Standardization versus adaptation of global marketing strategies in emerging market cross-border acquisitions

Abstract

Purpose The recent increase in the presence of emerging market firms (EMFs) in global markets requires a closer examination of their international marketing strategies (including branding). The purpose of this paper is to examine the factors behind the standardization or adaptation of global marketing strategies adopted by EMFs for their cross-border acquisitions. Design/methodology/approach This paper examines the determinants of the marketing strategies adopted by Indian and Chinese firms for their cross-border acquisitions. The drivers of the standardization/adaptation of marketing strategies (including branding) are identified using both quantitative data collected in 168 cross-border acquisitions conducted by the EMFs mentioned above and the institutional theory and organizational identity literature. Findings Institutional factors have a stronger effect than organizational identities on global marketing strategies, including branding. The standardization of the EMFs’ marketing strategies is driven by the private statuses of the acquirers, legal distances, target countries’ economic development, and the ethnic ties that exist between the home and host countries. The acquirers’ decisions to retain the targets’ brand identities, thus adapting their global marketing strategies, are related to the cultural distances, economic freedom distances, and sizes of the targets. Research limitations/implications In this study, two large emerging markets – India and China – are used to gather the empirical data; future works can expand upon this line of research and examine other EMFs. Practical implications The acquiring companies have to decide whether to adopt an adaption marketing strategy, with reference to the acquired targets’ local stakeholder requirements, or to incorporate their targets’ brands into their own global marketing strategies. Originality/value Typically, previous work on the adaptation vs standardization of global marketing strategies adopted in the wake of cross-border deals has focussed on acquisitions involving companies from developed countries; this paper extends the field of research to the EMFs of two of the most important developing countries: China and India.