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Marketing in MEE - Literature + Book Summary
- Instelling
- Vrije Universiteit Amsterdam (VU)
Literature and Book Summary - Marketing in MEE
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Marketing Literature SummaryExport Performance: A Focus on Discretionary Adaptation (Westhohn & Magnusson, 2017)
Marketing adaptations strategy has been characterized as a strategic imperative in markets
with protectionist and nationalist sentiments, which underscores the need to better
understand the effects of adaptation strategy
The adaptation strategy may be more advantageous than previously thought, and that
researchers should focus on discretionary adaptations when investigating the choice of a
relatively standardized versus adapted international marketing strategy
Mandatory adaptations include compliance with local laws and regulations (package
labelling, advertising restrictions, safety features), whereas discretionary adaptations are
modifications to the firm’s marketing mix to better appeal to customer tastes and
preference of the local market (product features, positioning, distribution outlets)
Discretionary adaptations are important because international marketers can control their
implementation and because their optional nature enables marketers to create an
advantage through localization
Mandatory and discretionary adaptations are significantly different, and conflating both
types of adaptation into one adaptation construct may be responsible for some of the
ambiguity in the literature
Strategic fit theory can be used to predict a positive relationship between discretionary
adaptation and export performance
A better understanding of international marketing adaptations may be gained by explicitly
focusing on discretionary adaptations because doing so allows for a more precise
measurement of marketing-mix adaptations
Global markets were homogenizing, and firms could reap tremendous benefits from a more
standardized marketing strategy
Performance was enhanced when the firm’s marketing strategy fit the external environment
Measuring adaptation more precisely and focusing on discretionary adaptation can offer
more accurate and nuanced insights to strategy research
Discretionary adaptations = adaptations that are not required by law or regulation but,
rather, are voluntary adaptations made to appeal to customers
Mandatory adaptations are those required by law or regulation. An example of a mandatory
adaptation might be redesigning an electric-powered product to accept voltage levels based
on the regulatory standard of the target markets, or adapting a promotion strategy that
,involves comparative advertising, which is welcomed in the U.S. but strongly restricted in
Germany
Strategy = deliberately choosing a different set of activities to deliver a unique mix of value
Mandatory adaptations offer no real choice with respect to how to compete in the market,
leaving discretionary adaptations the only type that matters in the context of international
marketing strategy
Discretionary adaptations are uniquely important with respect to strategy and are an
important focus of inquiry because they represent a managerial tool with which a firm’s
competitive positioning can be adjusted. Discretionary adaptations are based on managerial
research as well as observation and interpretation of the host-market environment, which
can be difficult for international marketers to interpret
Mandatory adaptations are the result of complying with codified regulatory requirements.
Goal of mandatory adaptations is the same for all firms (Regulatory compliance to operate
in a market), and strategies by different firms for achieving compliance should be relatively
similar
The goal of discretionary adaptations is not regulatory compliance, nor are there explicitly
codified guidelines to satisfy. The goal is a strategic fit with the local environment to
improve the firm’s competitiveness and performance in the market
Product adaptation at the same time of market entry generally reflects a mandatory
adaptation whereas adaptations following entry are likely to be discretionary
Mandatory adaptations pertain to whether to operate in a market, whereas discretionary
adaptations pertains to how to compete in that market
The variance in interpretation of the environment, the variety of possible solutions for
addressing those differences, and the potential to influence competitiveness makes
discretionary adaptations, not mandatory adaptations, the key type of adaptation to
investigate in international marketing strategy and performance research
Strategic fit theory suggests that the form should align its strategy with the environment,
and when strategy fits the environment, this results in superior firm performance
International marketing strategy will lead to superior performance only to the extent that is
properly matches the unique set of circumstances that the firm is confronted by within a
particular overseas market
Discretionary adaptations are the only type of adaptation that involves choice with respect
to how to compete in a market. Mandatory adaptations, while relevant for market entry
decisions, are irrelevant to the question of how to compute thus, investigations involving
,the strategic choice of how to compete in a market should disambiguate the adaptation
construct and focus only on discretionary adaptations
There is a positive relationship between discretionary adaptation and export performance,
which we have confirmed empirically. The effort to achieve fir with the environment is
inherent in the decision to employ a discretionary adaptation
Strategic fit in the environment is an inherent goal in the decision to employ a discretionary
adaptation
The characteristics of the market (psychic distance), the firm (international experience). And
the product (product positional advantage) significantly influence the effectiveness of
discretionary adaptations
The psychic distance enhances the effectiveness of discretionary adaptations on export
performance. Because psychic distance is based on subjective perception of differences
between markets, greater international experience would logically alter the perception of
psychic distance of the export market because the firm would have greater familiarity with
and more accurate knowledge about the export market
Discretionary adaptations compensate to some degree for a lack of positional advantage
Positive effects of discretionary adaptation even for firms with strong product positional
advantage. However, the positive effect is much stronger for firms with weak positional
advantage; thus, it is a strategy that pays comparatively higher dividends to such firms
Discretionary adaptations can have a positive effect on export performance, and this is
particularly so in psychically distant markets, when the firm has significant international
experience to help guide the adaptation process, or when the firm lacks a significant
positional advantage
Mandatory adaptations have cost and operational consequences that may affect the
decision of whether to export to a given foreign market
Discretionary adaptations that are needed to meet the desired competitive positioning in
the export market may also influence the decision of whether to enter
When determining strategy with respect to how to best compete in that same given market,
managers should focus not on mandatory adaptations but, rather, the potential benefit of
discretionary adaptations. These potential benefits are predicated on the idea that
managers engage in a cost-benefit analysis of any proposed discretionary adaptation, and
how it might affect other elements of the firm’s strategy. Thus, managers are cautioned not
to simply believe that all adaptations lead to improved export performance under all
conditions
The significance of international experience as a moderator suggests that firms with more
international experience tend to benefit more from implementing discretionary adaptations
, A firm lacking in experience might also benefit from on boarding human resources or
acquiring firms that bring international experience with them
Non-local or local brands? A multi-level investigation into confidence in brand origin
identification and its strategy implications (Zhou, Yang, and Hui, 2010)
CBO (Confidence in Brand Origin) moderates the effect of PBF (Perceived Brand
Foreignness) on consumer evaluations of brand value
The moderating influence of CBO is found to be more profound for local than for foreign
brands
Perceived Brand Foreignness (PBF) refers to a consumer’s perception that a brand is of
foreign or non-local origin
PBF is different from the traditional country-of-origin construct documented in the
literature because the latter is associated with one specific country, as is often reflected by
the made-in label
PBF represents more generalized perceptions of a brand as of foreign images or appeals (As
opposed to the traditional made-in affiliations)
Foreign image appeals are generally associated with a glamour that local brands cannot
compete with, especially among consumers in developing countries
Foreign image associations are not a privilege that only foreign brands have; they may also
be attached to local brands
Foreign appeals bring about a higher quality perception and increase social status for their
brands
Foreign brands have experienced mixed fortunes in some of the fast-developing markets.
Although foreign brands may will be associated with an inherent glamour that makes local
brands envious, there is a growing scepticism about this automatic cachet because
consumers have started to wonder which brand is of local or non-local origin
Global branding or localization strategies pursued by international players seem to further
deepen consumer confusion regarding the authenticity of foreign image appeals
Some consumers find foreign brand images no longer distinguishable or diagnostic in both
product evaluations and subsequent purchase decisions. This is a potentially neglected
outcome of local versus non-local confusion, an issue recently raised in the fast-changing
market place of emerging economies
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