The SEGA handbook of international marketing HELSOEN

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‘For their Handbook of International
Marketing, Masaaki Kotabe and Kristiaan
Helsen have managed to assemble a formidable
cast of experts. The Handbook provides
a comprehensive overview of the field of
International Marketing and readers gain access
to cutting edge insights from top researchers
in the field. A “must-read” for everyone with a
serious interest in the topic!’
Bodo Schlegelmilch, Dean, WU Executive
Academy, Vienna University of Economics and
Business Administration (WU-Wien), Austria

Over the past two decades the nature of international marketing has faced huge change.
Increasingly challenged with the unprecedented emergence of globally integrated, yet
geographically scattered activities multinational marketing has had to respond accordingly.
The SAGE Handbook of International Marketing brings together the fundamental questions
and themes that have surfaced and promises to be an essential addition to the study of this
critical subject area.

Masaaki “Mike” Kotabe holds the
Washburn Chair Professorship in
International Business and Marketing,
and is Director of Research at the Institute
of Global Management Studies at the Fox
School of Business and Management at
Temple University.

Kristiaan Helsen is an Associate Professor

of Marketing at the Hong Kong University
of Science and Technology (HKUST).

Cover image © iStock
ISBN: 978-1-4129-3428-2

9 781412 934282

The SAGE Handbook of

In an internationally minded and detailed analysis the contributors seek to examine the stateof-the-art in research in international marketing, with particular emphasis on the conceptual
framework and theory development in the field. Looking at new research, formative and
fundamental literature and the nature of global marketing strategy and consumer behavior, this
timely and comprehensive Handbook offers the reader a compelling examination of the central
concerns of marketing for an international community.

International Marketing

‘This Handbook covers a whole range of research
topics in international marketing, written by
world-class researchers conducting cutting-edge
work in their respective areas.  It is truly a stateof-the-art book on research in international
marketing.  It is a “must” read for academics and
PhD students interested in building their career
in international marketing.’
Vijay Mahajan, John P. Harbin Centennial Chair
in Business, The University of Texas at Austin,
USA

Edited by

‘The Handbook of International Marketing is a very timely book in light of the rapid
globalization of the world. It is not only the integration of markets of advanced and
emerging markets (North-South integration) but also among the emerging markets
(South-South integration). Kotabe and Helsen have done an outstanding job of
selecting some of the best contemporary scholars in the field. I was particularly pleased
to see authors from all over the world contributing to this Handbook!’
Jagdish N. Sheth, Charles H. Kellstadt Professor of Marketing, Goizueta Business School,
Emory University, USA

Kotabe and Helsen

‘This Handbook, edited by two of the leading
global scholars and written by a prestigious
and authoritative collection of international
scholars, will be a key resource in the evolution
of international marketing scholarship.  It will
be especially helpful to PhD students and junior
faculty, but more senior faculty will also benefit
from the broad scope and insightful analysis in
this Handbook.’
David B. Montgomery, Kresge Professor of
Marketing – Emeritus, Stanford Graduate School
of Business, USA & Dean – Emeritus, Singapore
Management University, Singapore

The SAGE Handbook of

International Marketing

Edited by

Masaaki Kotabe
and Kristiaan Helsen

‘This new Handbook of International Marketing
provides an in-depth analysis of international
marketing issues which must be understood and
addressed in today’s global and interdependent
markets. While covering the managerial issues
critical to marketers, the various chapters are
fundamentally based on thorough research
reviews. The book communicates a phenomenal
scope of knowledge; the authors, who are
expert researchers on these topics, summarize
the key concepts, frameworks and findings
of the international marketing literature with
thoroughness and great clarity. I do believe
that this book covers everything that marketing
academics need to know to access the field’s best
current knowledge. It is a must for Marketing
and International Business PhD students as well
as anyone interested in accessing the state-ofthe-art research in International Marketing.’
Hubert Gatignon, The Claude Janssen Chaired
Professor of Business Administration and
Professor of Marketing, INSEAD, France


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The SAGE
Handbook of

International
Marketing


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EDITORIAL ADVISORY BOARD
Dana Alden,
University of Hawaii at Manoa
Michael R. Czinkota,
Georgetown University

Angela da Rocha,
COPPEAD
Hubert Gatignon,
INSEAD, France
Kate Gillespie,
The University of Texas at Austin
G. Tomas M. Hult,
Michigan State University
Vijay Mahajan,
The University of Texas at Austin
Matthew B. Myers,
University of Tennessee-Knoxville
Michael Song,
University of Missouri-Kansas City
Gerhard A. Wüehrer,
Johannes Kepler University, Austria
Shaoming Zou,
University of Missouri-Columbia


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The SAGE
Handbook of

International
Marketing

Edited by

Maasaki Kotabe
and Kristiaan Helsen


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© SAGE Publications 2009
First published 2009
Apart from any fair dealing for the purposes of research or
private study, or criticism or review, as permitted under the
Copyright, Designs and Patents Act, 1988, this publication may
be reproduced, stored or transmitted in any form, or by any
means, only with the prior permission in writing of the publishers,
or in the case of reprographic reproduction, in accordance with the

terms of licences issued by the Copyright Licensing Agency.
Enquiries concerning reproduction outside those terms should be
sent to the publishers.
SAGE Publications Ltd
1 Oliver’s Yard
55 City Road
London EC1Y 1SP
SAGE Publications Inc.
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Thousand Oaks, California 91320
SAGE Publications India Pvt Ltd
B1/I 1, Mohan Cooperative Industrial Area
Mathura Road
New Delhi 110 044
SAGE Publications Asia-Pacific Pte Ltd
33 Pekin Street # 02-01
Far East Square, Singapore 048763
Library of Congress Control Number: 2008925349
British Library Cataloguing in Publication data
A catalogue record for this book is available from the British Library
ISBN 978-1-4129-3428-2
Typeset by CEPHA Imaging Pvt. Ltd., Bangalore, India
Printed in Great Britain by The Cromwell Press, Trowbridge, Wiltshire
Printed on paper from sustainable resources


