World Academy of Science, Engineering and Technology

International Journal of Economics and Management Engineering

Vol:6, No:4, 2012

Technological Environment - International

Marketing Strategy Relationship
Suthawan Chirapanda

Abstract—International trade involves both large and small firms In a competitive environment, companies should strive to
engaged in business overseas. Possible drivers that force companies maintain their differential advantage from their competitors in
to enter international markets include increasing competition at the order to retain their existing customers and attract new ones.
domestic market, maturing domestic markets, and limited domestic
market opportunities. Technology is an important driving factor in
shaping international marketing strategy as well as in driving force II. TECHNOLOGICAL ENVIRONMENT
International Science Index, Economics and Management Engineering Vol:6, No:4, 2012 waset.org/Publication/15292

towards a more global marketplace, especially technology in Technological advancement is an important environmental
communication. It includes telephones, the internet, computer factor impacting strategy formulation. It has accelerated in
systems and e-mail. There are three main marketing strategy choices,
transportation, communication, manufacturing and computer
namely standardization approach, adaptation approach and middle-
of-the-road approach that companies implement to overseas markets. systems, which may be considered major part of marketing
The decision depends on situations and factors facing the companies strategy [4]. Different levels of technological development
in the international markets. In this paper, the contingency concept is and information technology between markets can affect the
considered that no single strategy can be effective in all contexts. degree of export marketing strategy adaptation. For example,
The effect of strategy on performance depends on specific situational the availability, reliability and cost of communication media
variables. Strategic fit is employed to investigate export marketing
such as telephones, internet systems, technological networks,
strategy adaptation under certain environmental conditions, which in
turn can lead to superior performance. and computer software and hardware in the export country,
which are likely to differ from the home country to a varying
Keywords—Contingency approach, international marketing degree, may necessitate an adaptation in marketing strategy
strategy, strategic fit, technological environment [5]-[8].
Advanced technology in transportation can facilitate the
I. INTRODUCTION distribution of products. It helps companies to better
communicate and control their distribution channels.
T HE emergence of a more open world economy has
resulted in an upsurge in international trade, since many
countries belong to major trading blocs. Companies of all
Information technology together with technological skills can
create new opportunities for companies to communicate with
sizes need to develop skills, ability and knowledge to compete their target customers [9]. Moreover, the selection of
effectively in international markets. Moreover, with the promotional media in foreign markets should take into
advancement of technology, communications and international consideration the existing technological environment. Many
transportation become faster and more convenient, and domestic companies expect that replicating their domestic
increase opportunities for companies to look beyond their promotion plans in foreign markets will be important for
domestic markets and facilitate their engagement in marketing purposes. This may be so if, other things are equal,
international market operations [1]. the level of technology and the environment surrounding it are
Three common business strategies that have been found in similar. Nonetheless, this may not be the case for many firms.
many companies are competing on the basis of low prices In sum, this discussion suggests that technological
through production at lowest cost; offering a differentiated environment factors are crucial in determining extent of
product and competing on basis of unique value to the marketing strategy adaptation.
customers; and avoiding competition by seeking government Many companies use the internet as a direct marketing tool
assistance to operate in a protected market [2], [3]. In general, to send e-mail to the target market. Moreover, transportation
companies emphasize the marketing elements in management technology and other logistics are important aspects that affect
and have applied them to create, deliver and communicate export marketing strategy adaptation. This includes the
application of information technology to scheduling and
superior customer value to their chosen target markets, which
controlling shipments, such as new bridges and roads and high
attract their target customers and persuade them to buy
speed trains, as well as technological skills to support
products and services.
transportation and communication facilities [9]-[10].
Therefore, these technological aspects should be evaluated to
S. Chirapanda is with School of Business, University of the Thai Chamber
of Commerce, 126/1 Vibhavadee Rangsit Road, Dindeang, Bangkok, 10400 customize export marketing strategy from home market to
Thailand (phone: 66-2697-6112; fax. 66-2277-1434; e-mail: export market. In addition, companies can increase
[email protected], [email protected]). productivity and revenue-growth such as a research advantage,

