HKR
Adaptation and Standardization
--- cases of McDonald’s and Apple
Tao Jingyan, Su Fei, Hamza Fayel, Shefali Roy 2014/3/28
Content 1. Introduction .................................................................................................................................. 3
1.1 the purpose of the research .............................................................................................3 1.2 Research method..............................................................................................................3 1.3 Theoretical framework ....................................................................................................3 2. Adaptation – McDonald’s .......................................................................................................... 4
1.1 Introduction of McDonald’s .............................................................................................4 1.2 The adaptation strategy of McDonald’s ..........................................................................5 2.2.1 Adaptation in local menus ............................................................................................. 5 2.2.2 Adaptation in services .............................................................................................10 2.3 Summary .............................................................................................................................. 11 3. Standardization - Apple ........................................................................................................... 11
3.1 Introduction ......................................................................................................................... 11 3.2 The standardization strategy of Apple ............................................................................... 11 3.2.1 Segmentation ....................................................................................................11 3.2.2 Positioning and product policy .............................................................................. 12 3.2.3 Standardization of the product and the personal Customization ..................... 13 3.2.4 Survey and analyses ................................................................................................. 15 3.3 Conclusion ............................................................................................................................ 19 4. Conclusion................................................................................................................................ 20 3.4 Answer to the purpose ......................................................................................................... 20 3.5 Implication ........................................................................................................................... 21 3.6 The limitation of the project ................................................................................................ 22
Reference ...................................................................................................................................... 24
Appendix ....................................................................................................................................... 26
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1. Introduction 1.1) Purpose of research The main purpose of the study is to investigate two marketing strategies for multinational corporations: adaptation and standardization as well as to explore how different companies manage to succeed by taking advantages of them.
1.2) Research method The major method of the study is comparison. To compare the different patterns of adaptation and standardization, we come up with the cases of two typically representative multinational corporations: McDonald’s adaptation and Apple’s standardization. In the example of McDonald, we compare its menu on its websites in different countries to find out what adaptations have it made. Then in order to figure out if these changes work, we pose a questionnaire online to test consumers’ reactions towards them. Then we do a survey to explore the standardization of Apple and make comparison between it and McDonald.
1.3) Theoretical framework Nowadays, the growing trend of economic globalization is bringing not only opportunities but also challenges for many multinational corporations. It has been a heated debate as to whether they should choose either adaptation or standardization of products in some researches. For the sake of fully understanding the decisions different companies make between these two strategies, it is vital to acknowledge the basic concepts of them. Adaptation is a marketing strategy in which products or services are modified according to the markets they are planning to enter to fit the unique dimensions of each local marke. Generally speaking, it is the process of ―adjusting the native ways of thinking and behaviors to be consistent with the local culture‖ (Kotler, 1982). It ―may be as simple as tweaking the logo and the colors of the packaging, or may
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involve developing new flavors better suited to the local palate or new financing models more fitting for the local economy‖(Valdez 2011). Standardization is quite different from adaptation. It is an approach of setting universal characteristics for particular products. In contrast to adaptation, those firms following standardization ―use [using] the same, packages and presentations that were used in the domestic market‖ (Valdez 2011) when entering foreign markets. The economies of scale are the main advantage of standardization, ―as global brands standardize their marketing strategy, this generates important cost savings in many areas of their marketing‖ (Ghantous 2008). The dilemma of whether to standardize or to adapt a product in international marketing has always been debated because of the growing globalization. In 1960s, R. Bartels (1968) developed a framework to study standardization and suggested that for U.S. companies, ―emphasis on the inherent similarities rather than differences will enable a better understanding of the nature of foreign marketing.‖ However, many critics hold the opposite ideas: they argued that standardization is ―not feasible or desirable due to differences in the legal, cultural, and climatic environments‖ (Douglas and Wind, 1987) because ―culture is the prime determinant of consumers’ behaviors‖ (Cleveland and Laroche 2007). Subsequently, there are also some scholars who advise that it is better for global corporations to combine these two options together when deciding their marketing strategies. Because various cultural markets mix and coexist, they need to ―reach a balance to fulfil this new fragmented consumer culture‖ (Ghantous, 2008).
2. Adaptation - McDonald’s 2.1) Introduction of McDonald’s In fast food service industry, McDonald’s is an undoubted pioneer and a recognized leader. It was initially established in America in 1940 and then spread rapidly around the world.
