What is Product Standardization?
Product standardization refers to the process of maintaining uniformity and consistency among the different iterations of a particular good or service that are available in different markets. It is a process of marketing a good or service without making any changes to it. If a product is changed at all, it is only changed superficially. Otherwise, the characteristics of the good or service remain uniform. It is made using the same materials and processes, has the same packaging and is marketed under the same name.
The strategy of product standardization requires a particular industry or organization to follow certain guidelines in order to maintain the consistency of a product’s nature, appearance, and quality. These guidelines are ones that are accepted on a general basis and are adhered to when producing a good or carrying out a service. The guidelines may apply to one organization or one industry and may be applicable on a national level or an international level.
Products may be either standardized or customized to a targeted consumer base. Standardized goods and services promote the convenience of use for the consumer and attracts consumers on the basis of consistent quality. Product standardization relies on using the same basic template across markets. It is a necessity for certain kinds of technology and construction materials. The features of a product are kept identical as far as possible, which might be difficult if the product is marketed internationally but is easy to achieve locally.
Product standardization lowers the available variety of products that serve a similar purpose. There are general standards that goods are required to meet. Where industry-wide standardization is concerned, consumers are able to choose from a range of goods and services which are all distinct, yet offer the same general benefits and are of the same general quality. Uniformity and consistency of products are cost-effective and increases the efficiency of production.
The Uses of Product Standardization
Product standardization is useful for a number of reasons. By following certain guidelines for the production of goods and services goals such as innovation, cost reduction, and streamlined production system can be achieved.
- Cost reduction: Product standardization reduces the cost of production. When a set of guidelines are being adhered to in order to produce identical goods or services, the cost of raw materials goes down. The raw materials being used for that particular product are the same. Instead of spending money on different raw materials, different packaging and different marketing techniques, standardization ensures that both production and maintenance costs are kept low. Since there is no need to introduce different benefits with each iteration of the product, the expense of production is reduced.
- Production efficiency: The production process becomes more efficient when the end goal is to maintain uniformity of products. Less effort is expended on production. It is easier to automate at least part of the production process. The same process is utilized in different organizations or industries to produce the same good or service. The lack of pressure to innovate the particular product with each iteration increases efficiency. The consumer does not expect the product to deteriorate, but they do not expect it to become radically different either. There is an established process, which streamlines production and makes it faster.
- Establishment and strengthening of the brand: When a particular product is available across different markets, including the international sphere, in a consistent form with uniform features, it becomes a brand that the consumer base recognizes and trusts. Regardless of geographical location, the exact same good or service is delivered to the consumer, with no change in quality. This reinforces the branding of the product. The organization or industry of origin profits from the particular recognizable product being chosen by consumers who have used it in the past and wish to use it again based on its quality. If the consistency of quality is maintained, then the product will become an international brand.
- Convenience for consumers: Product standardization is convenient for consumers when it comes to products like technology or construction materials or automobiles. There are certain product specifications according to which particular products are made. Adhering to the specifications ensures that consumers will be able to find a particular product to satisfy a particular need wherever they might be located. Standardizing technology maintains compatibility of technological devices across the globe. It improves efficiency. Certain materials used in construction such as tools are the same across international markets. It ensures that there is little chaos regarding these products.
- Standard of quality: Standardizing of products ensures that all products are held to a certain standard of quality. The particular product must be uniform in every way. Therefore, it is easy to detect any failure in the process of production or marketing. Any inconsistency in the product will stand out. Consumers and inspectors can see any obvious failure of a particular iteration of a product to meet the previously established standard of quality. The existence of this standard ensures that the producer will seek to maintain it. Thus the producer is kept accountable and the quality of the product does not suffer.
The Advantages of Product Standardization
Product standardization has certain advantages in comparison to the alternative of adaptation and customization.
- Product innovation: The availability of a basic template to work with increases the possibility of innovation. Different organizations in a particular industry that offers standardized goods and services build upon the standardized product to produce a more distinct good or service that is consistent with the standards of the industry yet improved in nature. Instead of innovating from scratch, having a framework to build upon lowers cost and increases efficiency. It is an effective utilization of time and resources to build upon a standardized product.
- Benefits to the consumer: Product standardization reduces the number of available products which serve a particular purpose. The consumer is able to choose more easily which product they desire to purchase. It lowers confusion among consumers. A particular good is identical in all its iterations and the consumer is aware of its quality. Thus they can make an informed decision as to whether they should obtain it or not. If the product fails to meet standards then the consumer knows it and is able to avoid it. Product standardization ensures consumer safety.
