International marketing programme (My PhD 1996)

INTERNATIONAL
MARKETING PROGRAMME
STANDARDISATION OF UK
COMPANIES IN THE GULF.
A Thesis submitted to the University of Manchester
for the degree of Ph.D. in the Faculty of Business
Administration.
Obaid Saad Al-Abdali
Manchester Business School
1996

INTRODUCTION, RESEARCH TOPIC, UK AND GCC
BUSINESS RELATIONSHIPS AND THESIS STRUCTURE.
CHAPTER ONE

INTERNATIONALMARKETINGPROGRAMME
4
5
1.1 INTRODUCTION
Many researchers, including Elinder (1961); Fatt (1964); Roostal (1963); Sorenson
and Wiechmann (1975); Chase (1984); Harris (1984); Thackray (1985); Hamel and
Prahalad (1985); Boddewyn et al. (1986); Friedman (1986); Hill and Still (1984);
Huszagh et al. (1986); Kotler (1986); Whitelock (1987); Levitt (1983); Martenson
(1987); Wind (1985); Walters (1986); Ghoshal (1987); Yip (1989); Grosse and Zinn
(1990) and Wills et al. (1991) question the degree of international standardisation of
various elements of the marketing mix programme and wonder whether to standardise
their marketing programme or to have a different marketing programme in each
country.
This question is still troubling practising business managers as well as academics, and
produces divergent viewpoints. The issue has become prominent since the publication
of Levitt’s (1983) article arguing that the world has become one global market. On his
analysis great differences in culture, national tastes and standards are something of the
past. Many researchers have tried to refute Levitt’s argument, with varying degrees of
success. Some of those critics are Boddewyn et al. (1986); Douglas and Wind (1987).
According to Franzen and Light (1976) and Akaah (1991) one of the most striking
developments in business in the past three decades has been the trend toward increased
internationalisation of business operations. Jeannet and Hennessey (1988) argue that
many companies are expanding their operations outside their local market, especially
overseas, because they think the world-wide marketplace is becoming accepted as a
reality.
Robock and Simmonds (1989) remind us that international business is not new, and can
be traced back in history to around 2800 B.C. The Dutch East India Company, founded
in 1602, was one of the first international corporations. Robock and Simmonds (1989)
argue that the multinational enterprise as we know it today dates back to the mid-
1800s, when the Singer Company expanded internationally and began operating with
a global horizon.
According to Barker andAydin (1991), multinational companies (hereafter MNCs) had
developed by the 1960s and 1970s, followed by global companies, prominent by the
1980s. Nowadays there is greater competition, interdependence of national economies,
companies aiming at the same target in the same markets and trying to improve their
market position, and new competitors have entered the international market. Some
international firms have lost their market position. All of this can be seen as a threat
to the existing companies doing business abroad and at home, and obliging them to
engage in new competitive strategies (Barker and Aydin (1991) and Barker (1993)).
The term globalisation is used in the literature in different ways: one of its meaning is
standardisation as opposed to adaptation (Barker andAydin (1991); and Barker (1993)).
When a company treats the world market as a whole rather than looking at markets
country by country, then it can be said to be a global company. Hout et al. (1982),
Barker andAydin (1991), and Jeannet and Hennessy (1988) have defined multinational
companies as companies having subsidiaries that are autonomous and where the
competitive balance is struck on a country-by-country basis. Kashani (1990) argues
that global marketing is a worthy element in a firm's search for competitive advantage.
Levitt (1983) claims that multinational companies are nearing extinction. He thinks
that multinational and global corporations are not the same thing, since differences
exist between multinational and global co-operation. “A multinational corporation
operates in a number of countries, and adjusts its products and practices in each market
at high relative costs. The global corporation operates with resolute consistency at low
relative cost as if the entire world (or major regions of it) were a single entity; it sells
the same things in the same way everywhere”. Halliburton and Hunerberg (1987) view
international, multinational and global as alternatives along a continuum. According
to them, international firms “..grew from a national parent base by way of exports,
with key competitors normally determined in the parent country”. Multinational firms
“..evolved separate international divisions acting as semi-independent operating units,
focused upon their particular markets and countries, with key competitors defined in
relation to each separate market..”. The global corporation, “..operates on a world
scale as an interdependent total system facing other global competitors. Non-optimal
country strategies may be accepted provided the firm benefits corporately.”.
Boddewyn et al. (1986) argue that Levitt’s idea is good in theory but hardly grounded
in fact. The validity of Levitt’s case needs to be examined. In this study we see

6
7
globalisation in the context of standardisation versus adaptation. According to Kustin
(1994) in globalisation there are many different interpretations of specific terms.
Walters and Toyne (1989) state that “..global marketing is the process of focusing an
organisation’s resources on the selection of global market opportunities consistent
with and supportive of its short and long-term strategic objectives and goals”. The
same definition is given by Cateora (1990), supported by Levitt (1983) and Pride and
Ferrell (1991), who add that “..global marketing... strives for efficiencies of scale by
developing a standardised product, of dependable quality, to be sold at a reasonable
price to global markets, that is, the same country market set through the world”.
According to Dahringer and Muhlbacher (1991), “Global marketing, in contrast to
international marketing, concentrates on product strategies (groups of customers with
shared needs), emphasising their similarities, regardless of the geographic areas in
which they are located. However, it does not ignore differences among markets”.
1.2 INTEREST IN THE TOPIC
The debate on the issue of marketing standardisation goes as far back as the 1960s
(Elinder (1961); Fatt (1964); Roostal (1963); Chase (1984); Harris (1984); Thackray
(1985); Hamel and Prahalad (1985); Boddewyn et al. (1986); Friedman (1986); Hill and
Still (1984); Huszagh, et al. (1986); Kotler (1986); Levitt (1983); Martenson (1987);
Simmonds (1985); Wind (1985); Walters (1986); Ghoshal (1987); Yip (1989); and
Wills et al. (1991)). Marketing standardisation is a complex question, but it should be
given very careful consideration by international companies (Walters 1986). Onkvisit
and Shaw (1987) also affirm that marketing standardisation is a significant problem
which warrants attention and evaluation.
The concept has many implications for business firms, government, international
trade, and marketing education. During the literature review stage, it became obvious
that international marketing standardisation was an area relatively poorly examined
by academic researchers. But the fact is that international marketing is a significant
issue that deserves serious academic study. The issue is a complex one (Walters, 1986).
From the literature available, a distinction was made between standardised marketing
programmes and the marketing process. Most of the literature focuses on the marketing
programme, and promotion is the element most researched, with some attention given
to product design, whereas other elements of the marketing programme, such as price
and distribution, are overlooked in the literature. Price and distribution, as well as other
elements in the marketing programme, will be included in this study. As the literature
indicates, marketing standardisation cannot be accomplished without a reference
market, and most of the existing research is about the developed world, while markets

8
9
in the developing world are neglected. Therefore, it is the purpose of this research to
study marketing standardisation in the developing world, namely the GCC market.
Furthermore, of the research so far has focused on consumer-goods companies, with
little attention given to companies in other sectors such as industrial goods. This study
will include both consumer and industrial companies. Finally, many of the marketing
standardisation studies have lacked high quality empirical evidence (Jain, (1989)
and Kanso (1992)), with a few exceptions such as Sorenson and Wiechmann (1975);
Kacker (1975); Killough (1978); and Huszagh, et al. (1986), which were empirical.
According to Walters (1986), most studies of marketing standardisation are limited to
markets in Western Europe or the developed world. Onkvisit and Shaw (1987) plead
for more empirical evidence to resolve the standardisation/localisation controversy.
From the literature available, it appears that no systematic research has been conducted
into the standardisation of international marketing practice since Sorenson and
Wiechmann (1975); Boddewwyn et al. (1986). According to Hornik (1980), the debate
on advertising standardisation continues without reaching agreement because of the
lack of empirical data on the subject. Practical considerations are important but, also,
most of the existing research has dealt with multinational companies based in the
USA. Researching multinational companies in other parts of the world will give a clear
comparison of UK multinational companies and USA multinational companies.
This study is significant, since previous work on marketing standardisation has
concentrated mainly on the supply of goods to overseas markets through subsidiaries
based in those countries, and thus ignored direct export, which is still an important
part of international marketing activity, particularly for trading nations such as the UK
(Whitelock (1987); (Reichel (1989)).
1.3 DEFINITION OF MARKETING STANDARDISATION
One source of problems in the debate over marketing standardisation is the definition
of the term (Onkvisit and Shaw, 1987). In the literature there are differences in
definition which produce problems of comparability in the research results (Sandler
which result in problems in comparability of research results (Sandler and Shani,
1992). For example, Onkvisit and Shaw (1987) define standardisation in advertising
as using the same advertisement everywhere with no change in its theme, copy, or
illustration, except for translation when needed. Peebles et al. (1977) and Peebles
and Ryans (1984) in their definition of standardisation, allow for local flexibility
while maintaining the standardisation heading. They differentiate between prototype
standardisation and pattern standardisation. First, prototype standardisation is the
same marketing programme used by multinational marketers in many markets. This
programme was initially designed to be used in the home market and because of its
success it has been employed in multiple markets. Second, pattern standardisation is
the design of flexible marketing programmes intended from the beginning for multi-
market use. For this approach to be successful, a centralised system is necessary. In
implementingthisapproach,multinationalmarketerscouldgainmanyoftheadvantages
of standardisation, such as geo-segment image, and lower marketing cost.
Onkvisit and Shaw (1987) state that pattern standardisation is a cross between
standardisation and localisation and is designed from the outset to be susceptible to
extensive modifications to suit local conditions, while maintaining sufficient common
elements to minimise the drain on resources and management time. Jeannet and
Hennessey (1988) define standardisation as the amount of similarity companies want
to achieve across many markets with respect to their marketing programme. Levitt