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As one of the biggest fast food chains, McDonald’s is a valuable object for research because its popularity is beyond imagination. According to the statistics in McDonald’s annual report, there are 35,429 Donald’s settling in 119 countries (McDonald’s Corporation 2013 annual report, 2014). Despite of these already huge numbers, McDonald’s still keeps a high expanding speed – 731 new restaurants opened in 2013, including 225 in the US which is the place where it originally comes from (McDonald’s Corporation 2013 annual report, 2014). Countless journals and newspapers are discussing the implications and controversies McDonald’s brings because it is not only a restaurant chain, it also represents American life style and culture. More importantly, it disseminates them successfully. How popular is McDonald’s? Even the most remote areas in this planet are aware of its existence. ―They are everywhere‖ (McDonalds around the world).
The success of McDonald’s largely depends on its marketing strategies. On the basis of the QSC&V1 principle which is always stressed, McDonald’s attaches great importance to adaptation, i.e. localization. It adjusts the brand according to local culture and therefore, it is widely accepted by people from different countries.
2.2) The adaptation strategy of McDonald’s 2.2.1) Adaptation in local menus Fundamentally, McDonald’s is a fast food brand. So, the diversely designed menus in different countries should be considered as the most representative aspect of its 1
Quality, Service, Cleanliness and Value.
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adaptation strategy. In order to study this strategy, two methods were used. Firstly, it compares the online menus of the US with those of the other 5 countries, namely, India, China, Japan, France and Canada. By comparison, it measures the extent to which McDonald’s adapts itself to local conditions. Secondly, an online questionnaire aimed at Chinese was issued so as to study customers’ attitude towards its adaptation and their further expectations. The two questions which will be discussed is as follows： -
Is it true that adaptation is an important marketing strategy for McDonald’s?
-
What do the customers think about the adaptation strategy and is it helpful to the development of McDonald’s?
The menu comparison The results of menu comparison reflect many adjustments McDonald’s has made to adapt to local culture. This part of the essay will illustrates the results by using India as a typical example. The comparison is made with the help of the form below: Burgers
Sides
(Sandwiches&
&
Wraps)
Snacks
45
5
33
12
23
7
125
India 13
3
17
8
8
-
49
7
109
The Total
The
Number
US
Beverages
Desserts
Breakfast
Sala
Total
d
2
The
U 3 43
3
26
11
19
Number Of
I
(96%)
(60%)
(79%)
(92%)
(83%)
the
U
11
1
10
7
4
differences
I
(85%)
(33%)
(59%)
(88%)
(50%)
2
(87%) 0
The McDonald’s Indian website is divided into two parts – North & East India and South & West India. As McDonalds’ industry has not fully developed in South & West India and the statistics is limited so here India refers to North& East India. 3 In order to save space, symbols are used. “” means “existence” while “”means “nonexistence”, e.g. “U I” means that the food is offered in the US but not in India.
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33 (67%)
Designing this form is aimed at observing the degree of disparities between American menu and India one. Initially, the menus are divided into six categories in the light of the classification of McDonald’s website. Secondly, the total numbers are calculated respectively. Thirdly and most importantly, the disparities are found out by counting the numbers of the food which only exists in one country and calculating the proportion. Apparent from the form is that there is a huge discrepancy between two menus: 1) The food offered in American McDonald’s is 76 more than that in India McDonald’s. 2) Although the total amount is small, the food offered in Indian McDonald’s accords with local culture - Out of the 49 kinds of food, 33 are unique in India and are not served in the US, accounting for 67%. 3) Burgers (sandwiches and wraps) are the main food served by McDonald’s in both countries but the burgers in India McDonald’s are localised. 11out of the 13 kinds of burgers are ―Indian special‖, accounting for 85%. Besides the findings mentioned above, menu comparison also provides the following discoveries: 1) In order to show respect towards local religion, Indian McDonald’s do not use beef tallow or serve beef products, which is also the reason why the amount of food provide by Indian McDonald’s is relatively small. To replace beef, Indian McDonald’s usually contains chicken and fish. Masala Grill Chicken, for instance, is a kind of burger ―stuffed with India herbs and spices‖. 2) Considering the fact that many Indians are vegetarians, Indian McDonald’s produces various vegetarian diets such as McAloo Tikki, Masala Grill Veg and Spicy Paneer Wrap. Food, even including beverages, is marked with red dots and green dots, respectively representing vegetarian diets and non-vegetarian ones. According to the survey above, it is fair to draw a conclusion that Indian McDonald’s
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really devotes itself into adaptation – it provides special food for local people, respects local religions and living habits. It has even opened ―vegetarian-only restaurant‖ in India (McDonald’s opens vegetarian-only restaurant, 2012). Similarly, the menus comparison also shows that in the other four countries, McDonald’s also makes adjustments based on local conditions. In Canada, for example, McDonald’s designs McLobster. In Japan, it serves McHothot Mega Breakfast Sausage. In China, special rice recipes are served and in France, Croque McDo and Camembert Premiere are produced. In conclusion, in order to win customers from different countries and make its brand acceptable, McDonald’s always localises itself. That is to say, it is true that adaptation can be considered as a leading strategy in most of McDonald’s markets.
