Keywords: adaptstand, adaptation, standardisation, international, global, marketing

Transcription

1 jounuil of Marketing Managemetit, 2003,19, Demetris Vrontis^ Manhester Metropolitan University Business Shool Integrating Adaptation and Standardisation in International Marketing: The AdaptStand Modelling Proess Tliis researh otisists of a questionnaire survey to the largest UK multinational ompanies and investigates ompanies' level of adaptation and standardisation aross interiuitional marketing tatis. It examines whether multinational ompanies are adapthig or standardising their marketing mix elements token they ross geographial borders and expand their operations to foreign markets. This researh identified that both adaptation and standardisation are used at the same time. The level of integration is dependefit upon onsiderations of the relationship btxveen the reasons and elements identified and an understanding of how these are affeted by a number of fators. This artile proposes a neiv modelling approah, the AdaptStand Proess, whih outlines the different stages to be undertaken by multinational ompanies towards identifying the level of integration aross marketing mix elements. Consequently, the results of this researh guide marketing pratitioners in deiding on implementation of marketing tatis when ompeting in the international marketing arena. Keywords: adaptstand, adaptation, standardisation, international, global, marketing Introdution The literature on international marketing tatis debates two perspetives. On the one hand, those who support the global standardisation approah argue that a single marketing strategy and a standardised marketing mix should be used in international markets to minimise total osts and promote a global orporate image. On the other hand, those who support the ' Correspondene: Demetris Vrontis, Manhester Metropolitan University Business Shool, Aytoun Street, Aytoun Building, Manhester, Ml 3GH, Tel: , Fax: , F-mail: D.Vrontis@mmu.a.uk ISSN X/2003/3-4/ /0 Westburn Publishers Ltd.

2 284 Demetris Vrontis internationalisation shool of thought who see the need for marketing adaptation to fit the unique dimensions of eah loal market. However, literature quoting pratial evidene suggests that ompanies make ontingeny hoies whih relate to key determinants in eah irumstane. The debate over the amount or extent of standardisation or adaptation of marketing tatis is of long duration. Vrontis et al. (1999), omment that the debate on this ame under disussion as early as 1961, with Blinder (1961) onsidering the idea with regard to world wide advertising. In 1962, Marshall MLuhan first oined the term 'global village' (Paliwoda et a.i 1995). This was further disussed by Roostal (1963) and Fatt (1964). Buzzell (1968) widened the debate by stating that it would enompass not just advertising, but the whole of the marketing mix. Supporters of the standardisation point of view argue that in the past, dissimilarities among nations have led a multinational ompany to view and design its marketing planning in eah ountry stritly as a loal problem. However, in reent years the situation has hanged, and the experienes of a growing number of multinational ompanies suggest that there are real potential gains to onsider standardising the marketing mix elements (Buzzell 1968). Levitt (1983), with whom the term global standardisation has beome widely known, argued that well managed ompanies had moved from emphasis on ustomising items to offering globally standardised produts that are advaned, funtional, reliable and low pried. Supporters of standardisation believe that the fore driving this proess is tehnology, whih has failitated ommuniation, information apital, transport, and travel. Thus the reent resurgene of interest in the international standardisation issue is attributed to suh global influenes as TV, films, widespread travel/inreased tourism, teleommuniations, and the omputer. However, the above position (standardisation) is opposed by supporters of the adaptation shool of thought, who reat diretly to the sweeping and somewhat polemi harater of their argumentation. The ontrary ase argues that globalisation seems to be as muh an overstatenient as it is an ideology and an analytial onept (Ruigrok et al. 1995). Lipman (1988) argues that, for many, the global marketing theory itself is bankrupt. Not only are ultural and other differenes very muh still in evidene, but marketing a single produt one way everywhere an sare off ustomers, alienate employees, and blind a ompany to its ustomers' needs. Supporters of this approah believe that international marketing is exiting. Authors suh as Czinkota et al. (1998) state that this is so beause it ombines the siene and the art of business with many other disiplines: for example, eonomis, anthropology, ultural studies, geography, history, languages.

