Global marketing strategy

THE GLOBAL MARKETING
STRATEGY
A broad Conceptualization of GMS and its effect on firm performance
Journal Review, Presented by:
Danny Darmawan Kosasih
Retno Nuramini Hartawati

2
Problem Identification
1. What constitutes a global marketing
strategy?
2. Does GMS affect a firm’s global market
performance?
GMS Affects GMP

3
Background
Lack of empirical support in proving the
effect of Global Marketing Strategy to
Global Marketing Performance

4
Purpose of The Research
1. To develop abroad conceptualization of
GMS
2. To attempt in substantiating the
fundamental relationship between GMS
and a firm performance

5
Outline
Five major section:
1. A Brief review of the Global Marketing literature
2. A New conceptualization of the GMS
3. A Conceptual model that links the GMS to its
antecedents and effect and advance the related
research hypotheses
4. The research design and methodology of the study and
the result of the empirical analysis.
5. Major findings, theoretical and managerial implications.

6
 Standardization
 Configuration – Coordination
 Integration
1. Major Perspective of GMS

7
Perspective Basic Logic Key variables Antecedents Effects
Standardizati
on
perspective
 Scale
economics
 Low-cost
 Simplification
Product, promotion,
channel structure,
price standardization
 Convergence of
culture
 Similarity of
demand
 Low trade
barriers
 Technological
advances
 Orientation of
firm
 Efficiency
 Consistenc
y
 Transfer of
ideas

8
Configuration-
coordination
perspective
 Comparative
advantage
 Interdependency
 Specialization
 Concentration of
value-chain
activities
 Coordination of
value-chain
activities
 Low trade
barriers
 Technological
advance
 Orientation of
firm
 International
experience
 Efficiency
 Synergies

9
Integration
perspective
 Cross-
subsidization
 Competitive
dislocation
 Rationalization
 Integration of
competitive
moves
 Global market
participation
 Low trade barriers
 Orientation of firm
 International
experience
 Integrated markets
 Effectiveness
in competition
 Competitive
leverage

10
THE GMSProduct
Standardization
Promotion
Standardization
Standardized
Price
Standardized
Channel
Structure
Concentration
Of Marketing
Activities
Coordination
Of Marketing
Activities
Global
Market
Participation
Integration of
Competitive
Moves
2. A Broad Conceptualization of
GMS

11
Product Standardization:
The degree to which a product is standardized across country
market
Promotion Standardization:
The degree to which the same promotional mix is executed
across country markets.
Standardized channel structure:
The degree to which the firm uses the same channel
structure across country markets.
GMS

12
Standardized price:
The degree to which the firm uses the same price across country
markets.
Concentration of marketing activities:
The extent to which a firm’s marketing activities, including
development of promotional campaign, pricing decision,
distribution activities and after-sale services, are deliberately
performed in a single or a few country market
Standardized channel structure:
The extent to which a firm’s marketing activities in different country
locations, including development of promotional campaign, pricing
decision, distribution activities and after-sale services, are planned
and executed interdependently on a global scale
GMS

13
Global market participation:
The extent to which a firm pursues marketing operations in all
major markets in the world.
Integration of competitive moves:
The extent to which a firm’s competitive marketing moves in
different markets in the world.
GMS

14
 Theoretical Foundations
 A Structural Model of the GMS
 Model Components and Hypotheses
3. A Model of the GMS and Firm
Performance

15
Two Theoretical foundations are:
1. The industrial organizational theory focuses on
the external market to identify drivers of a firm’s strategy
and contends that the firm’s performance is determined
by its strategy.
2. The resource based view theory uses the firm’s
internal organizational resources to explain its strategy
and performance
Performance

16
International
experience
Global
Orientation
External
Globalizing
Conditions
The GMS
Global
Strategic
Performance
Global
Financial
Performance
A Structural Model of the GMS
Performance

19
 Sampling Frame : mail surveys to
business units within 23 global industries
 Instrument Development
 Measurement of the Constructs
 Data collection
 Assessment of Non-response Bias
4. Research Methodology

28
 The second-order CFA
 Test of the Structural Path Model
5. Analysis & Findings

31
5. Analysis & Findings
International
experience
Global
Orientation
External
Globalizing
Conditions
The GMS
Global
Strategic
Performance
Global
Financial
Performance
Fitted Structural Model of the GMS
* .05
* .01
* .01
* .01
* .01
* .01
* .05

32
 The GMS
 The Effect of the GMS on Performance
 Drivers of the GMS
 The Effect of International Experience on
Performance
 Managerial Implications
 Further Research
6. Conclusion

33
The GMS
As a broad conceptualization of global marketing strategy that
incorporates all three perspectives
 The GMS scale is shown to be related to a firm’s global market
performance, the external globalizing conditions, and the firm’s global
orientation and international experience.
 The GMS serves as a foundation for integrating previous research
finding and the differences.
 The GMS reflects an entire set of a firm’s marketing action, all
within the control of management.
6. Conclusion

34
The Effect of the GMS on Performance
 Has a positive and significant effect on a firm’s
global market performance
 Influence firm’s strategic performance positively in
global market, is found to affect a firm’s global financial
performance, both directly and indirectly through its effect
on the firm’s global strategic performance.
6. Conclusion

35
Drivers of the GMS
 External globalizing conditions
 global orientation
 international experience.
These findings are consistent with both the IO framework
and the RBV literature.
6. Conclusion

36
The Effect of International Experience on
Performance
Found that a firm’s global strategic performance is
influenced positively by the international experience.
This is consistent with the previous finding that international
experience is a valuable organizational resource and an
important determinant of success in international Market.
In terms of managerial practice, the findings indicate that it pays
to promote constant accumulation organization wide
international experience and also the firm will be able to
attain a stronger global strategic position, which
eventually will lead to improved global financial performance.
6. Conclusion

37
Managerial Implications:
Standardized product will provide the firm with
substantial efficiency in the global operations and a
standardized strategy will render scale economics, synergies
and efficiencies, and also will simplify worldwide planning and
afford the firm’s brands a consistent image with global customers.
6. Conclusion

38
Further Research
1. To Direct more resources to data collection to increase the
sample size and consider other types of firms or industries.
2. Consider adopting a longitudinal design to further test the
causal order of the factors.
3. To test the applicability of the GMS in other countries.
4. To explore the relevance of other external and internal factors
for a firm’s global marketing strategy and performance.
6. Conclusion

Global marketing strategy

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