The online questionnaire survey The second question is what opinions about adaptation the costumers hold. By analysing people’s attitude, the answer of whether the adaptation strategy helps McDonald’s market or not can be speculated. This question is studied by issuing an online questionnaire and they mainly focus on Chinese. China is a country with large areas and huge population, both of which will provide potential markets for the food chains. McDonald’s also pays great attention to Chinese market – it has settled in China for over 20 years and has opened more than 1900 restaurants. In 2013 alone, 275 new restaurants were opened in China, which was the most around the world and was highlighted in its 2013 annual report. However, the development of McDonald’s in China has been ―challenged‖ by local fast food firms and the other ―earlier-settled‖ brands (Chinese fast food firms challenged McDonald’s, 2013). In response to the decline in market share, McDonald’s produced rice recipes, which has never been served before. It is, again, a typical and recent example of the fact that the company uses the adaptation strategy to ―maintain its competitiveness and boost its overall business growth‖ (McDonald’s hopes to wow Chinese with rice, 2013). That is also the reason why Chinese people are chosen to be the objects of the
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second survey - we hope that this recent and completely new change has given Chinese a deep impression. The questionnaire is posted on the website of diaochapai4. It contains 5 questions besides the basic information about age and the frequency of visiting McDonald’s, the other three questions are: 1) Do you think that McDonald’s has adapted its menus to Chinese market? a) to a large degree b) to some degree c) seldom
d) not at all
2) Do you think that McDonald’s has adapted its services to Chinese market? a) to a large degree
b) to some degree
c) seldom
d) not at all
3) What is your attitude towards the adaptation of McDonald’s in China? a) supportive & expect more b) supportive & satisfied with the current situation c) adaptation is not necessary d) I do not care In total, 65 people completed the survey. Over 60% of them are between 20 years old and 40 years old. 18 are younger and only 5 are older than 40. As for the frequency, except 6 people who say that they seldom visit McDonald’s, most participants go to McDonald’s at least once a month. Many of them visit it more frequently - more than 3 times per month. Some people even go there more than 3 times a week. It is believed that the results of this survey are influenced by the ages of the participants and their frequencies of visiting McDonald’s. However, as the website can only show the total numbers of each choice, the relationship between them is hard to find out, which, is also a limitation for this survey. As this part is discussing McDonald’s menus, only the results of question 1 and 3 will be illustrated here. The numbers of choices and the proportion are as follows:
4
a
b
c
d
Total
1
7 (11%)
29 (45%)
20 (31%)
9 (14%)
65
3
36 (55%)
20 (31%)
4 (6%)
5 (8%)
65
diaochapai (http://www.diaochapai.com/) is a Chinese website specialized for doing online surveys.
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The answers of question 1 shows that most of the customers in the survey are aware of the adjustments which McDonald’s has made to adapt to Chinese market. However, nearly 45% of the people agree that McDonald’s only localized ―to some degree‖. These statistics reflects the fact that McDonald’s still use adaptation strategy in China but the degree is limited in Chinese customers’ eyes. On the other hand, the answers of question 3 are clearer in showing the attitude and expectation of Chinese customers. Overwhelmingly, over 80% of the people hold a very supportive attitude toward McDonald’s adaptation. Moreover, nearly 55% expect that McDonald’s can deepen the degree of adaptation. It is obvious that the adaptation strategy is welcomed and expected by Chinese customers. To sum up, most of the Chinese customers in the survey are aware of McDonald’s adaptation strategy. They support this strategy and agree that it should deepen its degree. This is a good evidence of the fact that the adaptation strategy has helped McDonald’s success in Chinese market, which, by analogy, will reflect some similar conditions in other countries.