3 Integrating Adaptation and Standardisation 285 jurisprudene, statistis, demographis, and many other fields are ombined in an exploration of the whole world. Researhers also believe that adaptation is essential as a result of various onstraints. Van Mesdag (1987) states that people in different ountries speak different languages and that rules and regulations differ aross national borders. In addition there are other fators suh as limate, eonomi onditions, rae, topography, politial stability, and oupations. The most important soure of onstraints by far, and the most diffiult to measure, are ultural differenes rooted in history, eduation, religion, values and attitudes, manners and ustoms, aesthetis as well as differenes in taste, needs and wants, eonomis and legal systems. Evidently, the debate on adaptation and standardisation is a huge one. In the middle of the ontinuum, it is suggested that the exlusive use of either approah is too extreme to be pratial. "The truth lies in neither of these two polarised positions. Both proesses, internationalisation and globalisation, oexist" (Diken 1998: 5). Prahalad et al. (1986) and Douglas et al. (1987) argue that the international marketers should have to searh for the right balane between standardisation and adaptation and therefore determine the extent of globalisation in a business and adapt the organisation's response aordingly. They believe that the deision on standardisation or adaptation is not a dihotomous one between omplete standardisation and adaptation. Rather it is a matter of degree and there is a wide spetrum in between that the international marketer should be aware (Sorenson et al. 1975; Quelh et al. 1986; Boddewyn et al. 1986). Based on the above, this researh seeks to investigate the omplex relationship of the two extreme approahes (adaptation and standardisation) and suggest methods and ways in determining the right level of integration. Researh Hypotheses An analysis of the literature, led to the formulation of the primary hypothesis (PH): Multinational ompanies are not exlusively adopting international adaptation or global standardisation aross their marketing mix elements. Moreover, this researh hypothesises that deiding on international marketing tatis / 7P's is dependent upon a number of determinants. These determinants are grouped into what an be termed: reasons and fators. Reasons are seen as those behavioural aspets 'pulling' multinational ompanies tatial behaviour towards the one or the other side of the ontinuum, while fators are those determinants affeting the behaviour and the importane of the reasons pulling it. This is illustrated below in figure 1.

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5 Integrating Adaptation and Standardisation 287 Figure 1 is important for understanding the omplex relationship affeting tatial behaviour. It is paramount and fundamental in setting nine seondary hypotheses (SH). In relation with the above figure, the seondary hypotheses are divided into two parts. Those that test the relationship between reasons and fators (SH],^) and those that test the relationship between fators and tatial behaviour/7p's (SH^^'j). The nine seondary hypotheses are outlined below: SHi: The level of importane of reasons pulling towards adaptation is dependent on a number of fators. SH2: The level of importane of reasons pulling towards standardisation is dependent on a number of fators. SH3: Multinational ompanies' produt deisions are affeted by a number of fators. SH4: Multinational ompanies' prie deisions are affeted by a number of fators. SH5: Multinational ompanies' plae deisions are affeted by a number of fators. SH^: Multinational ompanies' promotion deisions are affeted by a number of fators. SH7: Multinational ompanies' people deisions are affeted by a number of fators. : Multinational ompanies' physial evidene deisions are affeted by a number of fators. SH9: Multinational ompanies' proess management deisions are affeted by a number of fators. Researh Methodology The researh methodology onsisted of a questionnaire survey sent to the 500 biggest UK multinational ompanies aross five industrial setors (manufaturing, servies, transportation & ommuniation, onstrution and retail & wholesale). The analysis was mainly quantitative and it was undertaken by the use S.P.S.S. and Exel statistial pakages. More speifially it utilised hi-square {x~) and analysis of variane (ANOVA) statistial tests. To generate all the relevant information required to tost the Hypotheses, a questionnaire survey was believed to be the most appropriate method. This provided an insight into the behaviour of different multinational ompanies, and allowed an in-depth omparison of their responses, taking into aount their organisational harateristis, offerings and target markets.

6 288 Demetris Vrontis As the area of this researh is international marketing, it was deided that the sampling unit should be omprised of multinational ompanies that is ompanies that trade in more than one overseas market. Questionnaires were therefore posted to the biggest 500 UK multinational ompanies. The biggest multinational ompanies were hosen, as their experiene and behaviour in international marketing tatis is valuable for the aims of this researh. They also aount for a very big portion of the total employment and turnover. Sampling proedure used falls at non-probability sampling and speifially within the ategory of purposive/judgement sample (Crouh et al. 1996). The questionnaire utilised both losed and open-ended questions. The losed questions provided a number of alternative answers from whih the respondent was instruted to hoose (DeVaus 1991), the open questions allowed respondents to give answers in their own way (Fink 1995). The administration of the atual questionnaire was very important and valuable. To enourage respondents reply and maximise response rate, this researh has undertaken three follow-ups. Of these 500 ompanies, the number of usable respondents was 124, whih indiates a response rate of 24.8%. The results were suffiient for statistial analysis and enabled this researh to ontinue. The number of ompanies replying to state they were unable/unwilling to fill the questionnaire (negative respondents) was 111, 22.2%. The reasons given were mainly lak of time and ompany poliy and onfidentiality. Moreover, 265 ompanies (53%) were lassified as non-respondents as they failed to fill and return the questionnaire. In identifying whether the reasons they did not reply were similar to that of negative respondents, 65 ompanies were approahed. The reasons given refleted that of negative respondents with a greater emphasis to lak of time and onfidentiality. Researh Results Researh results illustrated that UK multinational ompanies use both adaptation and standardisation aross their marketing mix elements. Table 1 deals with the 7P's and illustrates the elements and sub-elements of the marketing mix researhed in onsidering standardisation and adaptation and their reported level of importane. The first olumn outlines the elements under researh, the seond presents the mean rating, and the remaining three olumns illustrate multinational ompanies' pratial level of standardisation and adaptation. It should be noted that in relation to the mean (olumn two), number one desribes omplete standardisation and number seven omplete adaptation. Any other number lies in the middle of the ontinuum, with any number below four representing standardisation, and any number above four, adaptation.

