Archetypes of International Marketing Strategy Conceptualization, Preliminary Evidence, and Research Directions.doc

archetypes of international marketing strategy: conceptualization, preliminary evidence, and research directions(revision: january 9, 2005)lewis k.s. limdoctoral candidate in marketingkelley school of businessindiana university1309 east tenth street (suite bu328w)bloomington, in 47405phone: 812-855-1116fax: 812-855-6440email: franklin acitoprofessor of marketing and doctoral programs chairkelley school of businessindiana university1309 east tenth street (suite bu730)bloomington, in 47405phone: 812-855-1013fax: 812-855-6440email: alexander rusetskidoctoral candidate in marketingkelley school of businessindiana university1309 east tenth street (suite bu328w)bloomington, in 47405phone: 812-855-1116fax: 812-855-6440email: the authors gratefully thank the indiana university center for international business education and research (iu ciber) for funding the empirical component of this study. the authors also thank professors alan rugman, hans thorelli, keith blois, shaoming zou, rockney walters, rebecca slotegraaf, and krishna erramilli for their valuable comments on earlier drafts of this manuscript. 2suggested running title: international marketing strategy archetypes51jibsarchetypes of international marketing strategy: conceptualization, preliminary evidence, and research directionsabstractthe extant business literature contains three characterizations of international marketing strategy that have, for decades, informed researchers, students, and practitioners alike of the different strategic options a multinational firm might have in formulating its cross-border marketing approaches. while useful, these characterizations have yet to be fully unified within an integrative framework that considers the gestalt patterns of interactions among key strategy dimensions. to consolidate and advance knowledge on the subject, this paper proposes a holistic conceptualization of international marketing strategy grounded in configurational theory, whereby strategies are viewed as multidimensional archetypes made up of different combinations of strategy elements. through a structured case coding/clustering study designed to tap such combinational patterns, we found preliminary evidence of three distinct international marketing strategy archetypes. after discussing the characteristics, possible drivers, and contingent performance potentials of these archetypes, we offer directions for future research.keywords: international marketing; global marketing; standardization versus adaptation; configurational perspective; case survey methodology; subsidiary-specific advantagesintroduction“classification is especially important to the study of organizational strategies; strategies consist of the integration of many dimensions which, in turn, can be configured in seemingly endless combinations. without a classification scheme, the strategy researcher must deal individually with the many variables of interest and must generally assume that all combinations are possible. a strategy classification scheme helps bring order to an incredibly cluttered conceptual landscape.” hambrick (1984, pp. 27-28)for the past four decades, business scholars have sought to characterize and classify the international marketing strategies of multinational firms (see buzzell, 1968; keegan, 1969; hovell and walters, 1972; ozsomer and prussia, 2000). of ultimate concern among these scholars is the performance potential associated with any type of international marketing strategy. a more basic goal of classifying these strategies, though, is simply to help researchers, students, and practitioners alike in the field understand the differing strategic options a multinational firm might have in structuring its marketing approaches across country markets.for the most part, the literature has characterized international marketing strategy from one of three perspectives (zou and cavusgil, 2002). the most common characterization of international marketing strategy is that along the standardization-adaptation dimension (e.g., jain, 1989). from this perspective, international marketing strategies are differentiated according to the degree of standardization (vs. adaptation) pursued with respect to one or more of the marketing mix elements (e.g., product, price, promotion, etc.). thus, a standardization strategy is characterized by the application of uniform marketing mix elements (i.e., product design, pricing, distribution, etc.) across different national markets. conversely, an adaptation strategy is characterized by the tailoring of the marketing mix elements to the needs of each market.a second way of characterizing international marketing strategy stems from the concentration-disepersion perspective (e.g., roth, 1992). this perspective, rooted in porters (1986) analysis of international competition and most recently reflected in craig and douglas (2000) theory of configural advantage, is more concerned with the geographic design of the international marketing organization. the underlying premise of this perspective is that a multinational firm should seek an optimal geographic spread of its value-chain activities such that synergies and comparative advantages across different locations can be maximally exploited. international marketing strategies, then, are differentiated according to the extent to which one or more aspects of the marketing value chain is consolidated or “concentrated” at particular geographic locations, versus being distributed or “dispersed” across various country markets.a third characterization of international marketing strategy is concerned with how competitive marketing activities across country markets are orchestrated. this perspective, referred to here as the integration-independence perspective, is heavily influenced by the competitive “warfare” description of hamel