Despite the success of international standards-setting bodies in developing globally applicable standards and regulations, governments continue to promote or set unique national and sub-national requirements.Therefore as the globalization of economic life continues, the role of standards in defining or limiting the contestability of markets remains a critical issue.
The issue of standards is a major item on the trade agenda globally- both to local investors and international investors. Success in reducing barriers has increased the relative importance of non-tariff barrier, including those related to standards and technical regulations.Advances in transportation and communication have equally opened up great new opportunities for cross-border transactions, exposing a whole new level of standards-related issues to international scrutiny.The underlying philosophy in globalization standardization is that the customer needs and interests are becoming increasingly homogeneous worldwide. There is also the will of the customers to sacrifice preferences in product features for lower prices at higher quality (Sun: 1996).
Another feature is that substantial economies of scale in production and marketing can be achieved by developing standardized marketing programs.Product issues in international marketing are considered in standardization and adaptation of the products. Timing and sequence of products introductions and new products development and global branding (Pelkmans: 1996) are some of the issues to be considered in standardization of products.In the quest of standardization marketing there is the issue of mandatory adaptation that is needed to cater for difference in standards, for instance the left versus right hand driving.In putting standardization into effect there is equally the issue of government regulations that are different from one country to another which are taken into account. Other factors that are considered are differences in consumer tastes and level of education and technical sophistication.
In this regard two approaches to standardization can be considered are that of perceiving a domestic product as a world product and not only domestic based. This approach endeavors to satisfy international customers and maximize returns during different stages of the product life cycle.Another approach is that of proactively developing a world product International product strategies considers whether the product function or the need satisfied is the same or different in the new market (Hart: 1998).Also whether the conditions of the product used are the same in the new market.
In addition the ability of the consumers to buy the product has to be considered while considering international product strategies-for the market in which the product is launched is paramount form the success of the products’ launch.On the other hand, globalization forces that drive the market include convergence of per capita income and lifestyles and tastes (Sun: 1996). Globalization sees global customers due to increased travel and organizational buyer. There is equally growing global and regional channels.This in essence sees increased number of world brands and global advertising. One of the globalization forces is the cost drivers thus pushing for economies of scale.
Cost is also incurred in accelerating technological innovation and in increasing cost of product development relative to the market. Emergence of newly industrialized countries with productive capability and low labor cost leads to low cost of the final products.Furthermore, globalization forces of competition ensure that more countries are becoming key competitive battlegrounds. This also realizes the rise of new competitors who intend to fight for their share in the market.Competition also raises the growth of global networks making countries interdependent in particular industries. This, therefore give more companies the allure to be internationally centered or oriented rather than nationally centered thus forming global alliances.
Other forces in the globalization are the government driven forces which include reduction of tariff and non-tariff barriers. Market liberalization and privatization are equally forces to be reckoned.As companies rush for standardization and globalization the blurring of traditional lines between trade policies and domestic economic policies underlines the need for consensus and better coordination. Trade and international policy must support and reinforce domestic objectives and vice versa.
Firms and governments alike need to respond creatively to international trends and the resultant adjustment pressures on the domestic economy.The governments must find new responses that build upon their traditional strengths of cooperation and compromise. As part of this response the government and industry should develop an integrated approach that points the way to continuing prosperity.There is therefore the need to use national approaches to the development and implementation of product, process, and other standards and to integrate these into the pursuit of a more comprehensive and better functioning global trade regime.Views expressed on Globalization and StandardizationThe major debate in international marketing deals with globalization of markets and extends to which a company’s marketing strategy can be standardized according to the views of (Zou etal: 1997).They observe the realization of the firms from the developing countries which assume the increasing importance role in international competition, thus showing the urge for companies to move out of their domestic market and venture into foreign market.
In this regard the developing countries have been noted to have a cultural difference from the developed countries, they provide suitable context to assess the general ability of the existing knowledge in the standardization literature.It is therefore that companies in the developing world have focused on coming up with products which are not laced with the domestic culture.In addition there is implicit assumption that standardization concepts are un-dimensional in the overall marketing program. They highlight that interested researchers and practitioners have to know the perspective of firms from developing countries regarding the standardization and adaptation of marketing strategy.Also there is the anomaly that standardization concept is un-dimensional at the marketing program level. The need of developing knowledge about the specific dimensions which is successfully standardized is an opinion carried by (Zou etal: 1997).
Thus this knowledge facilitates managerial utilization of the research practice.They equally highlight different ways in which standardization has been conceptualized which include meaning that the same marketing strategy is applied in all markets or domestic marketing strategy is applied to foreign market. They are for the use the conceptualization that domestic marketing strategy is used in the foreign market.The apparent dominant perspectives including total standardization perspective, the total adaptation perspective, and the contingency perspective is discussed in (Zou etal: 1997).Total standardization perspective emphasizes on the trend towards the homogenization of markets and buyer behavior and the substantial benefits of standardization. Total adaptation perspective emphasizes the persistent difference between the nations and the competitive regulatory necessity to customize marketing strategy to individual market.
The contingency perspective, on the other hand allows for various degrees of standardization which contingent on the international organizational characteristics and the external environmental forces.In this respect Levitt observes that the most effective world competitors incorporate superior quality and reliability into the cost structures. They sell in all national markets the same kind of products sold at home or in the largest market, compete on the basis of appropriate value- the best combinations of price, quality, reliability and so forth.
