- Email: [email protected]
Adapting consumer products to lesser-developed markets
Adapting Consumer Products to LesserDeveloped Markets Richard R Still, Calrforma Polytechmc State Unwerwy John S Hill, Unwersrty of Alabama
types of modern consumer products require substannally different amounts and types of aa’uptatlon rn preparing them for marketrng m Lesser-Developed Countries (LDCs) This study reports conclusions drawn from an emprrlcal study of 174 products marketed by 61 substdrartes of multmatlonal corporatrons operatmg m 7-7 different LDCs Some product categories such as foods and drinks. require adaptmg to ju them more appropnately for LDC marketmg condltrons Other categories. such as cosmetus. undergo few adaptations, as their makers seek to reap the benejit of therr products establrshed Images m LDCs St111 other categories, such as pharmaceutrcals, undergo muumal adaptations because of the substantial advantages their makers attach to global standardtzatlon
Different
International marketers deciding to adapt modem consumer products for sale m lesser-developed markets find both opportunmes and problems On the opportunity side, Lesser-Developed Countnes (LDCs) possess tremendous untapped potential as markets for the products of Multinational Corporations (MNCs) More than 100 of the world’s 170 countnes are classified as emergent or m the first stages of econonuc development Fmns entenng LDC markets early can establish themselves and take advantage of numerous opportumtles for profitable growth On the problem side, sellmg modem consumer products m LDCs 1s a complex matter Not only are consumer goods the most culturally sensitive of all products [3] but adaptations that marketers make In their products must bndge the considerable economc and cultural gaps that exist between the developed world and the developmg world The purpose of this study was to determme the susceptlb&y to change of different consumer products transplanted mto lesser-developed markets All consumer nondurable products have common charactenstics (bought by mdlvlduals or households for personal or nonbusmess use, Address correspondence to John S HzII, Department of Management and Marketrng, Unrverslty ofAlabama, P 0 Box College of Commerce and Busmess Admmntratlon, J, Umverszty, AL 35486 Journal ot Bwness Research 12,51-61 (1984) @ Elsewer Science Pubhshq Co , Inc 1984 52 Vanderbdt Ave , New York, NY 10017
51
0 148-2963/84/$3 00
52
R R St111 and J S Hdl
consumed m one or few uses, etc ), and thus suggests that all types of products should be SubJect to sm&u adaption or standardization pohcles But an analysis of four maJor categones of consumer nondurables (speafically , food/drmk, pharmaceutical, cosmetic, and general consumer goods), casts doubts upon the appropnateness of across-the-board policies These different types of products, whde shanng certam characterlstlcs, also possess certam umque charactenstics that require different adaptlon policies For instance, food/dnnk and pharmaceuncal products are consumed by buyers mtemally, but cosmetics and general consumer goods are not Then, too, brand image and physlcal appearance are more important for food/drmk , cosmetic, and general consumer products than they are for pharmaceuticals And differences m personal tastes among consumers m LDCs make more changes likely for highly personal products such as food/drmk and cosmetic items than for pharmaceuticals or general consumer goods Recogmzmg that these differences exist, we used data from a study of 6 1 MNC subsldlanes operatmg m 22 LDCs to identify any sundantles in adaptation strategies pursued for the four types of consumer nondurables Methodology
and Research Design
Fifty firms with over 550 LDC subsldlanes were selected for the sample Selections were taken pnmanly from the Duecrory of Ameruxzn Companws Operutmg m Foreign Countries [4], the maJor quahficatlon for inclusion being that the company’s maJor trading area had to be m consumer nondurable goods Food/drink, pharmaceutical, cosmetic and general consumer goods (e g , laundry detergents) were the pnmary mdustnes involved, and with the exception of one Bntlsh company, all respondents were U S -owned Thnty-two firms were reached by telephone and 19 gave permlsslon for us to send them questlonnares These respondents were CPC International, Colgate-Palmolive, Canada Dry Corporation, Chesebrough-Ponds, General Foods, Kraft Foods, Umlever, The Pdlsbury Company, Pfizer, Revlon, Quaker Oats, Royal Crown Cola, Seven-Up lntematlonal, Mead-Johnson, Standard Brands, Warner-Lambert, Helena Rubmstem, Johnson and Johnson International, and Eh Lilly Respondents, who included mtematlonal marketing managers, VPs, and executives from mtematlonal dlvlslons, supphed mformatlon about marketing strategies m 22 LDCs The LDCs were Egypt, Nlgena, Zimbabwe, Costa Rica, Guatemala, Jamaca, Mexico, Panama, Argen-
