European Journal of Social Sciences - Volume 3, Number 2 (2006)
EUROPEAN JOURNAL OF SOCIAL SCIENCES
ISSN: 1450-2267
Volume 3, Number 2
August, 2006
Editor-in-Chief
Adrian M. Steinberg, Wissenschaftlicher Forscher
Editorial Advisory Board
Leo V. Ryan, DePaul University
Richard J. Hunter, Seton Hall University
Said Elnashaie, Auburn University
Subrata Chowdhury, University of Rhode Island
Teresa Smith, University of South Carolina
Neil Reid, University of Toledo
Mete Feridun, Cyprus International University
Jwyang Jiawen Yang, The George Washington University
Bansi Sawhney, University of Baltimore
Hector Lozada, Seton Hall University
Jean-Luc Grosso, University of South Carolina
Ali Argun Karacabey, Ankara University
Felix Ayadi, Texas Southern University
Bansi Sawhney, University of Baltimore
David Wang, Hsuan Chuang University
Cornelis A. Los, Kazakh-British Technical University
Jatin Pancholi, Middlesex University
Teresa Smith, University of South Carolina
Ranjit Biswas, Philadelphia University
Chiaku Chukwuogor-Ndu, Eastern Connecticut State University
John Mylonakis, Hellenic Open University (Tutor)
M. Femi Ayadi, University of Houston-Clear Lake
Wassim Shahin, Lebanese American University
Katerina Lyroudi, University of Macedonia
Emmanuel Anoruo, Coppin State University
H. Young Back, Nova Southeastern University
Jean-Luc Grosso, University of South Carolina
Yen Mei Lee, Chinese Culture University
Richard Omotoye, Virginia State University
Mahdi Hadi, Kuwait University
Maria Elena Garcia-Ruiz, University of Cantabria
Zulkarnain Muhamad Sori, University Putra Malaysia
Indexing / Abstracting
European Journal of Social Sciences is indexed in Scopus, Elsevier Bibliographic Databases,
EMBASE, Ulrich, DOAJ, Cabell, Compendex, GEOBASE, and Mosby.
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European Journal of Social Sciences - Volume 3, Number 2 (2006)
Marketing Integration Strategy in Nigeria's Affiliates of
British and French Multinational Corporations
Olujide Jackson
Department of Business Administration
University ofllorin, Ilorin
Abstract
The globalization of multinational marketing has generated a lot of debate and controversy in recent
times. This paper provides empirical data and sheds light on the global marketing effort of Nigerian
affiliates of British and French MNCs and offers specifics on which marketing-mix elements are
targets for standardized approach in a multinational context. Results show that Nigerian affiliates of
the MNC have more autonomy than do similar subsidiaries in Asia, Europe or U.S.A. Disparities in
environmental factors and the socio-linguistic distance between affiliate and headquarter account for
the different degrees of integration of multinational marketing. Finally, product is the only element of
the marketing mix that is integrated while price, promotion and distribution are differentiated.
Introduction
The integration (i.e. globalization) of the marketing programme of overseas subsidiaries of the
multinational Corporation (MNC) has emerged as one of the most widely discussed developments of the past
decade. The growing importance of this subject has therefore stimulated a flood of comment and advice such that
conferences, seminars and surveys have probed the distinctive problems of the integration of international marketing
in this new breed of enterprise.
To date, much of the research effort on the marketing strategies of the MNC has focused on the
standardization of marketing programs with a headquarters-oriented perspective (Aylmer, 1970; buzzell, 1968;.
Effective coordination of plans, however, demands the involvement on the part of subsidiaries, (Schwendiman,
1971; Brandt and Hulbert, 1977 a).
Secondly, the majority of research done on the standardization of marketing decisions in the MNC has been
limited to European and American operations and one or two elements of the marketing mix in the low risk market
environments of Europe and America (Aylmer, 1970; wiechman, 1974: Sorenson and Wiechman, 1975;. Only one
research has been undertaken in a moderate risk market environment covering the four elements of the marketing
mix (Ahn, Lasserre and chandon, 1987). No research of this nature has been carried out in a high risk market
environment. This geographic limitation has therefore eliminated the different types of integration of marketing
decisions and programmes that could exist between countries that are culturally, politically and geographically
different and with different degrees of risk.
