International Marketing Strategy in Emerging - Market Exporting Firms

Article
Journal of International Marketing

2019, Vol. 27(1) 20-37
International Marketing Strategy ª American Marketing Association 2019
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in Emerging-Market Exporting Firms sagepub.com/journals-permissions

DOI: 10.1177/1069031X18812731
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Saeed Samiee and Suthawan Chirapanda
Abstract
Unlike their counterparts in developed markets, emerging-market firms are characterized by limited resources, including
international experience and access to relevant information, which are essential for developing suitable international marketing
strategy (IMS). Under such circumstances, strategies are expected to produce suboptimal results, especially when targeting
competitive markets in advanced economies. Prior IMS research has largely focused on developed markets. In contrast, the
authors examine IMS of exporters in Thailand, an emerging market. Despite major differences in environments and processes in
emerging markets, they establish that Thai exporters that match their IMS to local market conditions realize superior perfor-
mance, as predicated by strategy coalignment. The authors validate these results and discuss emerging-market firms’ capacity to
adapt their strategies and succeed in highly competitive advanced economies, despite relative inexperience, volatility, and
information asymmetry at home. Exporting remains of critical importance to the economies of emerging markets, and the findings
provide greater optimism for their firms’ ability to address host-market conditions in their marketing strategies, as well as pointing
to the competitive threat posed by these emerging-market neophytes.
Keywords
export marketing strategy standardization/adaptation, emerging markets, ideal profile analysis, strategy coalignment, Thailand
Since the early 1990s, researchers have increasingly incorpo- host market information, and other resources necessary to
rated performance-based outcomes associated with interna- weave appropriate strategies for targeting markets abroad.
tional marketing strategy (IMS) and empirically examined However, the veracity of this assumption has not been exam-
financial and nonfinancial outcomes using multiple contexts. ined. Concurrently, exporting is the key means of internationa-
The ubiquity of multinational corporations (MNCs) and the lization for emerging-market firms, the majority of which are
importance of IMS standardization for operational integration exporters (Luo and Tung 2007). In addition to information
across their global networks drove much of the initial IMS asymmetry, emerging-market exporters tend to face lesser
research. Later, this line of research was extended to IMS of access to export assistance (Leonidou, Samiee, and Geldres
exporting firms, with the bulk of research being focused on 2015), thus creating a challenge in developing or adapting
exporters in advanced economies. In contrast to much of the appropriate marketing strategies for targeted export markets.
published work in IMS adaptation or standardization, our focus Given the increasing number of emerging-market exporters
in this research is emerging-market exporting firms targeting vying for contracts in developed markets, the extent to which
developed markets. they adapt their IMS in environments that sharply differ from
Emerging-market exporters are environmentally distanced their home markets and conditions under which they achieve
from the more competitive developed markets they seek to optimum performance warrant closer scrutiny.
cultivate (Rao-Nicholson and Khan 2017). Given the differ- Market-based evidence from advanced economies (e.g.,
ences between their home market and developed host markets, Agins 2007; Burkitt 2012a, b; Esfahani 2005) as well as empiri-
IMS adaptation would seem more appropriate. However, cal support (e.g., Katsikeas, Samiee, and Theodosiou 2006;
research indicates that these exporters often lack the necessary Lages and Montgomery 2004; Westjohn and Magnusson
orientation and information essential for IMS adaptation, in the
absence of which suboptimal performance can result (Grant
Saeed Samiee is Collins Professor of Marketing and International Business,
1995; Menon et al. 1999). A tacit assumption associated with Collins College of Business, University of Tulsa, USA (email: samiee@utulsa.
IMS research involving emerging-market exporters is the focal edu). Suthawan Chirapanda is Lecturer in Marketing, University of the Thai
firms’ possession of or access to necessary networks, fine-grain Chamber of Commerce, Thailand (email: [email protected]).
Samiee and Chirapanda 21
2017; Zeriti et al. 2014) demonstrate a linkage between firms’ for the testing of our key proposition and our research method.
use of IMS adaptation in addressing complex market condi- We then present our results, discuss the theoretical and man-
tions and improved performance. Nevertheless, global market- agerial implications, and conclude with limitations and future
ing efforts are partially dependent on some level of IMS research directions.
standardization, and developed-market firms exhibit a ten-
dency to underadapt to prevailing target market conditions to
leverage cost efficiencies (Dow 2006), especially in the case of
smaller markets (Wafler and Badir 2017). Standardization of
Emerging-Market Firms
IMS offers a range of economies and plays a central role in A growing body of knowledge sheds light on external and firm-
developing global strategies. However, firms cannot a priori based differences in emerging and developing markets relative
know which strategy leads to superior performance because a to advanced economies, including internationalization and
comparison of potential outcomes of alternative strategies is strategy initiatives (e.g., Alon et al. 2013; Brouthers, O’Don-
generally not an option. Thus, firms may meet their goals and nell, and Hadjimarcou 2005; Xie and Li 2018). Emerging-
be profitable but be unaware that an alternative IMS would market firms exhibit multiple traits that affect marketing
have enhanced their performance. planning and strategy formulation for international markets,
Research on IMS can be divided into three streams: (1) stud- which we extend to Thailand, the context of our investigation.
ies addressing the extent of IMS adaptation (or standardization), They operate in uncertain environments and are more likely to
(2) studies examining performance consequences of IMS of encounter social upheavals, political disturbances, and/or par-
MNCs, and (3) studies specifically focusing on performance tially controlled or difficult economic conditions. Their com-
outcomes of IMS of exporters. Our research addresses an impor- petitive advantage is often limited to home-country advantages
tant gap in the IMS literature for several reasons. First, published (e.g., low-cost labor) (Ramamurti 2012; Xie and Li 2018). For
works have demonstrated contradictory outcomes with respect example, their brands, even when strong at home, have nominal
to the export performance impact of IMS (Albaum and Tse equity in markets abroad. They also possess limited distribution
2001; Chung, Wang, and Huang 2012; Theodosiou and Leoni- knowledge, networks, and means of market access. Thus,
dou 2003). For example, Cavusgil and Zou (1994) report a rela- emerging-market firms often use short-term planning, are reac-
tionship between product adaptation and export performance, tive to market conditions (Iseri and Demirbag 1999), and pur-
but Zou, Andrus, and Norvell (1997) demonstrate the opposite. sue opaque strategies (Sozen and Shaw 2002). They also use
Second, in most publications in which a target market is fewer analytical and planning tools in strategy formulation
identified, the focus is on firms and markets in advanced (Koufopoulos 2002), and power in these firms is centralized
economies (e.g., Hultman, Robson, and Katsikeas 2009; Katsi- with chief executive officers, who are often directly involved in
keas, Samiee, and Theodosiou 2006; Zeriti et al. 2014). The the planning process (Alon et al. 2013; Koufopoulos 2002).
MNCs and exporting firms based in these markets possess Finally, these firms lack extensive international experience and
greater knowledge and have access to information and are less likely to seek or be able to access fine-grain informa-
resources that are often in short supply in emerging-market tion for developing export IMS (Ramamurti 2012; Xie and Li
firms. Emerging-market firms are generally attracted to devel- 2018).
oping markets where markets are more fragmented, competitive When emerging-market firms first internationalize, they
rivalry is less intense, and thus a suboptimal IMS is less critical tend to use exporting as their primary market entry mode (Xie
(Esfahani 2005). With the advent of greater globalization initia- and Li 2018), frequently by extending marketing plans and
tives and government inducements for export growth, emerging- strategies that have proven successful domestically. In the
market firms have been converging on developed markets (Xie absence of extensive international experience and host-
and Li 2018), where conditions are vastly different. Furthermore, market information, this move seems logical. This choice is
the extent to which existing knowledge applies to enterprises further reinforced by the proclivity of decision makers to main-
based in emerging markets is not known. Thus, the objective tain the status quo (Dow 2006), as well as by path dependence
of this study is twofold. First, taking a normative view, as rec- theory (Tan and Sousa 2013), which asserts that the appropri-
ommended by Dhanaraj and Beamish (2003, p. 243), we inves- ateness of a strategy cannot be considered in the absence of a
tigate the performance consequences of emerging-market firms’ firm’s history and its previous marketplace approach. Thus,
IMS. Second, in contrast to prior IMS contributions using strat- initial IMSs lean toward standardization. Alternatively, some
egy coalignment principles, we use the profile deviation emerging-market firms emulate their developed-market coun-
approach. To our knowledge, strategy coalignment has not been terparts (DiMaggio and Powell 1983; Haveman 1993; Wright
applied to examine the performance of IMS of emerging-market et al. 2005). This approach demonstrates greater market-based
exporters, and specifically, the profile deviation method has not sensitivity and practical functionality; however, emulating
been previously used in IMS research. developed country rivals is not normative per se and offers
In the sections that follow, we first examine the emerging- no assurance of optimum performance. Nevertheless, emulat-
market conditions under which exporters function. We con- ing competitors’ strategies may be both rational and profitable
tinue with focused coverage of the pertinent literature followed (Abrahamson and Rosenkopf 1993; Brouthers, O’Donnell, and
by our theoretical framework. Next, we present the background Hadjimarcou 2005).
22 Journal of International Marketing 27(1)
International Marketing Strategy and Third, although the importance of a particular IMS lies in its
Performance potential to enhance business performance, limited attention
has been devoted to assessing performance implications of IMS
Research regarding the appropriateness and performance con- adaptation (or standardization) in MNCs, compared with the
sequences of IMS adaptation (or standardization) is a central vast amount of research examining factors driving the extent of
theme in the international marketing (IM) literature. Although adaptation. In addition to the issues already discussed, mixed
a growing number of IMS investigations have been incorporat- results in IMS research are in part due to researchers’ proclivity
ing plans’ performance outcomes for nearly three decades, to establish a direct link between marketing strategy and per-
studies considering the full complement of marketing program formance, assuming that adaptation is always superior to stan-
components have produced mixed results, thus leading to dardization (or vice versa) and thus leads to better performance.
polarized positions on the conditions under which a particular Strategy coalignment, on the other hand, is based on the asser-
IMS may lead to superior performance (Chung, Wang, and tion that superior performance is a function of aligning a par-
Huang 2012; Theodosiou and Leonidou 2003). Numerous stud- ticular strategy with the contextual imperatives of the targeted
ies, anecdotal observations, and conceptual frameworks have host market (Schilke, Reimann, and Thomas 2009; Zajac,
enriched our understanding of antecedents of standardized ver- Kraatz, and Bresser 2000).
sus adapted IMS, while making the debate opaque and polemic. Several recent contributions to this literature have pursued a
The insights offered in IMS adaptation (or standardization) normative model by focusing on conditions under which a
studies notwithstanding, the literature is incomplete in certain particular IMS heightens performance for MNCs (e.g., Katsi-
respects. First, the handful of comprehensive empirical IMS keas, Samiee, and Theodosiou 2006) and for exporters based in
studies is typically from the standpoint of the MNC headquar- and targeting advanced economies (e.g., Hultman, Robson, and
ters. The unit of analysis is often problematic as well: firms are Katsikeas 2009; Zeriti et al. 2014). We extend this line of
assumed to pursue a single strategy for (1) all products, (2) a inquiry by examining emerging-market exporters’ IMSs for
given export venture, or (3) all markets. Thus, the authors of developed markets and their corresponding performance.
several studies have voiced concerns about the validity of
information gathered from headquarters (Samiee and Roth
Theoretical Framework
1992) because one cannot be certain to what extent a locally
adapted or globally standardized marketing strategy is actually We leverage the strategy coalignment concept to address our
implemented in host markets. Whereas the accuracy of data key research question. Coalignment and its complementary
gathered from a single respondent at the MNC headquarters contingency theory are deeply rooted in organization theory
regarding the strategies in place in multiple markets abroad is (Drazin and Van de Ven 1985; Zajac, Kraatz, and Bresser
open to question, greater knowledge regarding the components 2000). Within the context of this study, we posit that IMS
of intended IMS is available in an export venture context, adaptation (or standardization) by emerging-market exporters
especially for emerging-market exporters, which tend to be can lead to superior performance only to the extent that a high
smaller and centrally managed. level of congruency is achieved vis-à-vis contextual dynamism
Second, some projects have focused on individual market- and complexity within the developed markets being targeted
ing program elements in isolation (e.g., advertising or product (Venkatraman and Prescott 1990). That is, the interaction
strategies). In practice, however, the components of marketing between environment and strategy is dynamic (Miller 1988),
necessitating multiple programs for differing contexts.
strategy are intertwined, and the examination of any single
Emerging-market exporters may suboptimize their perfor-
variable is unlikely to reveal the full strategic thrust of a given
mance when extending a dominant market strategy to the vastly
marketing program. The design and implementation of an opti-
different host markets in advanced economies, where compe-
mal IMS involves interplay among the marketing program ele-
tition is more intense and where they often lack advantages
ments. For example, Tommy Hilfiger standardized its
such as a well-known brand (Ramamurti 2012).
processes and branding but adapted every component of its
Research using strategy coalignment in marketing has cen-
marketing strategy for its European markets (Agin 2007). Even
tered on the environment as an exogenous variable to which the
in situations where a standardized strategy is appropriate, firms
firm reacts by adjusting its marketing strategy and/or organiza-
increasingly tend to adapt certain aspects of the marketing tional form (Walker and Ruekert 1987). However, the strategy
program, thus necessitating more localized communication, coalignment paradigm is receiving increasing recognition, and
distribution, and/or pricing (Agin 2007; Esfahani 2005). Proc- its use in IM has been growing (e.g., Katsikeas, Samiee, and
ter & Gamble’s practices in China and Japan are representative Theodosiou 2006; Lukas, Tan, and Hult 2001; Murray, Kotabe,
of such hybrid IMS; the firm adapts some components of its and Westjohn 2009; Zeriti et al. 2014). Although strategy coa-
marketing programs (e.g., product, packaging, and/or commu- lignment offers a particularly relevant theoretical foundation
nications) for several well-known brands (e.g., Crest, Pampers, for assessing the export marketing strategy–performance rela-
Tide). Variations in the international product offerings, in turn, tionship, past research indicates that its applicability and vera-
inhibit a comprehensive standardization of marketing strate- city for emerging-market firms is uncertain (Wright et al.
gy(ies) in markets abroad. 2005).
Bartels (1968) addressed the necessity of seeking consis- The Performance Impact of Export Marketing Strategy
tency between the environmental context and the firm’s IM
In our theoretical arguments, the key outcome measure within
program, and his conceptual framework stressed the influence
our integrated conceptual framing is the performance impact
of the environment on the form and content of the marketing
of a marketing strategy implemented by emerging-market
plan. Since then, others have also embraced the influence of
environmental factors on the suitability of marketing programs. exporters targeting developed nations (Jain 1989; Samiee,
For example, internal and external environmental influences Katsikeas, and Theodosiou 2009), with the expectation that
play a central role in Jain’s (1989) conceptual work on the superior performance is the key determinant of strategy
topic. Jain makes a distinction between marketing and nonmar- appropriateness. Although there is a tendency to focus on the
keting environments and proposes a lower degree of adaptation economies associated with standardization, our theoretical
