See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/230743793
Marketing Strategies
Chapter · January 2006
CITATIONS READS
10 435,360
1 author:
Olivier Furrer
University of Fribourg
210 PUBLICATIONS 4,715 CITATIONS
SEE PROFILE
All content following this page was uploaded by Olivier Furrer on 29 May 2014.
The user has requested enhancement of the downloaded file.
, MARKETING STRATEGIES
Olivier Furrer, Radboud University Nijmegen (The Netherlands)
INTRODUCTION
The study and practice of marketing have broadened considerably, from an emphasis on
marketing as a functional management issue, to a wider focus on the strategic role of
marketing in overall corporate strategy (e.g., Kotler, 2000; Sudharshan, 1995). This
broadening of the marketing concept, to include strategic as well as operational decisions, has
resulted in an overlap between marketing and strategic management. Managers around the
globe are recognizing the increasing importance for the firm to develop marketing strategies
to compete effectively in worldwide markets. The emergence of a more open world economy,
the globalization of consumers’ tastes, and the development of a worldwide commercial web
all have increased the interdependency and interconnections of markets across the globe. In
such a global environment, firms should develop their marketing strategy around three key-
dimensions (Zou and Cavusgil, 2002): (1) standardization-adaptation, (2) configuration-
coordination, and (3) strategic integration. Following Sudharshan (1995), we define a firm’s
marketing strategy as the development of and decisions about a firm’s relationships with its
key stakeholders, its offerings, resource allocation, and timing.
The first, and perhaps the most important dimension of a multinational corporation1 (MNC)’s
worldwide marketing strategy is related to the standardization or adaptation of marketing
programs, such as product offering, promotional mix, price, and channel structure, across
different countries (Jain, 1989; Keegan, 2000; Laroche et al., 2001; Levitt, 1983; Ohmae,
1989; Samiee and Roth, 1992; Szymanski, Bharadwaj and Varadarajan, 1993; Yip, 2003; Zou
and Cavusgil, 1996). The second dimension of a worldwide marketing strategy focuses on
configuration and coordination of a firm’s value chain activities across countries (Craig and
Douglas, 2000; Hout, Porter and Rudden, 1982; Porter, 1986, 1990; Roth, Schweiger and
Morrison, 1991). Finally, the third dimension is the strategic integration dimension, which is
concerned with how a MNC’s competitive battles are planned and executed across country
1
Multinational corporations or MNCs are defined, following Dunning (1992) as firms that own and control
value-adding activities in more than one country.
1.
,markets (Birkinshaw, Morrison and Hulland, 1995; Yip, 1989, 2003; Zou and Cavusgil,
1996). In this chapter, we focus our attention on these three worldwide marketing strategy
dimensions and how they are combined by MNCs from different regions of the world to gain
a competitive advantage.
A dominant conceptualization for examining the configuration of these three dimensions
within worldwide marketing strategies is the integration-responsiveness framework (e.g.,
Bartlett, Ghoshal and Birkinshaw, 2004; Furrer, Sudharshan and Thomas, 2001; Ghoshal and
Bartlett, 1998; Harzing, 2000; Jarillo and Martinez, 1990; Johnson, 1995; Perlmutter, 1969;
Prahalad and Doz, 1987; Roth, 1992; Roth and Morrison, 1990; Taggart, 1997). This
framework suggests that two salient imperatives simultaneously confront a business
competing internationally. A MNC, to secure competitive advantages vis-à-vis the domestic
firm, must exploit market imperfections that are derived through multi-country capacities.
However, given that the MNC is operating in several countries, it must also be responsive to
the demands imposed by local governmental and market forces in each country. A worldwide
strategy is framed by the response to or management of these two imperatives: meeting local
demands and capitalizing on worldwide competitive advantages. The framework, therefore,
suggests that MNCs develop strategies across two dimensions: The first dimension,
integration, refers to the standardization, coordination, and integration of activities across
countries in an attempt to build efficient operations networks and take maximum advantage of
similarities across locations. The second dimension, responsiveness, refers to the attempt to
respond to specific needs within a variety of host countries.