Thus, the question of whether to use multinational standardization or to customer-tailor marketing
programmes in each country has continued to trouble practicing international managers, academicians and
researchers alike, and has produced a wide array of divergent view-points (Simon-Miller, 1986; Sheth, 1986; Porter,
1986; Levitt, 1983, etc).
This debate on the integration of international marketing turns around two contradictory hypotheses about
the international consumer. The first is that consumer needs are basically the same worldwide. Thus, an MNC finds
it economically advantageous to use identical marketing procedures in each country. This point of view is based on
the proposition that worldwide integration contribute to overall objectives of cost minimization, coherence of image
and competitivity.
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According to the second hypothesis, consumer needs, cultural and socio-economic factors vary widely from
country to country. Thus, under these diverse market conditions, marketing decisions, programmes and practices
must be flexible in order to meet the needs of each country. Therefore, affiliates can pursue differentiated
approaches in host countries.
In view of this debate and the fact that up to the present, the debate has been couched in abstractions with
limited empirical research, practitioners' pleas for data which will show areas of convergence among countries and
how companies might respond remain unanswered.
Thus, this study is designed to provide empirical data and to shed some light on the integration of
marketing (global marketing), and offer specifics on which marketing mix elements are likely targets for a
standardized approach in a multinational context.
This study is distinct in that it analyzes the degree of marketing integration in British and French
subsidiaries based in Nigeria, a high-risk market environment, as measured by the risk scale of Anderson and
Gatignon, (1986); and covers the four elements of the marketing mix.
Objective of the Study
This study proposes an analysis of the two identifiable modes of integration in the MNC, the centralization
and the standardization of marketing decisions and practices.
The centralization of marketing decisions is defined as the degree of influence exercised by the parent
company on the marketing decisions of its foreign subsidiary, while standardization is the degree of similarity of
marketing practices. In this study, comparisons are mostly between the subsidiary, (host country) and the parent
company (country of origin).
Three major themes are examined:
i)
The first is to determine the nature and degree of real influence wielded by the parent company in
respect of the decisions concerning the four elements of the marketing mix.
ii)
The second is to determine the degree of standardization versus adaptation of marketing
programmes with respect to the four marketing mix elements.
iii)
The third is to examine the relationship between the centralization of marketing decisions and the
standardization of marketing procedures and practices.
Methodology
Sample
Several sources were consulted in the process of designing the sample. These include the Central Bank of
Nigeria, Abuja, the Federal Ministry of Trade, Industry and Planning, Abuja, the Franco-Nigeria and Anglo-Nigeria
Chambers of Commerce, Lagos.
Our sample is made up of 31 British and 35 French affiliates of the MNC in Nigeria at the end of 2004; 66
subsidiaries are included. Altogether they represent the most important private sector foreign investment in Nigeria.
The selection was non-probabilistic and controlled by the researcher.
We have selected consumer goods because of the competitive nature of its market and also because
consumer goods marketing demonstrates a wide range of divergent approaches to the integration issue. We have not
included companies dealing in raw materials, industrial products or services. Equally important is the fact that this
choice facilitated the comparison of results with Sorenson and Wiechman (1977) on America multinationals in
Europe (a low risk market environment) and that of Ahn, Lasserre and Chandon 1987 on South Korean subsidiaries
of the MNC (a moderate risk market environment).
Data was collected by means of personal interviews based on a form-type questionnaire and was
complemented by a study of company records and books of account.
The interviews were conducted with the Marketing Manager of each company and lasted about 2 to 3
hours. Personal interviews seemed to be the most effective way of gathering this kind of data.
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Measurement Instrument
The information gathered from the Marketing Managers was recorded at the ordinary-scale level for the
variable centralization and at the interval-scale level for the variable standardization; 23 marketing decisions were
drawn from the four elements of the marketing-mix. These key marketing decisions were chosen both by examining
written materials by specialists in the field and by means of preliminary discussions with several Managers of the
subsidiaries in question through test and re-test.
Data Analysis
Data was analyzed by comparing the frequency distribution of centralization and standardization across the 23
marketing decisions. The relationship between the two variables was assessed through the significance level of
spearman Rank correlation coefficient, frequency distribution.
Results
Degree of Centralization Decisions
The results obtained for each of the elements of the marketing mix and for each of the operational marketing
decisions are presented in table 1.
