent strategy than is standardization (Walters, 1986; Douglas and Wind, 1987).

From a practitioner’s viewpoint, the ability to transfer advertising messages virtually unchanged between markets has been a topic that has long intrigued international managers. The emergence of the European Economic Community in 1958 prompted marketing scholars to begin the search for a “European consumer” that would be receptive to pan-European advertising. Elinder (1965) and Fatt (1967) looked for evidence of commonalities among Europeans upon which standardized campaigns could be based. There were also many who were skeptical about uniform advertising in foreign markets. Lenormand (1964) and Green, Cunningham, and Cunningham (1975) were equally adamant that individualized approaches to country campaigns were best.

Evidence that standardized campaigns can work was unearthed by Ryans (1969), who cited Esso’s “Put a Tiger in Your Tank” as a campaign that travelled the globe virtually unchanged. He also speculated that all countries had groups of “international sophisticates” — high income, well-educated consumers with high profile lifestyles-who might be susceptible to standardized campaigns. His conclusion, however, was that it was premature for most companies to contemplate uniform advertising campaigns.

The focus shifted briefly during the 1970s from end-result (i.e., adaptation or standardization of marketing mix elements) to planning processes. Sorenson and Wiechmann (1975), in a study of executive opinions, found that the process of evaluating marketing mix transfers between markets was illuminating, as it opened up opportunities for standardization. Peebles, Ryans, and Vernon (1978), in their profile of Goodyear’s international advertising efforts, reached similar conclusions, i.e., that whether companies could standardize campaigns across numerous markets was not as important as the interactive processes between head offices and subsidiaries in making those decisions. They differentiated between prototype and pattern advertising, which gave subsidiaries lesser and greater degrees of flexibility respectively in adapting GHQ-supplied campaigns to local tastes. In many cases, significant quantities of research were necessary to evaluate which alternative platforms were the most effective in individual markets (Colvin, Heeler, and Thorpe, 1980). Some commentators (e.g., Ryans and Fry, 1976; Dunn, 1976; Alsop, 1984) suggested that customer resistance was not the only factor acting against uniform campaigns. They all concluded that adverse managerial attitudes, especially at the local level, also played a part.

Only a few studies have reported empirical evidence on the extent of promotion transfers and tendencies to standardize and adapt. Of these, Killough’s (1978) opinion-based study of senior executives has been the most important. He made the important distinction between buying proposals (i.e., sales platforms) and creative presentations (i.e., creative contexts). His results showed that executives thought that sales platforms could be transferred to new markets without substantial change more than half of the time. Creative contexts however, could be standardized less than 30% of the time.

With regard to sales platforms, there is no direct evidence of standardization and adaptation tendencies, especially within the consumer nondurable industry. However, within the developing market context, the Still and Hill (1984) study showed that product feature change (which would relate at least partially to sales platform adaptation) varied significantly among types of nondurables. While the study mean for feature change was 33%, food/drink, pharmaceutical, cosmetic, and general consumer goods averaged 51%, 11%, 19%, and 33% respectively, suggesting that food/drink products might be more susceptible to sales platform changes and that pharmaceutical and cosmetic goods were better candidates for standardized platforms.

While the aforementioned studies provide a number of valuable insights into the complexities of promotion standardization and adaptations, a number of key issues remain unresolved. Among them are:

1. Does the incidence of sales platform and creative context change vary across different types of nondurable products?

2. With regard to the factors responsible for standardization and adaptation, are there noticeable differences among factors cited as causing change and those enabling uniformity to occur over the four kinds of nondurables?

This chapter addresses those questions.

RESEARCH METHODOLOGY

Sample Frame

Thirty-three consumer nondurable MNCs were randomly selected from the Directory of American Companies Operating in Foreign Countries (1979). Each had a minimum of seven subsidiaries outside of the U.S. Fifteen agreed to participate, with responses coming from 117 overseas subsidiaries and three international divisions in the U.S. MNCs had the choice of responding from the head office or allowing their subsidiaries to fill out mail questionnaires. Most elected to have their subsidiaries respond. In all cases, permission to approach subsidiaries had first been obtained from head office personnel (often the V-P International or equivalent). Copies of letters requesting cooperation were sent to the Head Office executive giving permission. The fifteen cooperating MNCs were: Shulton International, Kellogg’s, Warner-Lambert, Johnson & Johnson, Quaker Oats, Kraft, General Foods, Procter and Gamble, Pillsbury, Chesebrough-Pond’s, Nabisco-Brands, Beatrice, Libby’s, General Mills, and Bristol-Myers.

Responses were received from the following countries: (number in parentheses where more than one): Argentina (2), Australia (7), Belgium (2), Brazil (5), Canada (4), Colombia (5), Denmark (6), Dominican Republic, France (3), Germany (Federal Republic) (10), Guatemala (2), Indonesia (2), Ireland (3), Italy (3), Jamaica, Japan (5), Malaysia (3), Mexico (6), Morocco, Netherlands (3), New Zealand, Pakistan, Peru, Philippines (5), Singapore (2), South Africa (3), Spain (5), Switzerland, Taiwan, Thailand, Trinidad, United Kingdom (7), Uruguay, Venezuela (6), and Zambia.

Nine responses could not be coded by country. Three came from MNC international divisions in the U.S.A. Five were generalized by continent (e.g., South America, Western Europe, etc.) and one came from a company’s international division headquartered outside of the U.S.A. In all, therefore, 117 responses came from outside the U.S.A.

Information Gathered

Respondents were to select any two recent product transfers and to respond to a series of questions about the promotional materials accompanying the...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• About the Editors
• About the Contributors
• Table of Contents
• Foreword
• Preface
• Credits
• Section I. Introduction
• Section II. Degree of Globalization
• Section III. Market Behavior and Development
• Section IV. Standardization of Marketing Programs and Process
• Section V. Managerial Implications
• Index