Adaptmg Consumer Products
53
tma, Brazil, Chde, Colombia, Ecuador, Peru, Uruguay, Venezuela, Sn Lanka, India, Indonesia, Malaysia, Phlhppmes, and Thadand For each LDC subsldlary, international marketmg executives chose three products that had been transferred mto its market from the home country (the Umted States or the United Kmgdom) They recorded first the product category (food/drink, pharmaceutical, cosmetic, general consumer, or “other”), and then reported which of the mne product components had been adapted brand name, packaging protection, packaging aesthetics, measurement umts, product features, product constituents, labeling, pack sizes, and usage mstructlons Adaptation profiles for 174 products were broken down to show the extent of adaptation of each product type, measured by the mean number of adaptlons per product We then contrasted the adaptation profiles of mdlvldual product types agamst the profile for the entire sample to show the effect of product-type ldlosyncracles on adaptation strategies Extent of Product Adaption for Different Types of Consumer Nondurables To identify any significant differences m the extent of adaptation among classes of consumer nondurables, we cross-tabulated the number of adaptions to products by product type Table 1 shows the results of this cross-tabulation The contmgency table test showed significant vanatlon m the extent of product change by type of product (p less than 0 00 1) To determme the extent of these differences, we calculated the average number of product adaptations for each product category (see Table 2) The differences among the means were slgmficant @ < 0 001) The results of the F-test were further refined using a Scheffe test of pauwlse compansons The test confirmed the finding that food/dnnk and general consumer goods are adapted significantly more than are cosmetics and pharmaceutical products Differences m the mean number of adaptions were not significant between food/drmk and general consumer goods, nor were differences between pharmaceutical and cosmetics goods meaningful However, the differences between these two groups were significant These findings show the sensltlvlty of different consumer nondurables to changes m market environments And they show how these dlfferences affect selection of adaption strategies Cosmetic and pharmaceutical marketers, for example, should have fewer problems m transfernng products mto LDC markets The development and launch costs for these items should be less than for food/drmk and general consumer goods,
54
R R St111 and J S Hdl
Table 1 Number of Product Product Type
Adapt,ltlons
Total Product
Catagory
0
12
rood/drink Pharmaceuticals Cosmetics General Consumer Other
0424 13 15 1660435100 1142 0102011100
TOTAL
15
Table 2 Mean Number
Product
27
Number 3
3
1
by Consumer
of Adaptatwns
per Product
4567 I 2
8 1
9
Total
23 2
13 1
0 0
3 0
64 38 26 42 6
39
22
3
5
174
588632
15
9
18
21
of Acl,lpt~ltlons peg Product Mean Number of Adaptlonsjproduct
Type
8
Typv Sample Size
r ood/drmk General Consumer CosmetlL Pharmaceutlcdls Other
54 50 33 17 42
64 40 26 38 6
TOTAL
41
174
which average five or more changes The dlvlslon of consumer products into two groups probably reflects differences m target markets and dlstnbutlon patterns Food/dnnk and general consumer goods are more mtenslvely dlstnbuted than are cosmetics and pharmaceuticals, which are aimed at more speclahzed market segments (the unhealthy and the would-be-beautlfuls) The greater exposure of food/dnnk and general consumer goods to a broader spectrum of LDC consumers necessitates a more ‘ ‘locahzed’ ’ product image Adapation Consumer
Profiles of Product Categories: Nondurable Profile
Comparison
with
Which of the nme product components contnbutes the most to product change? To determme t.h~s, we compared profiles of the different
Adaptmg
Consumer
Products
55