Within this framework, Bartlett and Ghoshal (Bartlett, Ghoshal and Birkinshaw, 2004;
Ghoshal and Bartlett, 1998) have identified four generic worldwide strategies: (1) an
international strategy2 which is a strategy in which strategic and operational decisions are
developed in the home and only subsequently transferred abroad to be adapted to the local
market; (2) a multinational (or multidomestic) strategy which is a strategy in which strategic
and operational decisions are decentralized to the strategic business unit in each country so as
to allow that unit to adapt products to the local market; (3) a global strategy which is a
strategy through which a firm offers standardized products across country markets with
2
It should be noted that the terms international, multinational, global, and transnational have been used very
differently and sometimes interchangeably by various authors (e.g., Levitt, 1983; Porter, 1986, 1990; Yip,
2003). In this chapter, following Ghoshal and Bartlett (1998), we give each term a specific and different
meaning.
2.
, competitive strategy being dictated by the home office; and (4) a transnational strategy which
is a strategy through which a firm seeks to achieve both global efficiency and local
responsiveness by coordinating and integrating activities across countries.
Figure 1: The Four Generic Worldwide Strategies
Need for Global Integration
High
Global Transnational
strategy strategy
International Multidomestic
strategy strategy
Low
Low High
Need for Local Responsiveness
In this main body of this chapter, following Bartlett and Ghoshal (Bartlett, Ghoshal and
Birkinshaw, 2004; Ghoshal and Bartlett, 1998), we will present how MNCs from Europe,
United States, and Japan, which are the three major trading blocs in international business
referred to as the triad by Ohmae (1985), have traditionally, due to their administrative and
cultural heritage, adopted different generic worldwide strategies: Typical American MNCs
adopted an international strategy, typical European MNCs followed a multinational strategy,
and typical Japanese MNCs adopted a global strategy. More recently, MNCs from all regions
started to change their strategy to adopt a more effective, but more complex, transnational
strategy.
In the reminder of this chapter, we first describe and further develop the four worldwide
generic strategies. Then, we explore the consequences of adopting one of these strategies for
three critical marketing operational strategies: (1) marketing decision-making processes; (2)
innovation and new product development; and (3) service quality strategies. Because of their
diversity and their particularities these three marketing operational strategies provide a wide
range of experiences.
3.
Marketing Strategies
Chapter · January 2006
CITATIONS READS
10 435,360
1 author:
Olivier Furrer
University of Fribourg
210 PUBLICATIONS 4,715 CITATIONS
SEE PROFILE
All content following this page was uploaded by Olivier Furrer on 29 May 2014.
The user has requested enhancement of the downloaded file.
, MARKETING STRATEGIES
Olivier Furrer, Radboud University Nijmegen (The Netherlands)
INTRODUCTION
The study and practice of marketing have broadened considerably, from an emphasis on
marketing as a functional management issue, to a wider focus on the strategic role of
marketing in overall corporate strategy (e.g., Kotler, 2000; Sudharshan, 1995). This
broadening of the marketing concept, to include strategic as well as operational decisions, has
resulted in an overlap between marketing and strategic management. Managers around the
globe are recognizing the increasing importance for the firm to develop marketing strategies
to compete effectively in worldwide markets. The emergence of a more open world economy,
the globalization of consumers’ tastes, and the development of a worldwide commercial web
all have increased the interdependency and interconnections of markets across the globe. In
such a global environment, firms should develop their marketing strategy around three key-
dimensions (Zou and Cavusgil, 2002): (1) standardization-adaptation, (2) configuration-
coordination, and (3) strategic integration. Following Sudharshan (1995), we define a firm’s
marketing strategy as the development of and decisions about a firm’s relationships with its
key stakeholders, its offerings, resource allocation, and timing.
The first, and perhaps the most important dimension of a multinational corporation1 (MNC)’s
worldwide marketing strategy is related to the standardization or adaptation of marketing
programs, such as product offering, promotional mix, price, and channel structure, across
different countries (Jain, 1989; Keegan, 2000; Laroche et al., 2001; Levitt, 1983; Ohmae,
1989; Samiee and Roth, 1992; Szymanski, Bharadwaj and Varadarajan, 1993; Yip, 2003; Zou
and Cavusgil, 1996). The second dimension of a worldwide marketing strategy focuses on
configuration and coordination of a firm’s value chain activities across countries (Craig and
Douglas, 2000; Hout, Porter and Rudden, 1982; Porter, 1986, 1990; Roth, Schweiger and
Morrison, 1991). Finally, the third dimension is the strategic integration dimension, which is
concerned with how a MNC’s competitive battles are planned and executed across country
1
Multinational corporations or MNCs are defined, following Dunning (1992) as firms that own and control
value-adding activities in more than one country.