when there is greater similarity of marketing and nonmarketing foundation asserts that the appropriateness of a particular
environments (propositions 10 and 11). Jain (1989) was an marketing strategy depends on the context within which it is
early pioneer in explicitly center-staging performance as the deployed. In line with the established precedent, we concep-
key IMS determinant for assessing the appropriateness of a tualize performance as a three-dimensional construct consist-
given strategy. ing of financial, sales, and customer-related outcomes
Lemak and Arunthanes (1997) note that higher levels of (Hultman, Robson, and Katsikeas 2009; Katsikeas, Samiee,
performance in global markets depend largely on the firm’s and Theodosiou 2006), with the expectation that superior
selection of a global strategy that is appropriate for its unique export performance results from the coalignment export mar-
set of circumstances. Thus, a similar position is adopted in this keting strategy and the environmental context in which it is
research, which proposes that the coalignment between IMS implemented.
and its environmental context (i.e., macro- and microenviron-
mental factors that determine the optimal level of IMS adapta-
tion for a particular firm operating in a specific foreign market) Research Method
has positive implications for business performance (Venkatra-
man and Prescott 1990). Therefore, our main proposition is that Study Context
export marketing strategies of emerging-market exporters The extent of marketing strategy adaptation (or standardiza-
result in superior performance only to the extent that their IMS
tion) is situation specific, requiring reference to a particular
is coaligned with the environmental contexts of their advanced-
product or product line and market. Firms market a range of
economy host market.
products in a variety of markets and may use different plans in
each targeted market. Accurate and reliable data with respect to
Macro- and Microenvironmental Influences implemented export marketing strategy(ies) are unlikely to
The initial step in accommodating an empirical test of export emerge when questions are not anchored on a particular prod-
market strategy coalignment is to identify and test the pertinent uct or product line destined for a specific targeted market.
macro- and microenvironmental influences on the implemen- Thus, our unit of analysis is the product or product line
ted strategy. Consistent with prior literature, we rely on four exported to one of the three developed markets (i.e., the United
influences to assess exporters’ macroenvironment (i.e., eco- States, the European Union [EU], and Japan), on which respon-
nomic, sociocultural, regulatory, and technological; Katsikeas, dents were asked to focus. Focusing on a specific export prod-
Samiee, and Theodosiou 2006; Zeriti et al. 2014) and five uct–market venture limits contextual variations and potential
factors to account for microenvironmental influences (i.e., cus- influences of extraneous factors, while enabling the develop-
tomer characteristics, market characteristics, marketing inter- ment of grounded measures for all study participants (Bello,
mediaries, competitive intensity, and product life cycle [PLC] Katsikeas, and Robson 2010).
stage; Katsikeas, Samiee, and Theodosiou 2006). Environmen- A number of emerging Asian countries are exhibiting rapid
tal antecedents used in prior studies are deeply rooted in the growth, and exporting is the principal form of international
marketing standardization literature, and their influences are exchange in virtually all such markets. Importantly, from a
not shown to be context specific. Given the existing detailed theoretical perspective, these markets are well suited for testing
conceptual coverage (e.g., Hultman, Robson, and Katsikeas the boundary conditions of the strategy coalignment concept
2009; Zeriti et al. 2014) addressing these antecedents and (Lukas, Tan, and Hult 2001). Importantly, for Thailand, the
empirical evidence regarding the relevance and the veracity context of this investigation, the main export destination is the
of these environmental influences, we shall not introduce cor- triad economies of the United States, the EU, and Japan, mak-
responding propositions.1 ing it a particularly suitable emerging market for this research.
Furthermore, the export sector in Thailand is thriving and, as is
1
the case in other emerging markets, vital to the national econ-
Properties of these measures are shown in Tables 1 and 2 and Appendices A
and B. The conceptual backdrop for the items that constitute each construct of
omy. Concurrently with the tremendous growth in exporting
macro- and microenvironmental influences, as well as marketing strategy activities, the number of Thai firms engaged in exporting has
measures, is available from the authors on request. also greatly expanded.
Questionnaire Design and Pretest A total of 253 exporting manufacturers (41%) returned
completed questionnaires. Informant quality was assessed fol-
We initially specified each construct’s domain. We developed
lowing Heide and Weiss’s (1995) post hoc procedure. Using
an initial questionnaire, which was refined by academics famil-
seven-point Likert-type scales, informants were asked to rate
iar with the IM and strategy literature streams and export man-
their level of responsibility, involvement, and knowledge con-
agers, who examined the instrument for content validity and
cerning the firm’s activities in the export market venture as
consistency with our research objectives. The revised question-
well as their confidence level in answering the questionnaire.
naire was then translated into Thai and checked for translation
In line with Kumar, Stern, and Anderson (1993), we set a high
accuracy by native Thai academics as well as Thai marketing
threshold for screening informant competency (i.e., individual
managers who are fluent in Thai and English and familiar with
responses above the midscale point). Altogether, 56 question-
IM terminologies. Differences in the wording of the question-
naires were set aside because either the respondent score was
naire were resolved by consensus. The Thai version of the
less than 4 on one or more of the four informant quality items or
questionnaire was then back-translated by a native English
some responses were incomplete. This screening procedure
speaker who has worked in Thailand as a marketing manager
resulted in 197 usable responses, for an effective response rate
for many years and by Thai academic researchers specializing
of 32%. This response rate is relatively high for surveys of
in IM. Only minor differences in wording between the original
high-ranking executives in an emerging market, in which
and back-translated versions were observed, and, therefore, no
data collection from top managers is typically a challenging
major change in the Thai version was needed.
task (Lee and Griffith 2004; Walters and Samiee 2003).
The questionnaire was pretested using 30 marketing man-
We assessed nonresponse bias in two ways. First, early and late
agers in Thai manufacturing firms that engage in exporting.
responses were compared with respect to nine environmental fac-
The reliability of responses in the pretest sample (Cronbach’s
tors, export marketing strategy, export performance, and firm
alpha) was greater than .7 for all constructs, and, consequently,
characteristics (Armstrong and Overton 1977). No significant dif-
no change to the primary questionnaire was deemed necessary.
ferences between early and late returns were observed. Second, 70
The final version of the questionnaire was then professionally
nonrespondents were contacted to request additional information
printed in booklet form.
about such aspects of their firms as their employment, asset size,
and total and export sales. Again, no significant differences were
found between nonrespondents and respondents. These tests sug-
Data Collection gest that nonresponse bias should not be a concern in this study.
We used the list of exporting manufacturers compiled by the
Federation of Thai Industries, in association with and support
of the Ministry of Industry. The list maintained by the Feder-
Measures
ation of Thai Industries consists of 6,407 manufacturing firms, Following established precedent in this line of inquiry, we oper-
944 of which were engaged in exporting in a variety of indus- ationalized key constructs in our conceptual framework via
tries. A multi-industry sample was used to increase the multi-item scales (Bollen and Lennox 1991). Extensive empiri-
observed variance and to strengthen the generalizability of the cal research examining IMS standardization/adaptation has iden-
findings (Morgan, Kaleka, and Katsikeas 2004). All 944 tified and refined key constructs of interest and their indicators.
exporting firms were personally contacted via telephone to Given the novelty of our study context in this line of research, we
verify that they actually export to the United States, the EU, also conducted field interviews to uncover potential elements
and/or Japan. This screening process yielded 622 firms that met that might prove relevant for assessing Thai exporters’ IMS.
the study’s criteria for inclusion. Barring any major contextual difference for Thai exporters tar-
To enhance reliability and the response rate, during the geting developed markets, we leveraged empirical approaches of
presurvey telephone contact stage the key informant for each prior published works to examine the performance consequences
firm (i.e., the knowledgeable individual who was willing to of IMS standardization/adaptation. Accordingly, key macro- and
complete the questionnaire) was identified, personally con- microenvironmental constructs of our conceptual model include
tacted, and advised to expect the questionnaire. The question- economic, sociocultural, regulatory, and technological environ-
naires, along with cover letters and self-addressed stamped ments; customer characteristics; market characteristics; market-
envelopes, were mailed to all 622 managers who had met the ing intermediaries; competitive intensity; and the PLC stage of
eligibility criteria and had agreed to participate. Telephone the responding exporter’s focal product (Atuahene-Gima and
contacts with each participant were made after one week to Murray 2004; Cavusgil and Zou 1994; Hewett, Roth, and Roth
ensure that the questionnaires were promptly delivered. Several 2003; Hultman, Robson, and Katsikeas 2009; Katsikeas, Samiee,
respondents requested face-to-face interviews to familiarize and Theodosiou 2006; Kohli and Jaworski 1990; Özsomer and
themselves with the project and the investigator. Additional Simonin 2004; Samiee and Roth 1992; Zeriti et al. 2014; Zou,
follow-up contacts were made with respondents (a thank-you Andrus, and Norvell 1997). A description of response formats,
card) and nonrespondents (a reminder) two weeks after the specific items for each construct, and pertinent statistics, as well
initial mailing. A second mailing, with two further reminders, as sources from which they were adapted, are provided in
was sent to all nonrespondents after four weeks. Appendix A.
Marketing strategy adaptation. In accordance with previous nonnormed fit index [NNFI] ¼ .96; root mean square error
research, IMS adaptation is conceptualized as a second-order of approximation [RMSEA] ¼ .06; and average off-diagonal
construct (e.g., Katsikeas, Samiee, and Theodosiou 2006; squared residual [AOSR] ¼ .08) are satisfactory and indi-
Özsomer and Simonin 2004). From an extensive review of the cate a good model fit. As shown in Appendix B, all items
extant literature, we used 25 items that encompass various load heavily on their posited constructs (standardized load-
facets of the responding firms’ export marketing programs to ings .62) and are highly significant (t 7.43), which
capture the extent of export marketing strategy adaptation in demonstrates convergent validity. The confidence interval
each firm (e.g., Cavusgil and Zou 1994; De Luz 1993; Hewett, (+ two standard errors) around the correlation estimate
Roth, and Roth 2003; Katsikeas, Samiee, and Theodosiou between any two constructs is less than 1.0 (the largest is
2006; Özsomer and Simonin 2004; Zeriti et al. 2014). The .904 ¼ .84 þ 2(.032) for competitive intensity and market-
marketing strategy measures and their statistical properties are ing strategy constructs), indicating discriminant validity. We
shown in Appendix A. also used a chi-square difference test that involves collap-
sing each pair of constructs into a single-factor model and
Performance. As the key dependent measure in IMS research, comparing its fit with that of a two-factor model. A two-
export performance has received considerable attention (e.g., construct model yielded a better fit than a one-construct
Diamantopoulos and Kakkos 2007; Katsikeas, Leonidou, and model in all pairwise comparisons, providing further evi-
Morgan 2000; Leonidou, Katsikeas, and Samiee 2002; Sousa, dence of discriminant validity (Anderson and Gerbing
Martı́nez-López, and Coelho 2008). Relevant export perfor- 1988). As shown in Appendix A, Cronbach’s alpha coeffi-
mance assessment is crucial to determining the efficacy of an cients for multi-item scales range from .76 to .94, suggest-
export marketing strategy. Although illuminating and informa- ing satisfactory levels of internal consistency.
tive, past research efforts do not converge on a definitive con- A similar procedure was used for the validation of the per-
clusion regarding optimal combination of measures that truly formance construct. Another measurement model for the
reflect export performance. Thus, as with other components of performance construct contained 12 items measuring three
our conceptual framework, we leveraged previous research first-order constructs: financial, sales, and customer perfor-
focusing on IMS and conceptualized performance as a multi- mance. The chi-square statistic of the measurement model is
dimensional, second-order construct consisting of financial, significant (w2(51) ¼ 85.54, p < .002), but all other fit indices
sales, and customer components. The items that constitute our (CFI ¼ .99; NFI ¼ .97; NNFI ¼ .98; RMSEA ¼ .06; AOSR ¼
financial, sales, and customer-level performance measures are .05) are satisfactory and indicative of a good model fit for the
well established in both marketing (e.g., Atuahene-Gima and export performance scale.
Murray 2004; Hewett, Roth, and Roth 2003; Katsikeas, A key concern in most survey research pertains to the
Samiee, and Theodosiou 2006) and strategy (e.g., Chakra- possibility of introducing common method variance (CMV)
varthy 1986; Venkatraman and Ramanujam 1987) literatures. when the data for dependent and independent variables are
Following Clark and Montgomery (1999), our survey asked derived from the same informants. This concern is particu-
respondents to assess each performance item in the designated larly true in the case of performance measures where infor-
export market in comparison with that of their main direct mants might assume underlying relationships (Podsakoff and
export market competitor. Greater similarity across our con- Organ 1986), thus affecting the outcome of the links among
structs relative to prior IMS research affords the opportunity to study variables. In this study, however, potential CMV influ-
compare results across similar studies. ences appear limited because respondents lacked knowledge
of our conceptualization and the specific treatment of the data
Measure Validation they were providing. Respondents had no a priori knowledge
of the constructs that would emerge from their responses and
We employed confirmatory factor analysis to assess the valid- the functional relationships between them. In using coalign-
ity of our measures. One measurement model contained 26 ment methods, reported performance is not directly linked to
items measuring the eight first-order constructs: economic, IMS constructs. Instead, various strategy coalignment meth-
sociocultural, regulatory, and technological environments; odologies tend to rely on measures and functional relation-
customer characteristics; market characteristics; marketing ships that are not known to informants (e.g., ideal profile or
intermediaries; competitive intensity; and PLC stage. The error terms emerging from the marketing strategy misspecifi-
chi-square statistic of the measurement model is significant cation for individual host markets), thus shielding the poten-
(w2(308) ¼ 489.11, p < .001), as expected because of the test’s tial threat posed by CMV. Also, study participants were
sensitivity to sample size; however, all other fit indices (com- assured of anonymity, thus reducing the possibility of bias
parative fit index [CFI] ¼ .97; normed fit index [NFI] ¼ .92; in performance reports for self-presentation reasons. As
shown in Table 1, the performance construct generally
2 demonstrates nonsignificant or low correlation coefficients
Differences between the two group profiles were examined via multivariate
analysis of variance across dependent and independent variables. The overall with the other model constructs. Furthermore, we ran a
F-statistic (F(9, 124) ¼ 11.58, p .001) and dependent variables were single-factor measurement model containing all the environ-
statistically significant. mental, marketing program adaptation, and performance
Table 1. Correlation Matrix
Construct 1 2 3 4 5 6 7 8 9 10
1. Economic environment
2. Sociocultural environment .31
3. Regulatory environment .35 .28
4. Technological environment .25 .32 .41
5. Customer characteristics .21 .27 .29 .48
6. Market characteristics .24 .34 .33 .35 .29
7. Marketing intermediaries .29 .26 .36 .42 .47 .35
8. Competitive intensity .09 .20 .12 .29 .36 .20 .48
9. Product life cycle stage .14 .11 .07 .25 .45 .36 .41 .36
10. Export marketing strategy .29 .36 .18 .41 .47 .38 .39 .48 .43
11. Overall export performance .03 .09 .00 .09 .16 .03 .04 .13 .09 .34
Notes: Correlation coefficients .14 are significant (p < .05).
indicators. The single-factor measurement model demon- Table 2. The Extent of International Marketing Strategy Adaptation
strated a poor fit with the data (w2(298) ¼ 1,588.44, p < Relative to Macro- and Microenvironmental Measures
.0001) and was clearly inferior to our measurement model
Independent Expected
results. Variables Coefficient F-Value Direction
Economic environment .17 2.87** þ

