International Marketing

Stephen Anderson, Leonardo Iacovone, Shreya Kankanhalli, and Sridhar Narayan. (2021) "Modernizing Retailers in an Emerging Market: Investigating Externally-focused and Internally-focused Aproaches," Journal of Marketing Research.

This paper studies the impact of business modernization on the sales performance of traditional retailers in an emerging market. The authors define modernization as adopting physical structures and tangible practices of organized retail chains (for example, exterior signage with store name and logo, or a database to record product-level information). To address this research question, they implement a randomized field experiment in Mexico City with 1148 retailers. The sample is randomized as follows: 385 firms are externally modernized in ways that are visible to customers; 383 firms are internally modernized in ways that are not visible to customers; and 380 firms form a control group. The authors find a significant and persistent main effect of modernization on sales. Firms in both treatment groups increase monthly sales by 15% to 19%, 24 months after study recruitment. In terms of novel mechanism evidence, externally modernizing firms improve their store-level branding, while internally modernizing firms strengthen their product management. This paper additionally provides an exploratory analysis to guide policymakers, managerial stakeholders, and retailers on how to modernize for the highest returns. This analysis suggests that modernizing one’s exterior appearance, customer engagement methods, demand analysis, and stock ordering processes are most useful. Finally, the largest improvements come from the initial few modernizing changes, after which returns are diminishing.

Felix Xu, Lisa Bolton, and Karen Winterich. (2021) "How do Consumers React to Company Moral Transgressions? The Role of Power Distance Belief and Empathy for Victims," Journal of Consumer Research, 48 (1), 77-101.

This research proposes that consumers vary in their response to company moral transgressions as a function of power distance belief (PDB), which is the extent that consumers accept inequality (a prominent moral principle). Specifically, consumers with lower PDB tend to feel more empathy for victims, which in turn heightens harm perceptions and negative moral emotions, leading to less favorable reactions toward the transgressing company. A series of nine studies and four supplementary experiments provides converging evidence for the PDB effect and underlying empathy-based process, while identifying victim salience and company crisis response strategy as theoretically and pragmatically relevant moderators. Specifically, the PDB effect emerges when victim salience is high (evoking greater empathy among lower-PDB consumers) but is attenuated when victim salience is low (and empathy is not evoked). Likewise, the PDB effect on company evaluations can be mitigated when the transgressing company offers both an apology and remedy, which together signal the company’s empathy for victims and remedy for harm that are salient to low-PDB consumers. Together, these findings shed light on how consumer reactions to company moral transgressions vary by culture, transgression characteristics, and company response strategies, providing guidance to companies in crisis.

Dian Wang, Haipeng (Allan) Chen, Lisa Bolton, and Sharon Ng. (2020) "Dual Entitlement Revisited: Cultural Differences in Asymmetric Pricing," Journal of Marketing Behavior, 4 (2-4), 213-225.

Asymmetric pricing is less prevalent, and perceived as less fair, in collectivist (vs. individualist) cultures because it violates communal norms. We replicate this cultural difference by directly measuring managers' asymmetric pricing decisions and by priming self-construal among individual consumers as well as using country as a proxy for culture. In addition, we identify tactics that managers can employ to mitigate consumer unfairness perceptions. Together, these findings replicate, generalize, and extend the results in Chen et al. (2018), thereby shedding light on the generalizability of the principle of dual entitlement, a cornerstone of behavioral pricing.

Hans Baumgartner, and Bert Weijters. (2021) “Dealing with Common Method Variance in International Marketing Research,” Journal of International Marketing, 29 (3), 7-22.

Common method variance (CMV) is an important concern in international marketing research because presumed substantive relationships may actually be due to shared method variance. Because method effects may vary systematically across cultures and countries, accounting for method effects in international marketing research is particularly critical. A systematic review of Journal of International Marketing articles published during a five-year period (2015–2019, N = 93) shows that (1) authors often report post hoc CMV tests but usually conclude that CMV is not an issue and (2) many post hoc tests are conducted using the Harman one-factor test and the marker variable technique, which have serious deficiencies for detecting and controlling CMV. Drawing on a classification and comparative evaluation of the most common statistical approaches for dealing with CMV, the authors recommend two approaches and propose a procedure for dealing with CMV in international marketing research. The procedure, which is based on multisample structural equation modeling, is illustrated with data from a cross-national pan-European survey (N = 11,970, 14 countries), which shows that even though method variance is present in the data, method effects do not seriously bias the substantive conclusions in this particular study.

