Standardised and Localised marketing strategy for VW

 

Types of strategy

 

There are two types of strategies that an organisation are able to adopt, these are standardised and localised strategies. Strategically, this is one of the most important decisions an international business has to make in order to improve marketing and communication of their product/service to customers.

 

 

Standardised - This type of marketing strategy demonstrates a more wide spread communication. It communicates an organisation and their products/services on a global scale and "standardises" their marketing technique to appeal and be understood worldwide. Standardising in this instance can be defined as altering the communication to be suitable for multiple markets. This means that consumer’s cultures, language barriers, legal regulations, location, product pricing and packaging etc. are taken into account when marketing the service/product ensuring that these can be translated and understood globally. Segmentation such as geodemographical segmentation would be used for standardised strategy. "Standardization is commonly defined in the literature as a strategy wherein marketers assume global homogeneous markets and in response offer standardized products and services using a standardized marketing mix" (Mooij, 1998; Jain, 1989).

 

This type of marketing strategy would be useful for Volkswagen because it means that there is a larger market to communicate to. A larger market means that a larger number of people would be aware of VW as an organisation, what they do and what they can offer. The only disadvantages of having a more standardised strategy is that marketing products/services to a larger market will decrease the personalisation of the communication, meaning that the product will not be as specific to a certain market, but more of a generalised image/message of the company/products/service. Please see figure 1 copied from William L. Wilkie’s Alternate views of the market.

 

 

 

This image shows advantages and disadvantages of segmenting the market, in this instance, being standardised marketing strategy; we can see that targeting a larger market, i.e. the globe as a market is low cost. The disadvantages are that the effectiveness of the market strategy is reduced.

 

A standardised organisation will look and act the same to every market; companies like IKEA adopt this strategy and execute it extremely well,

 

 "A characteristic that makes IKEA stand out among global retailers is the - alleged - standardised approach to every market it enters. It looks and operates the same in every market" (Salmon and Tordjman, 1989). Ikea use the same product names, building layouts, product design and many more features of the organisation in all markets. This can build up an almost brand trademark for the company which is recognised globally.

 

 

 

Localised -

 

Localised marketing strategy is where the communication is customized to suit a specific market; this market is generally on a small scale and is easy to analyse and gain productive feedback from. Feedback can be obtained easier because it is a more localised market which means it is easier to manage and assess.

 

Most marketing activities will be more successful when adapted to local conditions and circumstances in the marketplace. In this way a pure global marketing strategy is not ideal as it does not take locally related issues into account. Marketers need to understand how their brand is meeting the needs of customers and how successful their marketing efforts are in individual countries (Kotler, 2009).

 

 

Kotler, 2009 describes how a localised marketing strategies advantages are that there is a more direct and simplified approach to pleasing a smaller (local) market.

 

Using a localised strategy, a marketer has less concern about language barriers, due to the fact that they will be marketing in the spoken languages, the only acceptations would be people living in that market area who do not speak the spoken language. Cultural issues would be a much smaller hurdle than marketing globally as the culture divides will be on a lot smaller scale.

 

A localised marketing strategy would be useful for VW because it can be more effective marketing to a smaller market with less segmentation. There is more of a view on what the consumers of a smaller market would like to hear and have, meaning that communication is easier when localised. With VW adopting a localised marketing strategy, VW as a company would be able to customise their marketing schemes to appeal to that market. The disadvantages of having a localised marketing strategy are that there is a smaller market to target and therefore less potential consumers are effected by the marketing strategy.

 

References

 

 

· [online] http://globalizationexecutive.com/articles/Chapter3.pdf

 

· (Neil Payne, 2008, www.proz.com). viewed online at:http://globalizationexecutive.com/articles/Chapter3.pdf

· (Salmon, W.J. and Tordjman), A. (1989), "The internationalisation of retailing", International Journal of Retailing, Vol. 4 No. 2, pp. 3-16.

· [online], definition and context of standardizing strategies http://globe.miis.edu/definitions.html

· (Mooij, 1998; Jain, 1989). viewed online at:http://globalizationexecutive.com/articles/Chapter3.pdf

·         William L. Wilkie’s Consumer Behaviour, Third Edition 1994, chapter 4/marketing segmentation, p85, Alternate views of the market figure 4-1.

·         Kotler, Ph. et al., (2009), Marketing Management – European Edition. Harlow, England: Pearson Prentice Hall Publishing, pp. 467 – 468