Sociocultural environment .14 2.25* þ
Results Regulatory environment .03 .48 þ
Technological environment .14 2.03* þ
Marketing Strategy Customer characteristics .15 2.10* þ
We examined the data for potential issues with multicollinear- Market characteristics .18 2.76** þ
ity (Hair et al. 2010). Correlation coefficients between envi- Marketing intermediaries .09 1.19 þ
Competitive intensity .26 4.49** þ
ronmental factors, degree of marketing strategy adaptation,
PLC .09 2.21* þ
and performance are shown in Table 1. The coefficients are R2 ¼ .45
generally low and range between .00 and .48. To assess poten- Adjusted R2 ¼ .43
tial bias that might be introduced in our regression estimates F-statistic ¼ 17.12**
because of multicollinearity, we examined two measures
*p .05.
(Dunlap and Kemery 1987; Judge et al. 1988; Neter, Wasser- **p .01.
man, and Kutner 1989). First, variance inflation factors for
independent variables were computed. These values were
satisfactory (1.25–1.79) and well below the recommended Performance Impact of International Marketing Strategy
critical value of 10 (Hair et al. 2010; Mason and Perreault
1991). Second, the maximum condition index was 15.63, Previous published works using a strategy coalignment
which is well below 30, the level that signals detrimental approach to examine IMS–performance links have relied on
multicollinearity (Mason and Perreault 1991). Thus, multi- residual analysis, deviation score analysis, and structural equa-
collinearity does not appear to present an issue in this study tion modeling (SEM) as means of examining the relationship
(Jaccard, Turrisi, and Wan 1990). between performance and marketing strategy (e.g., Hultman,
Consistent with our conceptual framework, macro- and Robson, and Katsikeas 2009; Katsikeas, Samiee, and Theodo-
microenvironmental measures were tested via multiple regres- siou 2006; Zeriti et al. 2014). In contrast to these approaches,
sion analysis using ordinary least squares. As shown in Table 2, we use ideal profile analysis to examine our key proposition
the model is significant (F(9, 187) ¼ 17.12, p < .01, adjusted asserting heightened performance for emerging-market expor-
R2 ¼ .43). All but two independent constructs (i.e., regulatory ters only to the extent that their export marketing strategies and
environment and marketing intermediaries) demonstrate a sig- the external contextual factors associated with their developed-
nificant relationship with the extent of marketing strategy adap- economy target markets are coaligned. Conceptually and
tation. Accordingly, the relationship between IMS adaptation methodologically, the profile deviation method for assessing
and economic environment, sociocultural environment, techno- strategy coalignment is deeply rooted in both the management
logical environment, customer characteristics, market charac- and marketing literatures (e.g., Kim, Park, and Prescott 2003;
teristics, competitive intensity, and PLC stage are supported. Van de Ven and Drazin 1985; Vorhies and Morgan 2003, 2005;
Relationships between marketing strategy adaptation and reg- Zajac, Kraatz, and Bresser 2000).
ulatory environment and marketing intermediaries, in contrast We benchmarked firms demonstrating superior perfor-
to our expectation, are not supported. mance (ideal profile) for comparison with other firms. Superior
Table 3. Environmental Profiles for the Standardization and Adaptation Groups
Standardization Group Adaptation Group
Top-Performing Profile of Entire Random Baseline Top-Performing Profile of Entire Random Baseline
Group Group Profile Group Group Profile
Environmental Factors n¼6 n ¼ 59 n¼6 n¼6 n ¼ 59 n¼6
Economic environment 3.24 4.11 4.28 5.24 4.92 4.62