7 Integrating Adaptation and Standardisation 289 Table 1. Tatial Behaviour (Perentage and Mean) Question: Is your organisation standardising ( using the same) or adapting (using different) the following elements of the marketing mix iin different ountries around the world? Average Rating /Mean (^i) % % Min=l Max=7 Standardisation Neutral Adaptation Element researhed Produ^servie Quality Brand name Image Performane Size and olour varieties Pakaging, styling Pre-sales servie After-sales servie. warranties Produt or servie varietv. design, features Delivery, installation Average mean , Prie Disount allowanes. payment period, redit terms Prie levels, list prie, prie hanges Azyerage mean Plae/distribution Promotion Advertising Diret marketing Personal selling Publi relations Sales promotions Average mean People Physial evidene Proess management In dealing with the different elements of the marketing mix, produt is the most standardised element with a mean {\x) of 3.1. This trend is even stronger if we onsider produt quality ( a=2.37, ompanies

8 290 Demetris Vrontis standardising=78.3%), brand name ( a=2.42, ompanies standardising=71.8%), image ( i=2.54, ompanies standardising=71%), performane ( i=2.65, ompanies standardising=67%), and size and olour varieties (^=2.89, ompanies standardising=54.1%). A trend towards standardisation is also seen in pakaging and styling, pre-sales and after sales servies, warranties, design, features, delivery and installation, however, these sub-produt elements inorporate a mixture of responding behaviour with reported means between 3.25 to The prie element of the marketing mix is the most likely to be adapted in foreign overseas markets. It has a mean of 5.25, whih makes it, the most adapted element of the marketing mix. As exemplified, mainly prie levels, list prie and prie hanges ( i=5.48, ompanies adapting=74.2%), and to a lesser extent disount allowanes, payment period and redit terms ( a=5.02, ompanies adapting=55.6%) are tailored aordingly to fit market needs and requirements. In terms of promotion, multinational ompanies' behaviour lean towards adaptation. Multinational ompanies have reported a mean of 4.64, whih makes it the seond most adapted element of the marketing mix. This adaptation trend is greater in sales promotions, publi relations, and personal selling, and less evident in diret marketing and advertising. A trend towards adaptation is also seen with plae or distribution ( i=4.39). As seen in table 1, 50% of multinational ompanies that replied mainly use an adapting approah while 32.2% a standardised one. The mean for the remaining elements of the marketing mix (people, physial evidene and proess management) is in the middle of the ontinuum. As illustrated in table 1, their respetive means are 3.90, 3.88, and The above results illustrate that there is a variable approah aross international marketing behaviour (marketing mix elements) and that adaptation and standardisation are not mutually exlusive. This ontradits the two extreme shools of thought illustrated in the literature and apparently supports the primary hypothesis (PH). In dealing with the seondary hypotheses (SHVM) it was neessary to examine whether the above behaviour (see mean in table 1 - related to the entre of figure A/lVs) is onsistent or signifiantly different aross the different fators (see bottom of figure 1) examined. In aordane to this objetive, seven seondary' hypotheses (SHI.Q) were developed early at this study. These were examined by ANOVA (Analysis of Variane) tests and identified that only produt and promotional deisions are signifiantly different aross and dependent upon the fators researhed. This means that those fators have a diret impliation on produt and promotional deisions and that the behaviour reported by individual

9 Integrating Adaptation and Standardisation 291 ompanies for those elements is statistially different and not lose to the mean (average). This verifies the third and sixth seondary hypothesis (SH\6). For the remaining five elements of the marketing mix (prie, plae, people, physial evidene and proess management) it was identified that the reported level of behaviour was not statistially different aross different fators. It was found that the reported average level of standardisation versus adaptation was onsistent, regardless of organisational harateristis. Consequently, the seondary hypotheses in relation to the above elements (SH4,3,7,8,')) were rejeted. As illustrated in figure 1 (top left), a number of reasons fore marketing pratitioners to adapt international marketing tatis. Quantitative analysis investigates those reasons and presents them in order of importane to the respondents. It was identified that the most important reasons driving UK multinational ompanies towards international tatial adaptation are ulture, market development, ompetition, laws, eonomi differenes, soiologial onsiderations and differenes in ustomer pereptions. The remaining four reasons researhed were of less importane. 92% of respondents stated that ulture is an important reason for them. As they argued, ulture should be highly onsidered when rossing national borders. "Culture. Oh yes! Just ignore it and no doubt you will fail" (ompany number 440). Market development (87%), ompetition (84%), eonomi differenes (78%), and soiologial onsideration (74%) were also rated a high perentage of importane by ompanies. All these reasons are ruial and multinational ompanies are onsidering them when ompeting in foreign markets. "Customers annot afford to pay more. If we want to remain ompetitive in developing or undeveloped ountries, our prie should be onsiderably lower than the one set in the home market" (ompany number 74). Laws (82%) and differenes in ustomer pereptions (71%) are also very important. "Our desire to meet differenes in ustomer pereptions and legal standards sometimes fore us to redesign our produts" (ompany number 375). Finally, tehnologial onsideration (60%), politial environment (53%), level of ustomer similarity (49%), marketing infrastruture (44%) and differenes in physial onditions (39%) were rated a smaller perentage of importane. However, these should not be ignored in any tatial deision making proess. Moreover, a number of reasons (see figure 1 - top right) fore marketing pratitioners to standardise marketing tatis. Quantitative analysis investigates those reasons and presents them in order of importane, as reported by respondents. Researh analysis pointed that the most important reasons for