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Contents

About the Contributors
Preface
OVERVIEW

1

1 Theoretical Paradigms, Issues, and Debates
Masaaki Kotabe and Kristiaan Helsen
SECTION 1

viii
xvii

CHANGING MARKET ENVIRONMENTS

3

13

2 The Ancient Road: An Overview of Globalization
Terry Clark, Monica Hodis and Paul D’Angelo

15

3 The Changing Global Political and Institutional Environment
Jonathan Doh and Terrence Guay

36

4 Marketing and the Global Legal Environment
Subhash Jain and Robert Bird

55

SECTION 2

CONSUMER BEHAVIOR RESEARCH

71

5 Consumer Cognition Across Cultures
Bernd H. Schmitt and Nader T. Tavassoli

73

6 Nation Equity: Country-of-Origin Effects and Globalization
Durairaj Maheswaran and Cathy Yi Chen

91

7 Researching International Markets: Philosophical
and Methodological Issues

V. Kumar
SECTION 3

CHANGING MARKET ENVIRONMENTS

8 Research into Exporting: Theoretical, Methodological,
and Empirical Insights
Constantine S. Katsikeas, Leonidas C. Leonidou, and Saeed Samiee

114

163

165


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vi

CONTENTS

9 International Franchising and Licensing

Lance Eliot Brouthers and Jason Patrick McNicol

183

10 Joint Ventures and Alliances
Miguel Rivera-Santos and Andrew C. Inkpen

198

11 Establishment Mode Choice: Acquisition versus. Greenfield Entry
Desislava Dikova and Keith D. Brouthers

218

12 Exit Strategies
Masaaki Kotabe and Sonia Ketkar

238

SECTION 4

GLOBAL STRATEGY

261

13 Global Competitive Marketing Strategy
Michael Grund, Oliver Heil, and Mark Elsner

263

14 Global Sourcing Strategy
Masaaki Kotabe, Michael J. Mol, and Janet Y. Murray

288

15 Uniformity versus Conformity: The Standardization Issue in
International Marketing Strategy
Saeed Samiee, Constantine S. Katsikeas, and Marios Theodosiou
SECTION 5

DEVELOPING MARKETING STRATEGY

303

323

16 International Diffusion of New Products
Trichy V. Krishnan and Suman Ann Thomas

325

17 Global Branding
John Roberts and Julien Cayla

346

18 Pricing in the Global MarketPlace
Kristiaan Helsen

361

19 Global Communications
Gary J. Bamossy and Johny K. Johansson

374

20 Global Channels of Distribution
Daniel C. Bello and Forrest Briggs

398

21 Global Trends in Grocery Retailing
Katrijn Gielens and Marnik G. Dekimpe

413

22 International Salesforce Management
Thomas Brashear Alejandro

429


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CONTENTS

SECTION 6

EMERGING ISSUES IN GLOBAL MARKETING

23 The Internet and International Marketing
Venkatesh Shankar and Jeffrey Meyer
24 Organizational Heritage, Institutional Changes and Strategic
Responses of Firms from Emerging Economics
Preet S. Aulakh and Raveendra Chittoor
25 Small Multinational Enterprises under Globalization
Gary Knight
26 Ethics and Corporate Social Responsibility for Marketing
in the Global Marketplace
Georges Enderle and Patrick E. Murphy
Index

vii

449
451

468

490

504

532


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About the Contributors
Preet S. Aulakh is the Pierre Lassonde Chair in International Business and Director of the PhD
Program at the Schulich School of Business, York University, Toronto, Canada. He received his
PhD from the University of Texas at Austin. His research focuses on structuring and managing
international alliances and partnerships, international technology licensing, and internationalization
of firms from emerging economies. His research has been published in journals such as Academy
of Management Journal, Journal of International Business Studies, Journal of Marketing,
Organization Science, among others.
Gary Bamossy is a Professor in the Marketing Group at the McDonough School of Business,
Georgetown University. He was Professor of Marketing at the Vrije Universiteit in Amsterdam
from 1985 to 1999 and Director of the Global Business Program at the University of Utah prior
to coming to Georgetown in 2005. His research looks at the global diffusion of material
culture, and he is co-author of Consumer Behaviour: A European Perspective, 4th edn., 2009
(Pearson/Prentice-Hall).
Daniel C. Bello (PhD, Michigan State University) is the Marketing Roundtable Research
Professor in the Department of Marketing at Georgia State University. Previously, he was on
the faculty at the University of Notre Dame and held management positions in the Product

Development Group at Ford Motor Company. His research interests include distribution strategy in domestic and international channel systems. He has published widely in professional
journals such as Journal of Marketing, Journal of the Academy of Marketing Science, Journal
of International Business Studies and Journal of Business Research, among others. Currently,
he serves as Marketing Editor (2007–2010) of the Journal of International Business Studies.
Previously, he served as Editor-in-Chief (2003–2007) of the Journal of International
Marketing. He also has served, or serves, on the Editorial Review Boards of the Journal of
Marketing, Journal of the Academy of Marketing Science, Journal of International Marketing
and Journal of Business Research.
Robert Bird is an Assistant Professor of Legal Studies at the University of Connecticut. Robert
received his JD and MBA from Boston University. Before joining academia full-time, Robert
practiced civil litigation and legal research in Connecticut. He has served as a clerk for the
Connecticut Appellate Court, the US Bankruptcy Court, and the Massachusetts Superior Court.
His research interests include employment law and international intellectual property law,
including compulsory licensing and foreign direct investment. Guest lectures include presentations at Indiana University, University of Texas, New York University, and the United Nations.
In 2003, he received the Junior Faculty of the Year award from the Academy of Legal Studies
in Business. He has published research articles in the American Business Law Journal, Boston
University International Law Journal, Cincinnati Law Review, Kentucky Law Journal, and the
Trademark Reporter.
Thomas Brashear-Alejandro (PhD, Georgia State University) is an Associate Professor of
Marketing at the University of Massachusetts Amherst. His work focuses on international marketing, sales management, business to business marketing and strategic marketing. Tom has


