THE STANDARDIZATION OF MARKETING: TOWARDS
A META-ANALYSIS OF EMPIRICAL STUDIES
Ahmet Bardakci, University of Salford, United Kingdom
Jeryl Whitelock, University of Salford, United Kingdom
ABSTRACT
Empirical studies on the standardization/globalization issue have mainly examined the degree of standardiza-tion/adaptation of marketing program elements in over-seas markets comparing one country to another. The aim of this exploratory paper is to present a method for integrating the findings of such separate empirical stud-ies, using five studies as a basis for this integration. The combined findings achieved as a result of this integration will also be presented.
INTRODUCTION
As far as the topic of globalization is concerned standard-ization of program elements is the most examined issue. A large number of theoretical (see for example Jain 1989; Douglas and Wind 1987; Douglas and Craig 1986; Buzzell 1968) and empirical studies (e.g., Boddewyn and Grosse 1995; Ozsomer, et al. 1991; Leonidou 1996; Whitelock, et al. 1995) have been undertaken either to establish a theoretical framework or to examine the degree of standardization of elements of the marketing program in practice in order to discover the elements most likely to be standardized. Although almost all of these empirical studies have focused on comparing only one country or culture to another, the U.S. and Europe for example, these studies have enhanced the understanding of which elements of the program are the most appropri-ate for standardization.
It may be argued that the definition of a global marketing program can be arrived at by multi cross-cultural studies. This is to say that, reaching a decision regarding the possibility of implementation of a standardized element/ s requires searching the entire global marketplace, then proving the standardized element works in every market without any problem. On the other hand, if a standardized element does not work in any one market it may be that the standardization of that element will be rejected glo-bally. In other words, in order to reject the idea of any one element of the marketing program becoming global, it is sufficient to prove that it does not work in any one market.
LITERATURE REVIEW
The globalization of markets has led the discussion for both academics and practitioners towards the
standard-ization of the marketing mix so that sustainable competi-tive advantage over global rivals can be gained. In contrast to the theory of standardization, however, in practice it has been found that global companies stan-dardize some elements of their marketing mix rather than undertaking complete standardization.
However, the conventional marketing mix elements, known as the 4P’s of marketing, may not be adequate for establishing a theoretical framework for standardization. Therefore studies on standardization have focused on two main streams of study, marketing process standardiza-tion and marketing program standardizastandardiza-tion. Process standardization is concerned with the marketing philoso-phy, principles and techniques employed in the planning and implementation of marketing decisions. In other words, the marketing process standardization approach aims at providing a conceptual framework, a way of thinking with a methodology for implementation rather than specific guidelines for marketing action (Ozsomer, Bodur, and Cavusgil 1991). Marketing program stan-dardization studies are concerned with the uniformity of the internal marketing mix elements (Ozsomer, Bodur, and Cavusgil 1991). Support for marketing program standardization may be found in a variety of studies. The elements of the marketing program are somewhat greater than the conventional marketing mix elements. For ex-ample, Sorenson and Wiechmann’s (1975) typology of the marketing program consists of eleven elements: prod-uct characteristics, brand name, packaging, retail price, basic advertising message, creative expression, sales promotion, media allocation, role of sales force, manage-ment of sales force, role of middlemen, and type of retail outlet. Similarly, these marketing program elements were examined by Ozsomer, Bodur, and Cavusgil (1991) with slight changes in order to examine similarity levels for marketing program elements between various countries (Germany, Switzerland, Holland, and Turkey), where the study was undertaken.
Culture is considered to be the most apparent and persis-tent barrier (Buzzell 1968; Quelch and Hoff 1986; Whitelock 1987; Boddewyn and Grosse 1995) to the standardization of marketing practices across borders. Nevertheless, it may be argued that the cultural impact on standardized elements is subject to the product’s position in a given cultural environment. Thus the literature is dominated by the idea that standardizing industrial
prod-ucts is easier than consumer goods (Whitelock 1987; Jain 1989; Baalbaki and Malhotra 1993). Demand for such products is mainly functional leading to a more homoge-neous demand pattern and allowing standardization of marketing elements across borders.
