Marketing agility in subsidiaries: market orientation and marketing program standardization as the "twin engines" of performance

Abstract

Multinational corporations (MNCs) must balance opportunity-seeking initiatives locally with global programs and imperatives. This balancing act between generating and responding to local insights and exploiting standardized marketing programs calls for some form of marketing agility. Under this lens, this study investigates the relationship between market orientation (MO) and marketing program standardization (MPS)-two critical marketing capabilities-and their dual effects on subsidiary performance. The authors compare the cases of Western MNCs' subsidiaries operating in Japan and Turkey and inquire about the moderating role of a country's economic development (advanced vs. emerging market) and an industry's global competitive interdependence. Analyzing MO at the subcomponent level, they find a positive relationship between responsiveness and MPS in both markets. MPS also functions as a partial mediator between responsiveness and profitability in an advanced market. In an advanced market, both responsiveness and MPS are positively related to profitability and market share. In an emerging market, MPS is negatively related to profitability in support of adapting the marketing program. The results and follow-up discussions with executives from established MNCs support the conceptualization of MO and MPS as reflections of international marketing agility in subsidiaries.