Global Leadership

Article

The Balancing of Country-Based Interaction Orientation and Marketing Strategy Implementation Adaptation/ Standardization for Profit Growth in Multinational Corporations

Hannah Soobin Lee and David A. Griffith

Abstract For business success and continued growth, multinational corporations (MNCs) must work to efficiently leverage interactions with customers dispersed across geographic boundaries. Under the framework of the attention-based view, this study examines the MNC strategic approach of country-based interaction orientation and marketing strategy implementation adaptation/stan- dardization as drivers of global profit growth, contingent on the environmental conditions of competitive intensity and market dynamism. The findings from a survey of U.S.-based MNCs indicate that managerial attention focused on country-based inter- action orientation and marketing strategy implementation standardization, when considered jointly, have a positive effect on MNC profit growth. The findings also show that the effect of a country-based interaction orientation on MNC profit growth is not as susceptible to competitive intensity and market dynamism when MNCs standardize their marketing strategy implementation, but it varies when MNCs take a more adapted approach to their implementation strategies across country markets. These findings bring to light important implications for international marketing theory and practice.

Keywords country-based interaction orientation, international marketing strategy adaptation, standardization, profit growth, multinational corporations

For multinational corporations (MNCs) to achieve business

success and growth in their global markets, they must effec-

tively harness the strategic process of interacting with their

customers (Gupta, Pansari, and Kumar 2018). A customer-

centric marketing strategy of interaction orientation—that is,

a “firm’s ability to interact with its individual customers and to

take advantage of information obtained from them through

successive interactions to achieve profitable customer

relationships” (Ramani and Kumar 2008, p. 27)—can help the

firm effectively enhance marketing capabilities and resultant

performance by proactively managing customer segments.

However, research suggests that the performance advantages

of an orientation focused on the customer or market are not

always achievable (Kumar et al. 2011; Narver, Jacobson, and

Slater 1999). Such strategic orientations come with complex-

ities and costs, rendering the returns too small to justify imple-

mentation. Furthermore, as the operational scope of interaction

orientation moves beyond national boundaries (Ramaseshan

et al. 2006), the problems and challenges of engagement and

coordination are further compounded (Kumar, Sunder, and

Ramaseshan 2011).

Assessing the “growth” value (Katsikeas et al. 2016; Mor-

gan, Slotegraaf, and Vorhies 2009) of interacting with custom-

ers is important for MNCs operating in multiple country

markets. Growth is essential for MNCs’ expansion and survival

and, as such, is part of their performance assessments of inter-

national marketing strategies (e.g., Chen, Sousa, and He 2016;

Nemkova et al. 2015; Shoham 1998). Morgan, Slotegraaf, and

Vorhies (2009) also note that profit growth is a priority for

marketing managers given that it is one of the primary drivers

of a firm’s stock price. While an interaction orientation drives a

firm’s strategic approach to engaging and managing customers

Hannah Soobin Lee is Assistant Professor, Department of Marketing, Farmer

School of Business, Miami University, USA (email: [email protected]). David

A. Griffith is Department Head, Hallie Vanderhider Chair in Business, and

Professor of Marketing, Department of Marketing, Mays Business School,

Texas A&M University, USA (email: [email protected]).

Journal of International Marketing 2019, Vol. 27(2) 22-37

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in their markets, unlike in the domestic market, MNCs must

also consider the implementation of this approach across all

markets (Katsikeas, Samiee, and Theodosiou 2006). Extending

this extant literature, we define “country-based interaction

orientation” as a firm’s ability to manage interactive relation-

ships with its international customers at the country level.

Country-based interaction orientation sets the approach a

firm uses to engage customers globally at the country market

level (similar to the country-based market knowledge acquisi-

tion achieved through subsidiary marketing operations [Hewett

and Bearden 2001]). For example, many companies, such as

KAYAK, employ country-level managers who are charged

with the responsibility of understanding the needs of a specific

country market and coordinating localization efforts to opti-

mize the firm’s market presence. However, to understand the

organizational performance value of its customer engagement

strategy, the firm must jointly consider the impact of country-

based interaction orientation and its marketing implementation

strategy, as tension stemming from a prima facie incompatibil-

ity may be inherent between the MNC’s desire to engage cus-

tomers (i.e., to understand and respond to consumers’ needs

and wants) and its ability to gain economies through standar-

dization (i.e., execution of its marketing strategy consistently

across all markets).

International marketing strategy researchers have tradition-

ally discussed marketing strategy implementation in relation to

the adaptation or standardization of the firm’s marketing mix

(e.g., Cavusgil, Deligonul, and Yaprak 2005; Jain 1989; Ryans,

Griffith, and White 2003; Tan and Sousa 2013; Westjohn and

Magnusson 2017; Zou and Cavusgil 2002). Some scholars

argue that through greater adaptation, whether of all aspects

or just discretionary aspects of the firm’s marketing mix (i.e.,

Westjohn and Magnusson 2017), the firm can more effectively

deliver customer value to disparate customers across markets.

Alternatively, Katsikeas, Samiee, and Theodosiou (2006) and

Zou and Cavusgil (2002) argue that MNCs tend to prefer stan-

dardizing as much of their marketing mix as possible across

global operations to reap increased financial performance,

inclusive of greater profit, than competitors. The range of

implementation approaches in practice is notable. For example,

Apple works to deliver highly personalized experiences

anchored in a unique point of difference that resonates univer-

sally (Hovivian 2016) while in contrast, Hilton Hotels &

Resorts delivers highly tailored and adapted experiences to

their customers across the globe (Hernandez, Conway, and

Knight 2018). However, it is unclear whether an MNC’s degree

of adaptation or standardization of its international marketing

strategy implementation functions synergistically with its abil-

ity to effectively reap the profit returns of its strategic approach

of country-based interaction orientation.

The profit growth implications of the joint effect of the

strategic approach and marketing strategy implementation are

further complicated by the competitive and market conditions

in which the MNC operates. Two of the most prominent envi-

ronmental conditions affecting the effectiveness of interna-

tional marketing strategies are competitive intensity and

market dynamism (Griffith et al. 2017; Obadia 2013; Shi and

Gao 2016; Spyropoulou et al. 2018). Scholars have found these

factors to either facilitate or hinder the effects of a firm’s mar-

keting strategy on performance. With that said, the literature is

unclear on whether these conditions elevate or mitigate the

customer-centric strategic approach of country-based interac-

tion orientation combined with marketing strategy implemen-

tation adaptation or standardization in the MNC’s quest for

profit growth.

