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CASE STUDIES of COSMETIC Mncs in the EUROPEAN UNION

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CASE STUDIES of COSMETIC Mncs in the EUROPEAN UNION PRODUCT STANDARDIZATION BY MULTINATIONAL CORPORATIONS IN A REGIONAL MULTICULTURAL MARKET: CASE STUDIES OF COSMETIC MNCs IN THE EUROPEAN UNION DISSERTATION zur Erlangung des Doktor grades der Wirtschafts-und Sozialwissenschaftlichen Fakultät der Universität Dortmund Lehrstuhl für Marketing Vorgelegt von NGOUEM Alain Claude IRIC - Kamerun Betreuer: Prof. Dr. Hartmut H. Holzmüller Referent: Prof. Dr. Hartmut Hirsch-Kreinsen Referent: PD. Dr. Nicola Berg Tag der Promotion: September 9, 2008. ACKNOWLEDGEMENTS I wish to express my deep debt of gratitude to all those who contributed to the successful completion of this thesis. In the first place, I would like to thank my advisor Prof. Dr. Hartmut H. Holzmüller for supervising this work. Without his excellent and broad background in the product standardization in particular, and marketing in general, this work would not have been possible. His guidance and careful advice was the important foundation of my work. With his open- minded and sound attitude, he created a research environment that can hardly be surpassed. I am particularly grateful to the Carl Duisberg Gesellschaft e.V., for all the support. I enjoyed from the Rector of Dortmund University Prof. Dr. Eberhard Becker, Prof. Dr. Jehle, Prof. Dr. Martin Welge, Student Secretariat, Academic Auslandsamt, Faculty of economic and social sciences, Department of Marketing of University Dortmund for the administrative support. This thesis would never have been completed without the help of various individuals and organizations who helped me to gather the information and data. The following deserve my appreciation: International Warsteiner, Beiersdorf, Schwarzkopf, L’Oréal, Lever Fabergé, Johnson & Johnson GmbH, Wella AG, Library of Duisburg – Essen University, Library Cologne University, Free University library Hamburg, Library University Saarbrücken, Library Dortmund University, Library of university of apply sciences of Gelsenkirchen, Ruhr University library Bochum. My sincere gratitude goes to the following individuals for their assistance in diverse ways, Dr. Helga Metzel, George Munde, Tim Tendick, Ursula Van Look, Bernadette Carmignac, Marion Fritz, Marcel René and delphine Suzel Lim Libog. Thanks to Anselme Madou Tetialy and Christophe Leonard my colleagues in Trade Africa program (2001-2002) for their advices and providing valuable comments. While working on this thesis in Germany, I came into close contact with many friends who provided a congenial academic environment for the testing of my ideas. Particularly Tanja Pferdekamper, Daniela Lobin, Arno Lammerts, Thomas Wittkop, Momo Jeufack Hervé. I am also grateful to Frank Wetzel, Albert Thomas Etongue Njoume, and Grempel Katherine for their warm welcome and continuing friendship. There is nothing more comforting than to know you have a place you can always turn to in a foreign land. Finally, how can I thank you Lydie Odette, Priscille Esther and Jane Ernestine for your faithfulness. Product standardization by Multinational corporations in a regional multicultural market:Case studies of cosmetic MNCs in the EU iv CONTENTS - List of tables……………………………………………………………………………..vii - List of figures …………………………………………………………………………..viii - List of abbreviations…………………………………………………………………..…ix - Abstract…………………………………………………………………………………...xi - Zusammenfassung…………………………………………………………………….…xii Introduction…………….…………………………….…………………………………………..1 1. The standardization phenomenon……………………………………………………………8 1.1. Explanatory theories of internationalization…....................................................................8 1.1.1. Macroeconomic theories…………………………………………………………....8 1.1.2. Microeconomic theories…………………………………………………………..10 1.1.3. Management explanations…...................................................................................11 1.2. Towards a theory of standardization……………………………………………………...13 1.2.1. The theory of economic integration……………………………………………....13 1.2.2. The adaptation versus standardization debate……………………………..….….16 1.2.3. Recent developments………………………………………………………….….19 1.3. The concept of standardization…………………………………………………….……..24 1.3.1. The Levitt´s standardization paradigm……………………………………………24 1.3.2. Standardization definition………………………………………………………....26 1.3.3. Standardization typologies………………………………………………………...28 2. The product in the international market…………………………………………………...31 2.1. The notion of product……………………………………………………………………31 2.1.1. Three stages of product…………………………………………………………....31 2.1.2. International product……………………………………………………………....33 2.1.3. Product presence in a regional market ……………………………………………34 2.2. Cosmetic products and classification………………………………………………….