While some elements of the marketing mix are more suitable for standardization others are found to be more sensitive to the environmental conditions affecting the standardization/adaptation decision. Sorenson and Wiechmann (1975) found a high degree of standardiza-tion in product related elements, such as brand names, physical characteristics and packaging. On the other hand, promotional elements and pricing are argued to be the most sensitive to a given culture and economic environment hindering standardization (Ozsomer, et al. 1991).
A high degree of program standardization, however, may be found in many empirical studies in contrast to the theoretical arguments which do not favor standardization of product elements across markets. Although the reason for implementing a standardized marketing program may vary, it can be argued that the emphasis is on internal factors rather than an objective assessment of a given marketing environment (Sorenson and Wiechmann 1975; Leonidou 1996). In addition, managing and implement-ing a standardized program is much easier to cope with than tailored programs for each country. Whitelock and Pimblett (1997) argued that customers buy standard products in the absence of more appropriate products, which is caused by a failure to recognize and exploit real differences in taste. This might represent lost opportunity but is, in fact, very difficult to measure (Harris 1985). Conversely, fragmentation in markets regarding needs and wants has caused enormous product proliferation (Pine 1993), since the high level of economic welfare and education of individuals results in more sophisticated consumers who will seek more appropriate products to meet their needs and wants.
Given that most studies of marketing standardization have examined a limited number of countries, the aim of this exploratory paper is twofold. The first aim is to develop a methodology for integrating empirical studies conducted in different markets, thus acquiring a more global picture rather than a specific country focus. Using an arithmetic formula to convert different rating scales into a standard, the paper incorporates studies of U.S., U.K., Japanese, German, Swiss, and Dutch multination-als operating in the U.S., E.U., Turkey, and the Middle East. The second aim is, through this quantification and integration of empirical studies, to explore which ele-ments of the marketing program are consistently subject to substantial standardization.
METHODOLOGY
An initial search identified five empirical studies using the same data presentation techniques and dedicated to the same aim, to examine the extent of standardization of the marketing program elements across markets. Thus, studies examining a specific element/s of the marketing program rather than the extent of the firm’s behavior towards standardization of the marketing program ele-ments (e.g., Whitelock, et al. 1995) and studies present-ing the findpresent-ings in a different way (e.g., Sorenson and Wiechmann 1975) are excluded from the present study. The main characteristics of the studies evaluated in this paper are presented in Table 1.
By pooling these five studies the total number of re-sponses achieved is 114 for consumer goods and 137 for industrial goods. Moreover, pooling these studies pro-vides responses about U.S., U.K., Japanese, German, Swiss, and Dutch multinationals’ behavior towards the standardization/adaptation decision in overseas markets. However, it must be noted that these studies do not indicate the data variability inherent in their findings but provide only means. As a result, statistical inferences cannot be made to support the findings of this study. As can be seen from Table 1 different scales have been used to conduct these studies. One, for example, used 7 for total standardization whereas another used 7 for complete adaptation. If these scales are unified, a general mean for each element can be calculated since the number of respondents is given for each study. The mean values found in this way allow a more global view to be proposed, because these studies were conducted in different regions or countries and with respondents of different nationali-ties.