10
11
(1983) argues that standardisation seeks to view the whole world (or major regions) as
a single entity and to sell the same standardised product in the same way everywhere.
Picard (1978) defines standardisation as the degree of similarity in the marketing
activities, programme or policies of a multinational enterprise between one country
and another. According to Buzzell (1968), standardisation means using the same
marketing strategy in overseas markets as in the home market, while adaptation means
using a different marketing strategy in each overseas market.
Miracle (1990) believes that advertising strategies, advertising objectives, and
advertising execution can all be standardised to varying degrees.
As mentioned earlier, there are many definitions of marketing standardisation in the
literature, producing problems of comparability in the research results. According to
Halliburton and Hunerberg (1987), the measurement problem means that the concepts
of standardisation and adaptation are difficult to operationalise, and standardisation
and adaptation are not absolutes but should be seen rather as two ends of a continuum,
suggesting that researchers should establish the degree of standardisation or adaptation
along a continuum. Similarly, Quelch and Hoff (1986) suggest that the decision on
marketing standardisation is not a dichotomous one between complete standardisation
and adaptation. Rather, there can be degrees of standardisation. Jain (1989) argues that
total standardisation is unthinkable. As can be seen from these discussions, in practice
there is no such thing as complete standardisation, since any company will change
some of its marketing mix programme to some extent. It is thus impossible in practice
to use an absolutely identical marketing mix programme in the overseas market as
compared to the home market. Therefore, our definition of standardisation will not
assume “total” standardisation, since we will not expect companies to use an identical
marketing mix programme in the GCC markets to that used in the UK market. We
will expect degrees of standardisation. In our definition we will consider companies
standardised if on average they use a similar marketing mix programme with only
minor variation in the GCC market as compared to that used in the UK market.
We will consider companies as standardising any part of the marketing programme if
they rate it as identical (1) or similar with minor variation (2) on the five-point Likert
scale.
In judging, overall, whether a company has a standardised, moderately adapted or
localised marketing mix programme, we will take the average, for all the marketing
programme variables. Thus, for a standardising company on average it will have
marketing programme variables which are identical or similar with minor variation,
even if a number of individual variables are localised. Similarly, a company with a
localised profile on average may have some marketing programme variables which
are standardised. We will thus be researching the degree of marketing programme
standardisation.
1.4 RESEARCH TOPIC
For the last three decades the issue of international marketing standardisation has
generated considerable discussion among both academics and practitioners (Elinder
(1961); Fatt (1964); Buzzell (1968); Sorenson and Wiechmann (1975); Brandt and
James (1977); Colvin (1980); Levitt (1983); Boddewyn et al. (1986); Douglas and
Wind (1987); Hite and Fraser (1988); Jain (1989); Muller (1991); Grosse and Zinn
(1990); Kashani (1990);Akaah (1991); Whitelock and Jones (1993)). Despite the long-
standing interest in the issue, there is still controversy about it and no clear answer is
in sight. There are sharp differences of opinion as to the desirability and feasibility
of each strategy (Walters, 1986). A continuing issue in the international marketing
literature is whether multinational companies should pursue a marketing strategy that
is broadly standardised across different markets or broadly adapted to each market.
In the literature, arguments for and against both of these strategies are found.
Multinational companies typically assume one of two extremes when dealing with
the world market. Some companies see the world as one homogeneous entity, and
consequently use a standardisation strategy. Others view each nation of the world as
unique and for that reason they use a localisation strategy. In recent years it has been
suggested that multinational companies could be more effective by avoiding these
extreme positions and instead recognising the presence of market clusters within the
world. Whitelock and Jones (1993) note, for example, that the most frequently practised
strategy lies somewhere between standardisation and localisation. From the discussion
above there seems to be considerable controversy concerning the most appropriate
marketing strategy for multinational companies when they operate overseas, and this
is of practical significance since their success will largely depend upon the right
choice.

12
13
To clarify this controversy it is important to provide empirical evidence: this is the
object of this study. The research offers two additional perspectives to most previously
conducted research. Firstly, whereas most studies have involved a relatively narrow
focus, our research proposes a broader framework entailing the simultaneous
manipulation of variables across three main broad factors: firm, country and marketing
programme. Secondly, we research the marketing strategies of UK companies in a
developing economic region (the Gulf States), in contrast to the great majority of
studies which have focused on the developed economies.
1.5 OBJECTIVES OF THE STUDY
There are several objectives the research will try to achieve.
The first objective is to determine the overall degree of standardisation of marketing
mix programme activities used by UK companies exporting to the Gulf States, using
a three-factor, sixty variable model of country, firm, and marketing programme. (as
discussed earlier complete standardisation is impossible, companies will standardised
some of their marketing programme and adapt some of it)
The second is to test several hypotheses that have been propounded or supported in the
relating fragmented literature on international marketing.
The third is to see if there is any differences in views regarding marketing programme
strategies between UK companies and their agents in the Gulf States.
1.6 GCC AS A TARGET MARKET
The GCC was set up on 26 May 1981, under an agreement signed by the six leaders
of the states of Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the United Arab
Emirates. The objective, as stated, is to bring the six states gradually closer together
by developing common economic and social policies. Although there are differences,
the States are similar in their economic, political, religious, and geographical profiles,
and cultures. The GCC states provide tremendous opportunities for exporters of a wide
variety of products. They have been attractive targets for companies from all over the
world (Yavas and Glauser, 1985; Abu-Ismail, 1982; Balasubramanian, 1992). They
offer immense business opportunities and they are collectively one of the strongest
financial powers in the world. From the literature available it emerges that writers have
two different approaches regarding multinational companies operating in the GCC
market.
1.6.1 THE AGGREGATE APPROACH
Writers who support this approach assume that multinational companies see the GCC
market as one homogeneous entity due to the similarities of the States. Consequently,
they argue for marketing standardisation among these countries (Berger, (1962);
Almaney, (1981); Elbashier and Nicholls, (1983); Fernea and Fernea, (1985); Culpan,
(1985) ; Looney, (1989) and Hourani, (1990)). It is argued that the cultural and
geographical proximity as well as similarities in the economic, and political sphere and
in life styles might lead to the emergence of similar behaviour patterns to encourage
the use of standardised marketing activities all over the region. In general, consumers
in the GCC markets are much alike. They live under largely similar conditions and
consume the same food and drinks (Kassem et al. 1993). As a result, Yavas and Alpay
(1986) suggest that multinational marketers aiming at the Gulf countries may profitably
employ standardisation in their marketing activities, and several reasons are given for
this suggestion. First is the formation of the Gulf co-operation council, and an Arabic
and Islamic Common Market that includes the GCC. Second, the markets are relatively
homogeneous in economic development, social structure, and language. Third, the
GCC are also in geographical proximity that might lead to the emergence of similar
behaviour patterns and therefore standardisation is possible. Fourth, economic, political
and lifestyle factors are related, leading to a standardisation of marketing activities
throughout the GCC market. Fifth, cross-national circulation of media is rising, due to
the emergence of pan-Arabic publications which make regional advertising campaigns
possible. The overlap in the media is increased by the exchange of TV programmes
through the Arab satellite (Arabsat). Above all, Kassem et al. (1993) suggest that "...
marketers should view the six nations of the GCC as a single market area due to
their geographical proximity as well as the remarkable homogeneity of their cultures,
economies, politics, language, religion, income levels and consumption patterns..".

14
15
1.6.2 THE REDUCTIONIST APPROACH
Writers who support this approach assume that multinational companies see
each market in the GCC as unique, and as a result, marketers should devote attention
to each market, using a localisation strategy (Apgar, (1977); Abu Naba, (1984);
Tuncalp, (1988); Luqmani et al. (1989)). According to Sriram and Gopalakrishna
(1991), economic characteristics are often used to identify groups of countries that are
potential candidates for a standardised approach. In their research in 1989 they found
that countries which are similar economically are not necessarily similar in their media
usage and availability pattern, which is very important for standardising advertising
messages. Huszagh et al. (1986) used economic development measures to group 21
industrial nations into 5 clusters based on their similarity, but found differences in
product acceptability even within the same economic cluster, and concluded that
economic similarity may be necessary but not sufficient for standardisation. Walters
(1986) showed that differences between consumers even in similar countries do exist
and gave an example of the differences in the level of disposable income between
European consumers. Green and Cunningham (1980) suggest significant differences
in the way in which family purchasing decisions are made in the United States and
Venezuela.
In the GCC differences certainly exist. For example, SaudiArabia, which is the biggest
market in the GCC, exhibits unique characteristics deriving from its culture, which is
different from that of other GCC countries, even though they have a common heritage
and religion. Above all, within Saudi Arabia the different regions exhibit strikingly
different characteristics.
differences in character. To conclude, the GCC market has never been quite as
homogeneous as some international marketers believe.
GCC countries represent a very important market for UK companies, and inversely the
UK market is still very important for GCC oil products. The UK and GCC represent
two groups with common interests. The GCC countries and the UK have enjoyed very
good business relations for the last two decades. In the following pages, their business
relations will be discussed to show how important both the GCC and the UK are in
their trading.
1.7 UK AND GCC BUSINESS RELATIONS
GCC countries have been one of the biggest markets for capital equipment and
consumer goods. They have been attractive to many international companies from
all over the world, including UK companies. The GCC represents very important
countries in terms of commercial as well as political and strategic factors. The GCC
holds world oil reserves on which the UK is expected to be heavily dependent by the
end of the century when supplies from other sources are running out.
According to trade statistics, the GCC markets have taken 75 per cent of British exports
to the entire Arab region and supplied 67 per cent of British purchases from it in the
last few years. These figures contrast with 70 per cent and 56 per cent respectively
in 1990. Of all the GCC countries Saudi Arabia is by far Britain’s biggest Arab trade
partner, absorbing £2,229 million worth of UK exports in 1991 (46 per cent of UK
exports to all Arab countries) and supplying £964 million of British imports (48 per
cent of total UK imports from the Arab region).
In value terms, Saudi Arabia accounted for the biggest rise in British exports to any
Arab country in 1991. The increase was £218 million, or 10.82 per cent. The United
Arab Emirates, again a GCC country, is the UK’s second biggest trade partner among
Arab countries. The British exports to UAE also rose in 1991, by 14.3 per cent to £760
million, and UK imports from the UAE also increased significantly, rising by 28 per
cent to £232 million. Table 1.1 shows the British exports to the six GCC countries.
Historically, GCC markets have been profitable markets for UK companies and
British products were in a dominant position until recently (Abu-Ismail, (1982) and
Greenstock, (1984)). The reasons for losing the dominant position are many but,
according to Abu-Ismail (1982) and Yavas and Tuncalp (1984), the most important
one is that UK companies fail to match their competitors’ marketing expertise and
skills in adapting their marketing strategy to the needs of the local customers. Oil
and military projects seem to control the level of economic and commercial co-
operation between the UK and GCC countries, but recently GCC countries have tried
to diversify this co-operation in the interests of both sides. According to Shah (1985),
over 350 UK companies are very active in Saudi Arabia. There is no proof that this
figure is correct because the only directory issued by the Department of Trade states
that UK companies with representatives in Saudi Arabia numbered no more than
180 in 1993. In recent years a good deal of British business with Saudi Arabia has
comes under the Al-Yamamah economic offset programme started in 1989, involving
supply of air defence equipment and training. It was agreed in 1986 and involved
participation by UK companies in industrial and other joint ventures in Saudi Arabia.
The agreement emphasises commercial viability and technology transfer. The main
industries in the GCC are petrochemical, oil refining, steel, fertilisers, cement, cables,
truck assembly, and pipes; the main exports of the GCC are crude and refined oil and
petrochemicals.