product categones agamst an overall profile Table 3 shows the mformation base used to construct the profiles and Figures 1 and 2 are the adaptation profile compansons As Indicated us Table 3, adaption rates for eight out of nme components vary slgmficantly among several product categones Food/Drink Products and General Consumer Goods Local onentahons are necessary for the market success of food/dnnk and general consumer products (see Figure 1) Because external appearances of these consumer nondurables are especially Important, aesthetlc changes m their packages are requn-ed to make them stand out on shelves shared with locally produced packaged goods Probabdmes of thus type of change increase by 0 26 (0 8&O 54) and 0 15 (0 69-O 54) for food/ drmk and general consumer goods respectively over consumer products Locally-onented product constituents are also Important to market success, with mcreased probabdiues of adaption for both food/dnnk (0 78 vs industry 0 58) and general consumer goods (0 80 vs Industry 0 58) This IS easy to see for food/dnnk products, which are consumed internally, but not for general consumer products It IS hkely, however, that the strongest reason for using local mgredlents In both cases IS their avadablhty and convemence For both product types, measurement umts are the third most heavily adapted component Ldcehhoods of change are 0 86 for food/dnnk and 0 90 for general consumer goods The industry average for measurement umts IS 0 70 It IS important that consumers understand weights and measures, so it IS not surpnsmg that U S -based MNCs convert their measurement units to either the metnc or a local system when marketing m LDCs The mdlvldual charactenstlcs of either food/dnnk or general consumer products he behind several component changes Packaging protection Increases for food/dnnk products (from overall average of 0 35 to 0 54) to allow for changes m shelf-life, storage faclhhes, rough transportation and dlstnbutlon condltlons, adverse weather condmons, and lack of expemse by nuddlemen Product feature adaptions also are more frequent (0 5 1 vs industry 0 33) Perhaps the health onentahons that dommate food/dnnk promotion themes m the developed world give way to more basic pnce/value and taste appeals Or, perhaps, the absence of strmgent advemsmg laws encourages marketers to take some license in dramatizmg or exaggerating product attnbutes For general consumer goods, brand names and usage mstructlons are changed more frequently (0 40 and 0 37 probablhtles of adaption respectively agamst mdustry averages of 0 3 1 and 0 22) Because brand names often descnbe the product’s funcuon (for example, Drano bathroom cleanser), consumers m LDCs need to associate brand name with
56
R R Stdl and J S Will
0 4
1~
cnceo between product __r___-a__
Probability of adaption/ pnadaption 033
Probability of adaption/ nonadaption
067
0 6
00
10
0 62
0 001
0 38
0 50
0 31
lat 0 001
0 50
0 69
0 17
nat 0 001
0 83
0 90 0 10
0 50
0 20
Ibt 0 001
0 SO
0 80
I/nt at
0 33
0 33
0 67
0 67
,,
0 33
0 37
0 67
0 63
0 50
0 72
0 50
0 28
0 03
0 57
0 17
0 43
2 E 3 2 *a r; a. % ;;:
z% OS ci
P
3
b
R R St111 and J S Hz11
58
ADAPTATION
PRQFILES
ADAmATlON
FIGURE
1 Adaptation profiles of food/drmk and general consumer goods compared to the aggregate consumer nondurable product profile
Adapting Consumer Products
1
\
59
ADAWATION
PROFILES
‘RODUCT WAPTATION
\
Product Brandname
FIGURE
2
Adaptation profile the aggregate
of cosmetics and pharmaceutxal products consumer nondurable product profde
compared
to
60
R R St111 and J S H11l
product function Only the pre&sposlhons toward standarhzauon of some MNCs may mhlblt even greater changes and more frequent changes m brand names Adaptations m usage mstructlons are not surpnsmg, consldenng the differences m domestic households between modem and lesser-developed markets, together with the relative lack of consumption expenence by consumefS m LDCs Given that these differences do exist, the surpnse 1s that usage lnstructlons are changed for only about one-tird of general consumer products Cosmetics and Pharmaceuticals Cosmetic and pharmaceutical product profiles (see Figure 2) are highly standardized However, there are different motives for nonadaptlon Pharmaceuocal products show consistent standardization along all components, and one international marketing executive commented that global standardization makes possible substantial production and marketing economes In addition, it facilitates global product mtroductlons and mmmuzes research and adaptation costs However, the dangers of overstandardlzatlon are still present, for example, falling mto global disrepute because of what happens m one market Events such as the Nestle affau have serious repercussions for globally standardized firms The high sensltlvlty of pharmaceutical MNCs to this problem IS indicated by the fact that usage mstructlons 1s the only component with above-average chances of adaptation (0 36 vs industry 0 22) Cosmetics are adapted more often than pharmaceutical products, but certam of their components are sufficiently standardized to imply alternative motives for their nonadaptlon