A global analysis of this table brings to light the great autonomy enjoyed by Nigerian affiliates in making
their marketing decisions. Only 5,81% of the subsidiaries have a highly centralized process of decision making with
respect to the 4 elements of the marketing mix and the 23 operational decisions. 92.12% of these subsidiaries have a
decentralized system of decision making. This analysis brings to light the great independence with which Nigerian
subsidiaries make their marketing decisions except, to a limited extent, the area of product policies.
We note also from Table 1 and Figure 1 that the degree of centralization varies widely between the four
elements of the mix. The marketing decisions relating to the product are the most centralized while those regarding
price, communication and distribution are decentralized. Thus, the marketing decisions concerning the product are
more centralized than the three others.
There are several reasons for the relatively strong centralization of product decisions. First is the fact that
the modification or the creation of new products requires considerable capital outlay, which is strictly controlled by
the parent company. Secondly, the manufacture of international brands and the use of international brand names
must receive the approval of the parent company in order to maintain a uniform international standard. Thirdly,
since the parent company is the source of supply of production technology, it is relatively easy to control decisions
relating to these elements right from the source.
However, in the other areas of price, communication and distribution, the parent company considers
marketing decisions relating to them as privileged areas of the local executives. In fact, the subsidiary is in a
particularly privileged position for making such decisions and plays a unique, perhaps irreplaceable role due to its
knowledge of local market conditions. Most of these decisions are therefore made in Nigeria by local executives.
Product Decisions
Table 1 shows that there is a substantial intervention of the parent company in the decision making process
concerning the three sub- elements of the product: (physical characteristics, brand name and packaging). Only
39.08% of the affiliates in our sample had complete or significant autonomy in making decisions 35.0% and
concerning their products. As for physical characteristics and brand name, 37.5% had such independence whereas
46.25% control packaging decisions.
The competitive edge of MNCs producing consumer goods for sale abroad depends heavily on their
capacity for conveying an image of quality. It is not surprising then that their control over the sub-elements of the
product is so strong. MNCs want to protect the international reputation of their
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established brand names, as well as controlling and organizing the development of new international brand names.
Table 1: Degree of Centralization
Figure 1: Percentage of Marketing Mix Highly Integrated in the three Market Environments
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Price decisions
Table 1 shows that all the subsidiaries in the sample have complete or significant autonomy in making decisions
concerning retail price, producers' and retailers' margins, rebate policies regarding price specials, credit policies,
e.t.c. Decisions concerning these sub-elements of price are almost entirely taken at the level of the subsidiary. This
is due to the remarkable difference in the characteristics of national markets, particularly between industrialized and
developing countries as well as the fast changing market conditions in the host country.
According to the executives of subsidiaries interviewed, 'autonomy in decisions concerning price allows
quick reaction to local contingencies. There is an enormous difference between countries in terms of production
costs, competition, legal framework for state intervention in price fixation, custom regulations and consequently
local market conditions are a decisive factor in determining prices".
Communication Decisions: Advertising and Promotion
The decisions concerning the sub-elements of advertising and promotion namely: target definition, advertising
message, medial and copy selection, sales promotion, advertising and media budget, are significantly controlled by
all subsidiaries in our sample.
The managers interviewed recognize the great disparities in the market conditions and communication
infrastructures between Nigeria (host country), France and great Britain (countries of origin). They realize how
necessary it is to adapt the advertising message and its expression these must correspond to a Nigerian mentality.
Thus, operational decisions concerning advertising and promotion must be taken at the subsidiary level in order to
adapt to the market conditions of the host country.
Distribution Decisions
The results of this study show that the MNCs operating in Nigeria have a very decentralized approach to distribution
decisions and practices (See table 1). All the subsidiaries have a complete autonomy in making decisions concerning
all the sub-elements of distribution.
These results are similar to those of previous studies. For instance, the study of Wiechman, (1997), on 27
American MNCs involved in selling consumer products hi Europe and that of Ahn, Lasserre and Chandon, (1987),
on NMCs in South Korea, showed that most parent companies consider distribution decisions to be purely local.
Furthermore, Keegan, (1974), concludes that "in large MNCs with foreign subsidiaries, the choice of distribution
channels is the element of marketing which is the least controlled by the parent company. On the whole, distribution
channels are an aspect of the marketing programme which are left entirely at the discretion of the local marketing
teams".