…38 2.2.1. Cosmetic product history………………………………………………………….38 2.2.2. Cosmetic product classification……………………………………………….…..40 2.2.3. General characteristics of the cosmetic product groups…………………..…….…42 2.3. The standardized product criteria..……………………………………………………….44 2.3.1. Determinants for the product standardization……………………………….…….44 2.3.2. Characteristics for a regional standardized product……………………………….48 2.3.3. The standard manufacture of cosmetics…………………………………………...53 Product standardization by Multinational corporations in a regional multicultural market:Case studies of cosmetic MNCs in the EU v 3. The problem of product standardization in the European Union………………………...56 3.1. Factors influencing product standardization in the European market…………………...56 3.1.1. Political influences…………………………………………….…………………..56 3.1.2. Communication and transport infrastructure……………………………………...58 3.1.3. Convergence of consumer needs………………………………………………….60 3.2. Factors against the regional product strategy in the EU………………………………...63 3.2.1. The language differences…………………………………………………….……63 3.2.2. The problem of multiculturalism……………………………………………….…64 3.2.3. Intellectual property and legal factor………………………….……………….….67 3.3. Regional market structure……………………………………………….……………….70 3.3.1. European Union market…………………………………………….……………..70 3.3.2. Europeanization and implications for firms………………………….……………76 3.3.3. Cosmetic firms classification……………………………………………..……….79 4. Framework of the product standardization analysis……………………………………....82 4.1. The research context……………………………………………………………………..82 4.1.1. International economy and study of economic integration………………………..82 4.1.2. Study of international management…………………………………………….....84 4.1.3. International marketing discipline…………………………………………….......85 4.2. Methodology………………………………………………………………..…………......87 4.2.1. Qualitative approach…………………………………………………………....…87 4.2.2. The case study………………………………………………………………….....89 4.2.3. Cosmetic firms’ sample……………………………………………………..…….91 4.3. Data collection………………………………………………………..……………….…93 4.3.1. Overview on firm data …………………………………………………...….……93 4.3.2. Firm documentations and product observations………………………………......96 4.3.3. Interview guideline and results…………………………………………………..109 5. Case review of product standardization by MNCs in the European Union…………….114 5.1. The Beiersdorf A.G. case ……………………………………………………………....114 5.1.1. Firm’s presentation………………………………………………………………114 5.1.2. Nivea creme...........................................................................................................116 5.2. The Wella cosmetics A.G. case ……………………………………………………….…120 5.2.1. The firm……………………………………………………………………….....120 5.2.2. Wellaflex hair spray …………………………………………………………......122 Product standardization by Multinational corporations in a regional multicultural market:Case studies of cosmetic MNCs in the EU vi 5.3. The L’Oréal case…………………………………………………………………………...126 5.3.1. The cobweb company…………………………………………………………....127 5.3.2. Forte-strong varnish ……………………………………………………..………128 5.4. The Schwarzkopf Group case ………………………………………………………….....131 5.4.1. The company……………………………………………………………………..131 5.4.2. Poly Brillance 890 ….............................................................................................132 5.5. The Johnson & Johnson case……………………………………………………...……….137 5.5.1. The MNC………………………………………………………………………...137 5.5.2. Penaten baby milk ……………………………………………………………….139 5.6. The Lever Fabergé case……………………………………………………………………143 5.6.1. The company……………………………………………………………………..143 5.6.2. Signal toothpaste …………………………..…………………………………….144 6. The standardization initiatives synthesis………………………………………...……….150 6.1. General results ………………………………………………………………………..150 6.1.1. Variable implications on the product standardization …………………………..150 6.1.2. Standardization Coordination…………………………………………………....152 6.1.3. Recommendations on product standardization initiatives……………………….155 6.2. Implication of the product standardization in the international product policy………..160 6.2.1. New considerations for the product standardization..………….……….………..160 6.2.2. Firms’ new organization ….………………….……….………………………....164 6.2.3. Implementation issues in building a regional presence ………………………....167 6.3. Discussions on the complete standardization……………………………………….…..170 6.3.1. Generalizing standardization processes………………………………………….171 6.3.2. The unavoidable adaptation phenomenon…..........................................................173 6.3.3. The complete standardization issues………….…………………………….……176 Conclusion………………………….………………………………………………………….180 Appendixes……………………………………………………………………………………….I Bibliography…………………………………………………………………………….…..XXIII Product standardization by Multinational corporations in a regional multicultural market:Case studies of cosmetic MNCs in the EU vii List of tables Table 1: Scope
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