Sociocultural environment 3.06 4.25 4.55 5.03 5.18 5.49
Regulatory environment 3.19 4.92 4.03 5.25 4.71 5.66
Technological environment 3.49 4.19 4.37 5.33 5.18 4.29
Customer characteristics 3.06 3.78 3.15 5.56 5.02 4.19
Market characteristics 3.01 4.16 3.62 5.11 5.03 4.52
Marketing intermediaries 2.63 3.68 4.32 4.81 4.74 4.13
Competitive intensity 2.29 4.02 3.66 5.52 5.33 5.15
Product life cycle stage 2.17 3.15 3.00 6.00 4.49 4.17
performance may result from any given strategy, which might environmental factors between the ideal profile group and the
range from full adaptation to complete standardization. Thus, remaining cases for each strategy type was calculated via the
the nature of the export marketing strategy is not a precondition following equation:
for selecting high-performing firms (i.e., the ideal group). Our sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
Xn
conceptual framework, however, asserts that greater distances d¼ ðxi yi Þ 2 ;
from the strategy(ies) pursued by the benchmarked high- i¼1
performing firms result in lower performance (Venkatraman
1989). where
In the absence of previously established theoretical perfor- d ¼ Euclidean distance (with higher d values reflecting
mance benchmarks, empirical results were used to create them. greater misalignment);
As per Hewett, Roth, and Roth (2003), to establish empirical xi ¼ the mean score of environmental factor i for ideal
benchmarks, the sample was divided into three equal groups, profile firms;
each representing the degree of export marketing strategy adap- yi ¼ the score of environmental factor i for a firm in the
tation (i.e., low, medium, and high). The extreme groups (i.e., study sample; and
n ¼ the number of environmental factors.
high adaptation [n ¼ 65] and high standardization [n ¼ 65])
The resultant Euclidean distances (or profile deviations) for
were retained for the remaining portion of the analysis.2
each group were compared with two measures: the ideal profile
Next, we profiled each group of environmental factors
and a baseline profile. We followed Venkatraman (1989) and
influencing marketing strategy. The mean levels of the envi-
Vorhies and Morgan (2003) to develop our baseline profiles for
ronmental factors were calculated for high-performing com-
the standardization and adaptation groups, consisting of a ran-
panies in each group. Firms with superior performance along
dom selection of six firms from each group. Given our four
each performance measure (i.e., financial, sales, and customer
performance measures, eight regression models were examined
performance as well as the overall performance) were tar-
for each strategy type with the expectation that significant
geted for consistency (Vorhies and Morgan 2005). Following
negative coefficients between the computed Euclidean dis-
Venkatraman (1989), we calibrated the ideal subgroup by tances (or profile deviations) and performance measures are
using the top 10% of the sample according to each perfor- indicative of strategy misalignment (Venkatraman 1989;
mance criterion for each strategy type. This approach yielded Vorhies and Morgan 2005). Regression results are shown in
six ideal profile firms for the adaptation group and six firms Table 4.
for the standardization group. Mean scores for strategy type Table 4 clearly shows that deviations from the top-
profiles are shown in Table 3. performing firms in the standardization and adaptation
As recommended by Van de Ven and Drazin (1985), we strategic groups (the ideal profile group) lead to strategic mis-
measured the profile deviation score for the remaining 59 firms alignment or misfit (i.e., larger Euclidean distances), which, in
in each group by computing the Euclidean distance of each turn, demonstrate significant negative relationships with all
observation from the group’s ideal profile for all nine environ- measures of performance. In contrast, the regression results
mental factors. The profile deviation score is the gap between from the randomly selected baseline profile deviation for both
“ideal” firms and the remaining firms in the group. A greater the standardization and adaptation groups demonstrate no sig-
deviation implies a greater misalignment between actual and nificant relationships to any performance measure. It is also
ideal profiles, suggesting a smaller export performance out- noteworthy that the R2 measures for the ideal profile groups
come. The Euclidean distance for profile deviation of are significantly higher than those obtained from the random
Table 4. Regression Results for Deviations from Ideal and Baseline Random Profiles
Standardization Group (n ¼ 65) Adaptation Group (n ¼ 65)
Sales Customer Financial Overall Sales Customer Financial Overall