16
17
Table 1.1 UK Exports to the GCC countries (£M)
Country19891990199119921993
Saudi Arabia24322011222819861826
Kuwait228181178262312
Qatar8998109118143
Bahrain138127147167151
Oman298272237241306
UAE5716647599261315
Total37563353365837004053
Source: Arab British Chamber of Commerce, London (March) 1994
From Table 1.1 it can be seen that British exports to the GCC increased by 10 per cent in
1993. Saudi Arabia represents a very important market for British exporters and is the
largest market in the GCC, followed by the UAE. However, this growth has not been
matched by GCC exports to the UK. The value of such exports was £1906 million in
1993, an increase from 1992, when the figure was £1577 million. The increase in GCC
exports to the UK may be due to the strong awareness among UK companies of GCC
products. The deficit in balance of trade between UK and the GCC resulted from the
military projects of the latter. In general, the GCC markets represent a very important
market in the Arab World and 75 per cent of total British exports. The UK exports
many goods and services to the GCC countries, including food, beverages, tobacco,
chemicals,manufacturedgoods,machinery,transportequipment,generalmanufactured
goods, consulting, banking, contracting, insurance, shipping and training.
Table 1.2 UK imports from the GCC (£ M)
Country19891990199119921993
Saudi Arabia5027949649641274
Kuwait15010830127236
Qatar4752110
Bahrain6148395052
Oman8489738383
UAE165181232332251
Total9661227134315771906
Table 1.2 shows that UK imports from the GCC have increased since 1989. The total
reached £1906 million in 1993, which is almost double the 1989 total for exports. It
can be seen from Table 1.2 that there is a gradual increase in the GCC exports. Within
the GCC countries Saudi Arabian exports to UK were the largest, reaching £1274
million in 1993, followed by the UAE, which exported £251 million, and Kuwait with
£236 million. The GCC countries try very hard to promote their non-oil products in the
UK. Much of this growth has been in the non-oil sector, almost 42 per cent in 1993.
As the figures in Tables 1.1 and 1.2 show, in terms of UK companies’ performance,
a surplus has been achieved. Qatar is Britain’s smallest trade partner within the GCC
countries, but despite the relatively low level of trade previously, there are many UK
companies working on big projects in Qatar at present.
Table 1.3 Economic importance of the GCC in 1992
Country)Population('000)$( GNP per head
Saudi Arabia159097940
Kuwait382811200
Qatar52416240
Bahrain529*
Oman16476490
UAE166822220
Total24105
Source: World Bank , Washington, USA 14 April 1994
From Table 1.3 one can see the importance of all the GCC countries, which have a total
population of 24.105 million, representing a very important group of customers with a
high average income per head. Although there are other groups with more customers,
their purchasing power is not as great as it is in the GCC countries; for example, the
GNP per head in the UAE is $22,220, which is one of the highest in the world.

18
19
1.8 MAIN DESTINATIONS OF EXPORTS AND IMPORTS
FOR THEGCC COUNTRIES IN 1992
Table 1.4 Main destinations of exports and imports of Saudi Arabia
Main destinations of
exports 1992
of %
total
Main origins of
imports 1992
of sales %
USA20.2USA20.9
Japan18.4Japan14.2
South Korea5.3UK10.6
France5Germany8.1
Singapore4.7Italy5.9
Netherlands4.2France5.3
Source: The Economist Intelligence Unit Limited, 1993
Table 1.4 shows the main destinations of exports and imports for Saudi Arabia. As
can be seen, the main destination for Saudi’s product exports is the USA and at the
same time the USA is the main supplier to Saudi Arabia. The UK is the third supplier
to Saudi Arabia, representing 10.6 per cent, behind the USA with 20.9 per cent and
Japan with 14.2 per cent. Saudi Arabia's export performance depends heavily on crude
oil and refined petroleum. Petrochemicals and plastics exports amounted to £2,536
million in 1990. The countries importing from Saudi Arabia include the USA, taking
22.4 per cent of the Kingdom's exports, followed by Japan (21.9 per cent). The Saudi
government is trying hard to diversify the country’s exports and has become the
world’s sixth biggest wheat exporter. The main suppliers to Saudi Arabia are the USA,
which in 1990 provided 16.4 per cent of the Kingdom's imports, followed by the UK,
providing 14 per cent, and Japan 13.6 per cent.
According to Tuncalp (1990), there are 35,000 British expatriates living in SaudiArabia
and, according to Shah (1985), there are 350 UK companies active in Saudi Arabia.
The companies have formed 166 joint ventures, comprising 126 service ventures and
40 industrial ventures, with British capital investment of around $700 million. Saudi
Arabia is regarded by Britain as a good source of income, from the transfer of profit
as dividend remittances from these British joint ventures. A British-Gulf Co-operation
Council Trade Exhibition was held in 1994, and considered to be the largest of its
kind in Europe. The objectives of this exhibition were to promote British products in
the Gulf countries, to promote Gulf products in Britain and to strengthen the business
relationships between the GCC States and Britain. GCC represents a very important
international marketing block for international marketers, especially those from
Europe.
Table 1.5 Main destinations of exports and imports of Kuwait
exports 1992
of total %
Main origins of
imports 1992
of sales %
France16.1USA34.8
Italy14.9Japan12.4
Japan12.3UK8.80
UK11.1Canada8.70
Egypt10.0Germany7.80
USA7.90South Korea3.50
Pakistan7.90France3.10
Table 1.5 shows that the main destination of exports for Kuwait is France, representing
16.1 per cent. The UK is the fourth main destination for Kuwait’s exports, representing
11.1 per cent. The main source of imports is the USA, followed by Japan (12.3 per
cent) and the UK, representing 8.8 per cent of the total imports.
Table 1.6 Main destinations of exports and imports of Qatar
exports 1992
of total %
Main origins of
imports 1992
of sales %
Japan61.4Japan13.6
Brazil5.6UK11.8
South Korea4.9USA11.6
UAE3.7Germany8.5
Singapore2.7France5.2
Table 1.6 shows that the main destination of exports from Qatar is Japan, representing
61.4 per cent, while Japan is also the main source of imports, representing 13.6 per
cent, followed by the UK, representing 11.8 per cent.
Table 1.7 Main destinations of exports and imports for Bahrain
exports 1991
of total %
Main sources of
imports 1992
of sales %
Japan12.9Saudi Arabia41.5
UAE12.3USA13.8
India9.5UK7.2
Pakistan7.8Japan4.6
Singapore5.8Germany4.1

20
21
From Table 1.7 it can be seen that Japan is the main destination for exports, representing
12.9 per cent, and Saudi Arabia is the main source of imports, representing 41.5 per
cent, followed by the USA, representing 13.8 per cent and the UK, representing 7.2
per cent.
Table 1.8 Main destinations of exports and imports for Oman
exports 1992
of total %
Main sources of
imports 1992
of sales %
Japan40.2Japan20.4
South Korea28.3UAE18.8
Taiwan7.6UK14
Thailand5.7USA6.8
Singapore4.6West Germany5.5
Source: The Economist Intelligence Unit Limited 1993
Table 1.8 gives the main destinations of exports and imports for Oman. It can be seen
that the main supplier to Oman is Japan, representing 20.4 per cent, followed by UAE,
representing 18.8 per cent, and the UK, representing 14 per cent. The main destination
of exports is Japan, representing 40.2 per cent.
Table 1.9 Main destinations of exports and imports of UAE
exports 1991
of total %
Main sources of
imports 1992
of sales %
Japan39.4Japan14.2
Singapore4.60UK9.30
South Korea4.40USA8.50
India3.90Germany5.60
Iran3.90
As can be seen from Table 1.9, the main destination of UAE’s products is Japan,
absorbing 39.4 per cent. The main source of imports is likewise Japan, followed by the
UK and USA, representing, 14.2 per cent, 9.30 per cent and 8.50 per cent respectively.
As can be inferred from the above tables giving the main destinations for exports and
the main source of imports, a good partner for all the GCC countries, close behind
Japan and USA, is the UK.
1.9 UK AND GCC COUNTRIES’ TRADE
In the following tables each GCC country’s balance of trade with the UK is shown.
Table 1.10 UK-Saudi Arabia trade balance 1981-1991 (£'000)
UK exportsUK importsUK trade balance
198111341893-759
198213621447-85
19831478898580
19841387545842
19851256483773
198615074361071
198719783831595
198817136141099
198924335021931
199020117951216
199122299641265
Source: Arab-British Chamber of Commerce, London (March) 1994
Table 1.10 shows the trade balance between Britain and Saudi Arabia. As can be
gleaned from the table, British exports to Saudi Arabia in 1991 were £2229 million,
compared with £2011 million in 1990. Saudi Arabian imports from Britain were £795
million in 1990 and £964 million in 1991. The surplus of imports over exports was
£1265 million in 1991. The British achieved a surplus from 1983 till 1991. Data are
not available for more recent years.
Table 1.11 UK-Kuwait trade 1981-1991 (£'000)
1981281477-196
1982333105228
198333367266
1984301142159
1985348157191
198630159242
198722582143
198823872166
198922915079
199018110972
199117830148