and prahalad (1985). the key question here is whether a multinational firm treats its subsidiary units as standalone profit centers (i.e., independently), or as parts of a grander strategic design (i.e., as integrated units). accordingly, international marketing strategies should be differentiated according to the degree of consultation and integrated action across markets, and the willingness to which a performance outcome in any one market is sacrificed in order to support the competitive campaigns in other markets.each of the above three major characterizations captures an important facet of international marketing strategy. specifically, as the standardization-adaptation characterization is concerned with the degree of harmonization of the marketing mix elements, it captures the market offering aspect of international marketing strategy. in comparison, as the concentration-dispersion characterization deals with the geographical design of the marketing value chain, it captures the structural/organizational aspect of international marketing strategy. finally, as the integration-independence characterization concerns the planning, implementation, and control elements of competing in a global marketplace, it captures the competitive process aspect of international marketing strategy. together, these characterizations potentially provide rich descriptions of the ways in which a multinational firm can choose to serve its customers, organize itself, and compete in the international marketplace.unfortunately, the potential to richly describe holistic patterns of international marketing strategies does not appear to be completely realized by conceptual and methodological advances in the field. until very recently, scholars have continued to rely on unidimensional scales to discuss international marketing strategies, and/or continued to discuss them from only a single perspective. for example, in jain (1989), the treatment of standardization seems to be in a general unidimensional sense, that is, with complete standardization on one end of the pole and complete adaptation on the other. in jains (1989) article, a brief section was devoted to pointing out the fact that the various facets of the marketing mix (product design, brand name, packaging, etc.) can be differentially standardized. nevertheless, the author did not discuss the potential implications of such differential levels of standardization among those sub-dimensions. furthermore, the author states, “conceptually, standardization of one or more parts of the marketing program is a function of five antecedents” (jain, 1989, pp. 71), implying either that standardization of one part of the marketing program sufficiently qualifies as a “standardization” strategy, or that standardizations of different parts of the marketing program are conceptually equivalent. likewise, olusoga (1993) also defines and measures concentration mostly only in general terms, that is, without distinction among varying degrees of concentration for different value chain activities. consequently, one would suspect that students and practitioners exposed to this literature might be at best equipped to think of international marketing strategies in terms of simple categorical labels such as “standardized”, “adapted”, “concentrated”, etc., without a deep understanding of what they imply at a holistic level.the recent effort by zou and cavusgil (2002) to model the construct of international (global) marketing strategy represents a significant step toward a truly multidimensional approach to this concept. zou and cavusgil (2002) propose a second-order factor construct, termed the “gms”, which overarches eight first-order dimensions of global marketing strategy spanning the three broad characterizations. the eight first-order dimensions were product standardization, promotion standardization, standardized channel structure, standardized price, concentration of marketing activities, coordination of marketing activities, global market participation, and integration of competitive moves. the price factor, however, was dropped from the final estimation of their gms model. thus, any multinational firms global marketing strategy, with given degrees of standardization, concentration, and integration, can be captured by a single gms score. however, such a second-order factor construct, while providing an aggregate measure of the degree of “globalness” of a multinationals marketing strategy, is not modeled to take into account possible interactions among the first-order strategy dimensions. specifically, by virtue of its linear approach, it is not designed to capture qualitatively distinct patterns of strategy (made up of different combinations of strategy elements). this limitation is regrettable because the various strategy elements are likely to interact and combine themselves into multidimensional “gestalts” (meyer, tsui, and hinings, 1993; miller, 1981, 1986).all of the above problems point to the need for a more intricate, yet robust, method for describing and classifying international marketing strategies. to this end, we present a holistic and unified approach to viewing international marketing strategy, an approach that is grounded in the configurational theory of organizations (meyer, tsui, and hinings, 1993; miller, 1981, 1986, 1996), and that sees strategy as taxonomic archetypes. this approach not only takes into account the different ways in which any given international marketing strategy can be characterized (i.e., in terms of standardization-adaptation, concentration-dispersion, and integration-independence), but also considers the overall configurational pattern of the strategy, in terms of its positions along the different dimensions. thus, our approach offers significant advantages over any single characterization of international marketing strategy, or any single aggregate score of the “globalness” of marketing strategy (zou