Performance Performance Performance Performance Performance Performance Performance Performance
Deviation from ideal .28** .27** .28** .29** .27** .29** .29** .28**
profile (3.91)a (3.68) (4.65) (5.07) (3.52) (3.52) (3.16) (4.11)
R2 .14 .19 .26 .31 .18 .18 .15 .23
F-value 9.41** 13.51** 21.64** 25.66** 12.76** 12.47** 10.00** 16.88**
Deviation from random .05 .001 .05 .03 .10 .09 .33 .07
profile (.31) (.003) (.39) (.26) (1.33) (1.09) (.03) (1.14)
R2 .02 .01 .03 .01 .03 .02 .02 .02
F-value .10 .01 .15 .07 1.76 1.19 1.10 1.30
**p .01.
Notes: For all ideal and random baseline profiles, n ¼ 6. The t-values from the unstandardized solution are in parentheses.
profile groups, demonstrating that ideal profile models are enterprises in these markets. Emerging-market exporters have
more robust. been especially active in the developed parts of the world,
These analyses provide evidence that Thai exporters show where demand is greater but contextual influences are vastly
superior performance when their marketing strategies are coa- different than in their home markets (Rao-Nicholson and Khan
ligned with the contextual complexities of the markets in which 2017). On the one hand, home-based contextual and firm-based
they are implemented. Results from the separate methods used influences suggest a greater tendency to extend local marketing
in examining the influence of marketing strategy on perfor- programs to export markets (i.e., standardized marketing stra-
mance provide strong evidence in support of our key proposi- tegies); on the other hand, complex contextual differences
tion regarding IMS coalignment and its resultant superior between the home and developed markets indicate the need for
performance. greater marketing strategy adaptation. The limited number of
comprehensive studies of exporting firms’ IMS has largely
Validation focused on firms based in developed markets. Our goal in this
investigation was to extend this line of inquiry by applying
We validated these results using residual analysis, an estab-
strategy fit to emerging-market exporters, whose home-
lished approach for assessing the impact of strategic fit on
market external forces and firm contexts (e.g., planning
performance. We calculated absolute standardized residuals
processes, information flow, international experience) are dif-
by regressing the extent of dissimilarity in environmental fac-
ferent from those faced by their larger counterparts in advanced
tors between home and host markets (independent variables)
onto the degree of export marketing strategy adaptation (depen- economies.
dent variable). Then, using simple regression analysis, we In line with strategy coalignment principles, superior per-
examined the export performance effects of absolute standar- formance is achieved only when an IMS addresses the contex-
dized residuals, which indicate the degree of misfit between the tual complexities of markets in which it is implemented (Smith,
environment and the export marketing strategy deployed. The Meera, and Wortzel 1995). Our key research question in this
results show a significant negative effect of misfit on perfor- investigation was whether superior performance is achieved
mance (t ¼ 3.94, p < .01), which in turn suggests that export when emerging-market exporters match host-market contexts
marketing strategy coalignment enhances export performance in advanced economies. We examined the appropriateness and
outcomes. Additionally, we tested the misfit–export perfor- veracity of IMS coalignment via profile deviation analysis,
mance link using a structural model that yielded a good overall which has not received much attention in the IM literature, and
fit (w2(62) ¼ 93.82, p < .01; CFI ¼ .99; NFI ¼ .97; NNFI ¼ we provide supportive empirical evidence within the context of
.99; RMSEA ¼ .05; AOSR ¼ .04) and a significant negative exporters based in an emerging economy. We validated these
effect (t ¼ 3.07, p < .01) fully consistent with the regression results on the basis of residual analysis using regression and
model. In summary, this evidence mirrors the results we structural equation modeling, as prescribed in the strategy coa-
obtained through ideal profile analysis. lignment literature.
The literature dealing with the performance consequences of
IMS has reported mixed results stemming from both concep-
Discussion tual and methodological considerations. Conceptually,
Emerging markets have increasingly taken an active posture in attempts to establish a direct link between strategy and perfor-
global trade and investment, and a growing body of literature is mance have been problematic (Katsikeas, Samiee, and Theo-
addressing wide-ranging issues regarding the activities of dosiou 2006; Theodosiou and Leonidou 2003). Because these
conceptual studies are coupled with qualitative research that unfamiliar market conditions (Brouthers, O’Donnell, and
sides with either standardization, on the basis of its associated Hadjimarcou 2005).
economies, or adaptation, on the basis of closely matching host We found no support for the impact of focal market regu-
markets, the appropriateness of a particular export marketing latory environment and marketing intermediaries as antece-
strategy has been controversial. Consistent with contingency dents of IMS deployed by Thai exporters. Within the context
theory (e.g., Drazin and Van de Ven 1985), our findings of Thai exporters targeting the United States, the EU, or Japan,
demonstrate that superior performance by emerging-market regulations and channel intermediaries do not account for the
exporters results from their implementation of strategies that pursuit of strategy adaptation. Our null finding regarding the
address contextual complexities in host markets. By extension, regulatory environment mirrors the findings of Hultman, Rob-
this research provides support for the applicability of strategy son, and Katsikeas (2009) and Zeriti et al. (2014), who also
coalignment in emerging-market contexts (Lukas, Tan, and examined exporters’ IMS. Our results regarding intermediaries
Hult 2001). are consistent with those of Katsikeas, Samiee, and Theodosiou
Given the conflicting empirical results reported in the mar- (2006), who also reported a nonsignificant relationship
keting standardization/adaptation literature, we provide a solid between marketing infrastructure (operationalized substan-
basis for the connection between superior performance and tially as channel intermediaries) and IMS standardization in a
IMS of emerging-market exporters in Thailand. Our empirical developed-market setting. However, Hultman, Robson, and
support for the veracity of strategy coalignment principles is in Katsikeas (2009) found market infrastructure’s impact, albeit
line with research asserting that, under ambiguous conditions measured differently, to be significant within the context of
(e.g., incomplete knowledge of the host market) with vague developed-market exporters. We suggest that greater similarity
solutions, imitating successful rivals’ strategies provides a between developed-market exporters and their host markets
low-cost, efficient response to the contextual uncertainties of may make it easier for firms to incorporate channel considera-
the host market (DiMaggio and Powell 1983, p. 154, HA3; tions in their IMS. Given the differences across emerging and
Haveman 1993). Imitating marketing strategies of successful developed markets, some emerging-market exporters are likely
competitors in the targeted advanced economies (i.e., mimetic to perceive limited channel control and thus do not directly
isomorphism) provides a platform for matching environmental plan and manage their export market distribution networks,
contexts. Mimetic isomorphism is one way in which an orga- leaving the local adaptation task to their importing intermedi-
nization can more efficiently change itself into an effective ary (Han and Kim 2003).
export market competitor (Davis, Desai, and Francis 2000). Although we a priori expected differences across home and
A firm copying its export market predecessors is seeking to focal market regulatory environments to lead to marketing
achieve conformity within these markets, which is an efficient strategy adaptation, an association between regulations and
response by emerging-market exporters to unknown conditions exporter IMS could not be established. We anticipate that
in export markets in advanced economies (DiMaggio and emerging-market exporters, like those based in developed
Powell 1983, p. 151). This reaction to market signals is logical economies (e.g., Hultman, Robson, and Katsikeas 2009; Zeriti
and serves as an avenue for gaining greater knowledge regard- et al. 2014), will adopt common international standards (e.g.,
ing host-market conditions (Abrahamson and Rosenkopf 1993; ISO 9000 series, which are increasingly demanded in both
Brouthers, O’Donnell, and Hadjimarcou 2005). Thus, gaps in emerging and developed markets) and/or comply with buyers’
emerging-market exporters’ limited resources (e.g., interna- demands with respect to various regulatory measures (in the
tional experience, host-market information, known brands) are absence of which importation into focal markets may not be
sufficiently addressed by unconventional means to match local possible). However, such adherence does not imply informed
contextual differences, thus resulting in superior performance. adaptation to host-market regulatory conditions per se.
Thus, mimetic isomorphism provides an explanation for a key Our results provide strong support for our normative view
contextual issue in this study regarding host-market informa- regarding the performance implications of export marketing
tion asymmetry for comparatively smaller exporters from strategy. Emerging-market exporting firms that closely match
emerging markets. their marketing strategies to the prevailing contexts, potentially
Our empirical results provide support for all but two rela- by mimicking successful firms’ strategies in advanced econo-
tionships pertaining to the antecedents of IMS adaptation by mies, demonstrate superior performance. Note that emerging-
Thai exporters. Greater divergence between home and export market exporters’ pursuit of mimetic isomorphism, while
markets with respect to economic, sociocultural, and techno- quicker and less costly than engaging in ongoing marketing
logical environments; customer and market characteristics; research internationally, is not free. At the least, managerial
competitive intensity; and the export product’s PLC stage is and executive time is diverted to gathering and analyzing fine-
the basis for successful Thai exporting firms’ decision to grain (and likely incomplete) market information about key
adapt their IMS to host-market conditions. Such a strategic competitors in markets being targeted. Regardless of how the
posture is in line with the strategy literature asserting that IMS information requirements are met, our key proposition
firms develop strategic responses rather than passively adapt- regarding the performance impact of IMS choice by Thai
ing to their settings (Oliver 1991) and is consistent with exporters is supported, consistent with past IMS research
mimetic isomorphism as a strategic response to different or involving developed markets.
Theoretical Implications environments generally face different home-market environ-