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ix

published his work in the Journal of the Academy of Marketing Science, Journal of Business
Research, European Journal of Marketing, Journal of Business and Industrial Marketing and
the Journal of Personal Selling and Sales Management. He is on the Editorial Board of the
Journal of Business Research and served as guest editor for the Journal of Business and
Industrial Marketing and for a special edition of Journal of Personal Selling and Sales
Management on international sales management. Tom has served as a visiting professor at the
~
Universidade Pontificia Catolica in Rio de Janeiro and Fundacao
Dom Cabral in Belo
Horizonte, Brazil.
Forrest Briggs is an Atlanta native and a doctoral student at Georgia State University. His
research interests include marketing to consumers at the bottom of the pyramid as well as personal selling and sales management. He is an academic member of the American Marketing
Association and other professional associations.
Keith D. Brouthers is Professor of Business Strategy at King’s College London, University of
London. He is ranked among the world’s leading scholars in international entry mode, international management, and Central and Eastern European research. Keith’s research has been published in leading academic journals including Strategic Management Journal, Journal of
Management, Journal of International Business Studies, Journal of Management Studies,
Management International Review, International Business Review, Thunderbird International
Business Review, Long Range Planning, Journal of Business Research, and Entrepreneurship
Theory and Practice.
Lance Eliot Brouthers is Professor of Western Hemispheric Trade at The University of Texas
at El Paso. He has published over 80 authored articles, proceedings and book chapters on
international business strategy, the international business environment and international
entrepreneurship.
Julien Cayla is a Lecturer in Marketing at the Australian School of Business. His research
program is an attempt to integrate anthropological theories and methodologies to the study

of marketing in the global marketplace. Julien received his PhD in 2003 from the University
of Colorado. His thesis examined the way companies learn about culture in the context of
their work with ad agencies. This work received the prestigious Alden Clayton Prize from
the Marketing Science Institute as well as the Sheth Foundation Best Doctoral Dissertation
Prize. His most recent work on Asian brands is forthcoming in the Journal of Consumer
Research.
Yi Chen Cathy is Assistant Professor of Marketing at the Lee Kong Chian School of Business
at Singapore Management University. She received a PhD in marketing from Anderson School
of Management, University of California, Los Angeles. She holds a BA from Huazhong
University of Science and Technology and an MA from University of International Business and
Economics, Beijing. Her research areas include Nation Equity, Emotions in Consumer Decisionmaking, Promotion, Reference Price and Culture. She has previously published in Journal of
Consumer Research. Before joining academia, she worked in the telecommunications industry
in China in international marketing.
Raveendra Chittoor is an Associate Professor in the strategic management group at the Indian
Institute of Management Calcutta, India. His research focuses primarily on issues related to
entrepreneurship, emerging economies and internationalization of firms from India and has


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been published or accepted for publication by international journals such as Organization
Science, Family Business Review and Journal of International Management. He regularly presents his research at annual meetings of Academy of Management and Academy of International
Business.
Terry Clark is Professor and Chair in the Marketing Department at Southern Illinois
University, Carbondale, where he teaches Marketing Strategy and Global Marketing in the
undergraduate, MBA and PhD programs. Prior to joining SIU, he was on the faculty of the
Goizueta Business School of Emory University (1993–1999), and the College of Business at
the University of Notre Dame (1986–1993). He is also Director of Barking Dawg Productions,
the Marketing/Advertising arm of Southern Illinois University, Carbondale, in which capacity
he has responsibility for building, crafting, and general stewardship of ‘Brand SIU’.
Paul D’Angelo is Assistant Director of Elderhostel International and Study Abroad in the
School of Social Work at SIU. In those capacities, he is involved with social development and
social policy issues related to poverty alleviation, HIV-AIDS, multicultural aspects of health
care, international adoption and the application of information communication technologies in
addressing social problems, around the world. His interests include global health policy, law,
and gerontology.
Marnik G. Dekimpe (PhD, University of California, Los Angeles) is Research Professor of
Marketing at Tilburg University (The Netherlands) and Professor of Marketing at the Catholic
University Leuven (Belgium). He is also an Academic Trustee with the Marketing Science
Institute. His work has been published in Marketing Science, Management Science, the Journal
of Marketing Research, the Journal of Marketing, the International Journal of Research in
Marketing and the Journal of Econometrics, among others. His current research interests deal
with understanding the hard-discounter phenomenon, the impact of product-harm crises, the
drivers of private-label success, the internationalization of retail firms, and the measurement of
long-run marketing effects.
Desislava Dikova is an Assistant Professor at the University of Groningen, the Netherlands. In
her doctoral dissertation, she examined foreign direct investment modes in the transitional
economies of Central and Eastern Europe, and focused on their performance implications. Her
current research interests include international market entry and establishment modes, preacquisition processes, and strategic fit models. Prior to embarking on an academic career,

Dr. Dikova worked briefly for the Bulgarian Ministry of Agriculture and Forestry (in Sofia) and
the European Commission’s Directorate General for Regional Policy (in Brussels).
Jonathan Doh is Herbert Rammrath Chair in International Business, founding Director of the
Center for Global Leadership, and Associate Professor of Management at the Villanova School
of Business. His research centers on international strategy and corporate responsibility. He has
authored more than 35 refereed articles, 20 chapters in scholarly edited volumes, and 50 conference papers on topics such as strategy for emerging markets, global corporate responsibility, and corporate–NGO relations. He is co-author or editor of five books, including
Multinationals and Development (with A. Rugman, 2008, Yale University Press). He received
his PhD from George Washington University in strategic and international management.
Mark Elsner is a Visiting Research Scholar at Leeds School of Business, University of
Colorado and Doctoral Candidate at the Department of Marketing, University of Mainz.


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xi

He studied economics and communication science in Mainz and Madrid and worked in consulting before becoming a scientic fellow in Mainz. He is a lecturer for several masters’ degree
courses in marketing strategy and an advisor for diploma theses. His research interest lies in
the investigation of the impact of consumer generated content in the Internet, electronic word
of mouth, and the influence of the Internet on global competitive interplay and price wars.
Georges Enderle is John T. Ryan Jr. Professor of International Business Ethics at the Mendoza

