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Marketing strategies in global markets: A transaction cost analysis
Title
Marketing strategies in global markets: A transaction cost analysis.
Creator
Karuppur, Devi Prasad R., Florida Atlantic University, Sashi, C. M.
Abstract/Description
Contrasting viewpoints have emerged regarding the selection of marketing strategies in global markets. One group of scholars recommends standardized global marketing strategies based on the premise that technological advances in telecommunication, transportation, and media are leading to similarities in customer preferences across the world. Other researchers recommend multi-domestic strategies on the premise that consumer heterogeneity continues to increase even within countries. Firms...
Show moreContrasting viewpoints have emerged regarding the selection of marketing strategies in global markets. One group of scholars recommends standardized global marketing strategies based on the premise that technological advances in telecommunication, transportation, and media are leading to similarities in customer preferences across the world. Other researchers recommend multi-domestic strategies on the premise that consumer heterogeneity continues to increase even within countries. Firms marketing products in global markets appear to adopt global marketing strategies, multi-domestic strategies, and various intermediate strategies that encompass different degrees of standardization. This research develops a theoretical framework to examine the factors that influence marketing strategies in global markets. Transaction cost analysis constructs are used to determine whether to standardize or customize marketing strategy. The basis for adopting different levels of standardization on marketing program and process variables is empirically investigated. A multinomial logit model is used to estimate the likelihood of adopting different degrees of standardization with data from American multinational corporations on 161 products marketed in different global markets. The results indicate that higher levels of asset specificity associated with patented technical knowledge favor physical attribute standardization in global markets. Volatile political environments, high degrees of ownership in affiliates, and global competitors' standardized marketing strategies encourage firms to tailor physical attributes. Brand names are standardized if the economic uncertainty is lower in foreign markets. Cultural dissimilarities between home and host countries hinder marketing control systems standardization. Operating experience in foreign countries and the need for technical service and customer interactions support standardization of marketing control systems. The need for specialized local market knowledge encourages the adoption of country-specific marketing research methods. Standardized pricing strategies are preferred over flexible country-specific strategies in volatile political environments.
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Date Issued
1994
PURL
http://purl.flvc.org/fcla/dt/12379
Subject Headings
Export marketing, Transaction costs, Business planning, International business enterprises
Format
Document (PDF)
On the interaction between the investment and financing decision: An extension and empirical test of the Williamson specificity hypothesis
Title
On the interaction between the investment and financing decision: An extension and empirical test of the Williamson specificity hypothesis.
Creator
Cushing, Woodrow Wilson, Jr., Florida Atlantic University, McCarty, Daniel E.
Abstract/Description
This dissertation has a twofold objective: to extend the Williamson asset specificity hypothesis and to empirically test both the asset specificity hypothesis and the extension. The Williamson asset specificity hypothesis asserts that the financial leverage used by firms is a function of the specificity of the assets owned by the firm when asset specificity is defined as the readiness with which assets can be re-deployed. This results from a governance argument whereby highly specific assets...
Show moreThis dissertation has a twofold objective: to extend the Williamson asset specificity hypothesis and to empirically test both the asset specificity hypothesis and the extension. The Williamson asset specificity hypothesis asserts that the financial leverage used by firms is a function of the specificity of the assets owned by the firm when asset specificity is defined as the readiness with which assets can be re-deployed. This results from a governance argument whereby highly specific assets can only be governed by increased equity participation. This argument is extended with the assertion that increased specificity causes operating leverage to rise and that firms counter this increased operating leverage by decreasing the financial leverage they employ. Liquidation value is employed as a proxy measure for how readily assets can be converted to cash. Data was gathered for a sample of firms who have liquidated and include firms liquidated in bankruptcy and firms liquidated voluntarily. Using these data a model is developed to estimate the liquidation value of any firm. A cross-sectional time-series formulation is employed using data gathered for thirty-six firms over a twenty-two year period. A statistically significant positive relationship was found to exist between the estimated liquidation value and financial leverage which supports the Williamson asset specificity hypothesis. Neither the cross-sectional nor time series behavior of firms provides evidence of a trade-off between interest tax shields and non-debt tax shields. No significant relationship was found to exist between the value of the non-debt tax shield and financial leverage. No evidence was found indicating a relationship between operating leverage of firms and financial leverage. However, evidence was found that firms with higher percentage changes in sales from year to year, lower probabilities of failure, higher levels of financial slack, and lower values for interest tax shields use less financial leverage. Finally, evidence was found indicating that firms employed more financial leverage in the 1980's than in the 1970's.
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Date Issued
1993
PURL
http://purl.flvc.org/fcla/dt/12343
Subject Headings
Transaction costs, Asset-backed financing, Corporations--Finance--Decision making
Format
Document (PDF)