10 292 Demetris Vrontis standardising are global uniformity and image, eonomies of sale and synergeti and transferable experiene. Consisteny with onsumers, easier planning and ontrol and stok ost redution are of less importane. Global uniformity and image is the most important reason pulling multinational ompanies towards global standardisation. 81% of ompanies researhed are onsidering it when rossing national borders. Companies' desire to promote a uniform image around the globe has driven them to onsider standardisation of international marketing praties. 75% of the ompanies questioned stated that eonomies of sale is an important fator pulling them towards standardisation. Minimising osts in prodution, researh, development and promotion is ruial for a ompany's profitability. "Eonomies of sale is the key to suess. End produts ost less per unit, therefore we gain bigger margins and remain ompetitive and profitable" (ompany number 343), Synergeti and transferable experiene is the third most important reason for global standardisation with 74% of ompanies onsidering it. "We know how to do things right in England. Why should we do them otherwise abroad?" Finally, onsisteny with the mobile onsumer (52%), easier planning and ontrol (48%) and stok osts redution (43%) have aquired a smaller perentage of importane. The question now in hand is whether the above level of importane, assoiated with the reasons pulling towards adaptation (see figure 1 - top left) and standardisation (see figure 1 - top right), is onsistent or signifiantly different aross different fators (see bottom of figure 1) investigated (SHi,2). In dealing with these seondary hypotheses (SHi, 2), researh findings, already disussed, identified that a number of reasons pull tatial behaviour towards adaptation (e.g. ulture, market development - see top left of figure 1) and standardisation (e.g. global uniformity, eonomies of sale - see top right of figure 1). y} tests indiated that multinational ompanies often plae a different level of importane on these reasons. This is dependent upon a number of fators that are diretly related to ompanies' organisational harateristis and the way in whih they operate (e.g. industrial setor, business to business versus business to onsumer - see bottom of figure 1). Consequently, the first and seond seondary hypotheses of this study (SHi, 2) are verified. It is possible to show the researh results related to the verifiation/rejetion of the primary and seondary hypotheses in table form, table 2.

11 Integrating Table 2. Hypotheses Researh Hypotheses Adaptation ani Standardisation Verified 293 Rejeted Primary hypothesis (PH) Multinational ompanies are not exlusively adopting international adaptation or global standardisation aross their marketing mix elements. Seondary hypothesis 1 (SHi) The level of importane of reasons pulling towards adaptation is dependent on a number of fators. Seondary hypothesis 2 (SH2) The level of importane of reasons pulling towards standardisation is dependent on a number of fators. Seondary hypothesis 3 {SH3) Multinational ompanies' produt deisions are affeted by a number of fators. Seondary hypothesis 4 (SH4) Multinational ompanies' prie deisions are affeted by a number of fators. Seondary hypothesis 5 (SH5) Multinational ompanies' plae deisions are affeted by a number of fators. Seondary hypothesis 6 (SH6) Multinational ompanies' promotion deisions are affeted by a number of fators. Seondary hypothesis 7 (SH7) Multinational ompanies' people deisions are affeted by a number of fators. Seondary hypothesis 8 (SHs) Multinational ompanies' physial evidene deisions are affeted by a number of fators. Seondary hypothesis 9 Multinational ompanies' proess management deisions are affeted by a number of fators. Main Findings and Conlusions of this Study The reurrent theme in international marketing in whether ompanies should aim for a standardised or ountry-tailored marketing approah is very muh debated in the aademi literature and is a onern for every multinational ompany and marketing pratitioner. When faing the dilemma of implementing marketing tatis, it was found