College of Business, University of Notre Dame, and a former President of the International
Society of Business, Economics, and Ethics (2001–2004). Educated in Philosophy (Munich),
Theology (Lyon), Economics (Fribourg), and Business Ethics (St. Gallen), he has extensive
research and teaching experiences in Europe, the United States, and China and is the author or
editor of 18 books, including Developing Business Ethics in China (2006), Business Students
Focus on Ethics (2000), International Business Ethics (1999), Handlungsorientierte
Wirtschaftsethik (Action-oriented Business Ethics 1993), and Lexikon der Wirtschaftsethik
(German Encyclopedia of Business Ethics 1993).
Katrijn Gielens (PhD, Catholic University Leuven, Belgium) is Associate Professor of
Marketing at the University of North Carolina at Chapel Hill. Her work has been published in
the Journal of Marketing Research, the Journal of Marketing, the Journal of Consumer
Research, and the International Journal of Research in Marketing. Her current research interests deal with private-label tiers, the introduction of new products, the internationalization of
retail firms, and price promotion effects.
Michael Grund is Professor for Marketing and Head of the Center for Marketing at the
University of Applied Sciences (HWZ) in Zürich. After obtaining a degree in Marketing,
Logistics and Psychology at the University in Mannheim (Germany), Michael started work as
doctoral student and research fellow at the European Business School (Germany) and the
University of Basel (Switzerland). After obtaining his PhD in Marketing, he spent several years
in the telecommunications industry in Switzerland before joining HWZ in 2006. His research
focuses on globalization, global competition, international competition and quality competition. He is currently working on a series of cross-national and -continental comparisions of
competitive conduct and focus.
Terrence Guay is Clinical Associate Professor of International Business at Pennsylvania State
University’s Smeal College of Business. His research focuses on the competition between
governments, international organizations, NGOs, and other non-state actors to shape business
behavior and the international business environment. He has published two books and several
articles and book chapters on the effects of government policies on the global defense industry; cooperation and competition in transatlantic economic relations; the impact of economic
sanctions on international business; NGOs and corporate codes of conduct; corporate social
responsibility; and corporate political strategy. He received his PhD from Syracuse University.
Oliver Heil is the Chaired Professor of Marketing at Mainz. He studied economics at Bonn,
econometrics at University of Pennsylvania and marketing at the Wharton School. He taught at

Indiana University’s Kelly School, at UCLA’s AGSM and at HKUST. He researches signaling,
global competition, price wars, over-acting, antitrust, luxuries, crises, reputation, and Internet
competition. He has served and will serve as co-editor (Special Issue on Competition) for
International Journal of Research in Marketing, as Editorial Board member/reviewer for
Journals such as JMR, JM, IJRM, Marketing Science, and Management Science. His papers


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ABOUT THE CONTRIBUTORS

have appeared in leading academic and professional journals. He has received awards from
MSI, EMAC, Schmalenbach, DFG, IRA, DAAD, and has won a best research paper award. He
also serves as a trustee at MSI. Oliver’s latest book is on competitive crisis management.
Kristiaan Helsen is an associate professor of marketing at the Hong Kong University of
Science and Technology. He holds a PhD in marketing from the University of Pennsylvania.
His research has appeared in the Journal of Marketing Research, the Journal of Marketing,
Marketing Science, and the Journal of the Academy of Marketing Science, among others. He is
also co-author (with Masaaki Kotabe) of Global Marketing Management, a textbook on international marketing. He is a member of the editorial board of the International Journal of
Research in Marketing. Research interests include duration modeling, product harm crises,
international marketing, and product diffusion.

Monica A. Hodis is a doctoral candidate in Marketing at Southern Illinois University,
Carbondale. She has a BS in Economics (Management) from the West University of Timisoara,
Romania, and an MBA from Southern Illinois University, Carbondale. Her research interests
include dysfunctional consumer behavior, vicarious learning in online environments, IM and
social networking, and the role of emotions in advertising. Her research has appeared in the
Journal of International Management.
Andrew Inkpen is the Seward Chair in Global Strategy at Thunderbird. His research addresses
various aspects of international management and strategy, including the management of joint
ventures and alliances, international knowledge transfer, and interfirm trust. His research has
been published in various journals, including Strategic Management Journal, Academy of
Management Review, Organizational Science, California Management Review and Journal of
International Business Studies.
Subhash C. Jain is a Professor of International Business, Director of the Center for
International Business Education and Research (CIBER), and the Director of the GE Global
Learning Center, at the School of Business, University of Connecticut. He is the author of more
than 100 publications, including nine books. He holds a PhD and an MBA from the University
of Oregon; and a B.Com and M.Com from the University of Rajasthan (India). He has presented seminars both in the United States and abroad on various topics including global marketing strategy, export strategy and global business negotiations. He serves as a consultant to
different companies and governments worldwide.
Johny K. Johansson is the McCrane/Shaker Professor of International Business and
Marketing, McDonough School of Business, Georgetown University, where he specializes in
international marketing strategy. He is a graduate of the Stockholm School of Economics and
University of California at Berkeley. He has conducted seminars at institutions worldwide
including Stanford, INSEAD and Hitotsubashi, and executive seminars for multinational companies, including General Electric, Honda and Beiersdorff. He is the author of Global
Marketing (4th edn), and co-author of Relentless: The Japanese Way of Marketing. His most
recent book is In Your Face: How American Marketing Excess Fuels Anti-Americanism,
(Financial Times/Prentice-Hall, 2004).
Constantine S. Katsikeas is the Arnold Ziff Research Chair in Marketing and International
Management and the Marketing Department Chair at Leeds University Business School. His
main research interests focus on international marketing and purchasing, competitive strategy,

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xiii

and collaborative exchange relationships. He has published widely in these fields and articles
of his have appeared in Journal of Marketing, Organization Sciences, Strategic Management
Journal, Journal of the Academy of Marketing Science, Decision Sciences, Journal of
International Business Studies, Journal of International Marketing and other journals.
Sonia Ketkar is Assistant Professor of International Business in the College of Business and
Economics at Towson University. Prior to joining Towson in 2006, she received her PhD in
Business Administration (International Business) from Temple University. She teaches courses
in international trade, investment and multinational strategy. She has worked on research
papers on outsourcing, foreign entry, foreign exit, subsidiary strategy and divestiture decisions.
She has also presented her research at leading management and international business
conferences.
Gary A. Knight (PhD, Michigan State University) is Associate Professor and Director of
International Business at Florida State University. He has authored numerous articles in the
Journal of International Business Studies, Journal of World Business, Management
International Review and elsewhere. He has co-authored three books, including International
Business, (1st edn), published by Prentice-Hall. He has extensive experience in international