Degree of Standardization of Marketing Decisions
Table 2 shows the results of each of the 4 elements and 23 sub-elements of the marketing mix. According to the
results, a very small proportion (5.05%) of subsidiaries constituting our sample consider the totality of their
marketing practices standardized; only 1.85% recognize a flexible marketing programme while a large percentage
(93.10%) consider then- marketing strategy adapted to the environmental and cultural conditions of the Nigerian
market. These results demonstrate that the Nigerian subsidiaries of the British and French MNCs have a low degree
of standardization in contrast to Sorenson and Wiechmann's study on American MNCs in Europe (63%) and Ahn,
Lasserre and Chandon's study on South Korea subsidiaries of the MNC (36%).
Each element of the marketing mix is standardized to a different degree, (see table 2). Product strategies are
relatively highly standardized (38.75%), whereas price, communication and distribution programmes are
significantly adapted to the conditions of the Nigerian market
Product Decisions
Table 2 shows that the sub- element of product: (physical characteristic, brand, packaging), remain relatively highly
standardized, with rates of 45%, 38.75% and 32.20% respectively.
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Pricing Decisions
The results of this study demonstrate that marketing decisions relating to price and its sub-elements are significantly
adapted to the Nigerian market environment. A Marketing Manager in the beer industry interviewed said, "among
the four elements of the marketing mix, practices relating to price are the least standardized Production cost,
competitor prices, state price controls, company taxes and custom and excise regulations vary greatly from Nigeria
to France and Great Britain."
Thus, the less peculiarity offered by host country markets, the more MNCs' tend to standardize marketing
practices. Sorenson and Wiechman notice that a high degree of similarity in market conditions of host and countries
of origin, leads to strong standardization.
This is not the case with the Nigerian affiliates. This could be attributed to the great disparity between the market
conditions of industrialized and less developed countries.
Communication Decisions: Advertising and Promotion
As in the case of pricing strategy, those relating to advertising and promotion are adapted to the Nigerian market
environment by all the subsidiaries.
Table 2: Degree of Standardization
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Usa, Europe
South Korea
Nigeria
Figure 2: Percentage of Marketing Mix Highly Integrated in the three Market Environments
An opinion largely shared by all marketing Executives interviewed is that there exist substantial differences in the
availability and depth of the diverse means of advertising and promotion and their effectiveness between Nigeria,
the host country, and the countries of origin. One of them gave the following example: "television advertising, a
very important vehicle of promotion in industrialized countries, does not reach more than a few households
possessing television sets in Nigeria. Added to this is the problem of irregular supply of electricity in the big towns
and its non-availability in the countryside. This situation poses serious problems for television advertising in
underdeveloped economies. Even in the case of the print media (newspapers, magazines e.tc.) the situation is not
better; the low literacy rate limits its accessibility and effectiveness. This is why companies emphasize the necessity
of adapting the advertising message, media mix and sales promotion programmes to the Nigerian market.
But the drive for cost minimization and competitivity and the necessity to build a coherent international
image to the "world wide" consumer pushes parents companies to want to maintain some influence. They wish to
preserve the content of the advertising message. Some companies also require that there Nigerian subsidiaries
coordinate their advertising campaigns with those of affiliates in neighboring countries in other to exhibit some
similarity from country to country.
Thus, MNCs send to their Nigerian subsidiaries ideas and suggested content for advertising campaigns.
They also send copies of advertising documents used in the country of origin. Seven of the companies interviewed
received advertising footages from their headquarters. They are however flexible as to the mix of delivering
advertising message and the media mix.
Distribution Decisions
MNCs in Nigeria maintain a less standardized approach to distribution activities than those operating in Europe and
U.S.A. As in the case of pricing and communication programmes, marketing strategies relating to distribution are
significantly differentiated from those of the parent companies.
It is often argued by specialist in Development Economics that the structures and functions of distribution
channels reflect the stage of Economic development of a country. In other words there is a relationship between the
level of industrialization and the structures of distribution. This implies that there is a significant difference in the
structure of distribution between developed and undeveloped
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countries. This assertion seems to be confirmed not only by the results of Sorenson and Wiechman's study which
shows that distribution decisions and progammes of subsidiaries operating in Europe or the U.S.A. are highly
standardized, (here market environment are very similar), but also by this study which shows that distribution
practices are differentiated by affiliates, (here market environments show great disparity).