2.2.2) Adaptation in services In the survey mentioned in the last part, people also show their opinions about the adaptation of McDonald’s services, which refers to other aspects such as the advertisements, activities, decoration in the restaurant and the delivery service. Most of the people (60%) think that McDonald’s also tries to adapt itself in other aspects besides food. This result can also be evidenced by much news reporting McDonald’s adaptation in different countries. In Thailand, for instance, the status of the McDonald’s makes a pose which Thai people will do when they greet each other. In Sedona, Arizona, McDonald’s changes the colour of its arches – from yellow to blue – to show respect to local scenery because the city does not want to ruin its beautiful desert views. There are many examples of McDonald’s adaptation and these examples, again, show that adaptation is a very important strategy in McDonald’s development all over the
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world.
2.3) Summary This part uses two methods - menu comparison and online questionnaire survey - to study the role that adaptation plays in McDonald’s development. The conclusion is that the adaptation strategy is significant to McDonald’s development and it is a great factor which contributes to McDonald’s success in the world. It should also be noted that adaptation is not the only strategy McDonld’s uses. It also uses standardization strategy. It has many recipes which are the same around the world to maintain its original value and image. The Big Mac, for instance, is a good example. So, it is fair to say that McDonald’s tends to use a mixed strategy but adaptation is its leading strategy.
3. Standardization – Apple 3.1) Introduction In this part of the project, we will analyze the strategy of Apple Inc. especially for iPhones, by beginning with a market analysis based on the history and brand image of the company, its internal polices, and try to prove our analysis with the survey we have carried out.
3.2) The standardization strategy of Apple 3.2.1) Segmentation At first we notice that the market of mobile phones is divided in several groups. Generally the effective creators on this market use all a differentiated marketing strategy. So the market of Smartphones is a segmented market with companies providing smartphones by targeting people of different tastes. For example, marketers sees this market consisting of people who are sms addicts, fashion conscious, love music or are web surfers etc.
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However, Apple had the idea to take back the same marketing strategy as its taken out Imac dixains earlier. Indeed the manufacturer offer only a unique range for his product and thus targets the whole market by means of the only iPhone. This strategy consisting in ignoring the various possible segments of the market is thus an undifferentiated strategy.
Apple thus operates, thanks to a marketing of mass, targeted at a very wide clientele ( no geographical or social segmentation) in a market, that of the Smartphone, nevertheless reserved for the segmentation. This marketing of mass is rarelly used by other companies. However Apple is a rather particular company, the undifferentiated marketing became its trademark. Of more the market of Smartphones is rather recent and Apple was able to benefit from the large-scale economy of this market (12% of the French people possesses a Smartphone, which is twice more than in 2008). Apple proposes only a single product at a time, they thus have a policy which allows them to dim their production cost by buying massively the same components and also by mass-producing the same product and not several products.
But not so long ago, Apple experimented by releasing two new iPhones, the 5s and the 5c. Those who want the top notch experience and who are willing to pay for it will get the 5s. Those who are more money conscious will have the plastic case i.e iPhone 5c. But after increasing orders of iphone 5s compared to iphone 5c, it can be concluded that they are not required to care about product differentiation at all.
3.2.2) Positioning and product policy 1. Apple wants to touch a large number of consumers by proposing a performing, multifunction, easy to use, ergonomic product and by being more innovative, to demarcate itself from main competitors, in particular Samsung and Nokia.
2. I Phone is innovative in the sense: it is the first telephone to propose a completely
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tactile wide screen. Apple proposing only a single consumer telephone, the product is thus multifunction and accessible for everybody (children, women, men, professionals).
3. Apple then designed the iPhone with an elegant and sober design to affect the largest number of consumers. The product remains nevertheless a high-end product, which does not break the quality reputation of Apple.
4.Another good point of Apple's product positioning is that there are very few variants in each class of products: iPad is available in Black or White, 3G + Wifi or WiFi only in 3 memory sizes: 16GB, 32GB & 64GB, and 3G is available on Verizon or AT&T network. This limits the number of choices the customer has to choose from and it makes it easy for customer to decide and buy.
3.2.3) Standardization of the product and the personal Customization · Apple also proposes a specific service in the iPhone named AppStore, where we can buy various applications for the phone. Apple although proposing a policy of monoproduction, manage to establish a certain differentiation by customization (personalization) of the phone with the help of AppStore : for example a young person will not personalize its iPhone with the same applications as an old person.