In order to unify the given scales into one, the following conversion technique has been used. If one scale assigned 7 for total standardization and another assigned 1 for total standardization, in this case 1 would equal 7 for conver-sion purposes and vice versa. Therefore, a simple method can be developed for conversion (Figure 1). The sum of each column in this case is 8, meaning that the sum of actual value, which is given in the studies, and the converted value, which would be found by using the scale, would be 8. Therefore in order to convert the values the simplest method is to subtract the given value from 8. The same method can be used to convert 5 and 4-point scale values into the desired form. In the studies evaluated here, 5 and 4-point scale values are consistent in terms of direction and conversion as indicated in Figure 1. How-ever, these values do need to be converted from a 5 and 4-point scale to a 7-4-point. The problem here, since both
scales do not originate from 0, is that it is not possible to convert values by using relativity between each scale. Therefore a simple mathematical formula has been used. The maximum and minimum values of each of the given scales are considered equal to each other as presented in Figure 2 (for example, on the one hand, 1 meant total standardization or very similar applications between given countries, on the other hand, 7 and 5 meant total adaptation or very different applications. Thus 7 must be equal to 5 and 1 equal to 1 after conversion of the values). Moreover the midpoints of the 7-point and 5-point scales, 4 and 3 respectively, must also be equal after conversion
A further difference in the studies evaluated also needs consideration. Boddewyn and Grosse (1995) reported their findings by separating consumer non-durables, con-sumer durables and industrial goods. However, both Doherty and Ennew (1995) and Leonidou (1996) studied consumer goods, and Ozsomer, et al. (1991) studied multinationals’ behavior without separating their find-ings for consumer and industrial goods. Picard, et al. (1988) reported their findings for industrial goods and consumer durables. Thus, to combine all these studies, all data has been separated into two main sections, consumer goods and industrial goods by pooling the data. This was undertaken by taking firstly, the number of responses
TABLE 1
Main Characteristics of Five Studies Evaluated (CND: Consumer Non-Durables, CD: Consumer Durables, IG: Industrial Goods)
Study Aim Methodology Scale
Picard, et al. (1988) Examine the changes occurred Mail survey of U.S. 4 = very substantial in the practice of U.S. manufacturers of CD, adaptation, 1 = very internationals regarding their CND and IGs operating substantial
marketing policies in the in the EC. standardization European Common Market.
Ozsomer, Bodur, Identify the factors that Interview with 33 1 = very different, and Cavusgil (1991) determine the degree of multinationals’, in 7 = very similar
standardization in marketing CNDs, food and beverages, between host and program and process of pharmaceuticals, chemicals, home country multinationals operating in electronics and motor vehicle
a developing country components industries, executives in Turkey.
Boddewyn and Examine whether EC has an Mail survey of U.S. companies 7 = total adaptation, Grosse (1995) impact on marketing decision manufacturers of CD, CND 1 = total
in terms of standardization and IGs operating in the EC. standardization and factors underlying
standardization and the degree of standardization of program elements.
Doherty and Examine the relationship Postal questionnaire to 1 = identical, Ennew (1995) between conditions favoring the product managers of 5 = unrelated
standardization and actual UK pharmaceutical practice in the EU by organizations. pharmaceutical industry
Leonidou (1996) Assess product standardization Personal interview with 1 = very similar, practices of Japanese either area manager or 5 = very different multinationals operating in the marketing officer in charge
Middle East. of the Middle East operations.
FIGURE 1
The Basic Method to Convert the Values from a 1 to 7 to a 7 to 1 Scale
1 2 3 4 5 6 7
7 6 5 4 3 2 1
FIGURE 2
Equal Values in 5 and 7 Point Scale
where x
aand x
bgiven values are either a or b point scales respectively, one of these
parameters is unknown (in this case x
a).
mean values must be converted from a 5-point scale to a 7-point scale. Hence our values for
and b are 7 and 5 respectively. The formula can be rewritten as y = 1.5x
5– 0.5 Doherty and
Ennew’s (1995), and Leonidou’s (1996) findings are therefore converted by using this
formula from a 5-point scale to a 7-point scale. Picard, et al.’s (1988) scale was a 4-point
scale. In this case our values for a and b are 7 and 4 respectively. Thus, the formula in this
case would be y = 2x
a– 1.
sum of mean values for both consumer non-durables and consumer durables were divided by the total number of responses for both these two categories. Ozsomer, et al. (1991) did not provide mean values for each product category in their study since their aim was examine multinationals behavior in Turkey. Therefore in this case the overall mean was used for each of the two categories, multiplied by the number of responses in each category (consumer goods and industrial goods).
LIMITATIONS
Although the study provides a more global perspective for academics, the number of studies examined is limited. Moreover, studies examined do not provide data variabil-ity preventing statistical analyses from being undertaken to enrich the findings. In addition, there is also a lack of consensus among these five studies regarding the ele-ments of marketing studied. As a result, the prevalence of each element can be used to filter the results. It may be suggested that, where elements have a frequency of greater than one among the studies examined, they would be considered as having basic prevalence. Each element’s frequency is presented in Table 2. Therefore, while the summary of results given in Table 2 provides detailed findings, Table 3 presents multiple encountered ele-ments.