Sales techniques and distribution channels are very similar in industrialized countries, be it in North
America or in Europe. Indeed, these nations are characterized by highly developed economies, distribution and
transportation systems, by a free market system and by the presence of a highly developed marketing infrastructure.
These make a high degree of standardization feasible. On the other hand, MNCs operating in less developed
countries like Nigeria must take into account local peculiarities in the market and therefore are forced to differentiate
distribution activities.
Table 3: Correlations Between Centralisation And Standardization of Marketing Decisions
-
Marketing Decision
Product
Physical Characteristics................................................
Brand Name..................................................................
Packaging......................................................................
correlation [1]
0.418*
0,418*
0.376*
0.375*
-
Price
Retail Price......................................................................
Productors margin...........................................................
Distributors margin.........................................................
Reductions Policies.........................................................
Credit polices..................................................................
0.494*
0.94*
0.94*
0.94*
0.494*
0.494*
-
Communication
Target definition..............................................................
Theme..............................................................................
Advertising message........................................................
Choice of media...............................................................
Promotion........................................................................
Advertising budget..........................................................
0.94*
0.474*
0.494*
0.494*
0.494*
0.494*
0.494*
-
Distribution
Sales force Role..............................................................
Sales force management.................................................
Sales force training.........................................................
Channel selection............................................................
Number of point of sales.................................................
Functions fulfilled by the channels.................................
Contract policies.............................................................
0.494*
0.494*
0.494*
0.494*
0.494*
0.000*
0.000*
0.494*
Global Correlation............................................................
0.395*
[1]
Spearman rank Correlation
* 0.1 level of significance
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European Journal of Social Sciences - Volume 3, Number 2
** 0.01 level of significance
Relation between Centralization and Standardization of Marketing Decisions
several studies have suggested that the degree of standardization is a direct corollary of the degree of power
exercised by the parent company in determining marketing procedures policies and They say that in order to achieve
a certain level of standardization, the parent company must F a direct role in marketing decisions. One major study
shows that there is some correlation between centralization and standardization in European subsidiaries of
American MNCs,(Wiechman, 1976). However, little empirical data exists to prove this relationship to a statistically
significant degree. This question becomes crucial in the context of marketing activity of MNCs operating in a high
risk market environment like Nigeria.
Table 3 shows that the coefficient of correlation (0.395) between me Global index of Centralization (GIC)
and the Global Index standardization (GIS) of marketing decision is significant. We conclude therefore that the
standardization of marketing practices and the centralization of marketing decisions go hand in hand.
However, there is some variation in this relationship among the elements and sub-elements of marketing
mix. In the area of product and its sub-elements, centralization and standardization are statistically related. This is
also the case for the other three elements of the mix, (price, communication, distribution). But in these areas MNCs
tend to decentralize marketing decisions and adapt marketing procedures and practices to local conditions. Three
explanations emerged in the interviews: first of all, the MNCs tend to leave much autonomy in marketing decisions,
which do not directly affect the product. Secondly, in the areas of price, communication and distribution, the MNC
hold no particular advantage over local competition. Thirdly, the peculiarities of the local market play such an
important role in these areas that the parent company prefers to leave these decisions to its subsidiaries.
Thus, it appears that managers of the affiliates are to use any marketing practice they feel is appropriate to
the Nigerian market. Thus, a certain pattern of differentiation (adaptation) appears in relation to the decentralization
policy concerning these three marketing mix elements. However, three sub-elements of distribution contradict this
pattern. The relation between centralization and standardization in respect of these sub-elements: channel functions,
number of points of sale and transportation, are not significant.
Comparative Analysis of Strategies of Integration in the Three Marketing Environments
One of the objective of this paper is to undertake a comparative analysis of the results of studies conducted in the
three different market environments as they affect the globalization of international marketing. This would enable us
respond not only to the proposition of Levitt (1983) concerning the globalization of international marketing but also
to make generalizations concerning the elements of the marketing mix that are most/ least amenable to global
marketing. According to the study of Sorenson and Wiechman on the European subsidiaries of American MNCs (a
low risk market environment), "a large proportion, 63% of the subsidiaries consider that the whole marketing
strategy is highly standardized; 11% utilized a flexible program while 27% adapt their strategy to local conditions.