12 294 Demetris Vrontis that the researhed UK multinational ompanies integrate the proesses of adaptation and standardisation. Marketing diretors and managers are not making a one-time hoie. UK multinational ompanies operating in several ountries find it extremely useful to integrate marketing tatis. Multinational ompanies simultaneously fous their attention on aspets of the business that require global standardisation and aspets that demand loal responsiveness. When appropriate proesses are standardised, however, operation in loal market neessitates the maintenane of the appropriate loal flexibility. UK multinational ompanies are striking to find a balane. This is not a straightforward task, and as identified, the balane between standardisation and adaptation is very diffiult to ahieve and indeed is very hallenging. Aording to the findings of this researh, 'produt' is the most standardised element of the marketing mix. Dealing with the remaining elements of the marketing mix, 'prie' and 'promotion' are the most adapted ones. Finally, ompanies' tatial behaviour regarding 'plae', 'people', 'physial evidene' and 'proess management' is onentrated in the middle of the ontinuum. It is identified that the huge osts involved in the use of an international adaptation approah, together with the multinational ompanies' desire to reap the benefits of standardisation do not allow international adaptation to be used in an absolute manner. Similarly, organisational differenes, heterogeneity among different ountries' maro and miroenvironment as well as ompanies' desire to satisfy onsumer's diverse needs do not allow standardisation to be pratised extensively, as suggested in the literature. Speifially, this researh has identified that a number of reasons inluding primarily ulture, market development, ompetition, laws, eonomi differenes, soiologial onsiderations and differenes in ustomer pereptions have highlighted the need for ompanies to adapt their marketing tatis, while global uniformity and image, eonomies of sale, and synergeti and transferable experiene sways them towards standardisation. Other reasons pulling tatial behaviour towards adaptation or standardisation were also examined. As identified these reasons are of less importane, however they annot be ignored. This researh found that the different fators examined are signifiant in shaping the behaviour of multinational ompanies. Dealing with (SHi), for example, this study identified that reasons pulling towards adaptation are more important to the 'business to onsumer' setor rather than 'business to business' setor as a result of the more heterogeneous needs and wants found in onsumer markets in omparison with business markets. Moreover, researh findings identified that the reasons for adaptation are more important for ompanies trading in 'more than one ontinent' rather than

13 Integrating Adaptation and Standardisation 295 those trading only in 'one ontinent'. It is worth mentioning that ompanies expanding within the same ontinent onsider the underlying reasons, however the assoiated level of importane is less if ompared with ompanies that expand operations in more than one ontinent. Dealing with (SHi), this researh examined the importane of reasons pulling ompanies towards standardisation aross different fators. It identified that both global uniformity & image and onsisteny with the mobile onsumer are more important to 'onsumer durables', 'onsumer non-durables' and 'servies' rather than 'industrial goods'. The above indiates that both reasons pulling towards standardisation are more signifiant to onsumer goods (i.e. lothing, toiletries, fragranes et) and servies, rather than industrial goods (i.e. omponents, raw materials, finished produts) were goods are bought and used by ompanies. The empirial results obtained in this researh showed that UK multinational ompanies integrate both approahes (adaptation and standardisation) in their effort to inrease organisational profitability and maintain marketing orientation. In relation with the marketing mix elements (see means in table 1) it was found that only produt and promotional deisions are signifiantly different (individual behaviour not lose to the mean) when ompared with the fators researhed (see figure 1). The behaviour on the remaining elements of the marketing mix is still variable, but not statistially signifiant aross fators. This verified the third and sixth seondary hypotheses (SH\(,). Dealing with produt deisions (SHi), for example, it is indiated that ompanies trading 'onsumer durables' adapt pakaging & styling and size & olour varieties in different ountries to onform to onsumer needs and requirements. The above sub-fators are less important with regard to 'industrial goods (finished produts)', where produt deisions need less adaptation. Moreover, by examining the fator 'plaes and ontinents', it was evident that multinational ompanies that trade in only 'one ontinent' generally standardise the produts' pre sales servie, after sales servie, delivery, installation and warranties more than ompanies that trade in 'more than one ontinent'. It may be argued that these sub-elements of produt need more adaptation when ompeting outside the existing ontinent and less when dealing with similar markets within the same ontinent. It ould be laimed that a suessful standardised marketing approah relies on markets being similar. If the markets are not suffiiently similar, the underlying rationale for standardisation disappears. Market researh is therefore ruial to test the assertion of market homogeneity aross nations and make sure that the markets under onsideration will respond positively to a standardised approah. If not, espeially when a ompany is rossing ontinents, then all neessary adaptations should take plae. In addition, researh findings illustrated that produt standardisation