22
23
From Table 1.11 it can be seen clearly that Kuwait has had strong ties with Britain
for many years. British trade with Kuwait declined in 1990 and 1991 because of the
Gulf war. British exports to Kuwait dropped by 21 per cent in 1990 to £181 million,
and again by 1.73 per cent in 1991 to £178 million but Britain has achieved a surplus
since 1982. In 1991 Kuwait’s exports to Britain were £178 million, whereas British
imports from Kuwait were £30 million. For many years Kuwait has enjoyed a good
relationship with the UK. Financial links have been particularly strong, with several
Kuwaiti banks and financial institutions establishing branches in London. At the end
of the Gulf war UK companies participated in the reconstruction of Kuwait. Figures
show that the UK was Kuwait's third largest supplier in 1990, following Japan. The
main industries are oil refining, petrochemicals (including fertilisers) and liquefied
petroleum gas; the main exports are crude and refined oil, liquefied petroleum gas, and
fertilisers.
Table 1.12 UK-Qatar Trade 1981-1991(£'000)
198113611125
198224534211
198321610206
198413428106
198514233109
19861123082
19871051491
198889485
198989485
199099792
19911095104
From the figures in Table 1.12 it can be seen that British exports to Qatar achieved a
surplus in each year. British exports in 1991 were £109 million, whereas imports were
£5 million and the surplus was £104 million for the UK. British exports to Qatar in
1991 were £109 million, 2.25 per cent more than in 1990. British imports from Qatar
are small and declined by 22 per cent in 1991 to just £5.5 million, giving Britain
a surplus of £104 million. The main industries are petrochemicals, fertilisers, steel,
flour, cement and the main export products are crude oil, petrochemicals, fertilisers
and steel.
Table 1.13 UK-Bahrain trade 1981-1991 (£'000)
19811021785
198215235117
198315037113
198413928108
198516245117
198613120111
19871256164
19881387662
19891396178
19901274879
199114739108
As the figures in Table 1.13 show, Britain achieved a surplus in each year from 1981
to 1991; in the latter year it was £108 million. Britain has long established trading
links with Bahrain. In 1991 Bahrain ranked eighth among Britain’s Arab customers,
taking £147 million worth of goods, while imports from Bahrain were worth £39
million, giving Britain a £108 million surplus. The main exports are refined oil and
aluminium.
Table 1.14 UK-Oman trade 1981-1991 (£'000)
198117140131
198226546219
198344991358
198439083307
198549069421
198640087313
198725049201
1988345147198
198929984215
199027289183
199123874164

24
25
Table 1.14 shows the trade balance between Britain and Oman, which proves to be a
good partner. In 1991 British exports were £238 million, and imports were £74 million,
achieving a surplus for Britain of £164 million. According to IMF figures, Britain was
the biggest supplier to Oman. The main industries are oil refining, cement and other
construction materials, copper mining, numerous light industries, and the main exports
are crude oil, copper, fish, wheat flour, dates, fruit and vegetables.
Table 1.15 UK-UAE trade 1981-1991 (£'000)
198149243449
1982559267292
1983568310258
198454287455
198562197524
198658274508
198747995384
198846384379
1989571165406
1990665181484
1991760232528
Table 1.15 shows trade between the UK and UAE. UK exports in 1991 were £760
million, having risen by 14.3 per cent from 1990. The UK has enjoyed surpluses in
its trade with the UAE for many years. In 1991 the surplus stood at £528 million. The
main industries are oil refining, natural gas liquefaction, fertilisers and aluminium; the
main exports are crude oil and refined products, fertilisers, aluminium, and natural
gas.
Table 1.16 Exporters to the GCC by main Country suppliers, 1990 (£‘000)
UKUSAGermanyFranceItalyJapan
Saudi Arabia342540351692130712113350
Kuwait308401329130231418
Qatar17511589198114152
Bahrain2277181785966151
Oman49116312510440421
UAE117899810796775821553
Total580464303492247522446045
Compiled from trade statistics Yearbook 1991, 1991
From Table 1.16 we see clearly that the main supplier to the GCC is the USA, followed
by Japan, and then the UK. SaudiArabia is the largest GCC importer. We conclude that
the long-standing business relationships between the GCC states and Britain are still
growing, despite the world recession. As the statistics show, the total trade between
the two sides increased by 11 per cent between 1992 and 1993, to just under £6 billion.
The GCC states are trying hard to get their non-oil products into the British market.
Looking at the statistics, in 1984 the GCC non-oil exports to Britain were worth £332
million, roughly a third of total GCC exports to Britain; by 1993 the GCC non-oil
exports increased to £924 millions, representing almost half of total exports. This is
clearly a success for the GCC. For UK companies the GCC market is now regarded as
more important than a decade ago.
In 1993, 73 per cent of British exports to the whole Arab world were sold into the
GCC market, compared with 59 per cent in 1984. Saudi Arabia is the largest market
in the GCC, followed by UAE; these two countries represent almost 75 per cent of
the market for British goods in the GCC. British exports to the GCC are dominated
by machinery and transport equipment. In 1993 these were worth £1854 million,
followed by chemicals (£540 million), general manufactured articles (£511 million),
and manufactured goods classified by materials (£493 million). In 1993, £186 millions
worth of food was exported to the GCC, roughly 12 per cent of Britain’s total annual
food exports. Exports from the GCC to the UK are dominated by crude oil, but
nowadays the non-oil sector is becoming increasingly important. The GCC are the
main external suppliers of oil and gas to UK and have provided a big market for capital
equipment and consumer goods for UK companies. The GCC states are all seeking to
achieve unity, solidarity and cohesion with the aim of becoming a single international
trade block. Despite the world recession trade between Britain and the GCC grew in
1993.

26
1.10 THESIS STRUCTURE
The study will comprise six main chapters, followed by appendices and references.
The following is a summary of the chapters.
Chapter One: this chapter is an introduction, including the research topic, UK/GCC
business relations, the conceptual framework and the structure of the thesis.
ChapterTwo:thischapterdealswiththeliteraturereviewforfirm,countryandmarketing
programme variables, which represent the proposed model. It examines previous
empirical research into the question of international marketing standardisation.
Chapter Three: this chapter describes and explains the models, the methodology
employed in the research and the hypotheses.
Chapter Four: this chapter represents the findings of the qualitative and quantitative
stages employed in the study.
Chapter Five: includes the perspective of the GCC agents and covers the findings
which required more explanation and elaboration.
Chapter Six: this chapter discusses the findings, draws conclusions and makes
recommendations; it also indicates the contribution made by the study, as well as its
limitations.
The thesis concludes with appendices and a bibliography
LITERATURE REVIEW AND BACKGROUND
CHAPTER TWO

28
29
2.1 INTERNATIONAL MARKETING STRATEGIES
The initial description of marketing standardisation/ localisation was presented by
many researchers including Elinder (1961); Terpstra (1967); Buzzell (1968); Bartels
(1968); and Keegan (1969). The literature on international marketing can be divided
into proponents of five international strategies: standardisation; localised (adaptation);
a ‘middle of the road’ mix of standardisation and adapted elements; a cluster approach
of transnational regions with common market characteristics and an intermarket
segmentation approach. The argument for each approach is provided in the following
sections.
2.1.1 STANDARDISATION APPROACH
Proponents of standardisation argue that a MNC should analyse the world market
as a whole rather than country by country. They argue that due to developments in
communication systems and information technology the market place and competition
are becoming global, and integration of international markets is a reality. Consumer
needs are relatively homogeneous all over the world. According to Domzal and
Unger (1987); Wells (1987); Langholz-Leymore (1988), people everywhere share
certain needs and emotions. Another reason to use standardisation is the adequate
international marketing infrastructure. The argument for a standardisation strategy is
generally the same across the literature. Among the proponents of standardisation are
Elinder (1961 and 1965); Fatt (1967); Rijkens et al. (1971); Britt (1974); Dunn (1976);
Peebles (1978); Levitt (1983); and Jain (1989). Elinder (1961), a Swedish marketing
executive, thought that European customers share similar needs and wants, and have
similar characteristics. He predicted that one promotion campaign could be used across
Europe, and it would be a waste of effort and money to use different promotional
campaigns in each country.
Miracle (1968) maintained that the communication requirements are the same and
fixed, cannot be changed with time or place, and therefore the same approach can be
used everywhere. According to Peebles et al. (1978), customer mobility and media
overlap make advertising standardisation possible. Fatt (1967) supported the approach
to standardisation by arguing that the marketing concept is spread across the world,
and the development of international media all make standardisation of advertising
possible. Levitt (1983) argued that technology has forced the world to become more
homogeneous.
Transportation, communications and travel close the gap between the peoples of
the world, which results in the emergence of the world citizen. Levitt went on to
argue that everyone everywhere wants what he sees and has heard about through
the new technologies. This results in a new phenomenon called the global market
for standardised consumer products. Levitt (1983) argues that in a world of growing
internationalisation the key to success is focusing on marketing standardised global
products and brands.
2.1.1.1 BENEFITS OF STANDARDISATION APPROACH
The proponents of a standardisation approach claim many benefits for its use.
Proponents of this approach argue for the transferability of better marketing practices,
which means that if a marketing strategy has been a proven success in one country,
it can be transferred to another, with the same market conditions, and lead to better
consumer acceptance, larger market share and higher profits. The other advantage is
economies of scale, which can be in production, marketing, research and development,
and management time and effort.All these can lead to cost reduction. Companies using
standardisation reflected in price can enjoy price competitiveness and consequently
market share( Buzzel (1968); Keegan (1980 and 1989); Saporito (1984); Douglas and
Craig (1986); Quelch and Hoff (1986); Whitelock (1987); Robock and Simmonds
(1989); Barker andAydin (1991); Whitelock and Pimblett (1994)).According to Harris
(1985), these savings from standardisation should be used for better investment in