Limits of this strategy of single range: Sometimes these strategies can have a bad effect and can be threatening for the company. The fact that the iPhone is (and will be still very certainly) a product designed on a unique range, a phenomenon of tiredness can be felt by consumers: That can urge them to use another brand.
Price policy: Apple products are generally priced higher than competition.This position has helped
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Apple a lot as it avoids getting into price war. Instead of competing on price, Apple can now compete on innovation and unique value propositions.This position of a premium priced superior product was once occupied by IBM and later by Sony. Premium pricing strategy helps to make big profits without hurting the brand. Apple brand is the most valuable asset, bigger than all the technologies it controls. Having volumes at this premium pricing helps Apple make bold design decisions and force its supply partners to comply with its design decision.To strengthen its premium pricing, Apple does not do any discounting on its products.
Distribution Policy: During the launch of the iPhone in 2007, Apple proposed an exclusive contract with some Operators of the various countries where the iPhone was available (like Orange for France). The company thus had a partnership policy of exclusivity with national operators. However, in many countries this contract was prohibited because it was considered as anticompetitive. The iPhone is thus from now on available under several operators. In the era of Internet sales, Apple moved boldly in the opposite direction and set up exclusive retail outlets, when its competitors closed retail outlets and moved to Internet based sales. Apple has been very selective in choosing the retail partners, has made big demands on how Apple products must be placed and displayed in stores and in case of company owned retail outlets Apple has gone the whole length to design the store as a boutique store aimed at giving the best customer experience. Apple stores are often located in prime retail places and that augurs well with its premium image.
Communication: We notice coherence on the various media adopted for advertisements by Apple. The brand opts for same type of advertising even for Web, TV or paper. However we found a preference for the Web publicity and TV, which is also confirmed with our
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survey. Advertisements followed each other on various features, like the possibility of surfing on the Internet with the Safari browser, the use of Google Maps as GPS(Global Positioning System), the possibility of playing games, videos specially conceived for the iPhone; but also advertisements informing about the technical aspect of the SmartPhone : we found several ad showing main assets of tactile. In 2008, company created a lot of ads utilising the form of comparative adversiting. The Ad showed two men, an older one in professional business attire with an intellectual flare about him, the other one, younger and sporting casual attire, standing side-by-side surrounded by a blanket of white space. The older, more "traditional" man represents Microsoft Windows-branded personal computers (PCs), while the younger, more "hip" man represents Apple's Mac brand of computers. The commercials often poke fun at PCs' flaws, subtly suggesting that using a Mac is the way to go to solve all your computer problems. The "Mac versus PC" ads created such a buzz for the product, Apple even expanded this scenario globally. Televised ads were then made to play out in the same manner in Japan, only instead of two caucasian males speaking English, they were replaced with two Asian males speaking Japanese, to accommodate the culture for which it was aired to.
3.2.4) Survey and analyses Adaptation or standardization in the international marketing has been a topic of debate for many years . Many researchers tried to investigate the factors influencing a company's decision but their research was not based on empirical findings.We, through our survey method collected some data which will give better insight into the marketing strategy of Apple Inc.
