Product adaptation is an international marketing tool that serves a variety of strategic requirements. In addition to the need to cater to market differences and compete effectively with others in these markets, product adaptation also helps a company reach its internal goals more effectively. Companies usually end up asking, “Is it worth it?” The answer depnds on the company’s ability to control costs, to accurately estimate market opportunities, and secure profitability in the long term. It is possible to recoup adaptation costs through export performance, but there is no question that the decision to adapt – even the decision to export – has risks. Some handle this by taking the stand that sales of a standard product might be small to start but grow over time.
However, the decision that was once “Can we afford to do it?” is now “Can we afford not to do it?” Before making changes, conduct a thorough market analysis with formal market research and prodcut testing. From the financial standpoint, some organizations have a policy of requiring specific return-on-investment levels when calculating the cost of adapting while others let the requirement vary as a function of the market and the amount of time there. Regardless, most companies aim for consistency in their marketing efforts, which requires that all products fit in terms of quality, price, and user perceptions.
Marketers want to remember that since people make the decisions, having the right people – the human resources to both lead and execute – is important to the adaptation decision. Companies dealing with these risks and who know about existing marekt conditions. Global companies usually benefit from having managers from different countries. This brings to the decision-making process a deptha nd breadth of experience and expertise that is needed to make informed decisions regarding standardization and adaptation.
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