Chapter 17 Outline

Configuring the Marketing Mix

There are many reasons a firm might vary aspects of its marketing mix from country to country to take into account local differences in culture, economic conditions, competitive conditions, product and technical standards, distribution systems, government regulations, and the like. Such differences may require variation in product attributes, distribution strategy, communications strategy, and pricing strategy. The cumulative effect of these factors makes it rare for a firm to adopt the same marketing mix worldwide.

For example, financial services is often thought of as an industry where global standardization of the marketing mix is the norm. However, while a financial services company such as American Express may sell the same basic charge card service worldwide, utilize the same basic fee structure for that product, and adopt the same basic global advertising message ("never leave home without it"), differences in national regulations still mean that it has to vary aspects of its communications strategy from country to country (as pointed out earlier, the promotional strategy it had developed in the United States was illegal in Germany). Similarly, while McDonald's is often thought of as the quintessential example of a firm that sells the same basic standardized product worldwide, in reality it varies one important aspect of its marketing mix--its menu--from country to country. McDonald's also varies its distribution strategy. In Canada and the United States most McDonald's are located in areas that are easily accessible by car, whereas in more densely populated and less automobile-reliant societies of the world--such as Japan and Great Britain--location decisions are driven by the accessibility of a restaurant to pedestrian traffic. Because countries typically still differ along one or more of the dimensions discussed above, some customization of the marketing mix is normal.

However, there are often significant opportunities for standardization along one or more elements of the marketing mix. Firms may find that it is possible and desirable to standardize their global advertising message and/or core product attributes to realize substantial cost economies. They may find it desirable to customize their distribution and pricing strategy to take advantage of local differences. In reality, the "customization versus standardization" debate is not an all or nothing issue; it frequently makes sense to standardize some aspects of the marketing mix, and customize others, depending on conditions in various national marketplaces. An explicit example, that of Castrol Oil, is given in the accompanying Management Focus. Castrol sells a standardized product worldwide--lubricating oil--yet it varies other aspects of its marketing mix from country to country, depending on economic conditions, competitive conditions, and distribution systems. Decisions about what to customize and what to standardize should be driven by a detailed examination of the costs and benefits of doing so for each element in the marketing mix.