ments and resource scarcity, they can succeed by adapting their
Our research contributes to IM thought along three dimensions.
IMS to host-market conditions. We propose that this alignment
First, to our knowledge, this study is the first to examine the
can also be achieved by observing and copying strategies of
performance influence of emerging-market exporters’ IMS
successful host-market competitors. Thus, a sharp focus on
specifically targeting developed markets using the strategy
primary competitors, as well as approaches of noncompetitors
coalignment paradigm. Although a number of studies have
selling to targeted customers, can offer pathways for adapting
established the veracity of IMS fit principles and their perfor-
IMS for a better fit in markets exhibiting vastly different con-
mance consequences using data gathered from developed-
ditions. Although acquiring fine-grain information about host-
market MNCs (Katsikeas, Samiee, and Theodosiou 2006) and
market competitors still requires some managerial effort and
exporters targeting developed markets (Hultman, Robson, and
resources, overall it should be easier and more cost efficient to
Katsikeas 2009; Zeriti et al. 2014), these principles have not
achieve because it is focused (e.g., on competitors’ actions and
been tested for emerging-market exporters aiming to cultivate
on the approaches of noncompetitors that serve targeted
developed markets.
customers).
Second, we demonstrate how strategy fit principles hold for
Concurrently, emerging-market export promotion programs
emerging-market exporters despite the resource scarcity that
should devise plans to provide smaller (would-be) exporters
limits their access to essential host-market information for
with relevant fine-grain industry- and customer-based informa-
strategy adaptation (e.g., Singh 2009). We propose that
tion to accommodate the design and development of their IMS.
emerging-market exporters leverage mimetic isomorphism
Much of the information available to exporters tends to be
(Brouthers, O’Donnell, and Hadjimarcou 2005; Davis, Desai,
generic and country-based information that is difficult to apply
and Francis 2000) as a logical reaction to market conditions
to export market contexts for specific products, services, or
that existing competitors have addressed. Similar to the
customer groups. A more hands-on consultative approach may
“bandwagon pressure” principle proposed by Abrahamson
help remedy emerging-market exporters’ information asymme-
and Rosenkopf (1993), the approach serves as a more efficient
try, thus allowing them to devise appropriate IMSs for more
avenue for emerging-market exporters to address resource
rapid export business growth in market conditions that are
scarcity conditions and reach developed markets with an
vastly different from the home market.
effective IMS. Concurrently, we acknowledge that some
More broadly, issues addressed in this research are of critical
emerging-market exporters may indeed have the necessary
importance to all firms because exporting serves as the basis for
resources to develop appropriate marketing strategies for
international strategies of firms. In other words, both large
developed markets; however, the literature shows that the
MNCs and small exporters are dependent on exporting. Concur-
majority of emerging-market exporting firms face greater
rently, a firm’s IMS, although of utmost importance to exporting
resource scarcity than is the case for their developed-market
firms and MNCs alike, is frequently chosen by default in the
counterparts (Singh 2009).
initial stages of internationalization. Often, the tendency is one
Third, as recommended in the literature, we test our model
of deploying familiar marketing strategies that mirror those
using the profile deviation approach as an alternative bench-
implemented in the exporters’ home markets (Dow 2006). Even
marking tool to identify optimum outcomes (Drazin and Van
though this approach may be suboptimal, it makes managerial
de Ven 1985; Venkatraman and Prescott 1990; Vorhies and
and intuitive sense because of these firms’ confidence in previ-
Morgan 2005). Previous research using the strategy coalignment
ously implemented (and presumably successful) plans.
paradigm has mainly relied on SEM and regression analysis. In
As initial export ventures lead to greater foreign market
contrast to prior works, we use the ideal profile–baseline profile
involvement, firms amass international knowledge and experi-
deviation method as our main approach but also validate our
ence and become increasingly dependent on exports. With
findings via residual analysis and SEM. By doing so, we provide
growing export sales, they accumulate finer-grain information
an alternative approach for future examination of IMS of firms.
regarding the host markets and local industry conditions in
Thus, while this study is instructive in terms of applying the
which they compete, thus affording them a basis to deviate
profile deviation approach, it provides researchers with evidence
from their initial strategies (i.e., better adapt to local market
of consistency across the three methods of testing and validation
conditions). Thus, for some firms, an optimal IMS is based on
of IMS coalignment used in the investigation.
adaptation, whereas for others, particularly those competing in
global industries (Samiee and Roth 1992), some level of stan-
dardization is more suitable. The approach of imitating the
Managerial Implications strategies of more experienced competitors can initially
This study contributes to management practice in several ways. address the exporting firm’s information asymmetry in the ear-
We demonstrate the veracity of strategy coalignment for expor- lier stages of export market ventures. However, a recurring
ters based in an emerging market and targeting developed mar- problem facing international managers, and one that they rarely
kets. Our findings support the notion that environmentally have the opportunity to test, is that a suboptimal IMS can still
consistent IMS leads to superior performance for emerging- result in acceptable performance and even meet their stated
market exporting firms. Although firms operating in such objectives, yet alternative strategies that closely match the
host-market environment, which may be adapted or standardized, In line with precedent, we viewed export performance as a
would lead to better performance. Accordingly, the results of our second-order construct. However, research examining perfor-
research on emerging-country exporters targeting developed mar- mance has recognized trade-offs across its various forms (Kat-
kets affirm that consistency between the local environment and sikeas et al. 2016). Therefore, considering broader
the implemented strategy leads to superior performance. conceptualizations of performance and attention to distinct
As emerging-market firms expand their exporting opera- indicators of performance (e.g., individual measures, first-
tions over time, they gain international experience, which may order constructs), along with greater care in examining perfor-
eventually lead to greater financial commitment in selected mance measure trade-offs in export market operations, should
host markets (e.g., direct investment). This broader interna- be stressed in future research.
tional operational knowledge and experience will, in turn, lead Thailand, the context of this investigation, shares similari-
to the adoption of more complex and balanced strategies that ties along a number of dimensions with other key emerging
concurrently leverage both marketing standardization and markets; however, it may not be representative of all such
adaptation. Among others, adaptation strategies in these firms environments. Thus, research involving other emerging coun-
may be the result of acquiring successful host-market firms or tries is needed to expand our knowledge regarding optimum
brands (e.g., Geely’s acquisition of Volvo; Tata Motors’ acqui- IMS for these markets.
sition of Jaguar and Land Rover). A balanced marketing strat- The extent of control by exporting firms over strategies
egy posture is also similar to that pursued by some Western actually implemented in host markets is a potential threat to
firms (e.g., Nestlé’s acquisition of Stouffer’s, the purveyor of all IMS research. In the absence of a host-market presence in
quality frozen foods, in the United States or Colgate-Palmol- markets involving intermediaries, exporters necessarily con-
ive’s acquisition of Hawley & Hazel, producer of its rebranded duct business through their international distribution networks;
Darlie toothpaste, in Hong Kong and Taiwan). thus, their controls over host-market activities are often indi-
rect. The extent to which exporters can fully manage and con-
Limitations and Future Research trol their IMS, or effectively implement a strategy in a host
A limitation inherent in all empirical research is the possibility market, has not been previously examined.
of model or measurement misspecification. This issue is espe- Future research should explore aspects of IMS adaptation/
cially important when applying strategy coalignment methods, standardization that accommodate or hinder further internatio-
which tend to rely on Euclidean distance or error terms. The nalization of exporters. Over time, some level of standardiza-
size of residuals is derived from regressing environmental vari- tion is essential as firms increasingly grow into global entities.
ables on the marketing strategy construct, thus making residual Thus, an examination of the impact of IMS adaptation in host
analysis susceptible to this limitation. Indeed, the fact that few markets on firm internationalization efforts is needed. Addi-
studies can claim perfect model precision and report low R2 tionally, market orientation is now central to the marketing
values is indicative of measurement and/or model errors. To strategies of both domestic and international firms. Customer
this end, the model tested in the current study incorporates orientation necessarily incorporates host-market preferences,
environmental and strategy measures stressed in the literature which, in turn, call for greater marketing strategy adaptation.
to examine the influence of strategy coalignment on perfor- Consequently, greater adaptation might impede or dampen glo-
mance. Although we remain confident in the appropriateness balization, which relies on some level of standardization. Thus,
and the veracity of the proposed model, the possibility of mis- future research should examine the influence of IMS on the
specification is always a limitation. firm’s market orientation drive.
Appendix A. Measures of Constructs
Construct Mean SD Reliability
A: Macroenvironment (seven-point Likert-type scale, anchored by 1 ¼ “very similar” and 7 ¼ “very different”)
Economic Environment 4.62 1.12 .94
(Adapted from Hultman, Robson, and Katsikeas 2009; Katsikeas, Samiee, and Theodosiou 2006)
Per capita income
Inflation rates
Income distribution
Foreign exchange ratesa
(continued)
Appendix A (continued)
Sociocultural Environment 4.77 1.16 .82

