Skip to main content
SpringerLink
Log in

Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics

  • Article
  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

Marketing products globally is challenging due to the diverse nature of markets. We use market heterogeneity, unbranded competition, resource and infrastructure availability, and sociopolitical governance as country-market characteristics that distinguish between developed and emerging countries. We investigate their moderating role on the relationship between elements of the marketing mix and brand sales. We provide evidence, from a hierarchical linear model and a panel data set of brands from 14 emerging and developed markets that account for 62% of the global GDP, that country-market characteristics moderate the relationship between the complete set of marketing mix elements and brand sales performance asymmetrically. While distribution and price have the largest impact in emerging and developed countries, respectively, product innovation and advertising have significantly larger impacts in emerging markets relative to developed countries. These finding highlights the importance of contingency view of marketing strategy in global markets.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Figure 1
Figure 2
Figure 3
Figure 4

Similar content being viewed by others

Notes

  1. A notable exception is the study by Lages et al. (2008). As shown in Table 1a, our study in addition to all the marketing mix elements in that study also has display. Moreover, this study has panel data and includes both developed and emerging market countries.

  2. While Sheth (2011) lists five traits that distinguish developed from emerging markets, we focus on four of them. We do so, because we find that two of the factors, namely, the availability of resources and the development of infrastructure in countries are highly related so we combine these dimensions for conceptual parsimony and empirical reasons.

  3. http://data.worldbank.org/data-catalog/GDP-ranking-table and http://data.worldbank.org/data-catalog/GDP-PPP-based-table. PPP data was not available for Argentina and GDP$ was used instead.

  4. It is important to note that as the size of the population that lives below the internationally recognized poverty level ($2 a day) and the percent of population employed in agriculture sector increases, the income and the net worth divide in a country will be more severe. In other words, fewer numbers of people will disproportionately earn higher incomes and have much greater net worths compared with the “bottom-of-the-pyramid.” Therefore these proxies capture the potential asymmetry in incomes and net worths that Sheth (2011) discusses.

  5. We acknowledge that the impact of better design and implementation of marketing strategy may be stronger/weaker in some product categories than others depending on consumption cycles associated with the product. We thank one of the anonymous reviewers for pointing out this issue.

  6. We do not include GDP per capita as an indicator in these dimensions as it is an aggregate indicator that does not allow us to capture the difference between emerging and developed markets discussed by Sheth (2011).

  7. We follow the procedure by Cameron and Trivedi (2009) to compute the elasticities. Thus we use the fully specified model in calculation of the elasticities.

References

  • Aaker, D. A., & Day, G. 1986. The perils of high-growth markets. Strategic Management Journal, 7 (5): 409–421.

    Article  Google Scholar 

  • Acemoglu, D., & Robinson, J. 2012. Why nations fail. New York: Crown Business.

    Google Scholar 

  • Acemoglu, D., & Scott, A. 1994. Consumer confidence and rational expectations: Are agents’ beliefs consistent with the theory? The Economic Journal, 104 (422): 1–19.

    Article  Google Scholar 

  • Alba, J., Lynch, J., Weitz, B., Janiszewski, C., Lutz, R., Sawyer, A., & Wood, S. 1997. Interactive home shopping: Consumer, retailer, and manufacturer incentives to participate in electronic markets. Journal of Marketing, 61 (3): 38–53.

    Article  Google Scholar 

  • Bahadir, S. C., Bharadwaj, S. G., & Parzen, M. 2009. A meta-analysis of the determinants of organic sales growth. International Journal of Research in Marketing, 26 (4): 263–275.

    Article  Google Scholar 

  • Barrios, S., Gorg, H., & Strobl, E. 2005. Foreign direct investment, competition and industrial development in the host country. European Economic Review, 49 (7): 1761–1784.

    Article  Google Scholar 

  • Bezawada, R., Balachander, S., Kannan, P. K., & Shankar, V. 2009. Cross-category effects of aisle and display placements: A spatial modeling approach and insights. Journal of Marketing, 73 (3): 99–117.

    Article  Google Scholar 

  • Bijmolt, T., Van Heerde, H. J., & Pieters, R. 2005. New empirical generalizations on the determinants of price elasticity. Journal of Marketing Research, 42 (2): 141–156.

