Make July 4th a Global Holiday?

Of course, such an absurd and arrogant comment like that could come only from an American. But it’s probably not a surprising construct to all of my international friends and colleagues.   

Here in America, we invented the idea of homogenizing marketing into a global effort to save cost and time. Past research shows that, other things being equal, companies usually opt for standardization. I have actually been in a global meeting early in my career and have heard my CEO ask, ‘Why don’t we deploy identical products at identical prices through identical distribution channels and support these identical products by identical sales and promotional programs throughout the world?’ 

Come to think of it, I’m not sure whatever happened to that CEO.

So, with prejudice, I wanted to share the two opposing viewpoints on deploying global marketing strategies:

(1) Localizing. Marketing is an inherently local problem. Due to cultural and other differences among countries, marketing programs should be tailor-made for each country.

(2) Standardizing. Marketing is a know-how that can be transferred from country to country. It has been argued that the worldwide marketplace has become so homogenized that multinational corporations can market standardized products and services all over the world with identical strategies, thus lowering their costs and earning higher margins.

Based on research, proponents of localized marketing strategies support their viewpoint based on four differences across markets: (a) buyer behavior characteristics, (b) socioeconomic condition, (c) marketing infrastructure, and (d) competitive environment. A review of history shows how companies often experience difficulties in foreign markets because they did not fully understand the differences.

For example, Campbell’s canned soups packed in extra-large cans did not catch on in soup-loving Brazil. A postmortem study showed that most Brazilian housewives felt they were not fulfilling their roles if they served soup that they could not call their own. Brazilian housewives had no problems using dehydrated competitive products, which they could use as soup starters and still add their own ingredients and flair.

Also, Johnson & Johnson’s baby powder did not sell well in Japan until its original package was changed to a flat box with a powder puff. Japanese mothers feared that powder when sprinkled from a plastic bottle would fly around their small homes and enter their spotlessly clean kitchens. Powder puffs enabled them to apply powder sparingly.

Similarly, marketers have encountered difficulty when using colors in certain foreign countries. For example, purple is a death color in Brazil, white stands for funerals in Hong Kong and yellow signifies jealousy in Thailand. In Egypt, the use of green, which is the national color, is frowned upon for packaging.

The overarching point is that consumers live in the local. We define ourselves by our differences. It’s called identity—self, family, nation. Thus, marketing must respect this context to be successful.

In contrast to the view that marketing strategies must be localized, many companies argue that significant benefits can be achieved through standardization of marketing strategies on a global basis.

Obviously, the marketplace is becoming increasingly global, and indeed standardized strategies have been successfully pursued in many cases. Among consumer durable goods, Mercedes-Benz sells its cars by following a universal marketing program. Among nondurable goods, Coca-Cola is ubiquitous. Among industrial goods, Boeing jets are sold worldwide based on common marketing perspectives.

The arguments in favor of standardization are the realization of cost savings, development of worldwide products and achievement of better marketing performance.  Those who promote standardization postulate on the benefits of consistency in product style features, design, brand name and packaging to establish a common image worldwide and help increase overall sales. For example, a person accustomed to a particular brand is likely to buy the same brand overseas if it is available. The global exposure that brands receive these days as a result of extensive world travel and mass media requires the consistency that is feasible through standardization.

Finally, standardization may be urged on the grounds that a product that has proven success in one country should do equally well in other countries that present more or less similar markets and similar competitive conditions. To me, this viewpoint merits complete theoretical BS, having experienced many a debate between American and British marketing practitioners trying to force campaigns in either direction.

So, this global agency guy concludes standardization offers benefits, but too much attachment to standardization can be counterproductive. The global marketplace is far more complex and competitive today than in the past.

However, for my global colleagues who think my old CEO was correct … get your barbecue ready, put on your favorite red, white and blue shirt, and forget everything that makes you, you. Happy 4th, world!

Bob Ray
President
GyroHSR, San Francisco