14 296 Demetris Vrontis is more feasible when 'exporting' diretly, and adaptation when 'diret investment' and overseas prodution is taking plae. The same is also the ase for promotional deisions. Expanding the disussion on promotional deisions (SHb), it is identified that advertising is less adapting in 'transportation and ommuniation' and more adapting in 'retailing and wholesaling'. Equally, businesses that sell mainly to onsumer markets ('business to onsumer') adapt promotion more than those that sell to other businesses ('business to business'). In both instanes it an be argued that promotional adaptation is neessary to appeal to and meet the diverse needs found in onsumer markets. The seondary hypotheses set for the remaining elements (prie, plae, people, physial evidene and proess management) are rejeted (SH4,5,7.8,9). This researh identified that there was no signifiant differene around the mean when omparing the above elements of the marketing mix with the researhed fators (see figure 1). It is therefore evident that multinational ompanies should not treat the world as one single market. They should undertake market researh and determine their ustomers, their needs and wants. They should get to know their ustomers, understand their problems, and maintain ustomer orientation. Equally, they need to be aware and highly onsider the unique benefits of standardisation. Eah element and sub-element of the marketing mix has to be studied on its own merits and shortomings. Applying generally preoneived ideas for or against standardisation and adaptation in not very helpful, as in pratie the level of integration neessary has to be applied in ways that take aount of given irumstanes. A Suggested Modelling Approah: The AdaptStand Proess Even though international adaptation and global standardisation of marketing tatis do take plae, and an bring benefits, their extreme use is not neessarily an optimal approah in international markets. This researh has illustrated that both proesses oexist and neither total adaptation nor omplete standardisation represents business responses. Consequently, the deision on tatial behaviour is not a dihotomous one between omplete standardisation and ustomisation. The hoie onerning these two polarised positions is a matter of degree. Speifially, a number of reasons, examined in this researh, 'pull' tatial behaviour towards adaptation and standardisation. Researh results identified that these hold a different level of importane for UK multinational ompanies based on a number fators related to the organisational and operational harateristis of every individual ompany (see figure 1). In addition, it should be highlighted that the reported level of integration, aross the marketing mix, is signifiantly different aross fators only for

15 Integrating Adaptation and Standardisation 297 produt and promotion. The deision on the degree/level (integration) of adaptation and standardisation in international marketing tatis, after onsidering reasons pulling and fators affeting marketing mix elements, is what this researh will now refer to as AdaptStandation. The proess of deiding on AdaptStandation is alled the Vrontis AdaptStand Proess. This is the name given to the new modelling approah to international marketing. The AdaptStand Proess is defined as the proess of integrating Adaptation and Standardisation in international marketing tatis. It is a mehanism that seeks to aid marketers to deide on the level of integration. This deision ould only be made after an in-depth onsideration of reasons pulling and fators affeting marketing behaviour. As already desribed, reasons are seen as those behavioural aspets pulling multinational ompanies tatial behaviour towards the one or the other side of the ontinuum, while fators are those determinants affeting the behaviour and the importane of the reasons pulling it (see figure 1). Organisationjl/ Operational Fators (B.E.S.T.K.H.A.C-T-) AdaptStandotion of the Marketing Mix Industri.il tnvironmenlii Torv Dt'sirtibility/Ctipability ol Adopting Cilobtil Benefils Figure 2. The Vrontis Triangular Pyramid of AdaptStand Integration This proess is presented in figure 2 in the Vrontis Triangular Pyramid of AdaptStand Integration developed in this researh. Aording to this, there are three ritial fores/stages in the AdaptStand Proess that guide a multinational ompany towards AdaptStandation. At the bottom of the Pyramid are the reasons shaping AdaptStandation. These are losely related with multinational ompanies' desirability and apability of utilising the global benefits and underpinned by the external environmental onstraints. At the top of the Pyramid are the organisational fators that affet the importane of the reasons and the tatial behaviour assoiated with produt

16 298 Demetris Vrontis and promotion. This is best desribed as the B.E.S.T R.E.A.C.T. model and it is presented in figure 3. The Pyramid desribes the AdaptStand Proess and highlights the three important areas to be onsidered by multinational ompanies when deiding on the level of AdaptStandation. As the level of AdaptStandation is dependent upon these three fores, it is therefore presented in the entre of the Pyramid. The first stage in the Proess, in relation to the Triangular Pyramid, is onerned with identifying organisational and operational fators. This is presented at the top of the Pyramid (figure 2) and expanded below in figure 3 in the 'easy to remember' B.E.S.T. R.E.A.C.T model. Aording to the findings of this researh, as already disussed, the above fators (B.E.S.T. R.E.A.C.T.) should only be onsidered for 'produt' and 'promotion' (see arrow at the top of the Pyramid at figure 2 pointing AdaptStandation of the Marketing Mix). This is beause only produt and promotional deisions were found to be signifiantly different when ompared with these fators (see figure 1). E s Business to Business Vrs Busines.s to Consumer Reltitionsliif; with Different Foreign Subsidiarv AdaptStandation and the Effet of B.E.S.T. R.E.A.C.T V-Vorld widt Turnover V\orld Number of Employees Number of Continents Authority to Subsidiaries Figure 3. The B.E.S.T. R.E.A.C.T. Model of AdaptStand Integration