1.
,markets (Birkinshaw, Morrison and Hulland, 1995; Yip, 1989, 2003; Zou and Cavusgil,
1996). In this chapter, we focus our attention on these three worldwide marketing strategy
dimensions and how they are combined by MNCs from different regions of the world to gain
a competitive advantage.
A dominant conceptualization for examining the configuration of these three dimensions
within worldwide marketing strategies is the integration-responsiveness framework (e.g.,
Bartlett, Ghoshal and Birkinshaw, 2004; Furrer, Sudharshan and Thomas, 2001; Ghoshal and
Bartlett, 1998; Harzing, 2000; Jarillo and Martinez, 1990; Johnson, 1995; Perlmutter, 1969;
Prahalad and Doz, 1987; Roth, 1992; Roth and Morrison, 1990; Taggart, 1997). This
framework suggests that two salient imperatives simultaneously confront a business
competing internationally. A MNC, to secure competitive advantages vis-à-vis the domestic
firm, must exploit market imperfections that are derived through multi-country capacities.
However, given that the MNC is operating in several countries, it must also be responsive to
the demands imposed by local governmental and market forces in each country. A worldwide
strategy is framed by the response to or management of these two imperatives: meeting local
demands and capitalizing on worldwide competitive advantages. The framework, therefore,
suggests that MNCs develop strategies across two dimensions: The first dimension,
integration, refers to the standardization, coordination, and integration of activities across
countries in an attempt to build efficient operations networks and take maximum advantage of
similarities across locations. The second dimension, responsiveness, refers to the attempt to
respond to specific needs within a variety of host countries.
Within this framework, Bartlett and Ghoshal (Bartlett, Ghoshal and Birkinshaw, 2004;
Ghoshal and Bartlett, 1998) have identified four generic worldwide strategies: (1) an
international strategy2 which is a strategy in which strategic and operational decisions are
developed in the home and only subsequently transferred abroad to be adapted to the local
market; (2) a multinational (or multidomestic) strategy which is a strategy in which strategic
and operational decisions are decentralized to the strategic business unit in each country so as
to allow that unit to adapt products to the local market; (3) a global strategy which is a
strategy through which a firm offers standardized products across country markets with
2
It should be noted that the terms international, multinational, global, and transnational have been used very
differently and sometimes interchangeably by various authors (e.g., Levitt, 1983; Porter, 1986, 1990; Yip,
2003). In this chapter, following Ghoshal and Bartlett (1998), we give each term a specific and different
meaning.
2.
, competitive strategy being dictated by the home office; and (4) a transnational strategy which
is a strategy through which a firm seeks to achieve both global efficiency and local
responsiveness by coordinating and integrating activities across countries.
Figure 1: The Four Generic Worldwide Strategies
Need for Global Integration
High
Global Transnational
strategy strategy
International Multidomestic
strategy strategy
Low
Low High
Need for Local Responsiveness
In this main body of this chapter, following Bartlett and Ghoshal (Bartlett, Ghoshal and
Birkinshaw, 2004; Ghoshal and Bartlett, 1998), we will present how MNCs from Europe,
United States, and Japan, which are the three major trading blocs in international business
referred to as the triad by Ohmae (1985), have traditionally, due to their administrative and
cultural heritage, adopted different generic worldwide strategies: Typical American MNCs
adopted an international strategy, typical European MNCs followed a multinational strategy,
and typical Japanese MNCs adopted a global strategy. More recently, MNCs from all regions
started to change their strategy to adopt a more effective, but more complex, transnational
strategy.
In the reminder of this chapter, we first describe and further develop the four worldwide
generic strategies. Then, we explore the consequences of adopting one of these strategies for
three critical marketing operational strategies: (1) marketing decision-making processes; (2)
innovation and new product development; and (3) service quality strategies. Because of their
diversity and their particularities these three marketing operational strategies provide a wide
range of experiences.
3.