    Article  Google Scholar 

  • Boulding, W., & Staelin, R. 1995. Identifying generalizable effects of strategic actions on firm performance: The case of demand-side returns to R&D spending. Marketing Science, 14 (3): G222–G236.

    Article  Google Scholar 

  • Brekke, K. R., Holmas, T. H., & Straume, O. R. 2013. Margins and market shares: Pharmacy incentives for generic substitution. European Economic Review, 61 (1): 116–131.

    Article  Google Scholar 

  • Brewer, T. L. 1993. Government policies, market imperfections, and foreign direct investment. Journal of International Business Studies, 24 (1): 101–120.

    Article  Google Scholar 

  • Burgess, S. M., & Steenkamp, J.-B. E. M. 2006. Marketing renaissance: How research in emerging markets advances marketing science and practice. International Journal of Research in Marketing, 23 (4): 337–356.

    Article  Google Scholar 

  • Calantone, R. J., Cavusgil, S. T., Schmidt, J. B., & Shin, G.-C. 2004. Internationalization and the dynamics of product adaptation: An empirical investigation. Journal of Product Innovation Management, 21 (3): 185–198.

    Article  Google Scholar 

  • Cameron, A. C., & Trivedi, P. K. 2009. Microeconometrics using Stata. College Station, TX: Stata Press.

    Google Scholar 

  • Cavusgil, S. T., & Zou, S. 1994. Marketing strategy-performance relationship: An investigation of the empirical link in export market ventures. Journal of Marketing, 58 (1): 1–21.

    Article  Google Scholar 

  • Cavusgil, S. T., Zou, S., & Naidu, G. M. 1993. Product and promotion adaptation in export ventures: An empirical investigation. Journal of International Business Studies, 24 (3): 479–506.

    Article  Google Scholar 

  • Chandrasekaran, D., & Tellis, G. 2008. Global takeoff of new products: Culture, wealth, or vanishing differences? Marketing Science, 27 (5): 844–860.

    Article  Google Scholar 

  • Chandy, R., & Tellis, G. 2000. The incumbent’s curse? Incumbency, size, and radical product innovation. Journal of Marketing, 64 (3): 1–17.

    Article  Google Scholar 

  • Child, J. 1972. Organizational structure, environment and performance: The role of strategic choice. Sociology, 6 (1): 1–22.

    Article  Google Scholar 

  • Chintagunta, P., & Desiraju, R. 2005. Strategic pricing and detailing behavior in international markets. Marketing Science, 24 (1): 67–80.

    Article  Google Scholar 

  • Cotsomitis, J. A., & Kwan, A. C. 2006. Can consumer confidence forecast household spending? Evidence from the European commission business and consumer surveys. Southern Economic Journal, 72 (3): 597–610.

    Article  Google Scholar 

  • Dekimpe, M. G., Parker, P. M., & Sarvary, M. 2000. Global diffusion of technological innovations: A coupled-hazard approach. Journal of Marketing Research, 37 (1): 47–59.

    Article  Google Scholar 

  • Deleersnyder, B., Dekimpe, M. G., Steenkamp, J.-B. E. M., & Leeflang, P. S. H. 2009. The role of natural culture in advertising’s sensitivity to business cycles: An investigation across continents. Journal of Marketing Research, 46 (5): 623–636.

    Article  Google Scholar 

  • Douglas, S., & Wind, Y. 1987. The myth of globalization. Columbia Journal of World Business, 22 (4): 19–29.

    Google Scholar 

  • Dow, D. 2006. Adaptation and performance in foreign markets: Evidence of systematic under-adaptation. Journal of International Business Studies, 37 (2): 212–226.

    Article  Google Scholar 

  • Dunn, L. F., & Mirzaie, I. A. 2009. Turns in consumer confidence: An information advantage linked to manufacturing. Economic Inquiry, 44 (2): 343–351.

    Article  Google Scholar 

  • Economist. 2010. The world turned upside down. Economist, 395 (8678): 3–6.