17 Integrating Adaptation and Standardisation 299 in relation to the remaining tatial elements, it was identified that the fators under examination are not important, as this study identified no signifiant differene in relation to the applied level of integration. It is therefore important for multinational ompanies to understand their organisational position within the market in regard to those fators. This is beause a different pattern of organisational harateristis would automatially mean a different produt and promotional behaviour. Moreover, this study illustrated that the fators (B.E.S.T. R.E.A.C.T.) examined were also signifiantly different with regards to the importane of the reasons pulling adaptation and standardisation of marketing tatis (see arrows at the top of the Pyramid pointing Industrial Environmental Fores and Desirability/Capability of Adopting Global Benefits). Compt!litivo praties level of ompetition Stiindards Patents Tariffs Quotas Boyotts Taxes Trade santions Embargoes Tastes, needs and wants Beliefs and praties Buying behaviour patterns H.ibits Psyhologial meaning Purhase and use motivational fators Media usage patters Level of awareness Customer Similarity/ Differenes M A R K E T S T A K E H O L D E R S Figure 4. Market Stakeholders The external environmental fators (left bottom of the Pyramid) are grouped into two broad areas, namely 'market stakeholders' and 'market environmental onditions'. 'Market stakeholders' is divided into four areas. These are: market ompetition; pohtial and legal fores; ustomer similarity;

18 300 Demetris Vrontis and differenes in ustomer pereption. In this ategory we find all the stakeholders that affet behaviour and ould neessitate marketing mix elements to be tailored either as a government imposed market entry requirement or as a result of ompetition or ustomer marketing orientation. This is illustrated in figure 4. Market environmental onditions' is equally important. This ategory (see figure 5) is divided into five areas. These are physial onditions; ulture; market development; eonomi differenes; and marketing infrastruture. It is onstituted by other external environmental fores that should be highly onsidered when making deisions on marketing mix formulation in the international arena. Climate Topography Resoures Language Religion Aesthetis Values and attitudes Customs Demographis Stage of development Stage of produt life yle Disposable inome Infldtion Unemployment Gross Domesti Produt Level of advanement Rate of hange Figure 5. Market Environmental Conditions Retailers Wholesalers Sales agents Warehousing Transporting Availability of distribution and promotional network

19 Integrating Adaptation and Standardisation 301 Multinational ompanies should undertake an in-depth investigation and identify the market stakeholders and market environmental onditions (industrial environmental fores - left bottom of the Pyramid) that ould influene their tatial behaviour (middle of the pyramid). Equally important they should onsider the effet deriving from organisational and operational fators (B.E.S.T. R.E.A.C.T. - presented at the top of the Pyramid). 'Industrial Environmental Fores' is the seond fundamental stage of the AdaptStand Proess. It is illustrated below in figure 6. Figure 6. External Environmental Fators of AdaptStand Integration The third and final stage of the Proess is onerned with ompanies' apability and desirability of adopting and taking advantage of global benefits (see right bottom of the Pyramid). Through the analysis of this study, it was identified that a number of reasons, variably rated on level of importane, pull UK multinational ompanies tatial behaviour (see middle of the Pyramid) towards standardisation. Equally, an examination of these reasons highlighted that they are signifiantly different aross a number of

20 302 Demetris Vrontis fators researhed (B.E.S.T. R.E.A.C.T. - see top of the Pyramid). These reasons and the effet of fators should be highly onsidered by multinational ompanies when entering or ompeting within foreign markets. This is the third and final stage of the Triangular Pyramid and it is a prerequisite step in the AdaptStand Proess. It is outlined below at figure 7. Having onsiiered all three stages of the AdaptStand Proess, a deision an then be made on identifying and deiding on the level of integration. The identifiation and implementation of marketing tatis, on the basis of the AdaptStand Proess, is of primal importane as it an eliminate problems reated by using solely the one or the other approah. It is essential as it inreases the hane for multinational ompanies to remain both ompetitive and marketing orientated within their industrial struture and international marketing arena. Desirability and Capability of Adopting Clobal Benefits AdaptStandation and the Fffet of Globalisation Figure 7. AdaptStand Integration and the Desirability/Capability of Adopting Global Benefits

21 Integrating Adaptation and Standardisation 303 This is true as a detailed in-depth onsideration of the AdaptStand Proess ould inrease organisational ost effetiveness without undermining onsumer requirements and other miro and maro-environmental onstraints evident in the situation analysis. Managerial Impliations It is antiipated that the findings of this researh (the AdaptStand Model) arry impliations not only for the literature, but also for uiternational marketing pratitioners. As this researh was based upon the pratial experiene and behaviour of UK multinational ompanies, marketing pratitioners an use its analysis and results as a means of omparing their urrent tatial behaviour with that of other similar ompanies. Corretive ation an then be taken, if and when neessary. Multinational ompanies should undertake an internal and external environmental analysis to identify a ompany's organisational position and industrial obstales in a single market. This would then allow a omparison of the tatial behaviour of the ompany under examination with that of other similar ompanies. Any differene observed in behaviour, when omparing the two, ould suggest orretive ation and lead to the improvement of the approah urrently in use. The benefits deriving from globalisation should also be onsidered. However, while it is logial to standardise where possible, unwarranted generalisations from one marketing situation to another should be avoided as every market and every ustomer ould be different. Marketing pratitioners should understand that there is a fine line between the benefits of utilising a standardised approah, when possible and desirable, and the risks of seeking a level of demand homogenisation. Multinational ompanies ould be more suessful if the world was not treated as one single market. Standardisation should only be enfored when it is not ontradited with the theme of marketing orientation and ustomer satisfation. This is essential as a great deal of maro and miro external environmental onstraints and organisational differenes may imply a different pratial, and inieed tatial behaviour, in different international markets. It is therefore benefiial for multinational ompanies to onsider the Triangular Pyramid of AdaptStand Integration, inluding the B.E.S.T. R.E.A.C.T. organisational model, the external environmental fators, and the apability and desirability of adopting the global benefits that underpin it. The outome of this researh provides marketing diretors and managers with an overview of what influenes marketing tatial behaviour in international markets. On this basis, marketing pratitioners will be better able to identify the importane of the reasons, fators and elements of the

