Antecedents of Brand Management Adaptation/Standardization and Its Influence on Firms’ Performance

Abstract

In this paper we analyze the antecedents and consequences of brand adaptation/standardization strategies in case of developing country. To explore this impact we ground on Structure-Conduct-Performance paradigm (SCP) where structure (analyzed through domestic product acceptance and market structure) drives conduct (strategic choices regarding adaptation/standardization of brand management elements), which in turn drives performance (viewed through market share and costs). Our results indicate that adaptation/standardization is not equally applicable to all elements of brand management strategy. Rather, domestic products acceptance in a foreign market and market structure have different effects on the level of adaptation/standardization of brand’s product, pricing, distribution and promotion strategies. While market structure complexity increases importance of adaptation of all elements, greater domestic product acceptance allows for product and promotion strategies to remain standardized. Subsequently, adaptation/standardization of each element of the brand strategy differently influences brand market share in a foreign market and brand management costs. As a result, we learn that adaptation of pricing and promotion strategies will drive brand’s market share. However, adaptation of promotion strategy will also increase brand management costs, while distribution strategy adaptation, although having no effect on brand’s market share, will have an impact on decrease of brand management costs.

DOI: http://dx.doi.org/10.5755/j01.ee.28.3.16884