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STANDARDIZATION VERSUS ADAPTATION OF INTERNATIONAL MARKETING strategy: AN EMPIRICAL INVESTIGATION

An issue debated frequently in the international marketing literature centers on whether a business should pursue a strategy that is standardized across national markets or adapted to individual national markets. Of the two aspects relating to standardization of marketing strategy across national markets--(1) standardization of the pattern of resource allocation across marketing mix variables integral to a business's marketing strategy and (2) standardization of the strategy content with respect to individual marketing mix variables--the latter has been the subject of numerous conceptual articles. However, there is a relative dearth of empirical studies on both issues. To partially fill this void, this study addresses empirically the question of the standardization of the pattern of resource allocation among marketing mix variables across national markets. The question is addressed by examining whether competitive strategy and industry structure variables affect market share and business profits similarly or dissimilarly across Western markets, that is, the U.S., U.K., Canada, and Western Europe. The results reveal that with few exceptions, the effects of competitive strategy and market structure variables generalize across these markets. The study findings provide insights into both the merits of standardizing the strategic resource mix across Western markets and the competitive strategy and market structure variables that are major explanators of business performance across Western markets.
In the international marketing literature, the desirability of pursuing a strategy of standardization of marketing mix and other competitive strategy variables across national markets versus adaptation to individual national markets has been debated extensively (e.g., Ghoshal 1987; Levitt 1983; Walters 1986; Wills, Samli, and Jacobs 1991; Wind 1986; Yip 1989). In recent years, however, the debate centering on the pros and cons of pursuing a strategy of total standardization across national markets versus complete adaptation to individual markets has given way to a more fruitful dialogue focusing on the (1) desired degree of standardization (or adaptation) with respect to various competitive strategy variables such as branding, advertising, sales promotion, and pricing (Riesenbeck and Freeling 1991) and (2) moderating effects of organizational and environmental contingencies on the desired degree of standardization (or adaptation) with respect to these variables (Quelch and Hoff 1986). However, two related issues that merit further exploration in an international context are the degree to which (1) the nature of the underlying relationships between competitive strategy variables and business performance are similar across national markets and (2) certain competitive strategy variables are relatively more important determinants of performance across national markets than other variables.
Realistically, a business competing in or contemplating competing in multiple national markets should first develop an understanding of the nature of the underlying relationship between competitive strategy variables (e.g., advertising, personal selling effort, etc.) and performance (e.g., market share and profitability) to determine whether the patterns of these relationships are similar across national markets. Specifically and as explicated in Figure l, the ma