FINDINGS Consumer Goods
The findings reveal that, “product characteristics” is the most standardized element (x = 2.86) of the marketing program for consumer goods’ (Tables 2 and 3). At first glance this is very surprising since most academics argue that product standardization is not a desirable strategy for global marketing practice unless the existence of a global segment is evident. However, “Product characteristics” consist of the technical elements of product such as formulation and pack/tablet size (Doherty and Ennew 1995), design, style, dimensions, ingredients/parts, con-struction method, technical specification and operating system (Leonidou 1996). Each or any of these character-istics might be standardized. The results should therefore be interpreted bearing the wide definition of “product characteristics” in mind.
Variables are far from being standardized for consumer goods. These findings are not surprising and support previous research discussed in the globalization/stan-dardization literature.
Although the product characteristics element is found to be the most standardized, Doherty and Ennew (1995) found x = 2.31 and n = 52 while total n = 84. Thus, the
If Doherty and Ennew’s (1995) findings are excluded for this element the mean would be 3.75, leaving brand name as the most standardized element across markets. Nevertheless, this may be a result of the nature of products surveyed. For example, they may be mostly culture free products without a long history within the local culture such as high-tech products, requiring generally either little or no adaptation. Alternatively it may be a result of the fact that standardization is the easiest method of operation even if markets vary according to their needs and preferences (Sorenson and Wiechmann 1975). Overall, brand name is the second most standardized elements (x = 3.68), followed by warranties (x = 3.89) and packaging (x = 3.91) respectively. While personal selling (x = 5.24) is the most adapted element, retail price (x = 5.16) is the second most customized element for this category. In general product related variables are found to be more standardized than other marketing elements for this category. Pricing and promotion related variables are far from being standardized for consumer goods. These findings are not surprising and support previous research discussed in the globalization/standardization literature. Although the product characteristics element is found to be the most standardized, Doherty and Ennew (1995) found x = 2.31 and n = 52 while total n = 84. Thus, the impact of this particular study for this element is too great. If Doherty and Ennew’s (1995) findings are excluded for this element the mean would be 3.75, leaving brand name as the most standardized element across markets.
Industrial Goods
While product positioning (x = 3.27), and brand name (x 3.40) are found to be the most standardized elements across borders for this category, pricing (x = 5.55), personal selling (x= 5.12), and sales promotion (x= 4.49) are the elements most adapted to the market of operation. Although product standardization for industrial goods is generally suggested to be easier than for consumer goods, “Product characteristics” is only the fourth most stan-dardized element. The effect of the wide definition of product characteristics in this study may again have an impact for this category.
However, in general product related elements seem to be more standardized than other marketing elements for industrial goods. The findings for this category are con-sistent with the standardization and globalization litera-ture, which suggests that standardization of product related elements for this category is much easier than for consumer goods, because the demand for this kind of product is more functional than innovative, making the
TABLE 2
Overall Means and the Frequency of the Elements’ Examined in the Studies Evaluated (1= Total Standardization 7 = Total Adaptation)
Consumer Goods Industrial Goods
Elements Mean f Elements Mean f
Product characteristics 2.86 3 Product Positioning 3.27 2
Brand Name 3.68 5 Brand Name 3.40 4
Promotional Message 3.71 1 Service policies 3.54 2
Warranties 3.89 2 Product characteristics 3.65 3
Packaging 3.91 5 Packaging 3.77 4
Product Positioning 4.00 2 Labeling 4.10 2
Media allocation 4.33 1 Marketing Research 4.18 1
Service policies 4.42 2 Media allocation 4.33 1
Customer Service 4.67 1 Warranties 4.40 1
Labeling 4.68 3 Advertising 4.48 3
Advertising 4.97 4 Sales Promotion 4.49 2
Sales Promotion 5.07 2 Customer Service 4.67 1
Pricing 5.16 4 Personal Selling 5.12 2
Personal Selling 5.24 2 Physical Distribution 5.30 1
Marketing Research 5.32 1 Type of middlemen 5.41 1
Type of middlemen 5.41 1 Pricing 5.53 2
Physical Distribution 5.50 1 Promotional Message
TABLE 3
Overall Means for Consumer Goods and Industrial Goods Based on Selected Elements (1 = Total Standardization 7 = Total Adaptation)
Consumer Goods Industrial Goods
Elements Mean f Elements Mean f
Product characteristics 2.86 84 Product Positioning 3.27 36
Brand Name 3.68 114 Brand Name 3.40 137
Warranties 3.89 30 Service policies 3.54 101
Packaging 3.91 114 Product characteristics 3.65 87
Product Positioning 4.00 32 Packaging 3.77 137
Service policies 4.42 30 Labeling 4.10 69
Labeling 4.68 46 Advertising 4.48 118
Advertising 4.97 98 Sales Promotion 4.49 67
Sales Promotion 5.07 38 Personal Selling 5.12 67
Pricing 5.16 98 Pricing 5.53 67
Personal Selling 5.24 38
Total 722 886
If Doherty and Ennew’s (1995) findings are excluded for this element the mean would be 3.75, leaving brand name as the most standardized element across markets.