30
31
plant, additional promotion and better quality. According to de Jonquieres (1991), the
savings made by Unilever from standardising all Lever Brothers products throughout
European markets will be around £250 millions. Another example of savings was
given by Berkowitz et al. (1992) with regard to Colgate-Palmolive, where around $2
million in television production costs was incurred in each country whereas the same
common advertisement might be used.
The cost savings associated with standardisation lack empirical evidence (Robinson
(1986);Houtetal.(1982)andJain(1989)).SamieeandRoth(1992)arguethatnoattempt
has been made to validate the financial pay-off associated with standardisation. Some
empirical studies have found no relation between standardisation and return on assets,
or sales growth and return on investment (Walters (1986) and Samiee and Roth (1992)).
Sorenson and Wiechmann (1975) do not believe cost savings can be associated with
marketing standardisation in product design, packaging, sales promotion, advertising
and production costs. They regard it as an attractive argument but not proven; in other
words, they say the cost savings are not as significant as claimed. In their study only
one company out of twenty-seven offered documented evidence of saving resulting
from standardisation.
According to Braidwood (1984) and Douglas and Craig (1986), the argument of
economies of scale ignores the recent developments in flexible automation, where
a non-standardised product can be produced at substantial cost savings, and, above
all, product costs are only a partial and not necessarily a critical factor in determining
the total price of the product. Sometimes the costs of distribution exceed production
costs. Douglas and Wind (1987) argue that production cost is only a minor component
in the total costs, and understanding the local condition of customers, including
tastes and preferences, may be more important than the cost reduction gained from
standardisation. For example, the cost of advertising copy may be less than media
cost. Another cost saving can come from the minimisation of duplicated services at
headquarters and at subsidiary levels (Kirpalani et al. 1988). Another advantage of
standardisation is effective control and planning. Proponents of the standardisation
approach stress management and headquarters controls which can be pursued with
this strategy.
Standardisation can lead to more effective planning and control (Douglas and Craig
(1986)). According to Robbins (1987) and Whitelock and Jones (1993) standardisation
will also focus management resources and talent, and simplify the strategic planning
process by minimising overlaps and also capitalising on good ideas. Many researchers
stress that standardisation does not always mean control. Local management
sometimes ask for details of marketing programmes used by HQs, because they regard
them as beneficial locally. In this case, standardisation is used and HQ do not impose
it on the local management. Samiee and Roth (1992) do not believe that control is
necessarily achieved as a result of marketing standardisation. Another advantage is
consistent corporate and brand image on a global basis: some companies strive for
a coherent world-wide brand image. Levitt (1983) and Peebles (1978) argue for the
importance of global brand names, and standardisation can achieve this. Other benefits
of standardisation include decision simplification, ease in execution, operational
efficiency, and consistency in customer service (Onkvisit and Shaw, 1987). Exploitation
of similar world-wide customer groups and the exchange of ideas are other advantages
suggested by Halliburton and Hunerberg (1987).
2.1.2 LOCALISED (ADAPTATION) APPROACH
The second approach is localisation (adaptation). Proponents of this approach (Pratt
(1956); Horn and Gomez (1959); Nielsen (1964); Lenormand (1964); Reed (1967);
Buzzell (1968); Miracle (1968); Ryans (1969); Wiechman (1974); Green et al. (1975);
Onkvisit and Shaw (1987); Mueller (1987) and Barker and Aydin (1991) stress the
dissimilarities between countries and even regions within the same country concerning
culture, the general environment, marketing infrastructures and other forces that
determine customer behaviour. The claim that differences among countries are gone
forever is not yet true, they argue, and the claim on the other hand that standardisation
of marketing programme will help companies to compete better may even mislead.
Barker and Aydin (1991) argue that the elements of a marketing programme should
be grounded in the needs and the environment of the customers in order to gain long-
term success. According to some researchers, the findings of advertising research
studies have indicated that multinational companies are using a localisation strategy
more than before (Peebles et al. (1978); Dunn and Lorimore (1979); Quelch and Hoff
(1986); Meffert andAlthans (1986) and Kanso (1992)). Kotler (1986) and Wind (1985)
argue that differences in product use and customer tastes and preferences make the
localisation strategy essential for any company.
Simmonds (1985) states that a MNC, to survive competitively, must adjust to a local
market which requires a different treatment, because of the differences in customers’
preferences and tastes. Arndt and Helgesen (1981) argue that nothing is universally
appropriate in marketing practice, which should be adapted to local conditions. Fisher
(1984) and Vedder (1986) argue that greater return and profit should be obtained from
adapting products to local conditions.
Lenormand (1964) states that differences in religious beliefs, standards of living,
customs, legislation, media availability, and advertising agency structure all work
against the standardisation approach. Roostal (1963) concludes that there are potential
benefits in standardisation, but market differences represent a barrier to it. Klippel
and Boewalt (1974) called the standardisation approach "behaviourist", assuming
that people everywhere have the same needs, wants, and motivations, while calling

32
33
the adaptation approach "environmentalist", taking into account the differences in
demography, culture, and social factors between countries. Kotler (1984) argues that
the standardisation approach will be appropriate in only some cases, such as rapid
innovation, high technology products, and truly international consumer products such
as Coca Cola and MacDonalds. According to Douglas and Wind (1987), there is
substantial evidence to suggest an increasing diversity of behaviour within countries
and the emergence of idiosyncratic country- specific segments.
2.1.3 MIDDLE OF THE ROAD APPROACH
Some writers conclude with a more middle of the road approach, in an attempt to
isolate those factors that determine when to standardise and when to localise. They
argue that standardisation and localisation may be too extreme to be useful in all
markets. Therefore, in certain situations it may be desirable to be standardised and
in other situations it is desirable to be localised. Examples of this view are Sommers
and Kernan (1967); Peebles, et al. (1978); Quelch and Hoff (1986); Daniels (1987);
Whitelock and Jones (1993). Peebles, Ryans and Vernon (1978) argue that the faults
of both standardisation and localisation strategies are in the implementation and not in
the validity of the concepts.
Whitelock and Chung (1989) argue that using a standardisation strategy can result in
missing out on important target segments, inappropriate positioning in view of long-
term market trends, or encountering negative attitudes. Using a localisation strategy
might lead to loss of potential economies of scale in production and loss of brand name
recognition world-wide. According to Day (1985), the brand is a unique aggregation
of facts and feelings which set the product apart from the general. Some uniformity
of marketing is needed, but differences must also be recognised. According to some
writers, the middle of the road is where we should find current marketing practice
(Sandler and Shani (1992); Onkvisit and Shaw (1987)). Jain (1989) argues that total
standardisation is unthinkable.
More recently, researchers seem to assume that standardisation and localisation are the
ends of a continuum, and that the right strategy lies somewhere between standardisation
and localisation, referred to as the middle of the road approach (Daniel, 1987; Kanso,
1992 and Whitelock and Jones, 1993)). Whitelock and Pimblett (1994) argue that very
few products are in fact fully standardised. They give Coca Cola as an example of
having a global image and position, but adapting its flavour to the local taste. Douglas
and Wind (1987) and Kashani (1989) argue that global products and brands may be
appropriate for certain markets and in targeting certain segments, but adopting such
an approach as a universal strategy in relation to all markets may not be desirable and
may lead to major strategic blunders. Hite and Fraser (1988) found a mixed approach
desirable and argue that the practice of most successful MNCs lies at the middle of the
standardisation-localisation continuum, with some exceptions.
2.1.4 CLUSTER APPROACH
Proponents of the market cluster approach argue that multinational companies
should recognise the presence of identifiable market clusters in the world, such as
European countries, South American countries, and the Middle East countries. In other
words, standardisation of marketing must be limited to one or a few geographical
areas (Elinder, (1961); Berry (1961); Lainder et al. (1967); Shethi and Holton (1973);
Doyle and Gidengil (1978); Boddewyn et al. (1986); Reichel (1989); Whitelock and
Kalpaxoglou (1991); Kassem et al. (1993); Ayal and Nachum (1994)). The proponents
of this approach strongly favour the use of marketing standardisation across similar
countries. Appropriateness of the standardisation approach will, however, vary
according to product-related environmental variables. Sommers and Kernan (1967)
recognise that standardisation is possible when environmental factors are the same
and note that environmental differences will require product adaptation, and that many
products will not be used universally and will therefore require adaptation. Quelch
and Hoff (1986) argue that it is not important to go global, but to tailor the global
marketing concept to fit each business. Flexibility is essential. The creation of the
European Community market, USA, Canada and, Mexico markets, the discussion
between USA and Japan to ease the trade between them, some of the changes in the
world market, and the signing of the GATT agreement by many countries to remove
trade barriers between the countries, and the creation of the Middle East market, all
these will increase the opportunities to implement a standardised marketing programme
among groups of similar countries (Dudley (1990); Tillier (1992)).
Writers have tried to cluster countries according to their economic characteristics and
to identify groups of
countries with potential for standardisation (Sriram and Gopalakrishna (1991); Sethi
(1971)). Huszagh et al. (1986) group 21 industrial countries into five clusters using
economic measurements. Another study by Day et al. (1988) used 18 economic
variables to cluster similar countries. Huszagh et al. (1986) found differences in
product acceptability even between five countries that were members of the same
cluster. Another study, by Sriram and Gopalakrishna (1989), found different media
usage and availability even in economically similar countries. That might lead to
the belief that economic similarity and media availability alone are not enough to
justify standardisation. Vandermerwe and L’Huillier (1989) studied some economic
demographic variables of Europeans, Americans and Japanese, and found differences
indicating that economic demographic variables should not be used as grounds for
using a standardisation approach. They identified six clusters of consumers within
Europe based on income, language, age and geographical area.

