Firms often adapt their market strategies when entering foreign markets, even in a global era where many brands and products like cola beverages and fast food outlets are nearly universally prevalent. Those adaptation decisions coalesce into an adaptation strategy that can influence the competitive position of the firm and, in turn, its performance in foreign markets. Adaptation strategies may be as simple as tweaking the logo and the colors of the packaging, or may involve developing new flavors better suited to the local palate or new financing models more fitting for the local economy.
Adaptation strategies involve changing the price, promotion and packaging of a product, or even the product itself, in order to fit the needs and preferences of a particular country. Adaptation occurs when any element of the marketing strategy is modified to achieve a competitive advantage when entering a foreign market.
Adaptation vs. Standardization
The opposite of adaptation is standardization. Firms following a standardization strategy enter foreign markets using the same ads, packages and presentations that were used in the domestic market. Because making new advertisements, packages and product lines is expensive, standardization requires less investment than adaptation. Besides, proponents of a standardization approach argue that it allows for the presentation of a consistent image across countries.
Dimensions of Adaptation
The cost effectiveness of adaptation strategies depends on the similarities or differences among the selected markets. The U.S., U.K., Canadian and Western European markets have been found to be broadly similar, making standardization strategies feasible. On the other hand, marketing Asian products in the U.S. and African products in Europe (or vice versa) would probably require adaptation, allowing firms to develop marketing strategies that better fit the local needs. Consumer needs, user conditions, purchasing power, culture and traditions, laws and regulations, and commercial infrastructure are among the many factors that must be taken into account when following an adaptation marketing strategy.
Once a firm has taken the decision to adapt its marketing strategy, it must assess its objectives and resources in light of the characteristics of the new foreign market it is entering. Input from experts familiar with the new market is crucial at this stage. As would be the case when introducing a new product in the domestic market, the adapted marketing strategy must be expressed in terms of product, price, distribution and promotion aspects, coordinated to achieve specific objectives within the new market.
- "Journal of International Marketing"; Adaptation of International Marketing Strategy Components, Competitive Advantage, and Firm Performance; Gerald Albaum et al; 2001
- "International Business Review"; Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research; Marios Theodosiou et al; 2003
- "The Journal of Marketing"; Standardization versus Adaptation of International Marketing Strategy: An Empirical Investigation; David M. Szymanski et al; 1993