Marketing Standardization and Local Adaptation in the Hospitality Sector

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Marketing Standardization
Local Adaptation
Summary
Conclusion
Reference List

Introduction

Globalization has influenced the marketing environment of organizations in a great way. Global marketing for hospitality based industries is more based on decision making on the global entry strategies to make use of. The marketing options available to hospitality companies are mainly either adapting to the local market or being standardized globally.

This decision is however made with the aim of choosing the option that not only provides a better global strategy, but also allows for profitability and maintenance of a competitive edge. Marketing standardization and local adaptation for the hospitality sector are opposing forces which mean that the market research for the best marketing mix has to be made.

Global standardization is not easy for the company neither is adaptation since both require adequate information and resources. It is thus definite that each of these options has both advantages and disadvantages leaving the management to make the best decision based on the hospitality industry sector and nature of products dealt with.

Marketing Standardization

Marketing standardization in marketing implies that the products or services offered are homogenous to fit the global market. This concept aims at establishment of the brand, cost reduction and offering of products or services to the vast audience (Samiea & Roth, 1992).

In the hospitality sector, for example, a multinational organization having various hotels or restaurants in various other countries globally, offers the same food, drinks and service type in all the outlets (Chaney & Martin, 2004). This strategy of global marketing has merits and demerits.

Advantages of Marketing Standardization

Marketing standardization applied in the hospitality sector lowers the cost of operation (Branch, 2001). This is because; the ingredients and supplies are bought in whole sale quantity to be distributed to the other outlets thus enabling the organization to get discounts for large quantity bought and for consistency in buying specific products.

This enables the organization to also maintain standardized qualities since the materials and ingredients are bought together (Dalgic, 1992). The costs of operation in terms of management is also reduced due to the fact that a similar management is applied through out the branches hence training costs are minimized (Defranco & Lattin, 2006).

The cost is also reduced due to the less labour required since no specialized skills such as dealing with local food is required hence staff can be trained together and sent to work in any country. For example, a chain of restaurants dealing with contemporary service with employees does not require the employees to be knowledgeable of Indian local food for them to work in the Indian branch (Czinkota et al., 2005).

The organization is able to establish and maintain a strong brand due to the fact that it is specialized and consistent in the branches. This means that customers are able to know the products offered; the service that they can look for when in any other country and guaranteed of quality.

For example, if a restaurant makes use of the Chinese style of service and specializes in Chinese food and uses marketing standardization, when a customer is in another country and desires Chinese food, they always locate the restaurant branch in that country. Maintenance of a strong brand not only helps the company to make higher profits, but also enable it to improve its quality (Reichheld & Sasser, 1990).

Marketing standardization lowers the competition in the market since the organization is specialised. Additionally, it is not affected by such factors as geographical, environmental or social thus increasing its uniqueness.

The offering of standardized products for the local market is advantageous to the organization since the local market customers do have a preference for products different from their local ones (Burca et al., 2004). For example, an Asian restaurant offering Asian foods, drinks and style is likely to attract curious customers in its American market sine they are anxious to have something different from their own local foods and drinks.

Disadvantages of Marketing Standardization

Customer service is very crucial in the hospitality industry since once the customers are not comfortable with the products offered, those products cannot be kept to be sold later because they are perishable (Payne, 2006). Contrary to this, the concept just offers products without consulting on the needs of the customers which may foster a dislike by them.

Additionally, standardization means that the products offered are homogenous in the country. This faces the challenges of the local names of the food to the local culture which may imply having the standardized foods or drink name which may have a totally different interpretation in the local industry (Lovelock et al., 2009). Further, customers feel attached to restaurants that offer their own cultural foods and drinks.

Most global hospitality sector industries make use of technologically advanced technology applied to the global branches. This becomes a challenge especially for developing countries where the local people do not get adequate employment opportunities in the local restaurant or hotel thus developing opposition (Samiea & Roth, 1992).

The local environment differs in terms of political factors, economic development, environmental factors, political risks, social factors and geographic factors. This offers many risks to the standardized organizations which may lead to many losses.

For example, a chain of restaurant that deals with pork is likely to lose market in the Arabic countries since the religion is Islamic that prohibits eating of pork. Organizations that adapt marketing standardization do suffer loses to the extent that there is limited market segmentation thus may advertise to the wrong target audience.

Local Adaptation

The organizations that make use of this strategy for global market entry and expansion base it on the customer service where effectiveness is established through the understanding of the needs of the customers and seeking to meet them (Thomas et al., 2004).

It is also applied with the thought of considering the differences between countries, needs for each country, factors unique to each market and adapting to the local market. This concept means that an organization offers products and services that suits a specific market segment or usually country. This concept has both merits and demerits as well.

Advantages of Local Adaptation

This strategy for the local adaptation allows for market segmentation where the service differs from one segment or country to another. This enables the organization to make high returns from each specialized segment (Payne, 2006). The difference in service enables the organization to take into consideration the factors such as geographic, economic, social, and political among others which allows for lowered market risk.