International Scholarly and Scientific Research & Innovation 6(4) 2012 656 scholar.waset.org/1307-6892/15292
 World Academy of Science, Engineering and Technology
International Journal of Economics and Management Engineering
Vol:6, No:4, 2012

cost saving, global presence, establishing and maintaining a conceivable [9]. The standardisation approach leads to many
competitive edge and shortening components of supply chains. benefits such as cost savings, consistency and planning control
Thus, technology advancement can be a thrust on all aspects of improvement. However, it may fail to respond to customer
marketing strategy formulation, involving gathering data on needs and fit local market requirements. Adaptation is viewed
markets, managing control capabilities and carrying out the as a reverse to standardisation. Making a decision on either
business function internationally with the advancement of adaptation strategy or standardisation strategy is deemed as not
electronic communications. Information technology together necessary. Standardisation and adaptation strategies should
with technological skills can create new opportunities for not be seen separately from each other. Flexibility is
companies to communicate with their target customers. necessary in determining the right magnitude of
standardisation versus adaptation [2], [6], [11], [13]. The
III. INTERNATIONAL MARKETING STRATEGY
extent to which the marketing programme should be adapted
Technological environment is fundamental for companies to or standardised across national boundaries has received
make a decision regarding the degree of their international significant research attention in international marketing [9].
marketing strategy adaptation in overseas markets, consisting These alternatives should be evaluated in the light of the
of product, price, promotion and distribution components. company’s performance in international markets, as well as the
International Science Index, Economics and Management Engineering Vol:6, No:4, 2012 waset.org/Publication/15292

Explicit consideration of environmental factor linkages leads differences in technological environment factors to survive in
to successful marketing strategy, in terms of export competitive markets [9]. This ‘middle-of-the-road’ approach
performance. Understanding of local market conditions in or ‘contingency perspective’ is advocated on the marketing
each of the export markets stimulates companies to adopt a programme standardisation versus the adaptation issues.
more standardized approach. This is because those companies Contingency theory differs from other theories in the
learn about local conditions in overseas markets, and perceive specific form of the propositions made [14]. The distinction
the similarities among them. Therefore, they are able to between congruent and contingent propositions clarifies this
standardize the marketing mix, which may lead to better dissimilarity. A contingent proposition is more complex, since
performance. Nevertheless, companies may still find some a conditional association of two or more independent variables
differences across markets. They should monitor their foreign with a dependent outcome is hypothesised and directly
market environments and adjust their offered products to fulfil subjected to empirical testing. The contingency perspective
overseas customers’ needs. Companies have to be sensitive to identifies the importance of external environmental
these variations and remain constantly on the alert to adapt determinants of a firm’s strategy [7]. Marketing managers
their marketing strategy to suit local conditions. have to decide on the extent of marketing strategy adaptation
This paper focuses primarily on those issues relating to the and the conditions under which these adaptations are
marketing programme. The term programme comprises implemented. The middle-of-the-road approach or the
various aspects of the marketing mix, such as product design, contingency view of strategy is based on the assumption that
product mix, brand name, packaging, retail price, basic no universal set of strategic choices is optimal for all
advertising massage, sales promotion, role of the middlemen, organisations and circumstances. Accordingly, it has been
type of retail outlets and customer service [2], [11]. The issue
suggested that optimal strategy is subject to a certain set of
of standardisation, adaptation and the degree of export
environmental conditions [14].
marketing strategy adaptation (middle-of-the-road) has long
The middle-of-the-road or contingency approach is the most
occupied the attention of international marketers and
researchers. Standardisation strategy leads to consistency, appropriate choice for companies to explore the degree of
ability to attract cross-country market segmentation, cost export marketing strategy adaptation. Decisions regarding the
reduction and economies of scale in marketing, research and degree of strategy adaptation are based on specific situations
development and production. Although adaptation strategy through the evaluation of contingency factors, such as the
faces higher costs than standardisation, it can achieve specific external environmental differences between home and export
local customer requirements from different environmental markets. The linkage between the degree of export marketing
factors. Companies using an adaptation strategy can achieve strategy adaptation and export performance is quite important.
customer satisfaction in foreign markets by adapting their Every business seeks to survive with superior performance in
offerings to suit local environments [12]. The middle-of-the- international markets. However, the consequences of strategy
road approach evaluates marketing strategy adaptation/ on performance remain inconclusive. Some studies have
standardisation for the optimal benefits upon differences in found that export marketing strategy adaptation has a positive
technological environment factors between the home and the effect on export performance [15], [16], while others have
export markets, which can help companies to gain long-term concluded a negative impact [5], [17]. The current study
economic payoffs. reconciles these inconclusive findings by utilising the concept
of strategic fit.
IV. MIDDLE-OF-THE-ROAD OR CONTINGENCY APPROACH
Use The middle-of-the-road approach is proposed by many
researchers, who claim that neither complete standardisation
nor complete adaptation of the marketing programme is