However, there are considerable variations in the decree of globalization of the four elements of the
marketing mix. Product strategies are highly integrated in 83% of the cases, 58% for communication and 68.3% for
distribution strategies.
In the case of the study of Ahn Lasserre and Chandon on the South Korean subsidiaries of the MNC, (a
moderate risk market environment), 36% of the affiliates have a highly integrated marketing procedure and
practices. In 23.8% of the cases, the degree of integration is moderate and low for 40.2% of the subsidiaries.
Each element of the marketing mix is standardized to a different degree. Product strategies are highly
standardized, (81.5%), while pricing procedures are only standardized in 10% of the companies in the sample. The
rates are 35.3% and 36.1% for communication and distribution respectively.
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The results shown in table 2 indicate that 5.05% of the Nigerian subsidiaries of the British and French
MNCs (a high risk market environment) have highly standardized marketing procedures and practices. The degree
of standardization is moderate for 1.85% of the affiliates and low for 93.10%.
We note from this that the Nigerian affiliate of MNC have the lowest degree of standardization of
marketing procedures and practices. The marketing practices are more standardized in the South Korea subsidiaries
and most standardizes by European affiliates of American MNC (see fig 2).
This analysis shows that MNCs tend to adopt standardized marketing procedures when cultural differences
between the host country and the country of origin are very minimal. For instance, Sorenson and Wiechman found
that highly standardized marketing techniques were used by American MNCs with subsidiaries in Europe. This
result was explained by the high degree of similarity between American and European market environments.
Great differences exist between the market environments of industrialized and developing countries such as
Nigeria. This is perhaps why the market practices in the Nigerian market environment are the least standardized.
Environment factors, such as product use conditions, income levels, customs and tradition, literacy, technological
context, legislation, e.t.c help to explain such modification.
We shall examine in the paragraphs that follow the standardization of marketing procedure in respect of the
four element of the marketing mix.
Product Decisions
Table 2 shows that physical characteristics, brand name and packaging of the product remain relatively highly
standardized in the moderate and high risk market environments of south Korea and Nigeria with rates of (80%,
73.6%, 93%, 75%), respectively. These results correspond with those found by Sorenson and Wienchman in the low
risk market environment (81%, 93%, 75%).
While it is true that the environmental factors mentioned above vary significantly between developed and
underdeveloped countries, the figures above indicate a high degree of standardization of marketing practices with
respect to the three sub-elements of product. The hypothesis of product modification is therefore not proven.
The explanation is that more than 50% of the companies hi the sample of Ann, Lasserre and Chandon and
12.6% of the subsidiaries constituting the sample for this study were established less than 10 years ago. This fairly
large proportion of the sample has only a limited experience in South Korean and Nigerian market and therefore
tends to borrow heavily from the parent companies' expertise in marketing. This result is corroborated by Wiechman
and Hill who found greater adaptation and lesser standardization in more mature subsidiaries. In other words, the
original product idea is gradually shaped to fit the culture of the final consumer.
Secondly, our sample includes several companies in the pharmaceutical, paper, and durable consumer
goods industry. The products of these industries are relatively highly standardized because their products are not
sensitive to cultural differences. This has probably raised the degree of standardization of the product.
Finally, several marketing executives explained that the quality and reputation of their product count a lot
for the Nigerian consumer. Here, foreign products have a better reputation than local ones-"the made abroad
mentality". This is probably why the sub-elements of the product are standardized in order to produce goods of high
quality and reputation. This will give to products an image of "made abroad". In these circumstances, a high degree
of adaptation of the product could signify deterioration in quality.
Pricing Decisions
Among the four elements of the mix, decisions concerning price are the least standardized: 56% for Europe, U.S.A.,
10% in the case of South Korea and 0% for Nigeria. These figures show that pricing strategies are highly
differentiated in the moderate and high-risk market environments. This is probably
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due to the great disparity in production costs, competitor prices, government price controls, custom and excise
duties, etc. between industrialized countries of Europe and America and the developing countries such as Nigeria
and South Korea.
Communication: Advertising and Promotion
TABLE 2 SHOWS THAT 58% OF THE SAMPLE have a highly standardized advertising and promotion strategy
in the low risk market environment of Europe and the U.S.A. Only 35.3% is the case of South Korean subsidiaries
while no Nigeria affiliate has a standardized advertising and promotion. This area, like pricing shows a tendency
towards adaptation, particularly in the less industrialized countries.