Although most components show below-average rates, the most highly standardized components (1 e , those whose adaption rates are much lower than the overall profile) are those most vlslble to the public-namely, brand name (0 15 vs industry 0 3 l), packaging aesthetics (0 38 versus 0 54), product features (0 19 vs 0 33), and labeling (0 50 versus nondurable mean of 0 69) Cosmetics manufacturers do not change their products’ external appearances unless forced to do so (anti-U S feelings, for example, or the existence of totally different attitudes toward beauty and bodily adomment, such as those In the Far East) By and large, cosmetics products probably benefit from their western Images, either because local consumers have great confidence In western-lookmg p@ucts, or because U S movies and other media stimulate emulation tendencies among LDC consumers Conclusion Modem consumer products are not all equally susceptible to change m
Adaptzng Consumer Products
61
preparation for marketmg m LDCs Adaptation profiles vary with the category or product Food/dnnk and general consumer items are the most hkely undergo the most adaptations-to adjust more closely to local market con&fions m LDCs Cosmeucs and pharmaceuhcals expenence less drastic adaptation patterns-cosmetics because of the values of retammg western images and pharmaceuticals because their makers emphasize the advantages of obtammg global product standardlzatlon to the highest feasible degree Also, the advemsmg-onented Amencan market gives U S MNCs Inherent advantages 111selhng marketmg-mtenuve products (that LS, those goods with high advertlsmg to sales ratios) overseas [ 1, 21 Clearly, then, the marketmg of consumer packaged goods m LDCs presents opportumties for mtemational market expansion m product areas where the U S has undeniable expenence and expertise References 1
Vaupel, James Walter, Charactenstlcs and Motlvatlon Manufacture Abroad, Agnelh roundatlon, Turm, Italy,
of U S Corporations (June 1971)
that
2
Vernon, Raymond, Some Tentative Hypotheses on the Behavior of Europeanbased and Japanese-based Multmatlonal Enterprises,,“› Agnelh Foundation, Tunn, Italy June 1971
3
Ward, James J , The European Approach to US Markets Product and Promotron Adaptattons by European Multmatlonals Praeger, New York, 1973
4
World Trade Academy Press Pubhcatlon, Dwector of Amencan Compames Operatmg m Forezgn Countrres Sunon and Schuster, New York, 1975
types of modern consumer products require substannally different amounts and types of aa’uptatlon rn preparing them for marketrng m Lesser-Developed Countries (LDCs) This study reports conclusions drawn from an emprrlcal study of 174 products marketed by 61 substdrartes of multmatlonal corporatrons operatmg m 7-7 different LDCs Some product categories such as foods and drinks. require adaptmg to ju them more appropnately for LDC marketmg condltrons Other categories. such as cosmetus. undergo few adaptations, as their makers seek to reap the benejit of therr products establrshed Images m LDCs St111 other categories, such as pharmaceutrcals, undergo muumal adaptations because of the substantial advantages their makers attach to global standardtzatlon
Different
International marketers deciding to adapt modem consumer products for sale m lesser-developed markets find both opportunmes and problems On the opportunity side, Lesser-Developed Countnes (LDCs) possess tremendous untapped potential as markets for the products of Multinational Corporations (MNCs) More than 100 of the world’s 170 countnes are classified as emergent or m the first stages of econonuc development Fmns entenng LDC markets early can establish themselves and take advantage of numerous opportumtles for profitable growth On the problem side, sellmg modem consumer products m LDCs 1s a complex matter Not only are consumer goods the most culturally sensitive of all products [3] but adaptations that marketers make In their products must bndge the considerable economc and cultural gaps that exist between the developed world and the developmg world The purpose of this study was to determme the susceptlb&y to change of different consumer products transplanted mto lesser-developed markets All consumer nondurable products have common charactenstics (bought by mdlvlduals or households for personal or nonbusmess use, Address correspondence to John S HzII, Department of Management and Marketrng, Unrverslty ofAlabama, P 0 Box College of Commerce and Busmess Admmntratlon, J, Umverszty, AL 35486 Journal ot Bwness Research 12,51-61 (1984) @ Elsewer Science Pubhshq Co , Inc 1984 52 Vanderbdt Ave , New York, NY 10017
51