34
35
Regarding the GCC countries, the object of this research, many attempts have been
made to place them within conventional country classification. Lainder et al. (1967)
treated the GCC as developing countries based on demographic analysis and economic
development. Lugmani et al. (1980) classified these countries as a Muslim market.
Apgar (1976); Shilling (1977); Fernea and Fernea (1985) saw them as an Arab market.
Searby (1976);Arbose (1981); Elbashire and Nicholas (1983); andAmine and Cavusgil
(1986) classified them as a Middle East market. Lastly, Srivastava and Green (1986)
classified them as an OPEC market.
It is our belief that the GCC countries represent a unique market in themselves.
They share many similar characteristics, including culture, language, economic
development, religion, and the legal convention signed by the heads of the six states to
form the Gulf Co-operation Council and thus create a common market. Therefore, this
should be considered by multinational companies as a cluster market, and be treated
accordingly. Kassem et al. (1993) argue that MNCs should view the GCC countries as
a single market area because of their geographic proximity as well as the remarkable
homogeneity of their culture, economics, politics, language, religion, income levels,
and consumption patterns.
2.1.5 INTERMARKET SEGMENTATION APPROACH
Finally, there is the intermarket segmentation approach. In recent years, there seems
to be an argument for the presence of a homogeneous consumer segment across many
countries, having the same characteristics and identified by similar criteria, providing
a foundation for marketing standardisation. Proponents of this approach, for example,
Levitt (1983); Sheth (1986); Onkvisit and Shaw (1987 and 1990); Douglas and Wind
(1987); Kale and Sudharshan (1987); Ohmae (1989) and Jain (1989) propose that
customers, not countries, should be the focus of marketing strategy. The argument
is that in focusing on similar segments in several countries and capitalising on their
similarities, companies can reduce the costs associated with a localisation strategy, and
on the other hand meet the needs and wants of this market, and preserve the customer
orientation which is at the heart of the marketing concept. Therefore, MNCs should
find comparable target groups in different countries and try to use the standardisation
approach.
A few empirical studies have been found in the literature to support this approach.
Among them are Kreutzer (1988) and Samiee and Roath (1992). Hill and Still (1984)
studied less developed countries and found that in rural areas adaptation of marketing
was more required than in urban areas. This may lead to the belief that urban people
in less developed countries may comprise a segment similar to those in developed
countries. Ohmae (1985) and Douglas and Wind (1987) argue that some MNCs have
successfully identified global customer segments and have developed a marketing
programme and brand targeted at these segments. Examples given are Rolex watches,
St. Laurent perfume, BMW cars: usually these products are targeted on special market
segments. The success of this strategy depends on the size and economic viability of
the segment and the ability to reach it effectively and profitably (Douglas and Wind
(1987)).
Having considered these approaches, one can conclude that the issue of marketing
standardisation and adaptation has been much discussed in the literature, although
there is little empirical evidence on how far it is used in practice. According to Kanso
(1992) the controversy over the use of standardisation or localisation may continue for
decades. According to Douglas and Wind (1987) and Kustin (1994), there is no single
best strategy for international marketing. The choice of strategy depends on many
factors. MNCs need explicit goals in order to judge the success or failure of a specific
strategy (Whitelock and Jones, 1993).
2.2 RATIONALE FOR STANDARDISATION OR LOCALISATION
Essentially, the two contrasting viewpoints on standardisation and localisation tend,
on the one hand, to aggregate factors to provide a rationale for standardisation or,
on the other, to disaggregate factors to support a localisation argument. The factors
which affect the standardisation strategy have not been discussed much in the literature
(Akaah, 1991).
AccordingtoJain(1989),standardisationofoneormorepartsofamarketingprogramme
is a function of many factors. These factors can be grounds for disagreement between
the proponents and opponents of either approach. Depending on the importance of these
factor differences in a marketing context, they can be either barriers to standardisation
in some situations, or encourage the use of standardisation in others. Some writers
have examined the factors that could influence the decision to be standardised or
localised: these are the homogeneity or heterogeneity of markets, the type of product,
the political and legal system, the marketing infrastructure, country factors such as
target market and market positions, and firm factors such as the relationships with the
headquarters, corporate orientation and delegation of authority (Jain, 1989; Miracle,
1968)). The following paragraphs will explain in more detail how these factors can
affect the degree of standardisation, citing relevant empirical studies where available.
2.2.1 TARGET MARKET
Some researchers argue that when MNCs seek similar target markets in different
countries, marketing standardisation can be used. Elinder (1961); Roostal (1963)
and Fatt (1964) argue that standardisation is feasible in European countries because
of the similarity of these markets. Another study by Ohmae (1985) maintains that
standardisation should be used in Western Europe, the USA, and Japan, because they

36
37
have become fairly homogeneous target markets. Boddewyn (1981) found many
differences between European countries, including behaviour and income, leading
to the use of an adaptation strategy. Fournis (1962) who was an opponent of the
standardisation concept, notes that custom and traditions in the developed world will
hinder the use of standardisation. Fisher (1984) argues that the more educated the
people, the more their tastes will diverge, and standardisation will not be advisable.
2.2.2 TYPE OF PRODUCT
Many writers argue that standardisation varies with the nature of the product (Jain,
1989), whether it is an industrial or a consumer product. For industrial products
standardisation is more likely (Bakker, 1977). Among consumer goods, durables offer
greater opportunity for standardisation than non-durable products, which need more
matching to the local customs and tastes (Douglas and Urban, 1977 and Jain, 1989)).
An empirical study concludes that consumer non-durable products are more adapted
than consumer durable products and industrial products are more standardised (Quelch
and Hoff, 1986 and Boddewyn et al. 1986)). Day and Huszagh (1988) studied twenty-
one industrial countries and twenty-seven consumer product categories and found that
for consumer durable goods standardisation was greater than for most consumer non-
durables. Another study, by Seifert and Ford (1989), found that for industrial products
standardisation was the rule for product, branding and pricing. These arguments have
been supported by empirical research (Douglas and Wind (1986); Miracle (1968)).
Boddewyn et al. (1986) again found greater standardisation for industrial products,
followed by consumer durable products, and more adaptation in consumer non-
durable products.
Other studies, by Quelch and Hoff (1986) and Huszagh et al. (1986), found that
consumer non-durable products were most affected by the local conditions, requiring
adaptation more than industrial and durable consumer products. Seifert and Ford
(1989) studied small and medium-sized industrial US exporting firms and found that
product, branding and pricing were more standardised. Grosse and Zinn (1990) found
that consumer non-durable products were more adapted to local conditions, whereas
consumer durable and industrial products were subject to more standardisation.
AccordingtoBartlett(1979)andLevitt(1988),whenaproductsatisfiesauniversalneed,
standardisation can be used across many countries. Product positioning is concerned
with how the product is put across to the customer. If MNCs position the product as
the same at home and abroad, then standardisation can be achieved (Sorenson and
Wiechmann 1975). According to Masdag (1987), the selling of food and beverages is
most difficult as far as standardisation is concerned. Cutler and Javalgi (1992) found
that advertising standardisation does not depend on the type of product, but on the
consumer involvement.
Many researchers argue that high involvement products may discourage the use of
standardisation, and conclude that the influence of product type on standardisation
is slight (Boddewyn et al. (1986); Douglas and Wind (1987); Hite and Fraser (1988);
Keegan (1989); Jain (1989); Mueller (1991); Samiee and Roth (1992); and Cutler and
Javalgi (1992)). Picard et al. (1988) conclude that an increased degree of standardisation
between 1973 and 1983 was found in many consumer goods.
2.2.3 MARKET POSITION
Market position is concerned with competitive factors, market development, and
market conditions.As regards the first, competition might be different from one country
to the other, which will make adaptation preferable. For example, if competitors in one
country are lowering their price, a company should lower its price to be competitive,
and therefore, standardisation would not be a good strategy in this case. When a firm
faces competition from the same rivals, the sensible way is to adapt its marketing
activities to meet the local customers’ needs, but if competition is absent, the firm can
use the standardisation approach.
HillandStill(1984)studiedUSMNCsindevelopingcountriesandfoundthatcompetition
was a relatively weak factor in influencing product standardisation, when compared to
the legal system, or local conditions. Sorenson and Wiechmann (1975) had a similar
finding in their study of US consumer packaged goods, examining the competition
when a product moves through its life cycle. They concluded that competition is a
relatively unimportant factor in determining the degree of adaptation.
Killough (1978), Dunn (1976), Purdy and Carl-Zeep (1988) argue that market
differences regarding media availability and the competitive situation are a barrier to
standardisation. Grosse and Zinn (1990) found no significant differences in behaviour
between firms in highly competitive markets as against the others. Henzler and Rall
(1986) and Porter (1986) argue that if a firm is doing business in different markets with
the same competition, pursuing a standardisation approach may then be worthwhile.
If MNCs compete with the same rivals, with similar share positions in different
markets, standardisation is possible (Copeland and Lewis (1985); Quelch and Hoff
(1986); Jain (1989)). As regards the second factor, market development, international
markets are at different stages (Keegan 1989). Jain (1984 and 1989); Kirpalani and
Macintosh (1980) examine market development through the product life cycle, and
argue that if a product is at the same stage of the product life cycle at home and abroad,
standardisation may be used.
To turn to the third factor, market conditions, many aspects of these conditions affect
the degree of standardisation. Among them are cultural differences (Hall (1959); Lee
(1966); Arndt and Helgesen (1981); Schiffman et al. (1981); Ricks (1983); Terpstra

