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 (A/S) strategies in the case of a developing country. To explore this impact we base our research on Structure-Conduct-Performance paradigm (SCP) where structure (analyzed through domestic product acceptance and market structure) drives conduct (strategic choices regarding A/S of brand management elements), which in turn drives performance (viewed through market share and costs). Our results indicate that A/S 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 A/S of brand’s product, pricing, distribution and promotion strategies. While market structure complexity increases the importance of adaptation of all elements, greater domestic product acceptance allows for product and promotion strategies to remain standardized. Subsequently, A/S 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 the decrease of brand management costs.