The current work attempts to address these important but

unexplored issues, filling a gap in the literature and making two

contributions. First, building on the attention-based view

(ABV), which recognizes that firm growth can vary depending

on the focus, as well as the limits, of managerial attention

(Joseph and Wilson 2018), we advance the literature on

customer-centric marketing strategies (e.g., Chen, Chen, and

Zhou 2014; Chen, Sousa, and He 2016) by investigating the

joint effects of country-based interaction orientation and the

degree of marketing strategy implementation adaptation/stan-

dardization (which we conceptualize as the extent to which the

MNC adapts or standardizes its overall marketing mix) on

profit growth. For expositional purposes, we refer to the firm’s

degree of marketing strategy implementation adaptation/stan-

dardization only as marketing strategy implementation standar-

dization from this point on. Our findings, which extend both the

international marketing strategy literature (e.g., Westjohn and

Magnusson 2017; Zou and Cavusgil 2002) and the ABV focus

on international marketing strategic orientations (e.g., Chen,

Chen, and Zhou 2014), reveal a positive interaction effect of

country-based interaction orientation and the firm’s degree of

marketing strategy implementation standardization on profit

growth. This finding is contrary to what may be regarded as

tension between country-based interaction orientation and mar-

keting strategy standardization (the apparent conflicting goals

of meeting individual market needs while working to gain

economies across markets). Notably, we find that the profit

growth effect of a country-based interaction orientation is neg-

ative when MNCs employ less of a marketing strategy imple-

mentation standardization approach across markets. This

suggests that the increased costs associated with high customer

engagement strategies (i.e., country-based interaction orienta-

tion and marketing strategy implementation adaptation) ham-

per profit growth.

Second, we extend the literature by examining the contin-

gent effects of competitive intensity and market dynamism.

The findings indicate that the effect of country-based interac-

tion orientation and marketing strategy implementation on

profit growth is more susceptible to environmental influences

when the MNC’s marketing strategy implementation is less

standardized across country markets (i.e., adaptation). For

firms opting for an adapted marketing strategy implementation

approach, country-based interaction orientation exerts a posi-

tive effect on profit growth when competitive intensity levels

are high. By contrast, profit growth is adversely affected as

country-based interaction orientation and marketing strategy

implementation adaptation increases when market dynamism

Lee and Griffith 23

levels are high. The results extend the international marketing

literature on interaction orientation (e.g., Chen et al. 2017;

Gnizy and Shoham 2014) and contribute to a growing stream

of literature in international marketing strategy on contextual

effects (e.g., Cadogan, Kuivalainen, and Sundqvist 2009; Oba-

dia 2013; Shi and Gao 2016; Spyropoulou et al. 2018).

Conceptual Model and Research Hypotheses

The ABV and MNC Profit Growth

The ABV, which originated in the work of Simon (1947) and is

often applied in the field of international strategy (e.g., Ambos

and Birkinshaw 2010; Chen, Chen, and Zhou 2014; Spyropou-

lou et al. 2018), argues that the attention of firms’ decision

makers determines firm behaviors. This theoretical perspective

is unique from traditional rational choice perspectives in that it

highlights the limitations of human rationality in explaining

firm decisions (Ocasio 1997), thus denoting the importance

of managerial focus in directing organizational activities.

Under the ABV, managerial attention influences both individ-

ual decision processes and firm structures by allocating and

distributing the focus of management (Simon 1947).

Prior research has highlighted a focus on strategic processes

and structures as central to driving firm outcomes (Chen, Chen,

and Zhou 2014; Xu, Cavusgil, and White 2006). Consistent

with the ABV, theories of firm growth denote performance

variations based on the focus and limits of managerial attention

(Joseph and Wilson 2018). Assessing how MNCs’ marketing

attention contributes to organizational performance (Katsikeas

et al. 2016) from the perspective of growth is particularly rel-

evant for development and survival in the global market. As

mentioned previously, profit growth is a key strategic firm

objective (Morgan, Slotegraaf, and Vorhies 2009) and is essen-

tial for firm expansion and innovation. Profit growth derives

from a firm’s ability to effectively engage customers, as it is

through the effective engagement of customers that firms can

offer value-added products and services, in turn reaping above-

average financial returns (Griffith and Lee 2016). In the mar-

keting strategy literature, profit growth comes from a firm’s

attention to engaging customers by strategically structuring an

interaction orientation (Ramani and Kumar 2008), which

allows the firm to leverage information obtained through suc-

cessive customer interactions to achieve profitable customer

relationships. Furthermore, and consistent with the ABV,

Kumar and Ramani (2006) argue that it is firms’ attention to

customers, driven by an interaction orientation, that engenders

competitive advantage.

The ABV further recognizes that attention in a complex

organization (e.g., an MNC) is not always uniform and that

members often have both imperfect and divergent understand-

ing of environmental signals, which affects firms’ ability to

achieve profit growth. MNCs’ international marketing imple-

mentation strategies, which are often formulated at headquar-

ters, take into consideration the organization and coordination

of marketing implementation activities across country markets

in which they operate, though the responsibility for carrying

out country-based approaches rests on foreign subsidiary mar-

keting units (Hewett and Bearden 2001; Katsikeas, Samiee, and

Theodosiou 2006). Global marketing managers are faced with a

seeming tension between their firms’ structural processes of

working to engage customers in country markets and the desire

for economies attained from strategic marketing implementa-

tion standardization at the global level. The effective balance of

managerial attention and focus will heavily affect the overall

profit growth MNCs are able to reap from their overall inter-

national marketing operations. Here, we argue that MNC profit

growth is dependent on the balance of a firm’s strategic orien-

tation (e.g., country-based interaction orientation) and the

degree of its overall marketing strategy implementation

standardization.

Ocasio (1997) argues that managerial attention is localized

within the strategic orientations the firm sets to achieve its

objectives. Interaction orientation is both broader and deeper

in conceptualization than a customer-centric approach of cus-

tomer orientation (e.g., Chen, Chen, and Zhou 2014;

Deshpandé, Farley, and Webster 1993; Park, Oh, and Kasim

2017). 1

Ramani and Kumar (2008) conceptualize interaction

orientation as consisting of four unique but related aspects. The

first aspect is customer concept, or the assignment of the unit of

analysis of every marketing action and reaction to the individ-

ual level. The second aspect is interaction response capacity, or

the firm’s systems to respond to heterogeneous customers dif-

ferently by pooling information from multiple sources and

points in time. The third aspect is customer empowerment, or

the extent to which a firm offers its customers avenues to con-

nect with the firm, shape transactions, and share information.

The fourth aspect is customer value management, or the extent

to which the firm can define and dynamically measure individ-

ual customer value and use it to guide marketing resource

allocations. Our extension of the construct (i.e., country-

based interaction orientation) allows us to maintain many of

the advantages of the interaction orientation construct while

capturing the firm’s ability to manage interactive relationships

with its international customers at the country level. This exten-

sion broadens the literature and provides an alternative view on

how MNCs can engage customers globally.

Furthermore, under the ABV, the strategic approach of a

country-based interaction orientation works to ensure that the

firm is responsive to customers by pooling information from

multiple country sources. Firms can accomplish this by devel-

oping systems that can define and dynamically measure cus-

tomer value at the country level, ultimately guiding marketing

resource allocations to enhance customer engagement capabil-

ities. This argumentation is consistent with that of Chen, Chen,

1 Whereas most conceptualizations of a market orientation are limited to either

a behavioral or a cultural perspective, interaction orientation is a more

comprehensive construct capturing not only the underlying belief but also

the processes and practices that supplement that belief (Ramani and Kumar

2008). Interaction orientation is also different from the broader concept of

customer relating capability (Day and Van den Bulte 2002).

24 Journal of International Marketing 27(2)

and Zhou (2014), who examine international joint ventures

under the ABV and find that a customer orientation confers

greater differentiation capability. It is also consistent with that

of Chen et al. (2017), who find that increased interaction orien-

tation enhances both market-linking and marketing

capabilities.

