Successful brands like Coca Cola, Starbucks, McDonald's and KFC have more in common than just a brilliant marketing strategy and original products. These industry giants adapt their offerings to customers' needs, regardless of their cultural background. McDonald's menu, for example, varies depending on the location. This strategy is known as product adaptation and plays a key role in branding.
Customer preferences and market trends vary from one country to the next. That's why popular brands are constantly adapting their goods and services to new markets. KFC, for instance, doesn't add pork or beef to the products sold in India. IKEA's furnishings and decorations look different in Japan than in the U.S or Sweden.
There are various social factors affecting the acceptance and rejection of an identified product. A pair of jeans that's popular in America might not sell at all in a Muslim country. KFC's DaDong Duck burger is all the rage in China. Most Americans and Europeans have never heard of it.
Product adaptation allows companies to expand their reach and enter new markets – the above examples show exactly how it works. Organizations worldwide use this approach for marketing purposes and legal compliance. For example, Denmark has strict requirements regarding food supplements – manufacturers are not allowed to use certain words on the labels or claim that their products are better than those of other companies. Foreign brands that are planning to enter the Danish market must comply with these laws.
According to Warren J. Keegan and Mark C. Green, authors of "Global Marketing," product adaptation is one of the five international product and promotion strategies that organizations may use to enter global markets. How you will implement this strategy depends on several factors, such as government regulations, customer preferences and purchasing power, competition, product features, profitability and more. Consider the following aspects, as well:
- Customer characteristics
- Per capita income and living standards
- Climate and geography
- Quality and safety standards
- Commercial infrastructure
- Product usage conditions
- Product positioning
- Cultural considerations
- Supply and demand
- Permits and licenses
- Tax regulations
- Discriminatory restrictions
- Operational restrictions
American skincare brands, for example, may need to use different ingredients in the creams and lotions sold in the Middle East where the climate is hot and humid. Product packaging matters too. Red Bull sells its world-famous beverage in golden cans in China where gold symbolizes happiness and wealth. Car manufacturers that enter foreign markets often modify the tires to adapt to the road conditions.
Product adaptation is essential for companies that plan to expand their operations globally. With this approach, you don't need to create new products or services, but to slightly change or improve the ones you already have. Your offering needs to meet the technical and regulatory standards of the host country while matching customer behavior, preferences and culture.
Standardization and adaptation are strongly connected. As a business owner, you have two options: you can either adapt your goods and services to new markets or sell the same products in all markets. Both strategies have advantages and drawbacks.
Compared to product adaptation, a one-size-fits-all strategy is less expensive and easier to implement. The downside is that you may encounter legal problems and fail to penetrate new markets. Some companies, such as those in the nut and bolt industry, are successfully using standardized products because most countries have similar quality standards and legal requirements for these goods. Consider your industry, budget and target market before making a decision.
Factor in the advantages and disadvantages of adaptation in international marketing. This strategy is more expensive and time-consuming than product standardization but yields better results. It makes it easier to increase your market share, achieve legal compliance and meet customers' needs. Standardization, on the other hand, is more efficient and ensures brand consistency.