  • Erdem, T., Zhao, Y., & Valenzuela, A. 2004. Performance of store brands: A cross-country analysis of consumer store-brand preferences, perceptions, and risk. Journal of Marketing Research, 41 (1): 86–100.

    Article  Google Scholar 

  • Esfahani, H. S., & Ramirez, M. T. 2003. Institutions, infrastructure, and economic growth. Journal of Development Economics, 70 (2): 443–477.

    Article  Google Scholar 

  • Everdingen, Y., Fok, D., & Stremersch, S. 2009. Modeling global spillover of new product takeoff. Journal of Marketing Research, 46 (5): 637–652.

    Article  Google Scholar 

  • Farley, J. U., Hayes, A. F., & Kopalle, P. K. 2004. Choosing and upgrading financial services dealers in the US and UK. International Journal of Research in Marketing, 21 (4): 359–375.

    Article  Google Scholar 

  • Fleisher, B., Li, H., & Zhao, M. Q. 2010. Human capital, economic growth, and regional inequality in China. Journal of Development Economics, 92 (2): 215–231.

    Article  Google Scholar 

  • Globerman, S., & Shapiro, D. 2003. Governance infrastructure and US foreign direct investment. Journal of International Business Studies, 34 (1): 19–39.

    Article  Google Scholar 

  • Golder, P., & Tellis, G. J. 2004. Growing, growing, gone: Cascades, diffusion, and turning points in the product life cycle. Marketing Science, 23 (2): 207–218.

    Article  Google Scholar 

  • Grewal, R., Comer, J. M., & Mehta, R. 2001. An investigation into the antecedents of organizational participation in business-to-business electronic markets. Journal of Marketing, 65 (3): 17–33.

    Article  Google Scholar 

  • Griffith, D. A., Cavusgil, S. T., & Xu, S. 2008. Emerging themes in international business research. Journal of International Business Studies, 39 (7): 1220–1235.

    Article  Google Scholar 

  • Grossman, G., & Shapiro, C. 1988. Foreign counterfeiting of status goods. Quarterly Journal of Economics, 103 (1): 79–100.

    Article  Google Scholar 

  • Hsieh, M.-H., Pan, S.-L., & Setiono, R. 2004. Product-, corporate-, and country-image dimensions and purchase behavior: A multicountry analysis. Journal of the Academy of Marketing Science, 32 (3): 251–270.

    Article  Google Scholar 

  • Hultman, M., Katsikeas, C. S., & Robson, M. J. 2011. Export promotion strategy and performance: The role of international experience. Journal of International Marketing, 19 (4): 17–39.

    Article  Google Scholar 

  • Hultman, M., Robson, M. J., & Katsikeas, C. S. 2009. Export product strategy fit and performance: An empirical investigation. Journal of International Marketing, 17 (4): 1–23.

    Article  Google Scholar 

  • Isobe, T., Makino, S., & Montgomery, D. B. 2000. Resource-commitment, entry timing, and market performance of foreign direct investments in emerging economies: The case of Japanese international joint ventures in China. Academy of Management Journal, 43 (3): 468–484.

    Article  Google Scholar 

  • Jain, S. 1989. Standardization of international marketing strategy: Some research hypotheses. Journal of Marketing, 53 (1): 70–79.

    Article  Google Scholar 

  • Janiszewski, C., Noel, H., & Sawyer, A. G. 2003. A meta-analysis of the spacing in verbal learning: Implications for research on advertising repetition and consumer memory. Journal of Consumer Research, 30 (1): 138–149.

    Article  Google Scholar 

  • Johnson, D. S., & Bharadwaj, S. G. 2005. Digitization of selling activity and sales force performance: An empirical investigation. Journal of the Academy of Marketing Science, 33 (1): 3–18.

    Article  Google Scholar 

  • Katsikeas, D., Samiee, S., & Theodosiou, M. 2006. Strategy fit and performance consequences of international marketing standardization. Strategic Management Journal, 27 (9): 867–890.

    Article  Google Scholar 

  • Kogut, B. 1984. Normative observations on the international value-added chain and strategic groups. Journal of International Business Studies, 15 (2): 151–167.

