Seeking common factors for standardization strategy in global marketing

Date of publication: June 15, 1995

Author: Hiroshi Kosaka

Abstract:

As global business expands, practitioners in this field have desire to control or manipulate their global business strategy. In order to do this, they have to understand the global marketing environment at the same sophisticated level as their strategy control. In reality, however, academic arguments remains only descriptive and abstract, and do not provide guidelines to such a necessity. The author has identified a structure of global marketing environment by the systems and quantitative approach. The structure of the environment is identified as having macro-environment and micro-environment, to which global marketing strategy should respond. In such a framework, the concept of common factor and different factor, which correspond to standardization strategy and adaptation strategy respectively, is introduced to quantitatively analyze the relationship among environmental factors. Common factor means a same phenomenon among countries of similar economic level, having a correlation with GDP per capita of a number of countries. In macro-environment, economic, technological and demographic environments are common factors, whereas cultural, natural and political/legal environments are different factors. Some market demands in micro-environment are common factors, having a correlation with GDP per capita. Some market characteristics such as consumer preference and marketers' behavior are identified as different factors. Recently, common factors are increasingly proliferating, providing global business opportunities. In this framework, such common factors will be systematically identified by examining economic, technological and demographic environmental factors.

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