business in the private sector. He has won several awards for research and teaching, including
best teacher in the MBA program and the Hans Thorelli 5-Year Award for his article
‘Entrepreneurship and Strategy: The SME Under Globalization’.
Masaaki ‘Mike’ Kotabe holds the Washburn Chair Professorship in International Business
and Marketing at the Fox School of Business and Management at Temple University. He
received his PhD from Michigan State University. Prior to joining Temple University in 1998,
he was Ambassador Edward Clark Centennial Endowed Fellow and Professor of Marketing and
International Business at the University of Texas at Austin. Dr. Kotabe served as the Vice
President of the Academy of International Business in 1997–98. In 1998, he was elected a
Fellow of the Academy of International Business for his significant contribution to international business research and education. Dr. Kotabe has written more than 100 scholarly publications, including the following books: Global Sourcing Strategy: R&D, Manufacturing,
Marketing Interfaces (1992), Anticompetitive Practices in Japan (1996), Global Supply Chain
Management (2006), and Global Marketing Management, 4th edn (2007).
Trichy V. Krishnan is a marketing faculty at the NUS Business School, NUS, Singapore. His
research interests are in new product diffusion, retailing and other channel issues, and licensing.
His papers have appeared in all leading marketing journals including Marketing science,
Journal of Marketing research, Management Science, International Journal of Reseach in
Marketing. He reqularly reviews for all leading marketing journals and is a member of the editorial board of International Journal of Research in Marketing. Having lived in India, Europe,
the USA and Singapore for extended periods, topics related to international matters, various
cultural differences are always of special interest for him. Recently he used this knowledge to
help an international market research company develop online ad spend forecasts for many
countries where no data were available.
V. Kumar (VK) has been recognized with numerous teaching and research excellence awards
and two lifetime achievement awards for his contributions to Marketing Strategy and B2B marketing. He has published over 100 articles in many scholarly journals in marketing, including
the Harvard Business Review, Journal of Marketing, Journal of Marketing, Marketing Science


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and Operations Research. His current research focuses on retailing, international diffusion
models, customer relationship management, forecasting, international marketing research and
strategy, resource allocation, sales promotion and interaction orientation. He was recently listed
as one of the top five ranked scholars in marketing worldwide. He has consulted for many
Global Fortune 500 firms. He received his PhD from the University of Texas at Austin.
Leonidas C. Leonidou is Professor of Marketing at the School of Economics and Management
of the University of Cyprus. He has research interests in international marketing, relationship
marketing, strategic marketing, and marketing in emerging economies. He has published extensively in these fields and his articles have appeared in various journals, including European
Journal of Marketing, Industrial Marketing Management, International Marketing Review,
Journal of Business Research, Journal of International Business Studies, Journal of
International Marketing, Journal of the Academy of Marketing Science, Journal of World
Business, and Management International Review.
Durairaj Maheswaran (Mahesh) is the Paganelli-Bull Professor of Marketing and
International Business at the Stern School of Business, New York University. He received a
PhD in marketing from Kellogg School of Management, Northwestern University. He has a
Bachelor degree in Engineering from University of Madras and a MBA from Indian Institute
of Management, Calcutta. He has six years of industry experience in advertising and marketing research. He has published widely in leading publications, including the Journal of
Marketing Research, Journal of Consumer Research, Journal of Personality and Social
Psychology and Journal of Consumer Psychology. He is the Editor of the Journal of Consumer
Psychology and was an Associate Editor with the Journal of Consumer Research. He is a Past
President of the Society of Consumer Psychology.

Jason Patrick McNicol is currently enrolled in the International Business Doctoral Program
at the University of Texas at El Paso. He has a Bachelor’s degree in Business from Texas Tech
University and a Master’s degree from the University of Texas at El Paso. His areas of interest
include international entrepreneurship and strategy.
Jeffrey Meyer is a PhD student at Texas A&M University. His main research interest is in the
area of hybrid innovation, with an emphasis on the pricing, bundling, and diffusion aspects.
Other research interests include the broad areas of services marketing and customer satisfaction. He holds a MS degree in Marketing Research from the University of Texas at Arlington
and a BS in Statistics from Iowa State University. Previously, he worked for several years as a
senior marketing research consultant for the Principal Financial Group, conducting numerous
research projects involving topics such as customer satisfaction, retention, and segmentation,
among others.
Michael J. Mol is a senior lecturer in Strategic Management at the University of Reading, and
Visiting Researcher of London Business School’s M-Lab. He researches strategic management
in large firms, with particular interests in sourcing strategy and management innovation. His
publications have appeared, or are due to appear, in – among others – Academy of Management
Review, Research Policy, Sloan Management Review, and Strategic Organization. He has also
(co-)authored four books, including the recent Outsourcing: Design, Process and Performance
(Cambridge University Press) and Giant Steps in Management (FT/Prentice-Hall). Michael
holds a PhD from RSM Erasmus University.


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xv

Janet Y. Murray is E. Desmond Lee Professor for Developing Women Leaders and
Entrepreneurs in International Business at the University of Missouri–St. Louis. Her research
focuses on global sourcing and international marketing strategies. She has published in
Journal of Marketing, Strategic Management Journal, Journal of International Business
Studies, and other journals. She is a recipient of four Best Paper Awards. In October 2005,
Michigan State University CIBER identified Professor Murray as the 21st most prolific IB
researcher (among a total of 1,908 authors) in 1996–2005. She serves on the editorial review
boards of Journal of International Business Studies, Journal of International Management,
Journal of International Marketing, and Strategic Outsourcing.
Patrick E. Murphy is the C.R. Smith Co-Director of the Institute for Ethical Business
Worldwide and Professor of Marketing in the Mendoza College of Business at the University
of Notre Dame. His work has appeared in leading journals and he has written or edited several
books on marketing ethics. He has served as a journal editor and on multiple editorial review
boards. Murphy won teaching awards at Notre Dame in 2005 and 2006. Currently, he is an
Academic Advisor of the Business Roundtable Institute for Corporate Ethics. He holds a BBA
from Notre Dame, an MBA from Bradley, and a PhD from Houston.
Miguel Rivera-Santos is an Assistant Professor of strategy and international business at
Babson College. His research focuses on strategic alliances and inter-organizational collaboration, and, more specifically, on how organizations can use alliances to pursue their own strategic goals. His current research interests include the organizational specificities of cross-sector
alliances, such as firm–NGO and firm–government alliances, the structure of cross-sector networks, and the impact of cross-sector collaboration on poverty in the context of Base-of-thePyramid initiatives. His research has been published in academic books and journals. He is also
the author of several case studies on alliances and on strategies in BOP environments.
John Roberts holds a joint appointment as Scientia Professor at the University of New South
Wales and Professor of Marketing at the London Business School. His research interests
revolve around the intersection of evidence-based marketing and management practice. John
has won the American Marketing Association’s John Howard Award, its William O’Dell
Award, and its Advanced Research Techniques Forum Best Paper Award. He has been a finalist in the John Little Award three times and was a finalist in the ISMS inaugural Marketing
Practice Award. John sits on the Editorial Boards of Marketing Science, Journal of Marketing