38
39
and David (1985); Parameswaran and Yaprak (1987); and Lipman (1988)). Culture
has a major impact on marketing standardisation (Killough (1978); Dunn (1976)).
Hofsted (1983) states that culture differences have a great impact on management
and organisations. Researchers have argued that differences exist everywhere and
a universal approach to managing MNCs is inappropriate unless similarity is found
(Dunn (1976); Green and Langeard (1975); Urban (1977); Killough (1978) and Ryan
and Fry (1976); Adler (1983); and Lannon (1988)).
AccordingtoDouglasandDubois(1977)andHornik,(1980)cultureisapowerfulfactor
in determining the degree of standardisation. Many writers argue that international
marketers fail abroad because they fail to understand local culture (Ricks et al. (1974);
Still and Hill (1985) and Thorelli et al. (1986) and Mesdag (1987). Hall (1959) and
Sommers and Kernan (1967) state that the differences between cultures in different
countries create barriers in trying to communicate effectively with another culture.
Ryans (1969) stressed that one factor stopping international marketers from using the
standardisation approach is the difference in culture between countries. Mallen and
Litval (1966) and Whitelock and Chung (1989) argue that culture plays an important
role in the perception and use of advertising. Lenormand (1964) recommends adapting
promotion to a specific culture to avoid unnecessary risk. Kaynek and Mitchell (1981)
argue that similar advertising messages have a different impact on different cultures.
Munson and Mcintyre (1979) believe that cross-cultural diversities exist which affect
the reception and acceptance of an advertising message. Dunn and Yorke (1974)
conducted Pan-European research and found great differences between European
countries, such as language, perceptions, values, and norms, which affect marketing
standardisation in one way or the other. Douglas and Dubois (1977) found that culture
affected advertising in four ways: advertising theme, choosing the words and symbols,
media selection, and the way pictorial conventions are interpreted.Amine and Cavusgil
(1983) found that when there are some economic and cultural differences between
countries, standardisation is then unsuitable.
On the other hand, Boote (1983) found homogeneity among consumers in the United
Kingdom, France and Germany, and recommended the use of standardised advertising
in these countries. Boote’s conclusion was challenged by Shaw and Onkvist (1983)
and Boddewyn et al. (1986), who argue that the evidence, when analysed carefully,
was overwhelmingly diverse. Nielsen (1964) and Unwin (1974) argue that the
advertising message must take cultural differences between countries into account.
Martenson (1987) argues that even if markets have different cultural values, successful
standardisation is possible. Sorenson and Wiechmann (1975) found that similarity in
market conditions leads to a high level of standardisation. Cavusgil and Yavas (1984)
found that the indifferent attitudes of Turkish managers towards marketing know-how,
as well as production-oriented philosophy, affected by the culture, can be a barrier
to international marketing standardisation in developing countries. Researchers argue
that different cultures create different needs. Even though some needs are basic
across cultures, people will not be satisfied with the same product, or communication
appeal.
Attitudes and perception are influenced by culture, life style and traditions (Cole and
Bruner (1971); Bond et al. (1975); Linton and Broudbent (1979); Schiffman and Leslie
(1987 and Chadraba and Czepiec 1988)). According to Gurivith (1971); Labarbera
(1987); and Luqmani and Quraesh (1989), one of the culture factors which determines
the individual's behaviour and attitudes is religious feeling. Keegan (1969) argues
that when a product is culturally compatible with the local culture, it is likely to be
more suitable for standardisation. In some cultures people perceive foreign products,
especially Western products, as high- quality, and in this case standardisation would be
desirable (Friedman (1986); Douglas and Wind (1987) and Shalofsky (1987)). Some
researchers have found differences between countries enough to discourage the use
of standardisation, these differences ranging from transfer of technology, decision
making, to the control mechanism (Fisher (1984); Kedia (1988); Tse et al. (1988) and
Kreder and Zeller (1988)).
Terpstra (1990) argues that there are universals common to all cultures, and Ricks
(1983) and Hawes (1985) argue that some elements of culture are widely accepted,
for example, language. All these should be included in any marketing strategy. Kanso
(1992) concludes that managers who use the standardisation approach to advertising are
less culturally oriented and vice versa.Another factor which has an effect on marketing
standardisation is customer characteristics; as we know, customers differ from country
to country, and even within different regions in the same country, which will result in
differences in taste, preferences, and shopping patterns. Therefore, adaptation of some
of the marketing elements is desirable in order to meet the customer’s need, and gain
competitive advantage.
Colvin et al. (1980) conducted research on how consumers in the UK, Germany,
Sweden, and France perceive the Ford Granada car, and found differences in consumer
perceptions from country to country. Other studies have found major differences in
behaviour between regions and subculture segments (Garreau (1981); Saegert et al.
(1985) and Kahle (1986)).
Language is another obstacle to standardisation, and may be the most difficult obstacle
to advertising standardisation (Thackray (1985); Whitelock and Chung (1989);
Engel et al. (1990); Jacobs et al. (1991)). Language differences make standardisation
difficult. Hempel (1974); Green and Cunningham (1980) found that US family buying
behaviour (English speaking) was similar to the behaviour of the English family
(English speaking) but differed greatly from that of the Venezuelan family (Spanish
speaking). Reichel (1989) states that differences between the various EEC countries

40
41
regarding culture, languages, and customer preferences still exist in the highest degree.
Mayer (1978) argues that some Western marketing concepts cannot be translated into
another language, such as Arabic. Elbashier and Nicholls (1983) emphasise the role of
linguistic barriers in international marketing.
Another market condition factor affecting standardisation is the economic differences
between different countries around the world. It has been argued that economic
differences between nations affect the degree of standardisation in many ways (Henzler
(1981); Luqmani et al. (1980);Terpstra (1986); Douglas et al. (1986)).According to Jain
(1989), poor economic performance may preclude developing countries from enjoying
the variety of products available in USA. He gives examples, such as automobile.
Because of the high cost of this product, in many developing countries it will not be
available to the majority of the people, and therefore MNCs should modify the product
to cut costs without reducing the quality significantly.
2.2.4 ENVIRONMENT
According to Shao et al. (1992), the factors which play the key role in determining
how successfully MNCs operate abroad are environmental. These factors, where
managers have little control, must be recognised and considered in all marketing
activities. Decisions in marketing include product, price, promotion and place, the
same in any market, but these decisions too are influenced by the environment. These
environmental factors affect marketing decisions in different degrees (Buzzell (1968);
Donnelly and Ryans (1969); Donnelly (1970); Britt (1974); Green et al. (1975); Dunn
(1976); Michell (1979); and Cavusgil and Yavas (1984)). As regards legislation,
Rutenberg (1982); Kacker (1972); Killough (1978); and Hill and Still (1984) argue
that differences in various countries make the standardisation of marketing difficult.
Barker and Aydin (1991) state that government regulations are the factor which
most distinguishes international from domestic business, and are the most difficult
to deal with. Some governments penalise international brands in favour of national
industry (Whitelock and Jones 1993). Another environmental factor is the marketing
infrastructure. This includes the institutions and functions necessary to create, develop,
and service demand, such as retailers, wholesalers, media houses, advertising agencies,
transportation, the distribution system, harbours, storage, level of customer services,
and store type (Jain (1989) and Barker and Aydin (1991)).
According to Tajima (1973); Ricks et al. (1979); Shimaguchi and Rosenberg (1979);
Thorelli and Sentell (1982); Bello and Dahringer (1985); Douglas and Wind (1987);
and Jain (1989), the availability and cost of such infrastructures will affect the degree
of standardisation and might require considerable adaptation of strategy to local
conditions.
According to Michell (1979), UK companies to some extent adapt their offerings
and implement a detailed marketing mix to overcome infrastructure problems. Media
availability varies from country to country (Kaynek and Mitchell, 1981). Some
countries ban TV advertising, and some countries restrict its use. These can hinder
the use of advertising standardisation (Whitelock and Chung (1989)). Another factor
is the advertising agency, with some advertising agencies present world-wide and
encouraging the use of standardisation. Another environmental factor which affects
standardisation is physical conditions.
Jain (1989) argues that the physical condition of a country may affect the degree of
standardisation.An example given is the Middle East, where in the hot climate products
such as cars need consequent modification, and the design of a house affects the size
of household products. Politics too is an environmental factor having some effect on
the degree of standardisation. Some developing countries’ governments intervene in
the affairs of MNCs, requiring changes in company policies, and operative procedures.
These interventions may invalidate standardisation (Vernon (1971); Poynter (1980)).
MNCs are trying to minimise their risks by seeking politically stable areas for
investment (Michell 1979).
2.2.5 ORGANISATIONAL FACTORS
Many researchers argue that once the marketing strategy and programme are in place,
the challenge for MNCs is to get the local management to implement them (Davidson
and Haspeslegh (1982); Hamel and Prahalad (1985); Quelch and Hoff (1986); Fannin
and Rodriguez (1986); Yip et al. (1988); Raffee and Kreutzer (1989); Kashani (1989)
and Barker and Aydin (1991)). To get standardisation implemented effectively, good
relationships between MNCs HQ and local management must be maintained, with
the support and commitment of local managers (Brandt and Hulbert (1977); Bartlett
and Ghoshal (1987); Kashani; (1989) Jain (1989); and Barker and Aydin (1991)).
Wind et al. (1973) and Perlmutter (1969) have identified three orientations among
international managers towards building international companies: "ethnocentric"
(home-country oriented), "geocentric" (world-oriented), and polycentric, the overseas
subsidiary acting independently of the HQ. In ethnocentric, the reference point is the
home market, and therefore standardisation will be used because domestic policy is
dominant. In geocentric, the marketing policy is derived from an international base,
assuming the world to be one big market. Therefore, standardisation will be used. Some
researchers argue that the idea of the geocentric approach has been greatly over-rated
(Wind et al. 1973). In polycentric, marketing policies will be driven by the host market
and adaptation will be used. Perlmutter (1969) and Jain (1989) argue that international
orientation alone is not sufficient grounds for standardisation.