    Article  Google Scholar 

  • Lages, L. F., Jap, S. D., & Griffith, D. A. 2008. The role of past performance in export ventures: A short-term reactive approach. Journal of International Business Studies, 39 (2): 304–325.

    Article  Google Scholar 

  • Lamey, L., Deleersnyder, B., Steenkamp, J.-B. E. M., & Dekimpe, M. G. 2012. The effect of business-cycle fluctuations on private-label share: What has marketing got to do with it? Journal of Marketing, 76 (1): 1–19.

    Article  Google Scholar 

  • Leeflang, P., & Parreño-Selva, J. 2012. Cross-category demand effects of price promotions. Journal of the Academy of Marketing Science, 40 (4): 572–586.

    Article  Google Scholar 

  • Levine, R. 1997. Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35 (2): 688–726.

    Google Scholar 

  • Levitt, T. 1983. The globalization of markets. Harvard Business Review, 61 (3): 92–101.

    Google Scholar 

  • Loree, D. W., & Guisinger, S. E. 1995. Policy and non-policy determinants of US equity foreign direct investment. Journal of International Business Studies, 26 (2): 281–299.

    Article  Google Scholar 

  • MacInnis, D., Moorman, C., & Jaworski, B. 1991. Enhancing and measuring consumers’ motivation, opportunity and ability to process brand information. Journal of Consumer Research, 55 (10): 32–53.

    Google Scholar 

  • Merton, R. 1957. Social theory and social structure. Glencoe, IL: Free Press.

    Google Scholar 

  • Miller, D., & Friesen, P. 1983. Strategy-making and environment: The third link. Strategic Management Journal, 4 (3): 221–235.

    Article  Google Scholar 

  • Minbaeva, D., Torben Pedersen, B., Björkman, I., & Fey, C. F. 2013. A retrospective on: MNC knowledge transfer, subsidiary absorptive capacity, and HRM. Journal of International Business Studies, 45 (1): 52–62.

    Article  Google Scholar 

  • Mitra, D., & Golder, P. 2002. Whose culture matters? Near-market knowledge and its impact on foreign market entry timing. Journal of Marketing Research, 39 (3): 350–365.

    Article  Google Scholar 

  • Morris, M. H., Davis, D. L., & Allen, J. W. 1994. Fostering corporate entrepreneurship: Cross-cultural comparisons of the importance of individualism versus collectivism. Journal of International Business Studies, 25 (1): 65–89.

    Article  Google Scholar 

  • Pauwels, K. 2004. How dynamic consumer response, competitor response, company support, and company inertia shape long-term marketing effectiveness. Marketing Science, 23 (4): 596–610.

    Article  Google Scholar 

  • Peterson, M. F., Arregle, J.-L., & Martin, X. 2012. Multilevel models in international business research. Journal of International Business Studies, 43 (5): 451–457.

    Article  Google Scholar 

  • Prahalad, C. K. 2009. The fortune at the bottom of the pyramid: Eradicating poverty through profits. Philadelphia, PA: Wharton School Publishing.

    Google Scholar 

  • Raudenbush, S. W., & Bryk, A. S. 2002. Hierarchical linear models: Applications and data analysis methods. Thousand Oaks, CA: Sage Publications.

    Google Scholar 

  • Riefler, P., Diamantopoulos, A., & Siguaw, J. A. 2012. Cosmopolitan consumers as a target group for segmentation. Journal of International Business Studies, 43 (3): 285–305.

    Article  Google Scholar 

  • Roth, M. S. 1992. Depth versus breadth strategies for global brand image management. Journal of Advertising, 21 (2): 25–36.

    Article  Google Scholar 

  • Roth, M. S. 1995. The effects of culture and socioeconomics on the performance of global brand image strategies. Journal of Marketing Research, 32 (2): 163–175.

    Article  Google Scholar 

  • Röller, L.-H., & Waverman, L. 2001. Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91 (4): 909–924.

    Article  Google Scholar 

  • Rusell, G., & Petersen, A. 2000. Analysis of cross category dependence in market basket selection. Journal of Retailing, 76 (3): 367–392.