Distribution Decisions
MNCs in Nigeria and South Korea maintain less standardized approach to distribution than do those operating in
Europe and the U.S.A. Distribution, like pricing and communication, does not lend itself to uniform practices For
example, 68.3% of companies in the low risk market environment, 36.1% of those in the moderate risk market
environment have a standardized distribution strategy and 0% in the high risk market environment.
These results are not surprising in that specialists in Development Economic say that distribution structures
reflect the level of industrialization of a country. This is why there is such a significant difference in the results
obtained for MNCs operating in the three different market environments.
This comparative analysis of the results of the three studies shows clearly that marketing practices are
globally more standardized in the low risk market environment, less in the moderate risk market environment and
the least standardized in the high risk environment (See figure 2).
Conclusion
The results of our research bring out several important conclusions concerning the strategy of marketing integration
of MNC operation in Nigeria on the one hand, and in three market environments on the other.
First of all, it is evident from this study that the centralization and standardization of marketing decisions
and practices are not uniformly utilized across the four elements of the marketing mix (see figure 1). Only product
decisions seem to be the object of direct control on the part of the headquarters. In this area, the parent company
prefers, in general to impose on its subsidiaries a relatively highly standardized approach, by using a centralized
procedure of decision making.
Thus, our study indicates that the prospects for a successful programme of standardization are most likely
to be feasible and effective when operationalized in terms of standardizing the market planning procedures
concerning the product. The prospects appear limited to sub-global market clusters for price, communication and
distribution. This conclusion indicates that the call by Theodore Levitt for the globalization of marketing is feasible
in the case of the marketing mix element -PRODUCT - but not supported by empirical evidence in respect of price,
Communication and Distribution.
We also found that in addition to cultural based barriers, which have a major impact, market differences
regarding the law, media availability and competitive situation often constrained opportunities for international
advertising and promotion standardization. It is also apparent that differences in law, conditions of product use and
competitive situation are important barriers for product standardization. Government interventions in practices price
often limit pricing flexibility and national differences in the distribution structure have obvious implications for
standardizing distribution strategy. Secondly, and as a corollary, the Nigerian subsidiaries are quite independent in
decision-making concerning price, communication and distribution.
Thirdly, it appears that Nigerian affiliates of the MNC have much more autonomy than do similar
subsidiaries operating in South Korea, Europe or the U.S A.
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Fourthly, the results of this research seem to find a place in the stream of current research on global
marketing. The fundamental problem is to find equilibrium between two essential strategic necessities:
[1]
Overall Competitivity, which requires strong coordinating action from the parent company in order to
ensure technological uniformity, cost minimization and quick transfer of production techniques and
marketing practices throughout the network of subsidiaries.
[2]
Adaptation To Local Market Environment, which requires differentiation in non-product, related
marketing strategies in order to overcome the specific local constraints found in each country.
The resolution of this dilemma is not to be found in monolithic formulae such as centralized or
decentralized management Conflicts can only be resolved through specific and sometimes temporal solutions and by
the use of several mechanisms. Our study confirms the position that none of the companies studied functioned
according to a structure entirely centralized and or standardized, or decentralized and or differentiated.
Finally, because of its highly regulated economy and its social and cultural peculiarities, Nigeria imposes
on MNCs an imperative need for adaptation, which outweighs the need for integration. On the other hand, Western
Europe and American economies which are more open and less diverse, one from the other require more integration
and less differentiation. This logic leads to the hypothesis that in the future as Nigeria economy develops, its market
will become more international and will therefore call for a more a more intense integration of management
techniques for subsidiaries while never abandoning the need for adaptation. This situation implies growing
complexity in the headquarters/subsidiary relationships. MNC established in Nigeria should therefore be prepared to
modify their structures and techniques of integration particularly in the wake of the privatizing and
commercialization efforts of the government in order to deregulate the economy.
In conclusion, one important thing that emanates from the result of this study is that global marketing on a
world-wide scale is not feasible. However, a trend that has been established is that global marketing on a limited
scope and restricted to pockets of homogeneous market, such as the Western Europe market, the American market,
the West African market, the Arab market etc. appears practicable and logical. Thus, it is along this direction that the
concept of global marketing should be pursued.
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