Joint Effect of Country-Based Interaction Orientation and Marketing Strategy Implementation Standardization

While the country-based interaction orientation sets an MNC’s

approach to individual country markets, the implementation of

its global marketing strategy allows for the execution of its

marketing mix. Under the ABV, an MNC faces tension stem-

ming from a prima facie incompatibility between focusing

managerial attention on customer engagement, so as to provide

unique value-added offerings, and gaining economies across

markets by standardizing as much of its international marketing

strategy as possible. We posit, however, that this tension

diminishes when increased managerial attention is paid to bal-

ancing these dual goals, in which managers strive to identify

intra- and cross-market commonalities and gain synergies to

increase profit growth.

A central element of interaction orientation is the firm’s

ability to allocate individual customers to homogeneous seg-

ments that it can effectively serve (Ramani and Kumar 2008).

We contend, under the ABV, that an MNC employing a

country-based interaction orientation considers the country

markets themselves to identify segments, as managerial atten-

tion is devoted to serving segments that cut across global coun-

try markets. One way to improve coordination is to globally use

information obtained through an interaction orientation in the

respective country-level markets. With that said, MNCs must

overcome national fragmentation of markets and cross-

subsidize their operations in different parts of the world. By

doing so, they can adopt a more standardized marketing strat-

egy implementation, simultaneously meeting customers’ needs

(within segments) and capturing scale economies. A country-

based interaction orientation coupled with marketing strategy

implementation standardization increases profit growth, as

managerial attention is devoted to identifying customer

insights that could work to serve the MNC’s customer seg-

ments that cut across its global markets (i.e., finding common-

alities). An MNC’s desire to standardize its marketing mix to

enhance financial performance, inclusive of profit and return

on investment, is consistent with the findings of Cavusgil and

Zou (1994).

Alternatively, we posit that country-based interaction orien-

tation will negatively affect profit growth when coupled with

marketing strategy implementation adaptation. While customer

interactions help firms refine their knowledge about customer

tastes and preferences (Srinivasan, Anderson, and Ponnavolu

2002), they also increase MNC resource inputs. Similarly, an

adaptive marketing implementation strategy requires increased

resources (e.g., product design and modifications, advertising

and creative adaptation, identification of country-based price

points), which can cause significant dispersion of managerial

attention and strain resources, thus hampering profit growth.

This argumentation is consistent with the broader literature that

suggests that a customer-centric approach can be too costly

(Narver, Jacobson, and Slater 1999). In other words, the returns

of an interaction orientation coupled with an adaptive approach

to marketing strategy implementation across markets may

overshadow the gained benefits of customer engagement. Thus,

we hypothesize the following:

H1: There is a positive interaction effect of country-based

interaction orientation and marketing strategy implementa-

tion standardization on MNC profit growth.

Effects of Competitive Intensity and Market Dynamism

The joint effectiveness of MNCs’ strategic structure of

country-based interaction orientation and marketing strategy

implementation standardization may be contingent on the

environments they face across global markets. Two environ-

mental conditions that are central to engaging customers effec-

tively are competitive intensity and market dynamism (e.g.,

Cui, Griffith, and Cavusgil 2005; Griffith et al. 2017; Jaworski

and Kohli 1993; Obadia 2013; Spyropoulou et al. 2018).

Competitive intensity refers to the degree to which a firm

faces competition in a market (Cui, Griffith, and Cavusgil

2005; Griffith et al. 2017; Jaworski and Kohli 1993; Lam,

Kraus, and Ahearne 2010; Theodosiou and Katsikea 2013).

As competitive intensity increases, consumers benefit from

having a larger number of alternatives (Houston 1986; Kohli

and Jaworski 1990). From a marketing strategy standpoint, we

do not expect the intensity of competition to affect the joint

effect of country-based interaction orientation and marketing

strategy implementation standardization. The positive impact of

a country-based interaction orientation on marketing perfor-

mance outcomes is likely to be relatively unsusceptible to com-

petitive influences in the market for firms employing a more

standardized approach to their marketing implementation strat-

egy. The synergies gained through managerial attention to

knowledge generated through a country-based interaction orien-

tation approach and a more standardized approach to marketing

implementation across country markets are large enough to

cover the effort of continuous engagement with customers across

country markets. Thus, regardless of the level of competition in

the market, we expect a country-based interaction orientation to

generate a consistent level of benefits and profit growth across

variations in country market competitive intensity.

However, we argue that competitive intensity will affect the

effect of country-based interaction orientation when employed

with greater marketing strategy implementation adaptation.

Theodosiou and Katsikea (2013) argue that in situations in

which the level of competition is more intense, the firm’s abil-

ity to disseminate relevant information to the appropriate deci-

sion makers becomes a crucial input to effective market

responses. Given the pressure from competitors to better tailor

marketing strategies to market characteristics (Cui and Lui

Lee and Griffith 25

2005), firms often become more adaptive (e.g., Lages, Jap, and

Griffith 2008). Under the ABV, a management focus drives

firm strategy. As competitive intensity increases, we anticipate

that MNCs will undertake a country-based interaction orienta-

tion jointly with marketing strategy implementation adaptation

across markets to benefit from managerial attention to deeper

customer engagement and the ensuing adaptation of strategy

implementation across markets. As the aspects of interaction

orientation provide an advantage over less customer-centric

competitors and because the firm’s implementation approach

is geared to satisfying specific needs, we contend that under

high competitive intensity, the MNC’s ability to leverage its

understanding of customers gained through an interaction

orientation coupled with an adaptive approach to its marketing

implementation strategy is enhanced, offsetting the inefficien-

cies and challenges of engagement and thereby magnifying its

profit growth. However, under low competition levels, the

unnecessary strain of resources by the focus on customer inter-

actions and subsequent adaptation to individual markets will

reduce profit growth. Thus,

H2: Competitive intensity negatively moderates the positive

interaction effect of country-based interaction orientation

and marketing strategy implementation standardization on

MNC profit growth.

Market dynamism refers to the degree of change in the

market (Achrol and Stern 1988; Cui, Griffith, and Cavusgil

2005; Jap 1999; Lam, Kraus, and Ahearne 2010; Shi and Gao

2016). Incorporated in this definition are market aspects such

as changing customer composition, customer preferences, and

marketing practices (Shi and Gao 2016). Inherent to market

dynamism is the concept of unpredictability. Unpredictability

decreases strategic certainty, making it more difficult for firms

to accurately plan their marketing actions (Cui, Griffith, and

Cavusgil 2005; Jap 1999; Shi and Gao 2016). Dynamic markets

affect firm operations, necessitating the ability to adapt quickly

to such changes (Jap 1999). However, the level of dynamism in

the market is not likely to affect the joint effect of country-

based interaction orientation and marketing strategy implemen-

tation standardization. We contend that, regardless of the level

of market dynamism, managerial attention to balancing cus-

tomer understanding gained through country-based interaction

orientation and marketing strategy implementation standardi-

zation enables firms to gain cross-market efficiencies at the

segment level and to maintain control over costs, even when

uncertainties prevail. Underlying this argument is the notion

that through standardization of marketing strategy implemen-

tation, firms avoid the high costs of adapting to ever-changing

country markets, thereby obtaining consistent levels of profit

growth across variations in country market dynamism.

