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Coca-Cola Company: Global Standardization vs Localization Case Study


Introduction

Coca-Cola is an iconic soda maker. The company operates in over 200 countries. According to Parker and Rees (677), many multinationals such as Coca-Cola are faced with dilemma in finding the balance between global standardization and localization strategies.

The dilemma relates to the selection of best strategy to apply in order to penetrate the international market. As the CEO of Coca-Cola, I will pursue localization strategy. The strategy will facilitate the acceptance of the company’s products in different countries.

Rationale for Pursuing Localization

There are different reasons that inform the selection of either localization or global standardization. For instance, Parker and Rees (677) note that global standardization approach is cost driven because it leverages on same product configuration and marketing strategies.

The global standardization promotes corporate identity. It also leads to unified products. However, the varying cultural orientations are the main impediment to this strategy. On the other hand, localization is a strategy that takes into account the cultural diversity and varying business environments in the global market (Singh 124).

The aspect of adapting to different cultures makes the strategy suitable for Coca-Cola. Parker and Rees (679) state that culture varies depending on factors such as nationality and ethnicity. In order to increase penetration and acceptance of Coca-Cola brands, it is critical to customize the brand to be consistent with the preferences and requirements of local consumers.

According to Parker and Rees (681), localization creates a sense of ownership and loyalty, which results in increased sales in a given locality. For example, in Japan, Coca Cola’s second profitable market, the Coca-Cola brand is customized to local taste. The localization was achieved by manufacture of a canned cold coffee drink.

The experience in Japan forced the company to initiate localization in other markets in the year 2002. However, the expected growth was not achieved. This saw the company revert to global standardization, which has also failed to yield the expected growth. For Coca-Cola to increase the global market share, localization strategy that incorporates the various aspects of local markets will be critical.

Competition in the global market has intensified. As a result, there is the need for timely decisions that will enable the company to compete favorably. Prompt decisions are difficult to make using global standardization strategy (Parker and Rees 677). Localization strategy provides a solution to such a challenge because it allows country managers to make autonomous decisions.

For example, in the design of advertisements and communications that can be easily understood by the local communities. According to Singh (125), localization strategies aid in avoiding marketing blunders that result from non-customized messages. Proper localization can lead to profit maximization in many Coca-Cola’s markets (Parker and Rees 687). For instance, localization can save the company millions of cash that is used for market re-positioning due to offensive messages that result in consumer boycotts.

Conclusion

For localization to be effective in Coca-Cola, it will not be limited to certain aspects. It will incorporate pricing, marketing, branding and distribution processes that suit the business environment in the target country. The strategies will be designed to adapt to the marketing mix that resonates with the needs of the consumers. However, the strategies will be undertaken with caution to avoid compromising of the overall brand identity of Coca-Cola. Therefore, as the CEO of Coca-Cola, I will pursue localization strategy.

Works Cited

Parker, Cathy and Patricia Rees. “Localization as a marketing strategy for small retailers.” International Journal of Retail & Distribution Management 38.9 (2010): 677-697. Print.

Singh, Nitish. Localization Strategies for Global e-Business, Cambridge: Cambridge University Press, 2012. Print.

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IvyPanda. (2020, March 30). Coca-Cola Company: Global Standardization vs Localization. Retrieved from https://ivypanda.com/essays/coca-cola-company-global-standardization-vs-localization/

Work Cited

"Coca-Cola Company: Global Standardization vs Localization." IvyPanda, 30 Mar. 2020, ivypanda.com/essays/coca-cola-company-global-standardization-vs-localization/.

1. IvyPanda. "Coca-Cola Company: Global Standardization vs Localization." March 30, 2020. https://ivypanda.com/essays/coca-cola-company-global-standardization-vs-localization/.


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IvyPanda. "Coca-Cola Company: Global Standardization vs Localization." March 30, 2020. https://ivypanda.com/essays/coca-cola-company-global-standardization-vs-localization/.

References

IvyPanda. 2020. "Coca-Cola Company: Global Standardization vs Localization." March 30, 2020. https://ivypanda.com/essays/coca-cola-company-global-standardization-vs-localization/.

References

IvyPanda. (2020) 'Coca-Cola Company: Global Standardization vs Localization'. 30 March.

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