and cavusgil, 2002).to illustrate our approach, we outline a case coding/clustering methodology which we have utilized specially for the purpose of uncovering several distinct archetypes of international marketing strategy. while the results cannot be taken as conclusive due to the exploratory nature of our analysis, the presence of archetypes within a conservative dataset provides preliminary evidence for the validity and theoretic value of our approach. our proposed approach makes three fundamental contributions to the international marketing literature. first, our notion of strategy archetypes arguably represents the first truly multidimensional way of describing and classifying international marketing strategies. by differentiating strategies in terms of their relative proximities in multidimensional space, our approach provides a novel integrative perspective of the various strategic marketing options that can be or have been pursued by multinational firms, and allows a more meaningful comparative evaluation of international marketing strategies. second, beyond identifying strategy archetypes per se, our approach provides a starting point for inquiring into their evolution as well as for a contingent analysis of their performance potential. by virtue of the multidimensionality in their configurational patterns, the archetypes contain rich information about the competitive structure of the global marketplace and factors that might lead them to succeed or fail. this presents a valuable opportunity to consolidate our knowledge of international business and international strategy. third, our approach has pedagogic value. by demonstrating the presence of archetypes of international marketing strategies and discussing their contingent performance potential, we bring forth an important set of ideas and a useful framework for future teaching of international marketing. students and practitioners could then better appreciate the multifaceted nature of international marketing without having to rely on unidimensional labels or dichotomies.the next section of this paper reviews our fields past efforts in characterizing and classifying international marketing strategy and reiterates the need for a more robust approach to delineating strategies. we then introduce our proposed archetype approach and highlight its foundations in configurational theory. next, we illustrate the implementation of our approach by examining data from our case coding study for the presence of archetypes. based on the findings, we explore the likely drivers of archetypes and potential archetype performance variations.the study of international marketing strategy: a brief historywhile the marketing literature has dealt with the issue of international advertising strategy since at least the early 1960s (e.g., elinder, 1961; fatt, 1964; roostal, 1963), it was buzzell (1968) who offered the first systematic discussion of the pros and cons of standardization as a type of international marketing strategy. a standardization strategy was defined as the harmonization of the various marketing mix elements (i.e., product design, pricing, distribution, etc.) across different country markets. conversely, a localization (adaptation) strategy would be the adoption of a unique marketing mix in each market. buzzell (1968) provided a number of reasons, including cost savings, consistency in customer dealings, and the exploitation of a universal appeal, for favoring a standardization policy, and urged multinational executives to consider moving away from the then-prevalent adaptation policy. following buzzell (1968), the international marketing literature continued to debate the merits of a standardization strategy. perhaps the most notable proponent of standardization was levitt (1983), who argued that diminishing cultural differences across countries due to technological advancements necessitate a global (i.e., standardization) strategy that best captures worldwide economies of scale. other supporters of this view included henzler and rall (1986), jain (1989), rutenberg (1982), and zou, andrus, and norvell (1997), who provided various arguments revolving around scale advantage and consistency in marketing planning and actions. on the other side of the debate were scholars such as boddewyn, soehl, and picard (1986), douglas and wind (1987), kotler (1986), ohmae (1989), and sheth (1986), who variously pointed out the barriers to worldwide marketing standardization, such as governmental and trade restrictions, inter-country differences in marketing infrastructure, and local management resistance.the debate between standardization and adaptation remained largely unresolved through the 1990s (see theodosiou and leonidou, 2003). more significantly, perhaps due to the intensity and prominence of the debate, the literature in the 1980s and 90s began to treat standardization and adaptation as fixed alternative options in international marketing strategy. a number of article titles (e.g., samiee and roth, 1992; solberg, 1998; szymanski, bharadwaj, and varadarajan, 1993) published in this period suggested that the academic community had come to accept the concept of international marketing strategy itself as falling along a single continuum of standardization versus adaptation. moreover, several scholars had begun using unidimensional scales to measure variations of international marketing strategies. for example, in a follow-up empirical study to jain (1989), samiee and roth (1992) used a single index to measure global (marketing) standardization. yet a careful reading of the literature reveals the state of knowledge was also evolving toward a multidimensional view of international marketing strategy. as early as 1969, keegan (1969) proposed looking at the issue of standardization versus adaptation from both the product and promotion points of view. he described four qualitatively different strategies, which c