Research, Journal of Forecasting, and International Journal of Research in Marketing. He is
an Academic Trustee of the Marketing Science Institute.
Saeed Samiee is the Collins Professor of Marketing and International Business at The
University of Tulsa. He has served as a visiting Professor and has lectured at business schools
in over a dozen countries. Prior to joining TU as the Director of the International Management
Center, he was a member of the faculty at the University of South Carolina. He received his
PhD from The Ohio State University. Professor Samiee has contributed to scholarly journals in
marketing and international business as an author and a member of editorial review boards,
including the Journal of Marketing, Journal of the Academy of Marketing Science, and Journal
of International Business Studies. He currently serves on 10 editorial review boards, including
Journal of International Business Studies.
Bernd Schmitt is the Robert D. Calkins Professor of International Business School in New
York and the Executive Director of the Center on Global Brand Leadership. His research


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ABOUT THE CONTRIBUTORS

focuses on language, global branding and customer experience. For further information, please
visit www.meetschmitt.com.

Venkatesh (Venky) Shankar is Professor and Coleman Chair in Marketing and PhD Director
at the Mays Business School, Texas A&M University. He has a marketing PhD from Kellogg
School, Northwestern University. His research has been published in Journal of Marketing
Research, Marketing Science, Management Science, Strategic Management Journal, and
Journal of Marketing. He is a winner of the Clarke Award for Outstanding Direct Marketing
Educator, the IBM Faculty Partnership Award, the Green Award for the Best Article in Journal
of Marketing Research, and the Lehmann Award for the Best Dissertation-based Article in an
AMA journal. He is co-editor of Journal of Interactive Marketing, Academic Trustee, MSI and
President of Marketing Strategy SIG, AMA. He has been a visiting faculty at MIT, INSEAD,
Singapore Management University, SDA Bocconi, Indian School of Business, and Chinese
European International Business School.
Nader Tavassoli is Chair of the Marketing Faculty at London Business School and non-executive
chairman of The Brand Inside (www.thebrandinside.com). His research focuses on brand strategy, internal branding, marketing communications, and consumer psychology, with a special
emphasis on cross-cultural differences in behavior.
Marios Theodosiou is an Assistant Professor of Marketing at the Department of Public and
Business Administration, University of Cyprus. He received his doctorate in international marketing from Cardiff Business School, United Kingdom. His current research interests include:
standardization versus adaptation of marketing strategies in international markets, export marketing strategy, and export sales management. He published articles in several international
journals, including the Journal of the Academy of Marketing Science, Strategic Management
Journal, Journal of Business Research, Journal of International Marketing, Journal of World
Business, International Business Review and the European Journal of Marketing. He currently
serves on the Editorial Review Board of Industrial Marketing Management.
Suman Ann Thomas is a Doctoral Candidate in the Department of Marketing at NUS Business
School, National University of Singapore. She is an engineer with an MBA from Indian
Institute of Management, Ahmedabad and worked for ICICIBank, India and has an overall
corporate experience of four years before pursuing an academic career. Her research interests
are in Consumer Search and Choice Behavior, Customer Targeting, Consumer New Product
Adoption and Growth, Structural Modeling, Learning Models and Strategic Interactions of
Firms in Marketing.

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Preface
Research in international marketing has evolved over the years, and has always reflected the
climate of the time. Three major changes that have taken place in the last decade or so should
be noted. First, the landscape of the global economy changed drastically in the last decade or
so. The Asian and Latin American financial crises, the further expansion of the European Union
(EU), the economic recovery of Japan from its decade-long recession, and the emergence of
BRIC (Brazil, Russia, India and China) as economic powerhouses, have occurred during the
this period. For example, up until mid-1990s, we were pretty certain that the Asian economy
would grow at a fairly fast pace as it had done in the previous 40 years. However, to everyone’s
surprise, the Asian economic miracle was brought to a screeching halt by the region’s financial
crisis toward the end of 1998. The ramifications of the Asian financial crisis are not limited to
Asian countries and their trading partners. Another epoch-making event was the introduction
of a common European currency, known as the euro, on January 1, 1999. China’s role as the
world’s factory is well established; India’s increased role in information technology development is obvious. At the time of this writing in 2008, Brazil and Russia, among other resourcerich nations, are benefiting from skyrocketing prices of oil and other resources, shifting
enormous amounts of wealth from resource-poor to resource-rich countries.
Second, the explosive growth of information technology tools, including the Internet and
electronic commerce (e-commerce), has had a significant effect on the way we do business
internationally. This is a relatively new phenomenon that we need to have a careful look at. On
one hand, everyone seems to agree that business transactions will be faster and more global
early on. And it is very true. As a result, marketing management techniques such as customer

relationship management and global account management have become increasingly feasible.
However, on the other hand, the more deeply we have examined this issue, the more convinced
we have become that certain things would not change, or could even become more local as a
result of globalization that the Internet and e-commerce bestow on us.
Third, it is an underlying human tendency to desire to be different when there are economic
and political forces of convergence (often referred to as globalization). When the globalization
argument (and movement) became fashionable in the 1980s and 1990s, many of us believed
that globalization would make global marketing easier. Marketing beyond national borders,
indeed, has become easier, but it does not necessarily mean that customers want the same products in countries around the world. For example, many more peoples around the world try to
emphasize cultural and ethnic differences as well as accept those differences than ever before.
Just think about many new countries being born around the world as well as regional unifications taking place at the same time. Another example is that while e-commerce promotion on
the Internet goes global, product delivery may need to be fairly local in order to address local
competition and exchange rate fluctuations as well as the complexities (export declarations, tariffs, and non-tariff barriers) and increased costs (due primarily to higher oil prices and security
needs) of international physical distribution. From a supply-side point of view, globalization
has brought us more products from all corners of the world. However, from a demand-side
(marketing-side) point of view, customers have a much broader set of goods and services
to choose from. In other words, marketers now face all the more divergent customers with
divergent preferences – far from a homogeneous group of customers.