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 World Academy of Science, Engineering and Technology
International Journal of Economics and Management Engineering
Vol:6, No:4, 2012

V. STRATEGIC FIT: TECHNOLOGICAL ENVIRONMENT - as the unit of analysis remains very rare. The widely used unit
INTERNATIONAL MARKETING STRATEGY RELATIONSHIP of analysis in previous studies is the single firm or a business
The critical importance of co-alignment between the division, which is likely to have led to confounded, unreliable
environment (i.e., external environment and internal and less valid results because of the existence of a wide range
organizational elements) and strategy has long been of various products that a firm may have and/ or several
recognized in the literature. This paper examines contingency markets in which the firm may compete. Firms often tend to
hypotheses under the different environments between the offer many types of products and employ different competitive
international and domestic markets leading to the more strategies across different foreign markets. The product-
feasible competitive strategy approach. It investigates market venture, defined as strategy of a specific product in a
business performance by using co-alignment strategy between particular market, can facilitate a more accurate and better
competitive strategy and the environmental context within understanding of the strategy-performance link and provide
which the strategy is implemented. This paper is a response to more reliable and valid results in comparison with studies
the need to systematically develop and examine a conceptual
using the firm’s overall activities as the focus of attention [2],
model and to determine measures of fit, which is related to
[4], [17].
strategic management areas. The main proposition in this
study is that competitive strategy leads to a higher
International Science Index, Economics and Management Engineering Vol:6, No:4, 2012 waset.org/Publication/15292

performance level only to a degree that there is fit between the VII. EXPECTED RESULT
environmental factors and the strategy being deployed. In In this empirical study, the expected result is that the match
other words, the investigator posits that the main issue facing between export marketing strategy adaptation and context
the manager is to achieve fit between strategy and its context, (technological environment factors) can enhance business
and the presence of fit should have significant and positive performance. Strategic fit can provide a solid theoretical
implications for firms’ performance. foundation to study export marketing strategy adaptation and
The chosen fit approach in this study is viewed as performance, and explain the formulation of an effective
‘matching’ perspective or ‘residual approach’, in which fit is a strategy to compete in global markets. Thus, the residual
theoretically defined match between two variables. A measure analysis method is employed in this empirical study to measure
of fit between two variables is developed independent of any fit, and assess its impact on performance. Therefore, the main
performance. Its conceptualisation is that no strategy is proposition of this study is that export marketing strategies,
universally superior, irrespective of environmental or whether adapted, standardized, or a combination of the two,
organisational context [17], [18], [19]. In terms of analytical result in superior performance only to the extent that the
issue of the matching perspective, residual analysis reflects strategy being deployed is co-aligned with the technological
operationalization of fit. The residuals from the regression of environment contexts.
one variable on the other are used to reflect fit, which
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