(Adapted from Cavusgil and Zou 1994; Katsikeas, Samiee, and Theodosiou 2006; Zeriti et al. 2014)
Value systems (e.g., beliefs and attitudes)
Customs and traditions
Language
Religion
Aesthetics (e.g., designs and colors)a
Education levela
Regulatory Environment 4.51 1.11 .80
(Adapted from Hultman, Robson, and Katsikeas 2009; Katsikeas, Samiee, and Theodosiou 2006; Özsomer and Simonin 2004)
Business law and regulations (e.g., technological specifications)
Government control and protectionism (e.g., safety standards and price control)
Government foreign policy
International organization membershipa
Technological Environment 4.66 1.19 .87
(Adapted from Atuahene-Gima and Murray 2004; Katsikeas, Samiee, and Theodosiou 2006; Samiee and Roth 1992)
Information technology
Technology in transportation
Technological skills
Level of technology developmenta
B: Microenvironment (seven-point Likert-type scale, anchored by 1 ¼ “very similar” and 7 ¼ “very different”)
Customer Characteristics 4.39 1.27 .81
(Adapted from Hewett, Roth, and Roth, 2003; Katsikeas, Samiee, and Theodosiou 2006; Kohli and Jaworski 1990; Özsomer and Simonin 2004)
Customer tastes and preferences
Product usage patterns
Customer purchasing criteria (e.g. price, quality and features)
Customer purchasing powera
Price sensitivitya
Market Characteristics 4.60 1.03 .76
(Adapted from Katsikeas, Samiee, and Theodosiou 2006; Kohli and Jaworski 1990; Özsomer and Simonin 2004; Zou, Andrus, and Norvell 1997)
Demand conditions and potential
Market size
Market growth
Availability of advertising agenciesa
Marketing Intermediaries 4.10 1.20 .86
(Adapted from Amine and Cavusgil 1986; Hewett, Roth, and Roth, 2003; Katsikeas, Samiee, and Theodosiou 2006)
Size of distributors
Physical distribution firms (e.g., transportation firms and warehouses)
Functions performed by intermediaries
Number and type of intermediariesa
Competitive Intensity 3.97 1.13 .81
(Adapted from Atuahene-Gima and Murray 2004; Hewett, Roth, and Roth, 2003; Samiee and Roth 1992)
Aggressiveness of competition in our industry
Frequency of promotion wars in our industry
Strength of price competition
Pace of new competitive moves in this product area
Product Life Cycle Stage (single item) 3.75 1.53 N/A
(Adapted from Katsikeas, Samiee, and Theodosiou 2006; Özsomer and Simonin 2004; Samiee and Roth 1992)
C: Marketing Strategy (seven-point Likert-type scale, anchored by 1 ¼ “highly standardized” and 7 ¼ “highly adapted”)
(Adapted from Cavusgil and Zou 1994; De Luz 1993; Hewett, Roth, and Roth, 2003; Katsikeas, Samiee, and Theodosiou 2006; Özsomer and
Simonin 2004)
Degree of Marketing Strategy Adaptation 3.93 .94 .85
1. Product 3.82 1.43 .74
Product quality
Product design
Product feature/performance
Product branding
Product packaging
(continued)
Appendix A (continued)
Product labeling
Product warranty
Pre- and after-sale service
Product mix
2. Price 3.94 1.38 .87
List price
Payment and credit terms
Sales terms
Discounts and allowances
Profit margins
3. Distribution 4.02 1.14 .88
Channel design
Channel intensity
Channel control/management
Channel coverage
Transportation
Warehousing
4. Promotion 3.91 1.34 .85
Advertising
Personal selling
Sales promotion
Publicity and public relations
Direct marketing
D: Export Performance
seven-point Likert-type scale, anchored by 1 ¼ “much worse” and 7 ¼ “much better”)
(Adapted from Atuahene-Gima and Murray 2004; Chakravarthy 1986; Hewett, Roth, and Roth 2003; Katsikeas, Samiee, and Theodosiou 2006)
Export Performance 4.43 .90 .94
1. Financial Performance 4.23 1.02 .93
Profitability
Profit growth
Profit margin
Return on export sales
2. Sales Performance 4.38 1.14 .93
Sales volume
Sales growth
Market share
Market share growth
3. Customer Performance 4.68 .97 .88
Customer satisfaction
Customer retention/loyalty
Customer referral
Customer service
New customer generationa
a
Indicates that the item was dropped as a result of scale purification.
Appendix B. Measurement Model Results
Measurement Model 1 Measurement Model 2
Environmental Constructs Export Performance