0 148-2963/84/$3 00
52
R R St111 and J S Hdl
consumed m one or few uses, etc ), and thus suggests that all types of products should be SubJect to sm&u adaption or standardization pohcles But an analysis of four maJor categones of consumer nondurables (speafically , food/drmk, pharmaceutical, cosmetic, and general consumer goods), casts doubts upon the appropnateness of across-the-board policies These different types of products, whde shanng certam characterlstlcs, also possess certam umque charactenstics that require different adaptlon policies For instance, food/dnnk and pharmaceuncal products are consumed by buyers mtemally, but cosmetics and general consumer goods are not Then, too, brand image and physlcal appearance are more important for food/drmk , cosmetic, and general consumer products than they are for pharmaceuticals And differences m personal tastes among consumers m LDCs make more changes likely for highly personal products such as food/drmk and cosmetic items than for pharmaceuticals or general consumer goods Recogmzmg that these differences exist, we used data from a study of 6 1 MNC subsldlanes operatmg m 22 LDCs to identify any sundantles in adaptation strategies pursued for the four types of consumer nondurables Methodology
and Research Design
Fifty firms with over 550 LDC subsldlanes were selected for the sample Selections were taken pnmanly from the Duecrory of Ameruxzn Companws Operutmg m Foreign Countries [4], the maJor quahficatlon for inclusion being that the company’s maJor trading area had to be m consumer nondurable goods Food/drink, pharmaceutical, cosmetic and general consumer goods (e g , laundry detergents) were the pnmary mdustnes involved, and with the exception of one Bntlsh company, all respondents were U S -owned Thnty-two firms were reached by telephone and 19 gave permlsslon for us to send them questlonnares These respondents were CPC International, Colgate-Palmolive, Canada Dry Corporation, Chesebrough-Ponds, General Foods, Kraft Foods, Umlever, The Pdlsbury Company, Pfizer, Revlon, Quaker Oats, Royal Crown Cola, Seven-Up lntematlonal, Mead-Johnson, Standard Brands, Warner-Lambert, Helena Rubmstem, Johnson and Johnson International, and Eh Lilly Respondents, who included mtematlonal marketing managers, VPs, and executives from mtematlonal dlvlslons, supphed mformatlon about marketing strategies m 22 LDCs The LDCs were Egypt, Nlgena, Zimbabwe, Costa Rica, Guatemala, Jamaca, Mexico, Panama, Argen-
Adaptmg Consumer Products
53
tma, Brazil, Chde, Colombia, Ecuador, Peru, Uruguay, Venezuela, Sn Lanka, India, Indonesia, Malaysia, Phlhppmes, and Thadand For each LDC subsldlary, international marketmg executives chose three products that had been transferred mto its market from the home country (the Umted States or the United Kmgdom) They recorded first the product category (food/drink, pharmaceutical, cosmetic, general consumer, or “other”), and then reported which of the mne product components had been adapted brand name, packaging protection, packaging aesthetics, measurement umts, product features, product constituents, labeling, pack sizes, and usage mstructlons Adaptation profiles for 174 products were broken down to show the extent of adaptation of each product type, measured by the mean number of adaptlons per product We then contrasted the adaptation profiles of mdlvldual product types agamst the profile for the entire sample to show the effect of product-type ldlosyncracles on adaptation strategies Extent of Product Adaption for Different Types of Consumer Nondurables To identify any significant differences m the extent of adaptation among classes of consumer nondurables, we cross-tabulated the number of adaptions to products by product type Table 1 shows the results of this cross-tabulation The contmgency table test showed significant vanatlon m the extent of product change by type of product (p less than 0 00 1) To determme the extent of these differences, we calculated the average number of product adaptations for each product category (see Table 2) The differences among the means were slgmficant @ < 0 001) The results of the F-test were further refined using a Scheffe test of pauwlse compansons The test confirmed the finding that food/dnnk and general consumer goods are adapted significantly more than are cosmetics and pharmaceutical products Differences m the mean number of adaptions were not significant between food/drmk and general consumer goods, nor were differences between pharmaceutical and cosmetics goods meaningful However, the differences between these two groups were significant These findings show the sensltlvlty of different consumer nondurables to changes m market environments And they show how these dlfferences affect selection of adaption strategies Cosmetic and pharmaceutical marketers, for example, should have fewer problems m transfernng products mto LDC markets The development and launch costs for these items should be less than for food/drmk and general consumer goods,