However, we argue that market dynamism will affect the

effect of country-based interaction orientation when employed

with marketing strategy implementation adaptation. Specifi-

cally, we contend that the ability of the firm to reap profit

growth from a country-based interaction orientation and an

adapted marketing strategy implementation approach will be

hampered by dynamic market changes. A country-based inter-

action orientation engaged jointly with marketing strategy

implementation adaptation focuses managerial attention on

understanding country-specific customer needs, sensing indi-

vidual market changes across all markets of operations, and

making marketing strategy modifications to suit these ever-

changing needs. However, as markets become more dynamic,

finding and adapting to commonalities across all markets and

effectively serving all unique segments of consumers across the

firm’s global markets through marketing strategy implementa-

tion adaptation become increasingly costly and difficult to

implement. Such challenges of customer engagement limit the

growth value gained from successfully engaging customers

because of higher costs. As such, we contend that greater mar-

ket dynamism mitigates the firm’s attention ability to leverage

both country-based interaction orientation and marketing strat-

egy implementation adaptation for profit growth. Thus,

H3: Market dynamism positively moderates the positive

interaction effect of country-based interaction orientation

and marketing strategy standardization adaptation on

MNC profit growth.

Research Methods

Sample and Data Collection

We used a survey of U.S.-based MNCs to test the hypotheses.

The proposed survey was reviewed by global marketers before

data collection, and a research panel of a market research com-

pany facilitated data collection (see Strizhakova and Coulter

2015; Westjohn and Magnusson 2017). We restricted the

respondent sample frame to people who self-identified as mar-

keting managers with responsibility for international opera-

tions in MNCs. To effectively assess the response rate,

emails soliciting participation in the study were sent out in

small batches on a rolling basis. Each batch allowed respon-

dents five days to participate in the survey. After this period,

other managers who met the study’s criteria were invited to

participate. The email solicitations indicated that the purpose of

the study was to understand MNC global marketing strategy.

As a qualification question, each potential respondent was

asked to indicate his or her level of active participation in the

development and administration of the firm’s global marketing

strategy. We deemed 584 respondents as qualified for the study,

and 258 managers responded to the survey. One hundred twenty-

eight surveys were complete and usable, for an effective

response rate of 21.92%. On average, MNCs in the sample reported $16.4 billion in annual sales revenue, 25.85% of which was attributable to international operations. The firms had

engaged in international operations for 23 years on average.

Of the responding managers, 50.4% were men and 49.6% were women. Their mean age was 43 years, and they had approxi-

mately 8 years of international operations experience. Respon-

dents represented firms in a variety of business-to-business and

26 Journal of International Marketing 27(2)

business-to-consumer industries, including consumer packaged

goods, software, manufacturing, and health care.

Measures

We adapted construct measurement from extant literature (see

the Appendix). Table 1 reports the descriptive statistics and

correlations.

Country-based interaction orientation. We conceptualized country-based interaction orientation as a firm’s ability to

interact with its customers at the country-market level and

to take advantage of information obtained through success-

ful interactions to achieve profitable customer relationships.

We measured country-based interaction orientation by

adapting Ramani and Kumar’s (2008) multi-item scale,

which captures the four aspects of interaction orientation:

customer concept (two items), interaction response capabil-

ity (four items), customer empowerment (three items), and

customer value management (three items). We averaged

each of the four aspects together to provide an equal

weighted construct (a ¼ .78).

Marketing strategy implementation standardization. We concep- tualized marketing strategy implementation standardization

as the extent to which the MNC standardizes or adapts its

overall marketing mix. We based our measure of this vari-

able on Roth’s (1995) areas of marketing implementation

problems, and it is consistent with the holistic global mar-

keting strategy approaches of Zou and Cavusgil (2002) and

Shi and Gao (2016). Through this approach, we gained an

understanding of the MNCs’ relative emphasis on standar-

dization, with the low end of the scale reflecting less stan-

dardization and, thus, greater adaptation across the MNCs’

markets and marketing-mix elements. We measured market-

ing strategy implementation standardization with a five-

item, seven-point Likert scale assessing the extent of the

firm’s use of standardization in all its markets in relation

to (1) distribution channels, (2) prices, (3) advertising and

promotion, (4) product characteristics, and (5) service

delivery.

Competitive intensity. We conceptualized competitive intensity as the degree to which firms face competition in the market

(Cui, Griffith, and Cavusgil 2005; Jaworski and Kohli 1993;

Lam, Kraus, and Ahearne 2010). We captured competitive

intensity using Lam, Kraus, and Ahearne’s (2010) three-

item, seven-point Likert scale assessing whether (1) compe-

tition in the industry is cutthroat across the markets in

which the firm competes, (2) competition is relatively

strong, and (3) the competition in country markets from

other firms offering similar products and services is

immense (a ¼ .83).

Market dynamism. We conceptualized market dynamism as the degree of change in the market (Cui, Griffith, and Cavusgil

2005; Jap 1999). Building on the work of Cui, Griffith, and

Cavusgil (2005) and Jap (1999), we measured market dyna-

mism with a two-item, seven-point Likert scale that captured

whether (1) the environmental demands on the firm were con-

stantly changing and (2) the marketing practices in the industry

were constantly changing (a ¼ .73).

Profit growth. We conceptualized profit growth as the firm’s profit growth rate over the last year. The use of profit growth

is theoretically consistent with the notion that an interaction

orientation is focused on driving profit. It also aligns with

Cadogan’s (2012) call for theoretical and operationalization

consistency when applying strategic orientations and Leh-

mann and Winer’s (2009) argument that linking marketing

actions with profit growth is necessary for marketing to be

given greater input within firms. Profit growth is both con-

crete and singular (i.e., firms have one profit growth rate). As

such, consistent with arguments for the measurement of con-

crete and singular constructs (e.g., Bergkvist and Rossiter

2007), we employ a single-item measure that asks respon-

dents to indicate the specific profit growth rate of their MNCs

over the last year.

Control variables. In an effort to minimize spuriousness of the results, we included several control variables. The international

marketing literature indicates that both firm and respondent

characteristics can affect marketing strategy effectiveness

(e.g., Lam, Kraus, and Ahearne 2010; Roth 1995; Zou and

Table 1. Measure Statistics and Correlation Matrix.

M SD 1 2 3 4 5 6 7 8

1. Country-based interaction orientation 4.71 .84 .784 2. Marketing strategy implementation standardization 3.57 1.16 .229** N.A. 3. Competitive intensity 4.98 1.19 .334** .202** .791 4. Market dynamism 4.79 1.26 .216** .284** .503** .760 5. Profit growth 21.54 56.44 �.265** �.187* �.141 �.077 N.A. 6. Length of international operations 22.70 27.13 .076 -.080 .086 .113 �.091 N.A. 7. International sales dependency 25.85 21.39 .076 -.075 .101 .006 .121 .350** N.A. 8. Respondent international experience 7.75 10.32 .052 �.073 .015 .016 �.060 .276** .141 N.A.

*p < .05. **p < .01. Notes: The square roots of the average variance extracted are on the diagonal. N.A. ¼ single-item and formative scales.