For example, a restaurant situated in a volatile country would not affect the sales performance of the other branches. Additionally, understanding the needs of the customers enables the organization to be flexible through adapting to fulfil the needs of the customers hence remaining relevant (Lovelock et al., 2009).

The fact that this kind of organization makes use of local foods attracts the target customers due to the familiarity they have with the market (Lamp et al., 2008). For example, a Chinese restaurant with global branches is likely to adapt to the Japanese context for its Japanese branch hence having the local people frequent it.

This enables the restaurant to sell its food and drinks without experiencing many losses due to spoilage. The organization does also not experience challenges in decisions such as products and pricing and place since it makes use of research from the local restaurants in these countries. For example, the prices for food and drinks would differ from one place to another enabling the organization to maximize on its returns (Isen et al., 1998).

Disadvantages of Local Adaptation

The aspect of globalization has turned the world into a global village through technology advancements and communication. This means that people in different countries are aware of the products and services offered in the global market (Lamp et al., 2008). The concept of adapting to the local market thus opposes this aspect.

The process of identifying the requirements of the local industry is time consuming and makes use of many resources such as finances which may affect the financial performance of the organization (Defranco & Lattin, 2006). For example, in order to set up a restaurant in China, the management would require carrying out market research which would need proficiency in the local language which may require additional personnel.

While the organizations are able to meet the needs of the customers, they face stiff competition from the local existing companies which have much higher knowledge of the industry. This competition is likely to affect the profitability of the organization (Lovelock et al., 2009).

Adapting to the local industry requires that the organization has different strategies for each different country. This thus denies it the uniqueness that comes from brand establishment (Hill, 2005). Customers globally are not able to recognise its uniqueness, for example, an organization in seven different countries offering different foods and drinks as well service suited for the local market may appear like different organizations in each different country thus lowering the brand strength and recognition to the customers (Payne, 2006).

Additionally, offering different food and drinks increases the costs to the organization since the management requires different ingredients for each different country or dish which vary in costs. Additionally, costs would be increased by the costs of labour due to the specialised skills of handling local foods and drinks required, training offered and management of each branch which requires a different style for each country (Griffin & Pustay, 2005).

Summary

The concepts of adapting to the local market or either market standardization is a crucial decision in the hospitality sector due to the perishable nature of the foods and drinks, diversity of the foods and the aspect of globalization (Clarke & Chen, 2007). Both however influence product, pricing, distribution and place decisions based on market assessment through marketing mix strategies.

It is worth noting that the strategy adapted has to influence the financial profitability and performance of the organization. Some global hospitality organizations such as hotels and restaurants have embarked on incorporating both marketing standardization and local adaptation for flexibility and lowering the risk associated with each individual strategy.

Conclusion

This discussion has focused on marketing standardization and local adaptation as strategies for the hospitality based organizations in the global market. These two concepts have their merits and demerits which have been reviewed in the discussion.

Reference List

Branch, A., 2001. Export Practice and Management. London: Thomson Learning.

Burca, D. Brown, L. & Fletcher, R., 2004. International Marketing: An SME Perspective. Upper Saddle River: Pearson Prentice Hall.

Chaney, H. & Martin, S., 2004. Intercultural Business Communication. Upper Saddle River: Pearson Prentice Hall.

Clarke, A. & Chen, W., 2007. International Hospitality Management (Concepts and cases). London: Butterworth- Heinemann.

Czinkota, M. Ronkainen, I. & Moffett, H., 2005. International Business. Mason: Thomson South-Western.

Dalgic, T., 1992. Euro marketing: Charting the Map for Globalization. International Marketing Review, 9(5), pp.31-42.

Defranco, A. & Lattin, T., 2006. Hospitality Financial Management. London: John Wiley and sons Publications.

Griffin, R. & Pustay, M., 2005. International Business: Managerial Perspective. Upper Saddle River: Pearson Prentice Hall.

Hill, C., 2005. International Business: Competing in the Global Market place. New York: McGraw Hill Publishers.

Isen, D. Tse, E. & West, J., 1998. Strategic Management in the Hospitality Industry. London: John Wiley and Sons Publications.

Lamp, C. Hair, J. & McDaniel, C., 2008. Marketing. London: Cengage Learning.

Lovelock, C. J. Wirtz, J. & Chew, P., 2009. Essentials of Services Marketing. Singapore: Pearson Education South Asia Pty Ltd.

Payne, A., 2006. Handbook of CRM: Achieving Excellence in Customer Management. London: John Wiley and Sons Publications.

Reichheld, F. & Sasser, W., 1990. Zero Defections: Quality Comes to Services. Harvard Business Review, 68, pp.105-111.

Samiea, S. & Roth, K., 1992. The influence of global marketing standardization on performance. Journal of Marketing, 56(1), pp.1-17.

Thomas, J. Reinartz, W. & Kumar, V., 2004. Getting the most out of all your customers. Harvard Business Review, 82(7/8), pp.116-123.

Click Here To Order Now!