Vishal Narayan and Shreya Kankanhalli. (2021) "The Economic and Social Impacts of Migration on Brand Expenditure: Evidence from Rural India," Journal of Marketing, 85 (6)

Households that send members to work away from home often receive information about the lifestyles and consumption behaviors in those migration destinations (i.e., social remittances) along with money or goods (i.e., economic remittances). The authors investigate the effect of having a migrant household member on household brand expenditures in rural India, a market characterized by substantial consumption of unbranded products. They collect and analyze household-level survey data from 434 households across 30 villages using an instrumental variable strategy. Economic remittances result in greater brand expenditure, and this level is higher for poorer households. After controlling for economic remittances, the authors find that the effect of migration on brand expenditures is more positive for households in more populous villages, with greater access to mobile phones, lower viewership of television media, and less recently departed migrants. They demonstrate how marketing resource allocation across villages can be improved by incorporating migration data and provide insights for household targeting in the context of door-to-door selling in villages. The results are robust to alternative, public policy–based instruments and can be generalized to expenditure on private schools. Using additional survey data from 300 households in 62 new villages, the authors replicate the results by comparing within-households brand expenditures before and after the migration event.

A. J. Petersen, B. J.  Paulich, F. Khodakarami, S. Spyropoulo, and V. Kumar. (2021) "Customer-based Execution Strategy in a Global Digital Context." International Journal of Research in Marketing.

Haipeng Chen, Lisa Bolton, Sharon Ng, Dongwon Lee, and Dian Wang (2018),“Culture, Relationship Norms, and Dual Entitlement,” Journal of Consumer Research," 45 (1), 1-20.

According to the dual entitlement principle, consumers find it fair for firms to price asymmetrically to cost changes—that is, for firms to increase prices when costs increase but maintain prices when costs decrease. However, a meta-analysis reveals asymmetric pricing is less prevalent in collectivistic (vs. individualistic) countries (study 1). We propose a fairness-based explanation, demonstrating that interdependent consumers in collectivistic cultures perceive asymmetric pricing to be less fair than do independent consumers in individualistic cultures (studies 2, 4, and 5). We attribute this cultural variation to culture-specific relationship norms. Specifically, we argue that while the practice of asymmetric pricing is consistent with the exchange norms among independent consumers that emphasize self-interest pursuit, it is inconsistent with the communal norms among interdependent consumers mandating firm benevolence. Supporting this argument, we find that (a) directly manipulating communal (vs. exchange) norms yields similar differences in fairness perceptions that mimic those due to culture (study 3), (b) the cultural differences are mediated by the communal mandate for firm benevolence (study 4), and (c) the cultural differences are mitigated when a firm frames asymmetric pricing as benevolent (study 5). We conclude by discussing the theoretical and managerial implications of these findings.

Karen Page Winterich, Gangwar Manisha, and Grewak Rajdeep. (2018) “When Celebrities Count: Power Distance Beliefs and Celebrity Endorsements,” Journal of Marketing, 82 (3), 70-86.

The use of celebrity endorsements varies across countries; does their effectiveness similarly vary across cultures? The authors propose that power distance beliefs (PDB), a cultural orientation related to the extent to which people expect and accept differences in power, moderate the effects of celebrity endorsements. A positive effect of celebrity endorsers on evaluations of advertising should be more potent with greater PDB; source expertise and trustworthiness likely underlie this effect. To test the hypotheses, the authors use moderated mediation analyses, with corrections for measurement error and endogeneity of the mediators (source expertise and trustworthiness). The results of three studies, using both manipulated and measured PDB for respondents in different countries and with a variety of endorsers, demonstrate that PDB determine the effectiveness of celebrity endorsements on attitudes toward the advertisement and the brand. In support of the moderated mediation model, perceptions of source expertise and trust mediate the effect of celebrity endorsements, conditional on PDB. The results hold for nondurables but do not generalize to durable products.

Hans Baumgartner and Bert Weijters. (2017), “Methodological Issues in Cross-Cultural Research,” in: Hester van Herk and Carlos J. Torelli (Eds), Cross Cultural Issues in Consumer Science and Consumer Psychology, Cham: Switzerland: Springer International Publishing AG, 169-190.

With markets becoming increasingly globalized, cultural issues are taking a more central place in consumer psychology and business research. Two key motivations lead researchers to engage in cross-cultural research. First, researchers tackle questions of generalizability, aiming to find out whether theories and models initially developed and validated in one culture (typically the US) hold in other cultures as well. Second, in case models and theories are found not to be universal, the research focus shifts to questions of differentiation, aimed at identifying and explaining differences in multivariate relations of interest across different groups of consumers, where the grouping is oftentimes defined by national culture. In this chapter, key methodological challenges in cross-cultural research will be discussed, with a focus on issues related to threats to the cross-cultural comparability of survey data and possible solutions in terms of survey design and data analysis. Our emphasis will not be on sampling, data collection, and survey administration issues. Rather, we focus on the rapidly evolving literature studying differences in the way people interpret and respond to questions, the biases that can result from these differences, and the procedures researchers can use to prevent or control for these biases. We will distinguish two major strategies for enhancing cross-cultural comparability. First, we describe a priori methods to ensure the comparability of data in cross-cultural surveys, especially in terms of survey design. In particular, we will discuss cross-cultural differences in the psychology of survey response, the consequences of these differences, and ways of dealing with them in the survey design stage. Second, we discuss post hoc methods to ascertain data comparability and enable comparisons in the presence of threats to equivalence, focusing on data-analytic issues. (PsycINFO Database Record (c) 2019 APA, all rights reserved)

Bert Weijters, Stefano Puntoni, and Hans Baumgartner. (2017) “Methodological Issues in Cross-Linguistic and Multilingual Advertising Research,” Journal of Advertising, 46 (1), 115-128.