Lee and Griffith 27

Cavusgil 2002). As such, we included the length of interna-

tional operations (in years), international sales dependency

(measured as the percentage of firm total sales derived from

international operations), and the manager’s length of experi-

ence in international operations.

Reliability and Validity of Measures

We estimated the measurement model using confirmatory fac-

tor analysis with Mplus 8. The measurement model consisted

of the reflective multi-item latent constructs of interaction

orientation, competitive intensity, and market dynamism. The

Appendix reports the results of the measurement model analy-

sis, together with item loadings, composite reliabilities, and

average variances extracted (AVEs).

We assessed the reliability of individual items by evalu-

ating the loadings of the items on their respective latent

construct. Hulland (1999) argues that loadings of less than

.50 may represent poorly worded or inappropriate items and

thus should be eliminated from the model. As the Appendix

shows, the measurement items exceed this threshold and

loaded significantly on the expected constructs (ranging

from .71 to .85). Furthermore, all constructs have acceptable

levels of reliability, with the computed Cronbach’s alpha

ranging from .73 to .83 and composite reliability coeffi-

cients ranging from .73 to .86 for each construct. These

values exceed the recommended thresholds of .70 (Nunnally

1978) and .60 (Bagozzi and Yi 1988), respectively. Conver-

gent validity is also evident, with the AVE for each con-

struct ranging between .58 and .63, exceeding the .50

benchmark (Fornell and Larcker 1981). To test for discri-

minant validity, we used Fornell and Larcker’s (1981)

approach by assessing whether the square root of the AVE

of each construct (see the diagonal in Table 1) was greater

than the correlations between variables. All constructs

demonstrate discriminant validity.

The overall chi-square goodness-of-fit index for the model

is 253.392 based on 112 degrees of freedom. The measurement

fit indexes for the confirmatory measurement models all meet

the critical values for a model of good fit (Hu and Bentler

1999): The comparative fit index was .902, the root mean

square error of approximation was .079, and the standardized

root mean square residual was .066.

Cross-sectional surveys in which both the independent

and dependent variables derive from the same source are

susceptible to common method bias (Podsakoff et al.

2003). We tested for the potential presence of common

method variance, consistent with prior marketing literature

(e.g., Kim et al. 2011), using the marker variable test. We

selected a marker variable—product implementation prob-

lems—as a proxy for method variance (Lindell and Whitney

2001). This variable is theoretically unrelated to at least one

of the study constructs. We measured product implementa-

tion problems with a seven-point Likert-type scale (1 ¼ “no problems,” and 7 ¼ “many problems”) that captures the extent to which the firm perceives experiencing marketing

implementation problems in its country markets in relation

to product characteristics. We partialed out the variable’s

coefficients from the bivariate correlations and then com-

pared the results with unadjusted correlations. After we par-

tialed out the marker variable, most of the significant

bivariate correlations between key predictors and outcomes

maintained their statistical significance. Furthermore, we

note that all the hypotheses in the model involve interac-

tions and therefore “cannot be artifacts of [common method

variance]” (Siemsen, Roth, and Oliveira 2010, p. 456).

Thus, we conclude that the risk of common method bias

is minimal.

Analysis and Results

Hypothesis Testing

We centered all the variables before conducting multiple

regression analyses, as Aiken and West (1991) recommend.

Multicollinearity was not a significant issue; the maximum

variance inflation factor (i.e., 2.394) and the maximum condi-

tion index (i.e., 4.744) were below 10 and 30, respectively.

Table 2 reports the results.

H1 predicted a positive interaction effect of country-based

interaction orientation and marketing strategy implementation

standardization on MNC profit growth. The results show a

positive and significant interaction, in support of H1 (Table

2; b ¼ .287, t ¼ 3.649, p < .001). To further clarify the mean- ing of the significant interaction, we examined it following the

procedure Aiken and West (1991) outline. The simple slope

analysis (Figure 1) indicates that country-based interaction

orientation has a positive effect on MNC profit growth when

the firm takes a more standardized approach to marketing strat-

egy implementation (simple slope b ¼ 12.29, t ¼ 1.94) but has a negative effect on profit growth when marketing strategy

implementation is more adapted (simple slope b ¼ �18.06, t ¼�2.74).

In H2, we theorized that competitive intensity would nega-

tively moderate the positive interaction effect of country-based

interaction orientation and marketing strategy implementation

standardization on MNC profit growth. In support of H2, the

results indicate that the three-way interaction among country-

based interaction orientation, marketing strategy implementa-

tion standardization, and competitive intensity is negative and

significant (Table 2; b¼�.322, t ¼�2.902, p < .01). Figure 2 plots the significant three-way interaction (Aiken and West

1991). The simple slope analysis indicates that competitive

intensity only affects the effect of country-based interaction

orientation when firms implement an adapted marketing strat-

egy. Panel A shows that in the case of marketing strategy

implementation standardization, country-based interaction

orientation does not have an effect on MNC profit growth in

environments characterized by either high (simple slope b ¼ 6.48, t ¼ .60) or low (simple slope b ¼ �3.83, t ¼ �.42) competitive intensity. Panel B shows that when firms employ

a marketing strategy implementation adaptation approach,

28 Journal of International Marketing 27(2)

country-based interaction orientation has a positive effect on

MNC profit growth in high-competitive-intensity markets

(simple slope b ¼ 24.23, t ¼ 2.27) but a negative effect on profit growth in low-competitive-intensity markets (simple

slope b ¼ �47.66, t ¼ �4.97). Thus, although the direction of H2 is as expected, the results indicate a more nuanced effect

than theorized.

In H3, we theorized that market dynamism would posi-

tively moderate the positive interaction effect of country-

based interaction orientation and marketing strategy imple-

mentation standardization on MNC profit growth. The results

indicate that the three-way interaction among country-based

interaction orientation, marketing strategy implementation

standardization, and market dynamism is positive and signif-

icant, in support of H3 (Table 2: b ¼ .315, t ¼ 3.195, p < .01). Figure 3 plots the significant three-way interaction (Aiken

and West 1991). Panel A shows that in the case of marketing

strategy implementation standardization, country-based inter-

action orientation does not affect profit growth in markets

characterized by either high (simple slope b ¼ �4.29, t ¼ �.64) or low (simple slope b ¼ 6.95, t ¼ .58) market dyna- mism. Panel B shows that when firms employ a marketing

strategy implementation adaptation approach, country-based

interaction orientation has a negative effect on profit growth

in high market dynamism (simple slope b ¼ �47.45, t ¼ �6.13) but a positive effect on profit growth in low market dynamism (simple slope b ¼ 24.01, t ¼ 2.29). Thus, although the direction of H3 is as expected, the results again indicate a

more nuanced effect than theorized.

Additional Findings

Though not directly hypothesized, we find a positive interac-

tion effect of country-based interaction orientation and com-

petitive intensity on MNC profit growth (Table 2: b¼ .384, t ¼ 3.648, p < .001). The simple slope analysis indicates that in high-competitive-intensity markets, country-based interaction

orientation has a positive effect on MNC profit growth (simple

−10

0

10

20

30

40

50

60

Low Country-Based

Interaction Orientation

High Country-Based

Interaction Orientation

Pr of

it G

ro w

th (%

)

Adaptation Standardization

Figure 1. Interaction effect of country-based interaction orientation and marketing strategy implementation standardization on profit growth. Notes: Both slopes in this figure are significant.