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Advertising media used by Apple:
Decisions of neighbourhood marketing:
Customer service:
Background & Experience of Sales personnel:
Types of distribution channels:
Customization of packaging:
Product Quality:
Localization of Apps:
100% results: 1. Level and Training provided to Sales Force: same everywhere; complete
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standardization 2. Product Design (trademark, warranty, user interface): complete standardization One can conclude from the analysis of this survey that the product element is the most standardized element of Apple Corporation. They provide the same quality and design worldwide. Its very interesting to note that Apple also don't change the packaging of the products. These may be the reasons that Apple is so successful, people trust because of the consistency and uniformity of Apple goods. The only hardware modification that Apple makes in their products is the power source because of the different power voltage in different countries. However, the underlying iOS operating system, among other things shows the text, labels, etc., in local languages. There are also lots of specialised apps in Appstore for every country. This is certainly a helpful sales enabler. What makes Apple more different than other Smartphone companies is that it releases only one smartphone a year, priced at the premium end of the market whereas other companies like Samsung releases multiple models annually with different specifications and at different price points. We created this survey on site 2ask.net and sent the link to our friends in different countries who then again distributed it among their friends. Countries included India (13 respondents), China (21), Sweden (12), Thailand (10), Germany(9), Morocco(3), Algeria(4), Czech Republic(2), Lebanon(1). The nations are big and small, Asian and European. Another important point which can be discussed is of Apple's strict control over its local retailers. We confirmed our survey result by visiting a local Apple dealer store. An employee at the reseller shop told us that before Apple ships any products, they have to create a space according to Apple specifications and then send Apple a photo of the space and Apple must pre-approve everything, including any furniture surrounding it, before the store gets its first new release. Apple's control extends to
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advertising campaigns as well. The store also has to submit any advertising or promotional materials it plans to use prior to publication- if it wants to sell something as important as an iPad. That is also how apple maintains the prices of the products everywhere. There have even been reports of Apple cutting off supplies to stores that sold products below a threshold. Knowing that the prices of its products are so stable makes shopping relatively stress free for people. Most participants agreed that Apple's customer service is same as its domestic market. We also found out that this is like a secret weapon used by Apple to keep its customers. Most people have satisfying repair experiences at the Genius Bar. Products are also replaced right away as long as it is within the warranty period. We also incorporated an element of extended marketing mix called Personal Selling in our research. Personal selling is where businesses use people (the ―sales force‖) to sell the product after meeting face-to-face with the customer. It is used for relatively high priced products with complex features. Employees at Apple's shop(especially direct store) undergo extensive training and they are not allowed to meet customer before they are ready with complete product knowledge. Apart from these major elements, we questioned survey participants about their opinion on the internal factors considered when pricing the product for their country. A little variation can be seen in the prices in different countries due to various reasons but Apple's product remains high-end. As per the results it came out that in China and Germany, demand for the Apple product is the most important factor followed by competition in Germany and economic conditions in China. Almost all the countries put 'global objective and guidelines' and 'product costs’ at the third or fourth position that means apple so far have justified its pricing strategy by selling world class products. In Thailand, government rules and standards were the major determinant followed by economic
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condition. In India and Sweden the most influential factor was competition as Indian market is hugely dominated by Samsung and Micromax. Apple is now relaunching its iphone 4 in India at a price much less than its original price. So, Apple does make pricing adjustments on older versions of its product because it does not want to lose its market share in burgeoning economies. Overall Apple being an exceptionally successful firm can be regarded as a strategic-winner. These guidelines can be useful for new international marketers planning the extent of standardization of their product. Striking the right balance: Optimization Apple also be experienced some socio-cultural problems when interacting with global markets especially in the countries that they are focused on like Japan. Apple failure in Japanese market can be attributed to its inability to adapt the product element. Apple Inc. could have overcome this barrier by conducting research, and should have taken into consideration Japanese culture from the start of product development. Apple localize its software part, so one can use the interface in their local dialect but this was not enough especially for Chinese and Japanese markets. This led to the fall of sales in China and Japan at one point of time. In Japan much importance is given in details and people like to have lots of emoticons in their messages. But Apple through its expertise in innovation comes up with a better product every time and grabs large market share. This could be possible because of the cost savings that arises due to standardized products which gets invested in the company's R&D. Though, it is advisable that the individual leading the firm should conduct research on the targeting market before trying to set their feet there. This improves the export performance. One must also be familiar with the economic and legal differences that could arise while expanding their market globally. There is always a tradeoff between standardization and customization but one must be able to find the right balance. 3.3) Conclusion
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Apple, today besides being world leader of the market of the computing, extends over the market of the mobile telephone by superseding good number of its competitors present on this market for many years, and it in particular owed the novelty which represents the iPhone and the prestigious rank of Apple which guaranteed its products to be of quality. The Apple Company thus launches the iPhone, a quite new tactile Smartphone which will revolutionize the mobile telephone industry. To promote the iPhone, Apple stayed on its specific and judicious mix-marketing that it attributes to its products for their communication and advertisements. This is the way they preserves the image of the company with his interlocutors and with his public.