    Article  Google Scholar 

  • Sethuraman, R., Tellis, G. J., & Briesch, R. A. 2011. How well does advertising work? Generalizations from meta-analysis of brand advertising elasticities. Journal of Marketing Research, 48 (3): 457–471.

    Article  Google Scholar 

  • Sheth, J. N. 2011. Impact of emerging markets on marketing: Rethinking existing perspectives and practices. Journal of Marketing, 75 (4): 166–182.

    Article  Google Scholar 

  • Shoham, A. 1999. Bounded rationality, planning, standardization of international strategy, and export performance: A structural model examination. Journal of International Marketing, 7 (2): 24–50.

    Google Scholar 

  • Sorescu, A., & Spanjol, J. 2008. Innovation’s effect on firm value and risk: Insights from consumer packaged goods. Journal of Marketing, 72 (2): 114–132.

    Article  Google Scholar 

  • Steenkamp, J.-B. E. M., & Geyskens, I. 2006. How country characteristics affect the perceived value of web sites. Journal of Marketing, 70 (3): 136–150.

    Article  Google Scholar 

  • Stevens, G. V. G. 2000. Politics, economics and investment: Explaining plants and equipment spending by US direct investors in Argentina, Brazil, and Mexico. Journal of International Money and Finance, 19 (2): 115–135.

    Article  Google Scholar 

  • Szymanski, D. M., Bharadwaj, S. G., & Varadarajan, P. R. 1993. Standardization vs adaptation of international marketing strategy: An empirical investigation. Journal of Marketing, 57 (4): 1–17.

    Article  Google Scholar 

  • Talukdar, D., Sudhir, K., & Ainslie, A. 2002. Investigating new product diffusion across product countries. Marketing Science, 21 (1): 97–114.

    Article  Google Scholar 

  • Tellis, G. J., Stremersch, S., & Yin, E. 2003. The international takeoff of new products: The role of economics, culture, and country innovativeness. Marketing Science, 22 (2): 188–208.

    Article  Google Scholar 

  • Townsend, J. D., Yeniyurt, S., & Talay, M. B. 2009. Getting to global: An evolutionary perspective of brand expansion in international markets. Journal of International Business Studies, 40 (4): 539–558.

    Article  Google Scholar 

  • Van Heerde, H. J., Gijsenberg, M. J., Dekimpe, M. G., & Steenkamp, J.-B. E. M. 2013. Price and advertising effectiveness over the business cycle. Journal of Marketing Research, 50 (2): 177–193.

    Article  Google Scholar 

  • Viswanathan, M., Rosa, J. A., & Ruth, J. A. 2010. Exchanges in marketing systems: The case of subsistence consumer-merchants in Chennai, India. Journal of Marketing, 74 (3): 1–17.

    Article  Google Scholar 

  • Wan, W. P., Yiu, D. W., Hoskisson, R. E., & Kim, H. 2008. The performance implications of relationship banking during macroeconomic expansion and contraction: A study of Japanese banks’ social relationships and overseas expansion. Journal of International Business Studies, 39 (3): 406–427.

    Article  Google Scholar 

  • Wessel, D., & Greenberg, S. 2011. Big US firms shift hiring abroad. Wall Street Journal, 257 (90): B1–B2.

    Google Scholar 

Download references

Acknowledgements

We thank Kendall Roth, Satish Jayachandran, and Subhash Sharma for their helpful comments on earlier versions of this article.

Author information

Authors and Affiliations

  1. Faculty of Business, Ozyegin University, Istanbul, Turkey

    S Cem Bahadir

  2. Terry School of Business, University of Georgia, Athens, USA

    Sundar G Bharadwaj

  3. Lee Kong Chian School of Business, Singapore Management University, Singapore

    Rajendra K Srivastava

Authors
  1. S Cem Bahadir
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sundar G Bharadwaj
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Rajendra K Srivastava
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

Accepted by Daniel Bello, Area Editor, 26 October 2014. This article has been with the authors for four revisions.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Bahadir, S., Bharadwaj, S. & Srivastava, R. Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics. J Int Bus Stud 46, 596–619 (2015). https://doi.org/10.1057/jibs.2014.69

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/jibs.2014.69

Keywords

Search

Navigation