When in Rome, do as the Romans do: can international marketing adaptation improve the association between servitization and profitability?

Abstract

Purpose Building on contingency theory, this paper aims to investigate the extent to which the “4Ps international adaptation strategy” and internationalization intensity shape the servitization–profitability relationship. Design/methodology/approach The authors use primary (survey) and secondary (archival) data to perform multiple regression analysis. Findings The results indicate a positive relationship between servitization and profitability, and international intensity strengthens this association. The effects, however, are not consistent across the 4Ps – the price international adaptation strategy strengthens the positive relationship between servitization and profitability, while product and place international adaptation strategies weaken that relationship. Practical implications The findings have implications for the role of international intensity and the 4Ps in the marketing servitization context. Originality/value The study provides guidance for small firms in realizing higher performance by leveraging the 4Ps in the servitization context. Counter to expectations, placement and product lead to lower performance with increasing servitization, whereas price strengthens this relationship. The study adds to the international industrial management and marketing literature, providing evidence that contingency factors such as international marketing mix adaptation/standardization strategies moderate the servitization–profitability relationship.