Industrial Goods
While product positioning (x = 3.27), and brand name (x 3.40) are found to be the most standardized elements across borders for this category, pricing (x = 5.55), personal selling (x= 5.12), and sales promotion (x= 4.49) are the elements most adapted to the market of operation. Although product standardization for industrial goods is generally suggested to be easier than for consumer goods, “Product characteristics” is only the fourth most stan-dardized element. The effect of the wide definition of product characteristics in this study may again have an impact for this category.
However, in general product related elements seem to be more standardized than other marketing elements for industrial goods. The findings for this category are con-sistent with the standardization and globalization litera-ture, which suggests that standardization of product related elements for this category is much easier than for consumer goods, because the demand for this kind of product is more functional than innovative, making the demand side of the market more homogeneous.
Overall
Overall means reveal that the degree of program stan-dardization for industrial goods (x=4.06) is greater than that for consumer goods (x =4.27) where the selected elements, which meet our prevalence criterion for both categories as depicted in Table 3, are concerned. This is not a surprising result since the overall effect of cultural and national differences is less likely to have an impact on industrial products as discussed above (Baalbaki and Malhotra 1993; Douglas and Wind 1987; Jain 1989; Whitelock 1987).
Overall product-related elements such as product charac-teristics and brand name are more standardized than
other marketing elements for both industrial goods and consumer goods. These findings are consistent with the studies evaluated. Other marketing program elements such as sales promotion, retail price and personal selling are found to be the least frequently standardized ele-ments.
CONCLUSIONS AND IMPLICATIONS
It is difficult to generalize from these findings since the number of studies is limited and data variability has not been provided, preventing any statistical tests to support the findings from being undertaken. However, keeping in mind these methodological limitations, the central find-ings of the study reveal that the product related elements are more standardized than other marketing elements for both categories of product (consumer goods and indus-trial goods), even though the studies integrated here consist of culturally, economically and geographically dispersed markets. However, although the mean of “prod-uct characteristics” reveals that standardization of this element has been common for some ten years, standard-ized products may not necessarily be the most suitable solution for the future (see for example Pine 1993; Rogers and Peppers 1997; Rogers and Peppers 1993; Davis 1996).
The study also reveals that a standardized brand name is a key element in competing globally both for consumer goods and industrial goods, since a standard brand name is essential to obtain global recognition. On the other hand, retail price, personal selling, and advertising are adapted to the markets of operation.
Finally, this paper is exploratory in nature and examines and integrates the findings of only five empirical studies. Future studies may include a wider range of empirical studies to provide a more complete global picture. Never-theless, this paper presents an attempt to quantify and integrate previous empirical studies and offers a method-ology for doing so. As such, it represents a step towards a meta-analysis of empirical studies carried out into globalization.
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For further information please contact: Jeryl Whitelock
The Business School University of Salford Salford M5 4WT UK Phone: +44 161 295 5987 FAX: + 44 161 295 5556 E-Mail: j.m.whitelock@salford.ac.uk APPENDIX 1
The basic premise of this formula is that the logic is to convert each scale’s values into a percentage or a 100-point scale. The formulas given below can be used to convert these values into the equivalent of a 100-point scale.
