Global standardization in marketing is a type of marketing strategy that is intended and expected to work across different people with various tastes and choices. It involves sponsoring a product that is the same in all these nations while localization is used to refer to when a product is introduced in a new country away from home. Coca-Cola being a multinational corporation must choose a strategy that is aimed at helping the company attain its goals.
Considering that Coca-Cola has tried operating using both strategies, which have brought out differing results, it would be effective and efficient to blend the two strategies together (Warf and Stutz 71). This can be explained with the fact that the local market may not enable the company to gain all the benefits realized from economies of scale, learning effects, and location economies.
Also, it may not be possible to serve the whole global market from a single low-cost location. Production of a globally standardized product and marketing it would help attain the company to gain cost reductions that are associated with experience effects. Firms put into practice a global standardization strategy with the aim of achieving the huge profits that result from mass production such as reduced costs and economies of scale.
Since global standardization involves producing a standardized product worldwide, the product may not be received well in all cultures since people have different tastes and preferences. Also, global standardization tends to forget about the local markets making the company faced stiff competition from local competitors as it happened in the late 1990s.
If the localization strategy had been also in place, this would have been minimized since products were produced customized to meet the local demands. It takes into mind that tastes and preferences differ depending on the culture (Lau 126). Products will be produced to meet their demands and hence reducing the unnecessary competition experienced.
The localization enables the firm to improve on its profits by ensuring that the commodities of Coca-Cola provide a high-quality equal to tastes and preferences of these differing cultures. In times when the demands for local responsiveness are high, the global standardization strategy would be inappropriate and hence should be substituted by the localization strategy, which helps meet the high local demand.
On the other hand, a localization would limit the ability of the company to capture the cost reductions associated with mass production of a standardized product for the global market and hence the global standardization strategy would apply in such a situation that involves mass production and there are reduced costs since demands for local responsiveness are minimal.
Having the two strategies in place also may help in situations when the company finds itself being confronted by low pressures and low demand for local responsiveness since products first produced for the domestic market can be sold internationally in areas where their demand is high and they are required urgently.
Although localization gives a firm a competitive edge, a company may start facing aggressive competition and the only way to reduce the competitions would be to impose the global standardization strategy in place (Clulow, Julie and, Carol 224).
Coca-Cola being a multinational corporation would efficiently realize its goals by combining both the global standardization strategy and the localization strategy in its operations. This enables it to take advantage of both the local and international markets depending on the levels of the demand. Both strategies will involve increasing the profits of the company ensuring that its expansion is maintained and a larger market is reached.
Works Cited
Clulow, Val, Julie Gerstman, and, Carol Barry. “The resource-based view and sustainable competitive advantage: the case of a financial services firm”. Journal of European Industrial Training 27.5 (2003): 220–232. Print.
Lau, Ronald. “Competitive factors and their relative importance in the US electronics and computer industries”. International Journal of Operations & Production Management, 22.1 (2002): 125–135. Print.
Warf, Frederick, and Stutz, Barney (2007). The world economy: resources, location, trade and development. Upper Saddle River: Pearson. Print.