Table 2. Least Squares Regression Results.

Model 1a Model 1b Model 1c

Predictors b t b t b t

Length of international operations �.092 �.940 �.059 �.684 �.097 �1.168 International sales dependency .164 1.724 .142 1.724 .130 1.638 Respondent international experience �.063 �.675 �.071 �.878 �.018 �.227 Country-based interaction orientation (CBIO) �.150 �1.575 �.051 �.605 �.093 �1.131 Marketing strategy implementation standardization (MSIS) �.097 �1.043 �.097 �1.198 �.104 �1.302 Competitive intensity (CI) �.035 �.326 �.230* �2.276 �.100 �.975 Market dynamism (MD) .095 .888 .128 1.364 .030 .320 CBIO � MSIS .287*** 3.649 .123 1.324 CBIO � CI .384*** 3.648 .394*** 3.910 CBIO � MD �.425*** �4.314 �.424*** �4.489 MSIS � CI �.022 �.250 .155 1.477 MSIS � MD �.175* �2.001 �.186* �2.222 CI � MD �.19 �1.810 �.158 �1.568 CBIO � MSIS � CI �.322** �2.902 CBIO � MSIS � MD .315** 3.195 Adjusted R2 .006 .282 .349 F-value 1.13 4.838*** 5.532***

*p < .05. **p < .01. ***p < .001. Notes: Dependent variable is profit growth (%). Standardized coefficients are reported. Two-tailed tests.

Lee and Griffith 29

slope b ¼ 17.16, t ¼ 2.30), but the effect is reversed in low- competitive-intensity markets (simple slope b ¼ �22.93, t ¼ �3.24). In addition, we find a negative interaction effect of country-based interaction orientation and market dyna-

mism on MNC profit growth (Table 2: b ¼ �.425, t ¼ �4.314, p < .001). The simple slope analysis indicates that country-based interaction orientation has a negative effect

on MNC profit growth when market dynamism levels are

high (simple slope b ¼ �23.62, t ¼ –4.14) but a positive

effect on MNC profit growth when market dynamism levels

are low (simple slope b ¼ 17.85, t ¼ 2.32). Finally, the results indicate a significant and negative interaction

between marketing strategy implementation standardization

and market dynamism (Table 2: b ¼ �.175, t ¼ 2.00, p < .05). The simple slope analysis indicates that marketing

strategy implementation standardization has a negative

effect on MNC profit growth when market dynamism levels

are high (simple slope b ¼ �10.86, t ¼ �2.48) but has no effect on profit growth when market dynamism levels are

low (simple slope b ¼ 3.38, t ¼ .67).

A: Marketing Strategy Implementation Standardization

B: Marketing Strategy Implementation Adaptation

−20

−10

0

10

20

30

40

50

60

70

Low Country-Based

Interaction Orientation

High Country-Based

Interaction Orientation

Pr of

it G

ro w

th (%

)

High competitive intensity

Low competitive intensity

−20

−10

0

10

20

30

40

50

60

70

Low Country-Based

Interaction Orientation

High Country-Based

Interaction Orientation

Pr of

it G

ro w

th (%

)

High competitive intensity

Low competitive intensity

Figure 2. Interaction effect of country-based interaction orientation, marketing strategy implementation standardization, and competitive intensity on profit growth. Notes: Solid lines indicate a significant slope; dotted lines indicate a nonsignifi- cant slope.

A: Marketing Strategy Implementation Standardization

B: Marketing Strategy Implementation Adaptation

−20

−10

0

10

20

30

40

50

60

70

Low Country-Based

Interaction Orientation

High Country-Based

Interaction Orientation

Pr of

it G

ro w

th (%

)

High market dynamism

Low market dynamism

−20

−10

0

10

20

30

40

50

60

70

Low Country-Based

Interaction Orientation

High Country-Based

Interaction Orientation

Pr of

it G

ro w

th (%

)

High market dynamism

Low market dynamism

Figure 3. Interaction effect of country-based interaction orientation, marketing strategy implementation standardization, and market dynamism on profit growth. Notes: Solid lines indicate a significant slope; dotted lines indicate a nonsignifi- cant slope.

30 Journal of International Marketing 27(2)

Discussion

This work extends understanding of international marketing in

MNCs under the ABV. Specifically, this study provides new

insights into how MNCs’ joint adoption of a country-based

interaction orientation and marketing implementation strategy

standardization drives profit growth, subject to the context of

competitive intensity and market dynamism. Our findings from

a survey of U.S.-based MNCs provide several new theoretical

and managerial implications for international marketing scho-

lars and managers.

Theoretical Implications

This work extends the literature on international marketing

strategy (e.g., Chen, Chen, and Zhou 2014) and adaptation/

standardization (e.g., Jain 1989; Ryans, Griffith, and White

2003; Tan and Sousa 2013; Westjohn and Magnusson 2017;

Zou and Cavusgil 2002) by framing the discussion under the

ABV as the interplay between managerial focus on strategic

orientation and international marketing strategy implementa-

tion. The findings advance a view that recognizes that market-

ing strategy implementation is a tactical marketing-mix

executional aspect that managers need to consider jointly with

their firms’ strategic orientation when engaging with global

customers (e.g., Buzzell 1968).

Moreover, the results suggest that global marketing man-

agers need to balance the structural process of interacting

with customers in country markets and its standardization of

strategic marketing implementation desire at the global level

to ease the prima facie tension of competing approaches and

find commonalities. MNCs that focus managerial attention

on the strategic orientation of country-based interaction

orientation, by implementing structures to collect, process,

and strategically use customer information while employing

a marketing strategy implementation of adaptation (thereby

working to align approaches), experience increased costs

and managerial inefficiencies, which limit profit growth

(at least in the short run). These inefficiencies may be due

to the dispersion of managerial attention and the complex-

ities of controlling and coordinating interactions with cus-

tomers across global markets characterized by diverse needs

and preferences and following adaptation of marketing strat-

egy implementation to cater these customers across the

firm’s subsidiaries. The inability to foresee inefficiencies

is consistent with argumentation under the ABV of the lim-

itations of human rationality, as well as marketing literature

documenting that the cost of customer engagement strate-

gies can offset potential gains (Kumar et al. 2011; Narver,

Jacobson, and Slater 1999). Furthermore, the finding that

country-based interaction orientation has a positive effect

on MNC profit growth under marketing strategy implemen-

tation standardization indicates the necessity of finding

commonalities across markets.

The findings also extend extant international marketing

literature on the role of environmental context in

international marketing strategy effectiveness (e.g., Cui,

Griffith, and Cavusgil 2005; Obadia 2013; Shi and Gao

2016; Spyropoulou et al. 2018). For firms that take a more

standardized approach to their marketing strategy imple-

mentation, greater competitive intensity in global markets

does not affect profit growth levels resulting from attention

paid to a strategic orientation of customer engagement at the

country level. By contrast, the findings indicate that the

joint effect of country-based interaction orientation and

marketing strategy implementation adaptation on profit

growth varies depending on the competitive intensity level

of markets in which MNCs operate. This provides strong

foundational evidence that though the inefficiencies arising

from managing interactions with global customers and the

coordination of adapting marketing strategy implementation

across markets may adversely affect profit growth in less

competitive environments, in highly competitive environ-

ments, a firm’s ability to focus on the customer-oriented

processes and structure of interaction orientation and the

ensuing adaptation of the implementation strategy is crucial

to achieve substantive advantage.