54
R R St111 and J S Hdl
Table 1 Number of Product Product Type
Adapt,ltlons
Total Product
Catagory
0
12
rood/drink Pharmaceuticals Cosmetics General Consumer Other
0424 13 15 1660435100 1142 0102011100
TOTAL
15
Table 2 Mean Number
Product
27
Number 3
3
1
by Consumer
of Adaptatwns
per Product
4567 I 2
8 1
9
Total
23 2
13 1
0 0
3 0
64 38 26 42 6
39
22
3
5
174
588632
15
9
18
21
of Acl,lpt~ltlons peg Product Mean Number of Adaptlonsjproduct
Type
8
Typv Sample Size
r ood/drmk General Consumer CosmetlL Pharmaceutlcdls Other
54 50 33 17 42
64 40 26 38 6
TOTAL
41
174
which average five or more changes The dlvlslon of consumer products into two groups probably reflects differences m target markets and dlstnbutlon patterns Food/dnnk and general consumer goods are more mtenslvely dlstnbuted than are cosmetics and pharmaceuticals, which are aimed at more speclahzed market segments (the unhealthy and the would-be-beautlfuls) The greater exposure of food/dnnk and general consumer goods to a broader spectrum of LDC consumers necessitates a more ‘ ‘locahzed’ ’ product image Adapation Consumer
Profiles of Product Categories: Nondurable Profile
Comparison
with
Which of the nme product components contnbutes the most to product change? To determme t.h~s, we compared profiles of the different
Adaptmg
Consumer
Products
55
product categones agamst an overall profile Table 3 shows the mformation base used to construct the profiles and Figures 1 and 2 are the adaptation profile compansons As Indicated us Table 3, adaption rates for eight out of nme components vary slgmficantly among several product categones Food/Drink Products and General Consumer Goods Local onentahons are necessary for the market success of food/dnnk and general consumer products (see Figure 1) Because external appearances of these consumer nondurables are especially Important, aesthetlc changes m their packages are requn-ed to make them stand out on shelves shared with locally produced packaged goods Probabdmes of thus type of change increase by 0 26 (0 8&O 54) and 0 15 (0 69-O 54) for food/ drmk and general consumer goods respectively over consumer products Locally-onented product constituents are also Important to market success, with mcreased probabdiues of adaption for both food/dnnk (0 78 vs industry 0 58) and general consumer goods (0 80 vs Industry 0 58) This IS easy to see for food/dnnk products, which are consumed internally, but not for general consumer products It IS hkely, however, that the strongest reason for using local mgredlents In both cases IS their avadablhty and convemence For both product types, measurement umts are the third most heavily adapted component Ldcehhoods of change are 0 86 for food/dnnk and 0 90 for general consumer goods The industry average for measurement umts IS 0 70 It IS important that consumers understand weights and measures, so it IS not surpnsmg that U S -based MNCs convert their measurement units to either the metnc or a local system when marketing m LDCs The mdlvldual charactenstlcs of either food/dnnk or general consumer products he behind several component changes Packaging protection Increases for food/dnnk products (from overall average of 0 35 to 0 54) to allow for changes m shelf-life, storage faclhhes, rough transportation and dlstnbutlon condltlons, adverse weather condmons, and lack of expemse by nuddlemen Product feature adaptions also are more frequent (0 5 1 vs industry 0 33) Perhaps the health onentahons that dommate food/dnnk promotion themes m the developed world give way to more basic pnce/value and taste appeals Or, perhaps, the absence of strmgent advemsmg laws encourages marketers to take some license in dramatizmg or exaggerating product attnbutes For general consumer goods, brand names and usage mstructlons are changed more frequently (0 40 and 0 37 probablhtles of adaption respectively agamst mdustry averages of 0 3 1 and 0 22) Because brand names often descnbe the product’s funcuon (for example, Drano bathroom cleanser), consumers m LDCs need to associate brand name with
56
R R Stdl and J S Will
0 4
1~
cnceo between product __r___-a__
Probability of adaption/ pnadaption 033
Probability of adaption/ nonadaption
067
0 6
00
10
0 62
0 001
0 38
0 50
0 31
lat 0 001
0 50
0 69
0 17
