Professional Documents
Culture Documents
and
Marketing
Communication
Adaptation by
MNCs
MM II Term Paper
Lal Bahadur Shastri Institute
of Management
61- Neha Shrivastava
62- Sagar Patel
63- Ritesh Dhundhuani
64- Pragyaa Shree Prasad
65- Sanchit Jain
84- Ratul Nagpal
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Convergence & Marketing
Communication adaptation by MNCs
ABSTRACT
In a globalised world it makes strategic sense for companies to expand their operations across national
boundaries. They get access to new markets and key resources such as specialized skills, mineral resources
and new sources of information. However the opportunities that comes by their worldwide presence up
need to be converted into competitive advantage. And for this MNCs need to launch to adapt to the right
strategies of marketing communication, build organizational capabilities and manage operations in a
diverse, complex and volatile competitive international arena. Also many markets are converging, as
communication and logistics networks become more integrated and firms from all parts of the world are
expanding operations on a global scale. This purpose of this paper is to study how convergence and
marketing communications are being adapted by MNCs across the globe and examine how this strategy
in marketing works and how well it has been employed by the companies.
Objective: To study how convergence and marketing communication adaptation have been
used by MNCs and how effective it has been for them.
Methodology: This methodology followed for this paper is intensive studying of various business
journals, newspapers and articles which highlight the Adaptation strategies employed by MNCs in
marketing. The study also includes analyzing various articles and visiting websites pertaining to the how
leading MNCs have adopted the global strategies for market communications.
INTRODUCTION
Background:
With the ever faster communication,
transportation, and financial flows, the world is
rapidly shrinking. Countries are increasingly
multicultural and products and services
developed in one country are finding
enthusiastic acceptance in others.
Just as the internationalization boom of the
1990s proved instructive with regard to market
assessment, so there is much to be learned from
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Joint Ventures:
There are five common objectives in a joint
venture: market entry, risk/reward sharing,
technology sharing and joint product
development, and conforming to government
regulations. Other benefits include political
connections and distribution channel access
that may depend on relationships.[30] Such
alliances often are favourable when:
Any marketing strategy focus on the ideal
product mix to achieve maximum profit
potential. Multinational Corporations must
decide how much to adapt their marketing
strategy to local conditions. At one extreme end
is the Standardized marketing Strategy
worldwide, which promotes cost effective
marketing. Some of the benefits of this program
include:
Economies of scale in production and
distribution,
Lower marketing costs,
Ability to leverage good ideas quickly
and efficiently,
Uniformity of marketing practices.
At the other extreme is an adapted marketing
strategy in which the company, consistent with
the marketing concept, believes consumer
needs vary and tailors marketing to each target
group.
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The US MNCs followed the International
strategies
- MNCs headquartered in large technologically
advanced countries adopted this strategic
approach to exploit home-country innovations.
- Centralize those resources that are key to
developing innovations;
- Go where locals dont have your skills. Power
systems, Airplanes, specialized machinery and
other Hi-tech equipment.
The Japanese MNCs followed the Global
strategies.
- Utilizes product standardization. Products like
watches, music systems, PCs and cameras are
global products. Assuming that the consumer
looks for functionality, quality and low cost only.
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PRODUCT STANDARDIZATION
Examples of Standardization of product:
Product Invention
Backward Invention: this strategy reintroduces
earlier product forms well adapted to a foreign
countrys needs and wants.
Forward Invention: It creates a new product to
meet the need in another country.
Changing marketing communication based on
each of the local market is a process called
Communication Adaptation. We can have 5
numbers of strategies revolving around
adaptation considering both the product to be
marketed and also the communication strategy
to be adopted.
1. Product and Communications Extension
Dual Extension:
At one extreme, a company might choose to
market a standardized product using a uniform
communications strategy. Early entrants in the
international arena will often opt for this
approach. Also, small companies with few
resources typically prefer it.
Dual extension might also work when the
company targets a global segment with similar
needs. E.g. The Japanese firm, Shiseido, the
worlds sixth-largest cosmetics company by sales
volume, sells in Europe, the Americas and across
the Asia- Pacific, including Australia and New
Zealand.
2. Product Extension Communications
Adaptation:
Because of differences in the cultural or
competitive environment, often the same
product is used to offer benefits or functions that
dramatically differ from those in the home
market. These differences between the foreign
and home market drive companies to market the
same product using customized advertising
campaigns.
E.g.: Clothing Company Levis uses this approach.
Although the famous Levis brand name carries
clout in many parts of the globe, and the basics
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Providers will obviously need to be aware of the
increasing threat of new entrants as all
technology players make a move for the services
space. Add to this the fact that the digital
revolution is fuelling disintermediation and
substitution in all areas, and youll need to
consider what this means for your portfolio,
pricing, and sector strategies. In addition to
ensuring that your value proposition addresses
the changing role of the CIO, you may also have
to work much more closely with organizations
that are also or have previously been your
competitors.
These "five C's" are areas in which some of the
most interesting new "fusion" concepts can be
developed:
CustomerizationConvergence
of
customized and standardized offerings
and messages
CommunityConvergence of virtual
and physical communities
ChannelsSeamless convergence of
call, click, and visit
Competitive valueConvergence of
new and traditional competitive value
equations and pricing models
Choice toolsConvergence of new
search engines and decision tools for
consumers and company-provided
advice
These are areas in which new technologies and
systems create opportunities for customers to
do things they could never do before, but they
are also areas in which customers are creatively
combining the old with the new to create a
fusion. Most of the initial discussion of these
topics over the past few years has focused on
As managers become more mobile and move
across national borders from one country to
another, increasing cultural diversity in their
outlook creates greater interests and sensitivity
to culturally and economically diverse market
opportunities. The spread of communication
links between and within countries and regions
and proliferation of the technology has further
facilitated the firms ability to develop market
knowledge competencies in relation to
customers, competitors and suppliers as well as
the market and institutional infrastructure.
Hence there is abundance of opportunities for
the leading MNCs to make use of these
technology, gain more insights into the
convergence of tastes, preferences, wants of
customers and thereby develop their marketing
communication strategies and also decide how
to use Marketing Adaptation.
We already have a lot of MNCs using the
convergence in their marketing communication
adaptation strategies. A few examples are
mentioned below:
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A FEW EXAMPLES
Apple:
Reebok:
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CONCLUSION:
REFERENCES:
Books:
1. Marketing Management By Kotler, Philip;Keller, Kevin Lane; Koshy, Abraham & Jha, Mithileshwar.
http://www.ftpress.com/articles/article.aspx
http://www.slideshare.net/friendlyankurpandey/marketing-strategies-progremmes-adopted-by-mncs-inindia-according-to-indian-culture-consumer-behaviour
http://successfulglobalmarketing.weebly.com/untitled/global-marketing-strategy-standardization-vsadaptation
http://www.fastcocreate.com/1683067/5-principles-of-convergence-how-to-work-better-at-theintersection-of-tech-creativity-and-me
http://www.researchersworld.com/vol3/issue3/vol3_issue3_3/Paper_09.pdf
https://hbr.org/1983/05/the-globalization-of-markets
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