42
43
Simmonds (1985) argues that "A geocentric approach to global strategy must be ready
to accept national adjustment even as it looks for international standardisation".
"Regioncentric" companies are trying to standardise within specific groups of markets.
According to Wind et al. (1973), most of the standardisation studies implicitly refer
to Regioncentric, such as Western Europe or less developed countries. Sim (1977);
Reynolds (1978); Das (1981); Nowakoski (1982); and Jain (1989) all pointed out that
conflict exists between headquarters and local management, resulting in different
points of view. When the level of co-operation (a good relationship between HQ and
local management) is greater, the greater the degree of standardisation is likely to be
(Jain, 1989; Akaah, 1991).
The final organisational factor which influences the degree of standardisation is how
much authority is delegated to the local management. The more authority the local
manager has, the better adapted the marketing decisions will be. According to Picard
(1987), the location of authority has important implications for marketing decision-
making. Local management will try to be more autonomous from the HQ, and, on the
other hand, HQ will require more control over the local operations. d'Antin (1971)
and Doz (1980) think that delegation of authority has more influence on marketing
standardisation. Aylmer (1970) found different degrees of authority for different
marketing decisions: for advertising decisions local managers were responsible for 86
per cent, 74 per cent for the pricing decisions, 61 per cent for distribution decisions,
and there was a high degree of standardisation for product decisions. These findings
were supported by another study by Brandt and Hulbert (1977). A study by Garnier et
al. (1979) of Mexican affiliates of US companies shows varying degrees of autonomy
from function to function within the same firm. Regarding the marketing function,
they found local managers were responsible for 83 per cent of price decisions, 89 per
cent of distribution decisions, and 47 per cent of product decisions. Aylmer (1970)
reported more autonomy in advertising decisions. Sim (1977) studied the subsidiaries
of different national origins, including British, American and Japanese in Malaysia.
The sample included firms from different fields such as consumer goods, chemical,
transportation, electronic, electrical, and textiles.
The study findings show that authority was given to local management on decisions
such as promotion, pricing, and distribution. HQs control the product decisions. Other
factors affect the degree of marketing standardisation. Kacker (1972) Rutenberg (1982)
and Hill and Still (1984) all argue that differences in product usage, the level of literacy,
the level of education, social class structures, eating patterns, and the development of
self-serviceretailingareallimportantobstaclestomarketingstandardisation.Downham
(1982) identified eight factors requiring changes in the marketing programme, and
leading to market differences. They are: brand name, distribution structure, regulation
regarding product formulation, media availability, packaging, content of advertising,
price and promotion. Quelch and Hoff (1986) argue that organisational constraints are
the key obstacles to standardisation, more so than the environmental variables.
To turn to nationalism in European countries, this would increase, and promotion
would have to be adapted or modified accordingly. Thus, the degree of nationalism
affects the degree of standardisation (Kaynak and Mitchell 1981).
Within the international environment, there are forces which create pressures towards
the using of a standardisation strategy across many countries. On the other hand, there
are other forces which create pressures to adapt the strategy to the local environment
(Fayerweather (1969); Doz (1980); Porter (1980 and 1985 )). Different organisations
perceived these factors differently, which has resulted in different strategies for firms
on the same market (Onkvisit and Shaw (1987); Douglas and Wind (1987); Yip (1989);
Cateora (1990); Terpstra and Sarathy (1991)).
2.3 EMPIRICAL EVIDENCE
While the debate on the standardisation issue has been extensive, empirical data relating
to actual corporate practice has been less forthcoming (Sandler and Shani, 1992).
Writers distinguish between marketing programme and marketing process (Walters
(1986); Kreutzer (1988); and Jain (1989)).According to Walters (1986) and Ozsomer et
al. (1991), most of the early literature on the subject focused on marketing programme
standardisation. Process standardisation was taken up in more recent studies. In
programme standardisation the focus has been on the marketing mix elements (product,
price, promotion and distribution), whereas process standardisation is concerned with
marketing planning, marketing philosophy, and budget and control; or, as Whitelock
and Jones (1993) put it, process standardisation involves the standardisation of the
tools utilised for development, implementation and control of marketing strategy.
According to Whitelock and Jones (1993), standardisation of the marketing process
does not have to result in programme standardisation.
In the following sections, marketing programme and marketing process elements are
analysed to show some of the empirical evidence.
2.3.1 MARKETING PROGRAMME STANDARDISATION
According to Ozsomer et al. (1991), studies of marketing programmes concentrate
mainly on the advertising and product elements of the marketing mix. Other elements,
such as pricing and distribution, have been given much less attention by academic
researchers. Most of the literature on the subject of standardisation has been involved in
international promotions (Elinder (1961); Fatt (1964); Roostal (1963); Miracle (1968);
Ryans (1969); Donnely (1969); Britt (1974); Green and Langeard (1975); Dunn (1976);
Colvin and Thorpe (1980); Hornik (1980); Walters (1986); Ryans and Ratz (1987);
Onkvisit and Shaw (1987); Hite and Fraser (1988); Synodinos et al. (1989); Mueller
(1991); Sriram and Gopalakrishna (1991); Whitelock and Kalpaxoglou (1991); Kanso
(1992) and Agrawal (1993)). Few articles were found in the literature that involve

44
45
other elements of the international marketing mix (Buzzell (1968); Keegan (1969);
Hovell and Walters (1972); Levitt (1983); Walters (1986); Boddewyn et al. (1986);
Rau and Preble (1987); Clark (1990); Szymanski et al. (1993)).
Altogether, from the literature on programme standardisation, it was found that
attention has focused on the degree of standardisation of individual marketing mix
variables, with promotional strategy remaining very much in the forefront of attention.
Boddewyn et al. (1986) examined the literature for a period of 10 years (from 1973 to
1983) and found an increasing standardisation in all parts of the marketing programme.
Quelch and Hoff (1986) found that firms were trying to standardise their marketing
activities during the 1980s. In the following sections the empirical evidence of each
element of the marketing programme will be presented.
2.3.1.1 PRODUCT
Regarding product elements, Olfermann (1987); Kirpalani and Macintosh (1980); Hill
and Still (1984); Aydin and Terpstra (1981); and Sorenson and Wiechmann (1975) all
foundhighlevelsofstandardisation.SorensonandWiechmann(1975)studiedmarketing
standardisation in the European subsidiaries of twenty-seven MNCs and found a high
degree of standardisation with brand names, physical characteristics and packaging
of consumer non-durable goods. Bakker (1977) studied Dutch firms operating in the
Common Market and found the same result as Sorenson and Wiechmann. Hill and
Still (1984) researched MNCs doing business in less developed countries, and found
that companies dealing with food and general consumer products required adaptation
to the local condition, whereas cosmetics and pharmaceutical products showed a high
level of standardisation. They also found more than half of the products sold in less
developed countries were originally developed for the home market. Ozsomer et al.
(1991) studied MNCs operating in a developing country, namelyTurkey, and concluded
the following: different levels of standardisation were found for different marketing
elements. With brand name, product characteristics, and product positioning, high
levels of standardisation were found. High levels of adaptation were found in price
and type of middlemen.
Regarding the type of product, pharmaceutical and chemical products show high
standardisation, followed by consumer non-durable products. Electronic and motor
vehicle parts and components showed low levels of standardisation. Moderate
standardisation was found in food and drink products. Kacker (1972 and 1975) studied
the products of American firms doing business in India, and found a great propensity
to standardise. Despite this, 45 per cent of the American firms reported significant
changes in the product arising from legal requirements, for example, the use of local
materials, and differences in the product usage.
Walters (1986) states that in a market where significant change in product was necessary
the tendency was to avoid these markets. Ayal and Zif (1979) argue that one limitation
of a company’s geographic expansion is the significant production adaptation required.
Aydin and Terpstra (1981) studied MNCs in Turkey and found that 46 per cent adopted
standard products. Akaah (1991) studied the degree of standardisation of US firms
with operations overseas, and found only 43 per cent of marketing programme and
marketing process activities displaying a high degree of standardisation, for example,
brand name, product characteristics, product warranties, and packaging.
As regards marketing process activities, marketing planning and budget and control
system were highly standardised. Michell (1979) studied the exporting practices of
sixty-three UK companies, and found that 65 per cent of the sample marketed the same
product to differing parts of the world. Ward (1973) studied the product and promotion
strategies of US subsidiaries of European companies for both industrial and consumer
products. He found that consumer products required more adaptation than industrial
products. These product adaptations related to the following: how the product is used,
labelling, quality, packaging and styling. Most of these adaptations were minor, and
the most influential factors in adaptation were customer needs and competition.
Quelch and Hoff (1986) found that the most standardised elements of the marketing
programme were product and branding. Kacker (1972) studied 26 US firms operating
in India and found that the most standardised elements of the marketing programme
were product, followed by pricing. Grosse and Zinn (1990), found branding and
product were least adapted. Donnelly and Ryans (1969) found that the majority of
US companies use their domestic marketing approach in overseas markets to some
extent.
According to Walters (1986), most marketing standardisation was on product policy,
namely branding. Rosen et al. (1989) reviewed the literature on international branding
and cited only four studies dealing with this matter. Boddewyn and Hansen (1976)
found brand standardisation high among US companies in the EEC market: consumer
durables (66 per cent), industrial goods (49 per cent) and consumer non-durables (38
per cent). Boddewyn et al. (1986) replicated the study some years later, and found high
standardisation for the brand name in consumer durables (75 per cent), industrial goods
(62 per cent) and consumer non-durables (50 per cent). Sorenson and Wiechmann
(1975) studied American and European non-durables and found 90 per cent of the
companies standardising their brand name. Still and Hill (1984) found that 72 per cent
of firms standardised their brand name, with product the next standardised variable.
Another study of US consumer goods companies by Rosen et al. (1989) found 82.5
per cent of the sample used the same brand name internationally. Akaah (1989) studied
US companies with overseas operations, and found that 73 per cent standardised their
brand name.

International marketing programme (My PhD 1996)

International marketing programme (My PhD 1996)

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (9)

Similaire à International marketing programme (My PhD 1996)

Similaire à International marketing programme (My PhD 1996) (20)

Plus de Obaid Saad Alabdali

Plus de Obaid Saad Alabdali (11)

Dernier

Dernier (20)

International marketing programme (My PhD 1996)