Finally, our findings highlight the limitation of country-

based interaction orientation, as market dynamism increases

within the MNC context. As noted previously, Ramani and

Kumar (2008) propose that interaction orientation puts pro-

cesses and structures into place to build homogeneous market

segments. When extended to the country level, in highly

dynamic markets in which consumers move in and out of

segments quickly as individual needs and wants change, it

may be difficult for MNCs to effectively engage the markets.

As markets become more dynamic, MNCs’ ability to quickly

incorporate and process information obtained through a

country-based interaction orientation to effectively serve all

unique segments of consumers through adaptation becomes

difficult, hindering their ability to make necessary changes.

The complexities and inefficiencies of following marketing

implementation adaptation are exacerbated in dynamic mar-

ket environments and limit firms’ profit growth realization,

suggesting that a country-based interaction orientation

coupled with marketing strategy implementation adaptation

is detrimental to short-term profit growth in highly dynamic

markets. By contrast, firms focused on a more standardized

approach to marketing strategy implementation in combina-

tion with country-level interaction orientation avoid the

increased costs of adapting to a dynamic market and experi-

ence consistent levels of profit growth even under market

turbulence. These findings highlight the limitations of human

rationality (Ocasio 1997) under the ABV when an MNC’s

strategic approach and marketing strategy implementation are

considered jointly with market dynamism.

Managerial Implications

The findings have several implications for managers. First, we

recommend that managers assess the value of a country-based

interaction orientation in securing profit growth, given

Lee and Griffith 31

variations in international marketing strategy implementation

approaches in global markets. Global marketing managers face

tension between the structural processes of interacting with

their customers in country markets and the strategic marketing

implementation desired at the global level. This tension creates

a context in which customer engagement in country markets

may not always be effective in positively boosting MNC per-

formance. As such, we recommend that global marketing man-

agers begin by accounting for the specific costs associated with

their firms’ country-based interaction orientation and then proj-

ect cost variations across levels of marketing strategy imple-

mentation standardization. They can then develop optimization

models to best understand the overall joint effects on profit

growth.

Second, joint consideration of strategic orientation and

implementation can be a challenge, as often the decision

authority of these two important aspects are not colocated

(Katsikeas, Samiee, and Theodosiou 2006). Although both

come from senior-level managers, MNCs’ strategic orienta-

tion toward customer engagement is often dictated by senior

leadership (i.e., chief executive officer [CEO]). Alternatively,

the decisional control over the implementation aspect of

firms’ international marketing strategy is more tactical in

nature and, though still residing in the C-suite (i.e., chief

marketing officer [CMO]), is often decided separately from

firms’ overall strategic orientation. One option would be for

senior management to jointly consider the strategic orienta-

tion and the marketing strategy implementation. However, we

contend that elevating international marketing strategy imple-

mentation to the decisional level of the CEO could be funda-

mentally unsound, as the CEO’s expertise may not be in this

domain. Rather, we recommend that CMOs keep the degree of

international marketing strategy implementation standardiza-

tion within their decisional scope and align it with their firms’

overall strategic orientation so as to achieve synergistic out-

comes and avoid detrimental ones that may lower profit

growth.

Third, we argue that focusing managerial attention on

country-based interaction orientation coupled with interna-

tional marketing strategy implementation adaptation will not

result in the same level of profit growth within all market

contexts. Rather, managers should carefully measure the

environmental conditions in which they operate. Here, we

advise that when faced with intensive competition in global

markets (e.g., level of industry concentration, number of

new competitive products introduced, increases in price

competition), managers should try to leverage the processes

and structures of an interaction orientation to build and

nurture homogeneous customer segments across markets.

Increases in global competition simultaneously increase

consumer choice and create price pressure. In this situation,

a country-based interaction orientation can provide a buffer

to competition because of the firm’s ability to engage its

customer segments.

Similarly, managers should try to understand the limita-

tions of the benefits gained from joint consideration of a

country-based interaction orientation and an adaptive mar-

keting strategy implementation approach. For example,

adoption of a country-based interaction orientation and mar-

keting strategy implementation adaptation may provide

managers with the false belief that they are well engaged

with local customers and therefore well prepared for

changes in the market. While country-based interaction

orientation leads to significant customer engagement, in

terms of understanding idiosyncratic customer segments,

managers need to realize that for an MNC, increased market

dynamism is a worthy challenge. The changing nature of

customer needs and wants can both benefit and harm profit

growth levels, particularly when MNCs adapt their market-

ing implementation strategy across markets. As such, we

recommend that MNC managers remain vigilant in measur-

ing the changing nature of the customer marketplace, to be

able to quickly assess whether their approach to customer

engagement and/or marketing strategy implementation adap-

tation can increase firm profitability (or other strategic

MNC goals) or whether the costs of adaptations outweigh

the benefits returned to the firm.

Limitations and Future Research Directions

This work provides new and important insights into interna-

tional marketing strategy. However, the findings should be

considered in light of the work’s limitations. First, this work

focused only on profit growth, given its alignment with the

theoretical argumentation of interaction orientation (Ramani

and Kumar 2008) and its importance to marketing managers

(Morgan, Slotegraaf, and Vorhies 2009). Although our research

advances the literature beyond traditional performance mea-

sures such as satisfaction (a widely used measure of perfor-

mance; Chen, Sousa, and He 2016), our focus on profit

growth also limits the findings. For example, profit growth is

only one of many important performance measures 2

of the

impact of marketing strategy (see Katsikeas et al. 2016). As

such, increased insights could be gleaned by using other

accounting-based performance metrics, such as leverage, cash

flow, or revenue growth, or through measures such as customer

acquisition/retention (which would also align theoretically with

country-based interaction orientation). Furthermore, although

we endeavored to assess profit growth, our measurement of this

construct was through self-reports, captured through a cross-

sectional survey, 3

and only served to capture short-term profit

growth (i.e., last year’s profit growth). Capturing objective

2 Profit growth exhibited a nonnormal distribution wherein a small number of

MNCs indicated having high performance (i.e., extremely high levels of profit

growth) and the majority of MNCs indicated they were within the 0%–20%

range). 3

We ran post hoc models connected with an alternative causal ordering (i.e.,

reverse ordering of country-based interaction orientation, marketing strategy

implementation standardization, and MNC profit growth) given the

cross-sectional nature of the data. The comparison of the model fit best

support our original conceptual model.

32 Journal of International Marketing 27(2)

profit growth, as well as using a longer horizon to validate the

full extent of the time-varying effect of country-based interac-

tion orientation on business performance (Kumar et al. 2011)

would provide increased validity for its assessment. We also

captured only short-term profit growth; however, it could be

argued that profit growth from a country-based interaction

orientation and marketing strategy implementation occurs over

longer time horizons, suggesting the need for a broader assess-

ment of the effects found in this work.