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PREFACE

Indeed, these environmental changes we have observed in the last decade or so are more than
extraordinary. As a result, researchers in international marketing are facing enormous challenges to address those changes in their theory development and empirical studies.
We have decided to compile the SAGE Handbook of International Marketing not just to
stockpile, reflect, and critique on past research but more importantly to address where the discipline is heading. Of course, such an endeavor requires enormous intellectual power. We
recruited truly world-class researchers who have been conducting cutting-edge research and are
recognized as thought leaders in their respective research areas. These researchers are so highly
coveted around the world that they are truly jet-setters. Despite their busy schedules, they were
kind enough to take up on a task of developing thought-provoking chapters with their critical
review of the existing literature and their vision of future directions for further theory development across a wide range of research areas in international marketing.
We hope that this comprehensive Handbook not only provides an in-depth authoritative
review of the literature but also helps define the direction of research in international marketing for years to come. Researchers, including those pursuing research careers in international
marketing, find it useful to consult with this Handbook as the first step to understanding the
nature and scope of research in various areas of research collectively constituting the discipline.
We sincerely hope that this Handbook will help junior researchers develop the discipline
further and even influence the direction of research in related disciplines such as management
and strategy.
Before closing, we would like to acknowledge many people involved in this Handbook project.
First and utmost, we would like to thank the chapter authors for taking the time to share their
state-of-the-art thinking on their research areas. Second, we would like to acknowledge the
Advisory Board members for their critical review of the chapter manuscripts for further
improvement. Third, we should recognize our two brilliant editors, Delia Martinez Alfonso and
Clare Wells, at SAGE Publications, who have given us encouragements and directions throughout
the project.


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Overview


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1
Theoretical Paradigms,
Issues, and Debates
Masaaki Kotabe and Kristiaan Helsen

Marketing is essentially a creative corporate
activity involving the planning and execution
of the conception, pricing, promotion, and
distribution of ideas, products, and services
in an exchange that not only satisfies customers’ current needs but also anticipates and
creates their future needs at a profit.1
Marketing is not only much broader than
selling; it also encompasses the entire company’s market orientation toward customer
satisfaction in a competitive environment. In
other words, marketing strategy requires
close attention to both customers and competitors. Quite often marketers have focused
excessively on satisfying customer needs
while ignoring competitors. In the process,
competitors have outmaneuvered them in the
marketplace with better, less-expensive products. The same logic applies to research in
international marketing. Research focus on
both customers and competitors is equally
important.
Companies generally develop different marketing strategies depending on the degree of
experience and the nature of operations in international markets. Companies tend to evolve
over time, accumulating international business
experience and learning the advantages and

disadvantages associated with complexities
of manufacturing and marketing around the
world. As a result, many researchers have
adopted an evolutionary perspective on internationalization of the company just like the
evolution of species over time. In the following pages we will formally define and
explain five stages that characterize the evolution of international marketing. Of course,
not all companies go through the complete
evolution from a purely domestic marketing
stage to a purely global marketing stage. An
actual evolution depends also on the economic, cultural, political, and legal environments of various national markets in which
the company operates, as well as on the
nature of the company’s offerings. A key
point here is that many companies are constantly under competitive pressure to move
forward both reactively (responding to the
changes in the market and competitive environments) and proactively (anticipating the
change).
Marketing products and services around
the world, transcending national and political
boundaries, is a fascinating phenomenon. The
phenomenon, however, is not entirely new.
Products have been traded across borders


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THE SAGE HANDBOOK OF INTERNATIONAL MARKETING

throughout recorded civilization, extending
back beyond the Silk Road that once connected East with West from Xian to Rome on
land and the recently excavated sea-trade
route between the Roman Empire and India
that existed 2,000 years ago. However, since
the end of World War II, the world economy
has experienced a spectacular growth rate
never witnessed before in human history,
largely led by big US companies in the 1950s
and 1960s, then by European and Japanese
companies in the 1970s and 1980s, and most
recently joined by new emerging market
firms, such as Lenovo, Mittal Steel, and
Cemex. In particular, competition coming
recently from the so-called BRIC countries2
has given the notion of global competition a
touch of extra urgency and significance.
On a political map, country borders are as
clear as ever. But on a competitive map,
financial, trading, and industrial activities
across national boundaries have rendered
those political borders increasingly irrelevant. Of all the forces chipping away at those
boundaries, perhaps the most important are
the emergence of regional trading blocs (e.g.,

NAFTA, the European Union), technology
developments (particularly in the IT area)
and the flow of information. Today people
can see for themselves what tastes and preferences are like in other countries. For
instance, people in India watching CNN and
Star TV now know instantaneously what is
happening in the rest of the world. A farmer
in a remote village in Rajasthan in India
might ask the local vendor for Surf (the
detergent manufactured by Unilever) because
he has seen a commercial on TV. More than
10 million Japanese traveling abroad every
year are exposed to larger-size homes and
much lower consumer prices abroad. Such
information access creates demand that
would not have existed before.
The availability and explosion of information technology such as telecommunications
has forever changed the nature of global
competition. Geographical boundaries and
distance have become less of a constraint in
designing strategies for the global market.

The other side of the coin is that not only
firms that compete internationally, but also
those whose primary market is home-based,
will be significantly affected by competition
from around the world.
We often hear terms such as global markets, global competition, global technology,
and global competitiveness. In the past, we
heard similar words with ‘international’ or

‘multinational’ instead of global attached to
them. What has happened since the 1980s?
Are these terms just fashionable concepts of
the time without some deep meanings? Or
has something inherently changed in our
society?

