Implementation and Standardization Strategies Paper Tracee Ward MKT/562 – Advanced International Marketing October 11, 2010 Jeffery Buck Implementation and Standardization Strategies Paper Valspar’s is planning to launch a new paint in its product line. The paint will change color based on the temperature. Once the paint is exposed to cold or heat the color will change which has lead to the product name Chameleon. “Since 1806, Valspar has been dedicated to bringing customers the latest innovations, the finest quality, and the best customer service in the coatings industry (About Valpsar.
Com, para 1)”. Therefore Valspar has a long history with developing implementations and standardization strategies. According to Heil “a company develops its international strategy by considering its overall strategy, which includes its operations at home and abroad. We can consider four aspects of strategy: (1) scope of operations, (2) resource allocation, (3) competitive advantage, and (4) synergy” (Heil, para 16). Valspar has all these areas addressed and is now looking to develop its implementation and standardization strategies for its new product Chameleon.
This paper will discuss the implementation strategies to include factors influencing local and foreign buyer behavior. Discuss the difficulties encountered when trying to research and understand local buyers. The implementation strategy will address which models of consumers’ behavior might be used to examine buyers in local markets and the importance of considering cultural elements to apply these models effectively. This paper will also discuss standardization strategies to include the difference between localization, adaptation and standardization of a global product or service.
Discuss the key factors that drive a successful globalization of a new product into a foreign market. Discuss the pros and cons of standardization. Explain methods of integrating a global brand to both local and foreign markets and the role of data analysis, local subsidiary input and managerial judgment in developing a globally standardized product. Implementation Strategies Valspar is currently conducting business in the global market.
So the implementation strategy will be fairly easy for the company. Valspar will just introduce a new product line by building brand equity and reinventing the brand in the UK market it is already conducting business in. Brand equity will allow the company to create brand awareness not only to the new products but also existing products. Brand equity also allows the company to create brand loyalty and brand association and perceived quality. Factors influencing local and foreign buyer behavior
Johansson stated that “Ultimately, customers in different places may want the same basic things, but specifically, their product and service needs and preferences vary considerably. The reasons for the variations lie in cultures and socioeconomic and geographic environments, that is, the conditions under which products and services are used and consumed”. “These locational and cultural factors affect buyer behavior directly and they demand a corresponding variety in local marketing activities” (Johansson, pg 207).
A good deal of the local marketer’s hard work abroad involves adjusting his or her understanding of what customers specifically want as well as of how and why customers and competitors behave as they do( Johansson, 2009). Culture, economics, technology, and politics are all considered external factors that influence local and foreign buyer behavior. These factors such as culture are major influences in buyer behavior because consumers have cultural beliefs that will keep a consumer from making a purchase.
Factors such as economics and politics play a role in buyer behavior because both factors tend to make consumers think twice about making purchases because if the economy is bad and it is politically driven then consumers will opt not to makes purchases based on the economy and other political reasons (such as politics being the main source of an economic turndown. Difficulties Encountered trying to research and understand local buyers Marketing research before entering into the global market is good decision for companies. However, some companies will overlook and flat out ignore his process which will lead to missed benefits of marketing research such helping the company communicate better, assist in identifying opportunities, minimizing risk and creating benchmarks to assist in the measure progress. Johansson states that “As in purely domestic marketing, to better understand the local customer requires marketing research” (Johansson, pg215). Not all marketing research is successful when trying to understand the local buyers. Companies encounter various difficulties when conducting market research on local buyers in the global market.
For example focus groups are a great form of market research however the problem with focus groups in the foreign market as stated by Johansson “they can also constitute an unrepresentative sample because typical screening criteria are incorrect in the new environment or are not implemented correctly and moderators—and the research firms—are usually specialized in certain products and customers, and may be less than ideal for other consumer groups” (Johansson, pg 217). There is also explanatory marketing research. This is when the marketing research provides and attitude and preference of the buyer on a certain product.