nat 0 001
0 83
0 90 0 10
0 50
0 20
Ibt 0 001
0 SO
0 80
I/nt at
0 33
0 33
0 67
0 67
,,
0 33
0 37
0 67
0 63
0 50
0 72
0 50
0 28
0 03
0 57
0 17
0 43
2 E 3 2 *a r; a. % ;;:
z% OS ci
P
3
b
R R St111 and J S Hz11
58
ADAPTATION
PRQFILES
ADAmATlON
FIGURE
1 Adaptation profiles of food/drmk and general consumer goods compared to the aggregate consumer nondurable product profile
Adapting Consumer Products
1
\
59
ADAWATION
PROFILES
‘RODUCT WAPTATION
\
Product Brandname
FIGURE
2
Adaptation profile the aggregate
of cosmetics and pharmaceutxal products consumer nondurable product profde
compared
to
60
R R St111 and J S H11l
product function Only the pre&sposlhons toward standarhzauon of some MNCs may mhlblt even greater changes and more frequent changes m brand names Adaptations m usage mstructlons are not surpnsmg, consldenng the differences m domestic households between modem and lesser-developed markets, together with the relative lack of consumption expenence by consumefS m LDCs Given that these differences do exist, the surpnse 1s that usage lnstructlons are changed for only about one-tird of general consumer products Cosmetics and Pharmaceuticals Cosmetic and pharmaceutical product profiles (see Figure 2) are highly standardized However, there are different motives for nonadaptlon Pharmaceuocal products show consistent standardization along all components, and one international marketing executive commented that global standardization makes possible substantial production and marketing economes In addition, it facilitates global product mtroductlons and mmmuzes research and adaptation costs However, the dangers of overstandardlzatlon are still present, for example, falling mto global disrepute because of what happens m one market Events such as the Nestle affau have serious repercussions for globally standardized firms The high sensltlvlty of pharmaceutical MNCs to this problem IS indicated by the fact that usage mstructlons 1s the only component with above-average chances of adaptation (0 36 vs industry 0 22) Cosmetics are adapted more often than pharmaceutical products, but certam of their components are sufficiently standardized to imply alternative motives for their nonadaptlon Although most components show below-average rates, the most highly standardized components (1 e , those whose adaption rates are much lower than the overall profile) are those most vlslble to the public-namely, brand name (0 15 vs industry 0 3 l), packaging aesthetics (0 38 versus 0 54), product features (0 19 vs 0 33), and labeling (0 50 versus nondurable mean of 0 69) Cosmetics manufacturers do not change their products’ external appearances unless forced to do so (anti-U S feelings, for example, or the existence of totally different attitudes toward beauty and bodily adomment, such as those In the Far East) By and large, cosmetics products probably benefit from their western Images, either because local consumers have great confidence In western-lookmg p@ucts, or because U S movies and other media stimulate emulation tendencies among LDC consumers Conclusion Modem consumer products are not all equally susceptible to change m
Adaptzng Consumer Products
61
preparation for marketmg m LDCs Adaptation profiles vary with the category or product Food/dnnk and general consumer items are the most hkely undergo the most adaptations-to adjust more closely to local market con&fions m LDCs Cosmeucs and pharmaceuhcals expenence less drastic adaptation patterns-cosmetics because of the values of retammg western images and pharmaceuticals because their makers emphasize the advantages of obtammg global product standardlzatlon to the highest feasible degree Also, the advemsmg-onented Amencan market gives U S MNCs Inherent advantages 111selhng marketmg-mtenuve products (that LS, those goods with high advertlsmg to sales ratios) overseas [ 1, 21 Clearly, then, the marketmg of consumer packaged goods m LDCs presents opportumties for mtemational market expansion m product areas where the U S has undeniable expenence and expertise References 1
Vaupel, James Walter, Charactenstlcs and Motlvatlon Manufacture Abroad, Agnelh roundatlon, Turm, Italy,
of U S Corporations (June 1971)
that
2
Vernon, Raymond, Some Tentative Hypotheses on the Behavior of Europeanbased and Japanese-based Multmatlonal Enterprises,,“› Agnelh Foundation, Tunn, Italy June 1971
3
Ward, James J , The European Approach to US Markets Product and Promotron Adaptattons by European Multmatlonals Praeger, New York, 1973
4
World Trade Academy Press Pubhcatlon, Dwector of Amencan Compames Operatmg m Forezgn Countrres Sunon and Schuster, New York, 1975