This article discusses methodological issues related to language in advertising research. We introduce a framework that distinguishes between cross-linguistic research settings, where several languages are used in the study and different samples of respondents are studied in their own language, and multilingual research settings, where only a single language is used and multilingual respondents are studied either in their native or nonnative language. We review key principles that govern cross-linguistic and multilingual effects in advertising research to formulate guidelines for research design and data analysis. In the cross-linguistic context, these principles address nonuniform cross-linguistic differences in responses (related to nonequivalence of individual questionnaire items) versus uniform response effects (related to nonequivalence of verbal response category labels). In the multilingual context, we bring together evidence that shows how—even when comprehension is not a problem—stimuli, questions, and response categories may be processed differently in respondents' native versus nonnative language.

Bert Weijters, Hans Baumgartner, and Maggie Geuens. (2016) “The Calibrated Sigma Method: An Efficient Remedy for Between-Group Differences in Response Category Use on Likert Scales,” International Journal of Research in Marketing, 33 (December), 944-960.

The authors propose a procedure, labeled the calibrated sigma method, which is designed to correct for between-group differences in endorsement likelihood of response categories that are unrelated to the content of the items. The method is especially useful in cross-cultural research where group differences may reflect variation in scale usage rather than substantive differences. However, the procedure is also relevant in other situations, for example, when different data collection modes or different experimental manipulations affect respondents' perception of the meaning of the scale labels. The calibrated sigma method uses information derived from heterogeneous control items (calibration items) to reweight the responses to substantive items in a group-specific way. The advantages of the calibrated sigma method are that it avoids the arbitrariness in the assignment of particular numerical values to response categories; that it is compatible with the linear model, which is used by most marketing researchers; and that it does not require the use of complex nonlinear models involving the estimation of many additional measurement model parameters. The authors validate the calibrated sigma method on a simulated cross-linguistic data set pertaining to 12 different languages; an empirical data set collected from respondents of the same nationality but from two different language groups; and an experimental data set consisting of responses to two different response scale formats. The findings demonstrate that the proposed procedure controls for artefactual scale use differences across groups but does not eliminate substantive differences. It is particularly efficient for marketing research agencies, panel providers and other marketing researchers who analyze surveys involving multiple language groups, different scale formats, multiple modes of data collection, or different manipulations affecting the meaning of the response category labels.

Hans Baumgartner and Bert Weijters. (2015) “Response Biases in Cross-Cultural Measurement,” in: Sharon Ng and Angele Y. Lee (Eds.), Handbook of Culture and Consumer Behavior, Oxford, UK: Oxford University Press, 150-180.

A frequent goal of cross-cultural research is to compare mean values on constructs or the strength of relationships between constructs across cultures. If these comparisons are to be meaningful, it is necessary that the data collected from respondents in different cultures validly assess the focal constructs and that certain requirements of measurement equivalence be satisfied. Unfortunately, it has been known for a long time that people's responses to survey questions do not only measure the intended content that the items in questionnaires are trying to tap, but may also reflect content-irrelevant influences. In particular, substantial evidence has accumulated which shows that various systematic sources of error can contaminate cross-cultural data and invalidate simple comparisons across cultures. The purpose of this chapter is to review the most common response biases and to provide guidelines for cross-cultural researchers about how to deal with them.

Huachao Gao, Karen Page Winterich, and Yinlong Zhang (2016) “All That Glitters is Not Gold: How Others’ Status Influences the Effect of Power Distance Belief on Status Consumption,” Journal of Consumer Research, 43 (2), 265-281.

This research proposes the relationship between power distance belief (PDB) and status consumption is moderated by the salience of others and their associated status (others’ status). When others’ status is not superior (similar or inferior), high-PDB consumers are more likely to engage in status consumption than low-PDB consumers. However, when others’ status is superior, high-PDB consumers are less likely to engage in status consumption. Both signaling effectiveness and need for status underlie the effect of PDB on status consumption. Need for status mediates the effect of PDB only when others’ status is not superior, whereas signaling effectiveness mediates the effect of PDB on status consumption when others’ status is superior, similar, or inferior. Compared to low-PDB consumers, high-PDB consumers perceive greater signaling effectiveness when others’ status is inferior or similar, but they perceive less signaling effectiveness, and therefore engage in less status consumption, when others’ status is superior. When status goods are consumed in private, and therefore not effective at signaling status, the interaction of others’ status and PDB is mitigated. This research articulates the nuanced effect of PDB on status consumption depending on others’ status as well as the multiple mechanisms underlying status consumption.