The goal of this research is to identify if the if price or advertising are drivers of brand preference and purchase. Again Johansson states that “In new foreign markets this kind of research is rarely worth the cost. The decisions to be made are much too basic to need that much fine-tuning, and the action alternatives facing the local marketer are often rather crude. The exception is advertising if there is good reason to try out some alternatives because the local consumers might not be receptive to the kind of advertising coming from headquarters”. (Johansson, pg220). Standardization Strategies
Valspar want its product design and advertising strategies to be standardized around the world. This is Valspar’s goal and focus in developing its standardization strategy. Valspar is thinking that people everywhere want to buy their paint products and not interrupt their way of living. These are the global strategies that a company like Valspar would work by and therefore these global strategies will help feed their standardization strategies. Valspar has to understand the role of data analysis, local subsidiary input and managerial judgment in developing a globally standardized product.
These elements are driver that help Valspar to develop and feed a well thought out standardization strategy. Valspar must also understand the key factors that drive a successful globalization of a new product into a foreign market. According to Johansson states that “According to research, the key success factors driving new product success for a company in a new market are the following (in order of importance): new product superiority, technological synergy with company know-how, innovativeness of new product, company market orientation and marketing synergy with company know-how” (Johnasson, pg 414).
Once Valspar incorporates these key factors into its implementation strategy its new product line Chameleon is sure to be a success in the global market. Pro and Cons The pros of standardization strategies are cost reduction, improved quality, enhanced customer preference, global customers, and global segmentation (Johansson, 2009). They also ensure that a product is manufactured to an acceptable level of high quality. Other pros to standardization strategies are reduced training costs and time and more routine purchasing, handling, and inspection procedures.
The cons of standardization strategies are companies are force to develop product a certain way that might not be the best way therefore ruling out options that are better than the dictated standard. According to Johansson the cons are “off-target, lack of uniqueness, vulnerable trade to barriers and strong local competitors” (Johansson, pg 405-406). There is also the problem of inflexibility. Once these standards are approved and set as a rule or regulation it is impossible to amend the rules or regulation, and makes it difficult to address the demands of the global market.
Another con is that special interest can influence politicized or unduly standards on rule or regulation that are made into laws create a situation where on company can monopolies the market and raise the prices up too high. This creates a situation that Supplement Quality web sites states “where this can cause a product to be removed from the market, even when it is quite safe. This deprives consumers of the opportunity to benefit from the product and can be financially devastating to producers who have invested in its production” (Supplement Quality, para 3).
Integrating a global brand to both local and foreign markets Johansson states that “A global brand is one that is available and recognized in most markets around the world. Strictly speaking, one should define a global brand as one that is available in absolutely all countries in the world” (Johansson, pg445). Valspar could increase its business by buying up local brands. This strategy will build up trust by the locals during the transition phase Valspar would keep the local brand’s brand logo until its brand can stand alone.
This will help the Valspar brand to create brand awareness for its new and existing products and set up a smooth transition for the Valspar to go from a local brand to a global brand. Acquiring company may also provide support for the local brand by serving as an endorsement or master brand. According to Johansson “Once the manager has gained an understanding of what drives the consumer brand choices in a given market, it is time to decide whether a global or a local brand is best. Some of the factors to consider are the following: Is the market/product category global? Is the competition global? , Do other global competitors use global brands, Antiglobalization and related sentiments (such as anti-Americanism), Pro-domestic sentiment, where strong, and the branding strategy needs also to take into account the likely shift in the local marketplace when a new brand enters” (Johansson, pg445-446). Conclusion In conclusion Valspar has an advantage because it is currently conducting business in the UK market therefore the implementation and standardization strategy process is more of a refinement process instead of a process that company is starting from scratch.
Valspar is aware that aware of the pros and cons of standardization and understands the various difficulties that are encountered when conducting market research. Valspar also understands role of data analysis, local subsidiary input and managerial judgment in developing a globally standardized product. Valspar goals with standardization is to make its consumers feel like their product is something that came from a local company down the street so the consumers has the perception that their needs are met.
References Heil. K (2010). Strategy in the Global Environment. Retrieved from: http://www. referenceforbusiness. com/management/Str-Ti/Strategy-in-the-Global- Environment. html Johansson. J. K. (2009). Global Marketing. New York, NY: McGraw-Hill. Valspar (2010). About Valspar. Retrieved from: www. valspar. com Supplement Quality (1999). Pros and cons of standards. Retrieved from: http://www. supplementquality. com/stdregs/proscons. html