Second, although the examination of country-based interac-

tion orientation was based on an established scale, more work

needs to be done to refine and tighten the conceptualization and

operationalization of the multi-component construct. It may be

of value to further clarify the meaning of the scale ends. For

instance, for an MNC to be low on country-based interaction

orientation could indicate various different approaches (e.g., do

they alternatively interact with customers at the individual

level or do they not interact at all?). This aspect of the construct

is not entirely perspicuous in the current study and would ben-

efit future examinations of country-based interaction orienta-

tion and its performance effects.

Third, although our model incorporated two important

marketing elements (i.e., country-based interaction orienta-

tion and marketing strategy implementation standardization)

and explained significant variance in profit growth, other

aspects of MNC strategy could be incorporated. For example,

a firm’s strategic orientation toward the marketplace could be

an important avenue for investigation. Griffith, Kiessling, and

Dabic (2012), using the strategic orientations of Miles et al.’s

(1978) typology (i.e., defender, reactor, analyzer, and pro-

spector), demonstrate that a firm’s overall strategic orienta-

tion can be useful in understanding how firms relate to their

markets given a set of market conditions. Furthermore, it may

be of value under the ABV to specifically measure the mag-

nitude of managerial attention to specific strategic

approaches. To do so, research could count mentions of

strategic approaches within internal management communi-

cations, such as through text analysis of emails within the

C-suite, or in other corporate communications (e.g., annual

reports, media statements). Furthermore, while we examined

MNCs’ holistic approach to marketing strategy implementa-

tion in combination with their customer engagement strategy

at the country level, it would be fruitful to determine whether

MNC performance improves by adapting/standardizing cer-

tain aspects of the marketing-mix elements. For example,

what are the profit growth effects when products are standar-

dized across markets but distribution and placement strategies

are adapted?

Fourth, although country-based interaction orientation

provides a new and useful lens for understanding how an

MNC approaches its markets, our study could be further

enhanced by exploring the set of capabilities that evolve

from such an approach. Morgan, Feng, and Whitler (2018)

call for research focusing on examining the capability–per-

formance mechanism for “adding value” to a firm’s assets,

such as understanding customers and building brands. In

this case, specifically examining value-added benefits

within brand strategies across markets could be extremely

helpful. For example, country-based interaction orientation

works to address customer acquisition and retention. As

each market may relate to the firm’s brand uniquely, under-

standing how the firm creates unique brand associations

across markets would help shed light on global and local

branding issues (see Gürhan-Canli, Sarıal-Abi, and Hayran

2018; Özsomer 2012).

Fifth, although our model controls for several factors

potentially affecting profit growth, further research could

include other market and competitive factors. For example,

investigation of country-based interaction orientation within

the context of importer–exporter relationships could be of

substantive value to international marketing managers (Leo-

nidou et al. 2014; Westjohn and Magnusson 2017; Yalcin-

kaya, Calantone, and Griffith 2007). Importer–exporter

relationships are a substantive aspect of the international mar-

ketplace, and many manufacturers reach customers through

this important channel. A key unexplored research question is

the importance of alignment of country-based interaction

orientation across international channel partners (i.e., impor-

ter, exporter, and manufacturer) for effective market connec-

tivity. We theorize that it is only when all three international

channel partners align on country-based interaction orienta-

tion that profit growth for all can be achieved. In addition, our

data did not allow us to identify the market type of respon-

dents (i.e., business-to-business or business-to-consumer),

thus preventing us from controlling for or testing such differ-

ences. The effect of a country-based interaction orientation is

likely to differ depending on market type (Ramani and Kumar

2008) and thus should be accounted for in research examining

global customer engagement activities (Gupta, Pansari, and

Kumar 2018).

Finally, an additional extension of this work would be to

explore the interaction of an MNC’s country-based interac-

tion orientation with its information technology and market-

ing analytics capabilities. As MNCs face increasing volume,

velocity, veracity, and variety of data, not only their strategic

approach to markets but also their ability to handle data across

markets will enable them to effectively grow (Johnson,

Friend, and Lee 2017). Song, Nason, and Di Benedetto

(2008) provide foundational measures for market-linking,

technical, marketing, and information technology capabil-

ities. Further research might extend these capability mea-

sures, in light of both current technological issues and

marketing capability measurement guidance (e.g., Moorman

and Day 2016; Morgan, Feng, and Whitler 2018), to advance

the literature in this important area.

Lee and Griffith 33

Appendix. Measurement Results

Construct Description Λ

Country-Based Interaction Orientation

a

(adapted from Ramani and Kumar 2008) AVE ¼ .62 CR ¼ .86 a ¼ .78

(1 ¼ “strongly disagree,” 7 ¼ “strongly agree”) Customer Concept � This firm believes that each country market cannot be satisfied with the same set of

products or services. b

� This firm consciously seeks to identify and acquire new customers within each market. � The firm believes that customer’s reactions to marketing action should be observed at

the country level.

.81

Interaction Response Capacity � This firm has systems in place that record customer’s transactions within each

country market. � This firm can identify customer transactions pertaining to each country market. � This firm analyzes previous customer transactions at the country level to predict

future transactions from that country. � In this firm, all customer interfaces possess transaction information on customers in

each market at all times.

.85

Customer Empowerment � This firm encourages customers in each market to share opinions of its products or

serviced with the firm. � This firm encourages customers in each market to share opinions of its products or

services with other customers. � This firm encourages customers in each market to participate interactively in

designing products and services.

.73

Customer Value Management � The firm has an excellent idea of what customers in each market have been

contributing to its profits. � This firm predicts that customers in each market will contribute to its profits in the

future. � This firm computes the revenue generated as a result of every marketing action

directed at each country market.

.75

Marketing Strategy Implementation Standardizationa

(adapted from Roth 1995)

� The firm uses standardized distribution channels in all of its markets. � The firm uses standardized prices for its products and services in all of its markets. � The used standardized advertising and promotion for its products and services in all of

its markets. � The firm used standardized product characteristics in all of its markets. � The firm uses standardized service delivery in all of its markets.

N.A.

Competitive Intensitya

(adapted from Lam, Kraus, and Ahearne 2010)

AVE ¼ .63 CR ¼ .84 a ¼ .83

� Competition in this industry is cutthroat across the markets we compete in. .76

� Competition in the country markets we operate in is relatively strong. .83

� The competition in country markets from other firms offering similar products and services is immense.

.79

Market Dynamisma

(adapted from Jap 1999) AVE ¼ .58 CR ¼ .73 a ¼ .73

� The environment demands on us are constantly changing. .71

� Marketing practices in our industry are constantly changing. .81

Length of International Operations How many years has your firm engaged in international operations? N.A. International Sales Dependency What percentage of your firm’s total sales are derived from your international operations? N.A. Respondent International Experience How many years have you been engaged in international operations? N.A.

a Item measured on a scale from 1 ¼ “strongly disagree,” to 7 ¼ “strongly agree.”

b Deleted item due to low loading.

Notes: N.A. ¼ not applicable.

34 Journal of International Marketing 27(2)

Associate Editor

Seigyoung Auh served as associate editor for this article.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to

the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, author-

ship, and/or publication of this article.

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