Local Adaptation Essay

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All firms that  operate  in a single, domestic  context have to design and implement  product,  pricing, promotional, and distribution strategies to compete effectively in their respective markets. On the other hand, firms that  operate  on an international scale face an additional challenge that must be tackled before they cross borders. The main dilemma for the marketing strategy of such multinational entities is the decision to either follow the same marketing program across all foreign markets  or employ a different approach  that corresponds  to each foreign market’s idiosyncrasies. This dilemma is the backbone of the global commercial policy of multinational corporations,  and in the business literature it is called “standardization versus adaptation” of international marketing strategy.

In particular, local adaptation  is the act of employing a marketing strategy that is unique for the market under  scrutiny  and thus  different from the marketing strategy used in other countries. Such a difference denotes modifications in the marketing mix with the purpose of adapting to the cultural diversity of international  markets.  Local adaptation  includes modifications on marketing elements such as the following: (1) the product’s tangible elements such as size, taste, packaging, or ingredients used; (2) the product’s intangible  elements  such as brand  name  and brand positioning; (3) the promotional message and promotional media; (4) pricing toward middlemen and final consumers; and (5) number and type of middlemen.

Locally adapted activities such as the use of different brand names or the use of different promotional efforts within  retailing  outlets  across  countries  are numerous  and have led firms to both success stories and major marketing  blunders.  For example, the ice cream unit of a giant firm like Unilever is called by different names (either Eskimo or Ola or Algida) in countries such as Sweden, the United Kingdom, Greece, or Spain. Additionally, large U.S. retailers have realized that successful types of promotional  activities in the United States (such as “buy two extra-large sizes and get one free”) have no equal appeal among consumers in a country like Germany, and so they have adapted their in-store promotional  strategy.

The main purported advantage of an adapted strategy is that such local responsiveness meets local customers’  needs  more  efficiently than  a standardized strategy that employs a common marketing program for all countries and thus ignores local markets’ specificities. On the other  hand,  though,  local adaptation  bears a major disadvantage compared  to standardization. It is a very expensive task to undertake, since modifications for each country in which a firm operates increase costs enormously. As a result, the effect of such a strategy on typical performance measures  such as profitability  is debated.  However, there are suggestions in the literature  that firms that locally adapt their marketing strategy perform better in other measures such as total sales or market share due to their closer look at local markets’ needs.

Thus, the decision as to whether firms should eventually employ a marketing  program  that  is partly or wholly adapted  to local idiosyncrasies is not an easy one and involves many considerations.  These considerations  influence the  degree to which the  firm will eventually adapt  its marketing  elements  and include factors that have to do with both the intra and extra firm environment such as the delegation  of decision making  within  the  multinational enterprise  and  the market size, respectively. A synoptic categorization  of factors, internal and external to the firm, distinguishes among influences that are either mandatory or discretionary and have to do with (1) characteristics  of each market in which the firm operates (e.g., weather conditions, local ethical rules, and legal guidelines); (2) the synthesis of the consumer  base the multinational firm addresses (e.g., demographic/psychographic characteristics of consumers  and their attitudes  toward foreign products); (3) the nature  (price versus nonprice)  and intensity (high or low) of competition; (4) the nature of the product (e.g., consumer versus industrial goods, luxury versus no luxury products,  culture versus no culture-bound products); and (5) organizational  and managerial  characteristics  (e.g., openness  of the firm toward international operations or international experience of business executives).

For example, legal restrictions  in several countries necessitate  a locally adapted  promotional strategy on behalf of tobacco firms, which cannot  advertise their brands on TV and thus must employ alternative means of advertising. Additionally, many multinational firms face increased competition by their local counterparts and may need to adapt their pricing strategies in order to  become  more  attractive  to  local consumers.  An example  of an intrafirm  influence  is the  polycentric orientation of the  mother  firm, which “forces” local subsidiaries to employ their own, locally adapted product policies that match local consumers’ preferences.

Summarizing,  it must  be noted  that  the decision whether to adapt or not is not necessarily antithetical to the decision to standardize. A firm usually employs diverse reasoning before actual strategic decision making, and adapted elements may coexist with standardized elements in the same marketing  strategy. It is therefore more appropriate to talk about the general degree of adaptation  and not in terms of a dichotomy between adaptation  and standardization.


  1. Roger J. Calantone, Daekwan Kim, Jeffrey B. Schmidt, and S. Tamer Cavusgil, “The Influence of Internal and External Factors on International Product Adaptation Strategy and Export Performance:  A Three-Country Comparison,” Journal of Business Research (v.59/2, 2006);
  2. Subhash C. Jain, “Standardization of International Marketing Strategy: Some Research Hypotheses,” Journal of Marketing (v.53/1, 1989);
  3. Masaaki Kotabe and Kristiaan Helsen, The Sage  Handbook  of  International   Marketing  (Sage, 2009);
  4. David A. Ricks, Blunders in International Business (Blackwell Publishers, 2000).

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