EVOLUTION OF MARKETING ACROSS
NATIONAL BOUNDARIES
There are five identifiable stages in the evolution of marketing across national boundaries. Therefore, knowing the dynamics of
the evolutionary development of international marketing involvement is important
for two reasons. First, it helps in the understanding of how companies learn and acquire
international experience and how they use it
for gaining competitive advantage over time.
This may help an executive to be better prepared for the likely change needed in the
company’s marketing strategy. Second, with
this knowledge, a company may be able to
compete more effectively by predicting its
competitors’ likely marketing strategy in
advance.

Domestic marketing
The first stage is domestic marketing. Before
entry into international markets, many companies focus solely on their domestic market.
Their marketing strategy is developed based on
information about domestic customer needs
and wants, industry trends, economic, technological, and political environments at home.
When those companies consider competition,

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THEORETICAL PARADIGMS, ISSUES AND DEBATES

they essentially look at domestic competition. Today, it is highly conceivable that competition in a company’s home market is made
up of both domestic competitors and foreign
competitors marketing their products in the
home market.
Domestic marketers tend to be ethnocentric and pay little attention to changes taking
place in the global marketplace, such as
changing lifestyles and market segments,
emerging competition, and better products
that have yet to arrive in their domestic
market. Ethnocentrism is defined here as a
predisposition of a firm to be predominantly
concerned with its worldwide viability and
legitimacy only in its home country – that is,
where all strategic actions of a company are
tailored to domestic responses under similar
situations. As a result, they may be vulnerable to the sudden changes forced on them by
foreign competition. US automobile and
consumer electronics manufacturers suffered
from this ethnocentrism in the 1960s

and 1970s as a result of their neglect of
imminent competition from Japanese low-cost
manufacturers.

Export marketing
The second stage is export marketing.
Usually, initial export marketing begins with
unsolicited orders from foreign customers.
When a company receives an order from
abroad, it may reluctantly fill it initially, but
it gradually learns the benefit of marketing
overseas. In general, in the early stage of
export marketing involvement, the internationalization process is a consequence of
incremental adjustments to the changing
conditions of the company and its environment, rather than a result of its deliberate
strategy. Such a pattern is due to the consequence of greater uncertainty in international
business, higher costs of information, and the
lack of technical knowledge about international marketing activities. At this early
export marketing stage, exporters tend to
engage in indirect exporting by relying on

5

export management companies or trading
companies to handle their export business.
Some companies progress to a more
involved stage of internationalization by
direct exporting, once three internal conditions are satisfied. First, the management of
the company develops favorable expectations
of the attractiveness of exporting based on its

earlier experience. Second, the company has
access to key resources necessary for undertaking additional export-related tasks. Such
availability of physical, financial, and managerial resources is closely associated with
firm size. Particularly, small companies may
have few trained managers and little time for
long-term planning as they are preoccupied
with day-to-day operational problems, and
consequently find it difficult to become
involved in exporting. Third, management is
willing to commit adequate resources to
export activities. The company’s long-term
commitment to export marketing depends on
how successful management is in overcoming various barriers encountered in international marketing activities. An experienced
export marketer has to deal with difficulties
in maintaining and expanding export involvement. These difficulties include import/export
restrictions, cost and availability of shipping,
exchange rate fluctuations, collection of
money, and development of distribution
channels, among others. Overall, favorable
experience appears to be a key component in
getting companies involved in managing
exports directly without relying on specialized outside export handlers. To a large
degree an appropriate measure of favorableness for many companies consists of profits.
An increase in profits due to a certain activity is likely to increase the company’s interest in such activity.
External pressures also encourage companies into export marketing activities.
Saturated domestic markets may make it
difficult for a company to maintain sales
volume in an increasingly competitive
domestic market; it will become much more
serious when foreign competitors begin marketing products in the domestic market.

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Export marketers begin paying attention to
technological and other changes in the global
marketplace that domestic marketers tend to
ignore. However, export marketers still tend to
take an ethnocentric approach to foreign markets as being an extension of their domestic
market and export products developed primarily for home country customers with limited
adaptation to foreign customers’ needs.

International marketing
Once export marketing becomes an integral
part of the company’s marketing activity, it
will begin to seek new directions for growth
and expansion. This stage is called international marketing. A unique feature of international marketing is its polycentric orientation,
with emphasis on product and promotional
adaptation in foreign markets whenever

necessary. Polycentric orientation refers to a
predisposition of a firm to the existence of
significant local cultural differences across
markets, necessitating the operation in each
country being viewed independently (i.e., all
strategic decisions are thus tailored to suit the
cultures of the concerned country). As the
company’s market share in a number of
countries reaches a certain point, it becomes
important for the company to defend its position through local competition. Because of
local competitors’ proximity to, and familiarity with, local customers, they tend to have an
inherent ‘insider’ advantage over foreign competition. To strengthen its competitive position, the international marketer could adapt its
strategy, if necessary, to meet the needs and
wants of local customers in two alternative
ways. First, the company may allocate a certain portion of its manufacturing capacity to
its export business. Second, because of transportation costs, tariffs, and other regulations,
and availability of human and capital
resources in the foreign markets, the company
may even begin manufacturing locally.
If international marketing is taken to the
extreme, a company may establish an independent foreign subsidiary in each and every

foreign market and have each of the subsidiaries operate independently of each other
without any measurable headquarters control. This special case of international marketing is known as multidomestic marketing.
Product development, manufacturing, and
marketing are all executed by each subsidiary for its own local market. As a result,
different product lines, product positioning,
and pricing may be observed across those
subsidiaries. Few economies of scale benefits
can be obtained. However, multidomestic

marketing is useful when customer needs are
so different across different national markets
that no common product or promotional
strategy can be developed.

Multinational marketing
In this stage the company markets its products in many countries around the world.
Management of the company comes to realize the benefit of economies of scale in
product development, manufacturing, and
marketing by consolidating some of its activities on a regional basis. This regiocentric
approach suggests that product planning may
be standardized within a region (e.g., a group
of contiguous and similar countries), such as
Western Europe, but not across regions.
Products may be manufactured regionally as
well. Similarly, advertising, promotional, and
distribution costs may also be shared by subsidiaries in the region. In order for the company to develop its regional image in the
marketplace, it may develop and acquire new
regional brands to increase up its regional
operations. Even when having difficulty
occupying a market, a firm may think out of
the box regarding an alliance or a partnership
that can lead it into the market.

Global marketing
The international (country-by-country) or
multinational (region-by-region) orientation,
while enabling the consolidation of operations