- International market: In today’s world, globalization has led to a growing similarity in the demands of people that transcends geographical and cultural borders. Product standardization across national and international markets ensures that the same product, consistent in all its aspects, is available to consumers, with no need to consider their actual location. A change in the country does not lead to a change in quality. People can go abroad and purchase the same product they use when they are at home. Alternatively, people who have heard of a particular product which originates in a particular country can purchase that product without having to travel to that country, while having the assurance that there is no deterioration in the quality of the product.
- Avoiding the cost of adaptation: It is undeniably more expensive to tailor a particular good or service to a particular consumer base. Industries and organizations save money by taking a “one size fit all approach”. In order to customize a product, the producer must gather data, carry out extensive testing, introduce different marketing techniques according to the consumer bases that are being targeted and so on. By producing uniform, identical goods regardless of the market the industry or organization save money. Depending on the size of the market and the kind of good or service concerned, the cost of adapting the product may be too high for a profit.
The Disadvantages of ProductStandardization
However, there are disadvantages to standardization as well.
- Stagnation: There is always a possibility of stagnation when it comes to product standardization. Innovation may not be easy to achieve if uniform, identical products has been made the norm. The producer may suffer in the face of competitors. Too much emphasis on consistency of products may become a roadblock to creativity, leaving to producer unable to adapt to changing demands from consumers. Failure to innovate in such a situation would be highly disadvantageous to the producer.
- Failure to communicate: If the demands of the consumer change and the industry or organization is too committed to maintaining consistency of products to realize this and respond accordingly then the consumers will cease to purchase the product and the producer will not be able to create a new product to meet the changing demands. This will lead to the industry or organization being surpassed by competitors who are more in touch with the consumers and their desires.
- Differences in equipment: While products may be standardized across markets without consideration for geographical boundaries, different countries may have different systems when it comes to electronics. Thus technological devices may be produced according to standardized specifications, but they cannot be used in every country. In India, the current supply is 220 V while the frequency is 50 Hz. In the United States, current supply is 110-120 V and the frequency is 60 Hz. Therefore, adapters are required to use technological devices made in one country in the other. Similar arrangements are required to accommodate similar differences.
- Cultural differences: Even in the age of globalization differences based on culture do exist. Religion is a very important factor as well, that affects the lives of many across the world. For example, a fast-food chain specializing in non-vegetarian food would have to adapt to the local market before it could make a significant profit in India. But if the chain remained focused on its non-vegetarian food and replicating its production process in India then it’s revenue would suffer. A failure to take the specific details of the local market into consideration and adapting products accordingly might spell disaster for an industry or organization.
Examples of Product Standardization
- Many fast food chains, such as McDonald’s, have certain fixed procedures when it comes to preparing food, so that regardless of which outlet the consumer is visiting, the product they order always tastes the same. Certain items from these chain restaurants become brand images that consumers across the world recognize and purchase. Any major food establishment, like Starbucks or Burger King, comes under this category. People do not visit Starbucks to drink coffee; they visit Starbucks to drink the coffee that is only available at Starbucks because Starbucks always prepares and presents it in a particular manner.
- Equipment and tools are usually produced to standard specifications because they are used to build other products which require particular equipment and tools. Federal-Mougal, for example, produces pistons for multiple automobile manufacturers like BMW and Maruti. Pistons are produced at standard sizes depending on what their exact use will be. They are an example of where product standardization is most efficient because producing uniform, and consistent pistons streamline the production process for larger goods.
- Goods like certain French perfumes or Swiss chocolates are quite famous even outside their country of origin. These are available even outside the country of origin and without any change in quality. The consumers are aware that these products meet a certain standard of quality and thus they are eager to purchase them in their own country if they become available. By emphasizing the country of origin and stressing the standard of quality that has been maintained the producer is able to make a good profit off these products.
- Items like screwdrivers and nuts and bolts are also made according to specifications because their use is often very specific. A screwdriver of a particular size may be uniquely suited to a particular task. Only a nut or bolt of a certain size may fit into a particular joint. These things are decided at the level of design specifications. Thus these items are produced, identical in every aspect in a particular iteration, to satisfy certain needs.
Product standardization is a very useful strategy, with many benefits. However, it is not without pitfalls as well. The ideal business model is one which takes the disadvantages into account, uses the advantages and ultimately employs a combination of standardization and adaptation.