a
First-Order Factor Std Loading First-Order Factor Std Loadinga
ECON (F1) FINPER (F1)

EC1 .95b PER1 .86b
EC3 .81 (16.95) FPER2 .90 (14.47)
EC4 .99 (31.32) FPER3 .90 (14.26)
FPER4 .83 (12.51)
(continued)
Appendix B (continued)
Measurement Model 1 Measurement Model 2
Environmental Constructs Export Performance

a
First-Order Factor Std Loading First-Order Factor Std Loadinga
SOCCUL (F2)
SOC1 .77b SALPER (F2)
SOC2 .85 (10.57) SPER1 .87b
SOC3 .62 (8.01) SPER2 .88 (14.01)
SOC6 .69 (8.91) SPER3 .85 (13.28)
SPER4 .90 (14.76)
REG (F3)
REG1 .75b CUSPER (F3)
REG2 .84 (9.77) CPER1 .90b
REG3 .71 (8.75) CPER2 .93 (15.91)
CPER4 .64 (8.56)
TECH (F4) CPER5 .77 (11.44)
TEC2 .86b
TEC3 .79 (11.96)
TEC4 .83 (12.77)
Second-Order Construct
CUST (F5) PERFOR (F4)
CUS1 .76b FPER (F1) .77 (8.09)
CUS2 .74 (8.84) SPER (F2) .90 (9.40)
CUS3 .74 (8.78) CPER (F3) .71 (7.72)
MARK (F6)
MAR1 .71b
MAR2 .71 (7.44)
MAR3 .71 (7.43)
MKTINT (F7)
MKTI2 .83b
MKTI3 .81 (11.46)
MKTI4 .81 (11.46)
COMP (F8)
COM1 .71b
COM2 .69 (7.93)
COM3 .75 (8.40)
COM4 .74 (8.36)
PLC (F9)
PL1 .98b
MKTSTR (F10)
MKTST1 .94b
Goodness-of-Fit Statistics Goodness-of-Fit Statistics
w2308 ¼ 489.11, p <.001 w251 ¼ 85.54, p <.002
CFI ¼. 97 CFI ¼ .99
NFI ¼ .92 NFI ¼ .97
NNFI ¼ .96 NNFI ¼ .98
RMSEA ¼ .05 RMSEA ¼ .06
AOSR ¼ .083 AOSR ¼ .045
a
The t-values from the unstandardized solution are in parentheses.
b
Fixed parameter.
Associate Editor Funding

Bulent Menguc served as associate editor of this article. The author(s) received no financial support for the research, author-
ship, and/or publication of this article.
Declaration of Conflicting Interests References

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Saeed Samiee and Suthawan Chirapanda

Table 1. Correlation Matrix

Economic environment .17 2.87** þ

Table 3. Environmental Profiles for the Standardization and Adaptation Groups

Standardization Group Adaptation Group

Environmental Factors n¼6 n ¼ 59 n¼6 n¼6 n ¼ 59 n¼6

Economic environment 3.24 4.11 4.28 5.24 4.92 4.62

Standardization Group (n ¼ 65) Adaptation Group (n ¼ 65)

Sales Customer Financial Overall Sales Customer Financial Overall

Theoretical Implications environments generally face different home-market environ-

Appendix A. Measures of Constructs

Construct Mean SD Reliability

Construct Mean SD Reliability

Sociocultural Environment 4.77 1.16 .82

Construct Mean SD Reliability

Appendix B. Measurement Model Results

Measurement Model 1 Measurement Model 2

Environmental Constructs Export Performance

ECON (F1) FINPER (F1)

Measurement Model 1 Measurement Model 2

Environmental Constructs Export Performance

Associate Editor Funding

Declaration of Conflicting Interests References

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