4. Conclusion 4.1) Answer to the propose The purpose of this study is to compare two intercultural marketing strategies : adaptation and standardization, and to explore how companies make their own achievement through each one of these two patterns. To find out the answers, the study analyses two typical cases: McDonald’s adaptation of products and Apple’s global strategy. By the comparison between them, it is concluded that both adaptation and standardization have their own advantages and if they are used properly, multinational companies can benefit a lot from them. On the one hand, adaptation policy may be more efficient in satisfying customers in different markets. Modifying the physical characteristics or attributes of the product may increase costs, but meanwhile it will fit the needs of different countries better, which will enhance the competitive power of multinational corporations compared with local firms. The key to the considerable expansion of McDonald is that it adjusts its food to the flavour of people in different cultures. On the other hand, standardization enables a firm to set up and maintain its brand image. For Apple, it helps to guarantee its products’ being high-quality. Moreover, it also contributes to efficiency and productivity in general. ―It is a very cost reductive
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way of doing business‖ by ―standardizing offers and by using forms to easily repeat the services as many times as possible‖ (Lissette Wallgren 2007) . Because making new product lines, commercials, packages is expensive, therefore adaptation requires more investment than standardization. When Apple sells the same product worldwide, it will be able to buy materials in bulk, make full use of cheaper labour in particular areas. In short, each of these two marketing patterns possesses distinctive virtues respectively. It would be wise to hold a holistic view instead of overall affirming one of them and meanwhile negating the other. Furthermore, to make full use of these methods, international companies should be able to figure out which one is suitable for themselves most. Only in this way can they become more competitive in a trend of globalization and expand their markets.
4.2) Implication Considering the fact that both adaptation and standardization have their own benefits, the long debate of whether multinational corporations should either standardize their products or adapt them to different cultures continues to be a focus of researches. But we can be inspired by the cases of McDonald and Apple that what plays a crucial role in the choice of these two strategies for products is the type of industry that a company operates in. Products of high technology such as automotive and electronic industry are more appropriate for standardization no matter culture, language nor traditions. While food industry tends to prefer adaptation concerning the vital factors dominating food markets such as eating habits vary in different cultures. For a fast food retailer like McDonald, product adaptation strategy is definitely more profitable because food is combined extraordinarily tight with specific culture all the time. There are various factors of local conditions that will influence the promotion of food, such as eating habits of the people, religious belief, customs and values. Without taking these into consideration, a multinational corporation is likely to get trapped when trying to enter a foreign market. That is why McDonald determines to adapt
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their products to local culture and meet the consumers’ preference. For instance, they do not provide beef hamburgers in India and supply rice-chicken combos in China. These intercultural transformations of menus and other service have gained people’s identification and to some extent decrease the boundaries of different cultures. It indicates McDonald’s attempt to respect cultural differences and adapt to local culture. Hence it can be able to defeat a large amount of its other competitors and expand rapidly in different districts. However, unlike food products, electronic ones such as laptops and mobile phones are not so much related to culture. They are hardly affected by cultural distinctions. There are few cultural restraints for electronic products compared to food supplies. What matters to the consumers is whether the functions of them are excellent. In this way, there is no need for Apple to make all efforts to adapt their computers or cell phones to the mix-culture markets; what should they focus on is to continuously upgrade their goods and bring out new, insanely great innovations. In fact, Apple sticks to a global strategy, selling the same products and sustaining identical image and values all around the world. Furthermore, the second thing we may learn from these two examples is that a cross-cultural company actually cannot follow only adaptation or standardization: it should be a mix strategy. McDonald does make some changes in terms of different cultures, but meanwhile it sells many same hamburgers everywhere. Apple seems to stress on standardization, but it also brings up with some adaptation in its apps based on various countries. On the one hand, they both make choice of their major marketing strategy: McDonald for adaptation and Apple for standardization. On the other hand, they do not ignore the benefit of the other one and manage to create a mix in order to be more flexible in their targeting markets.
4.3) limitation of the project In this study, it discusses about multinational corporations’ success through two different strategies: standardization and adaptation in mix-culture markets and
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implicates that the decision of companies relies on the type of products they produce. However, there are some limitations in this project. Firstly, there are definitely a great deal of factors that influence a company’s decision towards standardization and adaptation. However, in the implication, by comparing McDonald and Apple, only the factor: the type of products is being illustrated. To work out what is the most conclusive reason; further investigation must be carried on based on the cases of corporations which produce the same type of products. Secondly, as it has been mentioned above, companies should neither completely for nor against standardization or adaptation. Then there ought to be a balance between them. So further study can be made to explore the degree to how the firms manage to adapt or standardize their products.