22 304 Demetris Vrontis marketing mix and any signifiant differene between them relevant to their situation. An understanding and onsideration of the AdaptStand Proess ould benefit and aid UK multinational ompanies in formulating and implementing international marketing planning and tatis. Referenes Boddewyn, J.J., Soehl, R. and Piard, J. (1986), "Standardisation in International Marketing: Is Ted Levitt in Fat Right?" Business Horizons, Vol. 29, November/Deember, pp Buzzell, R.D. (1968), "Can you standardize multinational marketing?" Harvard Business Kexnew, November/Deember Crouh, S. and Housden, M. (1996), Marketing Researh for Managers, seond edition, Oxford, Butterworth-Heinemann Czinkota, M. R. and Ronkainen, I. A. (1998), International Marketing, fifth edition. Forth Worth, London, The Dryden Press DeVaus, D.A., (1991), Surveys in Soial Researh, third edition, London, UCL Press, Allen and Unwin Diken, P. (1998), Global Shift, Transforming the World Eonomy, third edition, London, Paul Chapman Douglas, S.P. and Wind, Y. (1987), "The Myth of Globalization", Columbia Journal of World Business, Vol. 22, Winter, pp Elinder, E. (1961), "How International Can Advertising Be?", hiter)uitional Advertiser, Deember, pp Fatt, A.C. (1964), "A Multinational Approah to International Advertising", International Advertiser, September, pp Fink, A. (1995), How to Ask Survey Questions, Thousand Oaks, Sage Levitt, T. (1983), "The Globalization of Markets", Harvard Business Reinei, May-June, pp Lipman, J. (1988), "Marketers Turn Sour On Global Sales Pith Harvard Gury Makes", Wail Street journal. May 12, New Jersey, Prineton Paliwoda, S. and Ryans, Jr.J. (1995), International Marketing Reader, London, Routledge Prahalad, C.K. and Doz, Y. (1986), Ih Multinational Mission: Baianhig Loal Demands and Global Vision, New York, The Free Press Queih, J.A and Hoff, E.J. (1986), "Customizing Global Marketing", Harvard Business Shool, Vol. 64, May/June, pp Roostal, I. (1963), "Standardization of Advertising for Western Europe", Journal of Marketing, Vol. 27, Otober, pp Ruigrok, W. and van Tulder, R. (1995), The Logi of International Restruturing, Routledge, London Sorenson, R.I. and Wiehmann, U.E. (1975), "How Multinationals View

23 Integrating Adaptation and Standardisation 305 Marketing Standardisation", Harvard Business Reviezv, Vol. 53, May/June, pp van Mesdag, M. (1987), "Winging it in Foreign Markets", Harvard Business Revieiv, January-February Vrontis, D. (1999), "Global Standardisation and/or International Adaptation?, A Tatial Marketing Deision for Multinational Businesses in Crossing Borders and Entering Overseas Markets", In; Kantarelis, D., (Ed.), Anthology, Business and Eonomis for the 2P' Century - Volume 111, Business and Eonomis Soiety International, Worester, USA, pp Vrontis, D. and Vignali, C. (1999), An International Marketing Reader, The Manhester Metropolitan University About the Author Dr Demetris Vrontis is a senior leturer at the Manhester Metropolitan University Business Shool and teahes marketing and international marketing aross the Business Shool on both under and postgraduate level. At the same time he is supervising postgraduate students at MA, MPhil and Ph.D. level. Other ativities inlude being an external examiner, moderator and visiting leturer at a number of Universities and Colleges in the UK and Greee. Dr Vrontis is also an ative member of the IMRG (International Marketing Researh Group) entre, undertaking researh and providing onsultation to a number of national and international ompanies, in both onsumer and trade markets. His prime researh interest is international marketing planning and speifially to investigate multinational ompanies' tatial and strategi marketing behaviour, an area that he has widely published and presented papers to onferenes on a global basis. He is urrently the editor and member of the editorial board in a number of aademi journals both in the UK and abroad. Dr Vrontis has widely ontributed in journals and he is the author of a number of books in international/global marketing and marketing planning.

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