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Reference: 1. (n.a), February 2nd 2014, McDonald’s Corporation 2013 annual report, Page 10. 2. (n.a), February 2nd 2014, McDonald’s Corporation 2013 annual report, Page 11. 3. (n.a), McDonald’s around the world. http://www.thetravelalmanac.com/food/mcdonalds/discussion.htm
4. (n.a), BBC News, September 4th 2012, McDonald’s opens vegetarian-only restaurant. http://www.bbc.com/news/business-19479013
5. (n.a), China Daily, October 29th 2013, Chinese fast food firms challenged McDonald’s. http://www.chinadaily.com.cn/bizchina/2013-10/29/content_17065973.htm
6. (n.a), People’s Daily Online, June 6th 2013, McDonald’s hopes to wow Chinese with rice. http://english.peopledaily.com.cn/90778/8272784.html
7. Cleveland M and Laroche M ,2007, ―Acculturation to the global consumer culture: Scale development and research paradigm‖, Journal of Business Research, 249-259. 8. Douglas S. P. and Wind. Y, 1987, ―The Myth of Globalization‖, Columbia Journal of World Business ,19–29. 9. Ghantous.N, 15-16th April 2008, ―Brand internationalization strategy beyond the standardization/
adaptation
dichotomy‖,
Presented
on
Thought
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International Conference on Brand Management, Birmingham- UK. 10. Kotler P, 1982, ―Global Standardization-Courting Danger‖, The Journal of Consumer Marketing. 11. Lissette Wallgren, December 2007, ―The complex service field—Is it possible to standardize?‖, Kristianstad University, 34. 12. Robert Bartels ,1968, ―Are Domestic and International Marketing Dissimilar?‖, Journal of Marketing. 13. Valdez, 2011, ―Adaptation marketing strategy‖, accessed on March 16 2014,
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http://www.ehow.com/info_8335809_adaptation-marketing-strategy.html 14. (n.a), Apple – Promotional Strategy http://macapplepod.wikispaces.com/Promotional+Strategy 15. Arun Kottolli, July 11, 2011, Apple’s Market positioning. http://arunkottolli.blogspot.se/2011/07/apples-market-positioning.html 16. Remi Otani, May 26, 2009, Case study: Why did iPhone not succeed in the Japanese Market? http://www.slideshare.net/RemingInSydney/case-study-why-did-iphone-not-succe ed-in-the-japanese-market
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Appendix: Questionnaire 1
麦当劳的中国化 年龄 *
20 周岁及以下
20-30 周岁
30-40 周岁
40 周岁以上
您去麦当劳餐厅消费的频率 *
每周 1-2 次
每周 3 次及以上
每月 1-2 次
每月 3 次及以上
基本不去
您觉得麦当劳有没有根据中国市场调整了菜单？ *
做出了很多调整
做出了一些调整
很少调整
基本没有调整
您觉得麦当劳有没有根据中国市场调整服务（送餐、店内布置等）？ * 做出了很多调整
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做出了一些调整
很少调整
基本没有调整
对于麦当劳的这种中国化的现象您的态度是 *
非常支持，还应继续加深中国化的程度
支持，维持现有程度即可
完全没必要中国化
无所谓
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Questionnaire 2 ADVERTISING1)Select the main advertising media used by apple corp in your country? a)internet b)tv c)print e)other..please specify 2)Does the apple brand communicate itself in your local dialect(ad campaign etc)? a)yes b)no 3)In your opinion, who has complete influence over approving promoting stategies for you country? a)your local subsidiary b)Parent corp c)Joint decision PRODUCT4)Is the apple product's quality in your country different than the world market? a)yes b)no 5)Is the product design (trademark,warranty,user interface)different in your country that the world market? a)yes b)no if yes: how? 6)Is the apple's product packaging(style,colour,shape,language) customized for your country?
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a)yes b)no 7)Is the product's brandname changed keeping in mind the cultural context? a)yes b)no PERSONAL SELLING8)Do you think that the level and training provided to the sales force is same as the international market? a)yes b)no 9)Do you believe that the background and experience of Sales personnel same as that of home country? a)yes b)no OVERALL AREAS10)What is the process for selling apple goods in your country(major distribution channel)? a)Direct personal sale;Superstores b)Direct online sale c)Indirect through channels;small local stores 11)Is the Price of apple goods adjusted for your country's market, compared to product's home market? a)yes b)no 12)In your opinion, does apple's customer service same as its home market? a)yes
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b)no 13)Please rank,in order of importance, what you think are factors considered when pricing the product for your market a)competition b)product costs(i.e. manufacturing,logistics etc) c)global objectives and guidelines d)consumer demand e)disributor needs f)economic conditions g)government regulations and standards
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