Resource title

Explaining cross-country differences in price and distribution effectiveness

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The objective of this research is to test wether, and to explain why, the effectiveness of marketing instruments such as price and distribution coverage varies across countries. The issue is important when marketing a product in multiple countries. Despite much normative discussion about the globalization of markets and the desirability of internal marketing program standardization, little analytical (compared to descriptive) empirical research to date adresses the issue. The case for standardization rests on the validity of the assertion that variations in marketing mix effectiveness across countries are rather small. In this research, we provide empirical evidence about the degree of similarity in market response function coefficients among European countries in one established consumer convenience good market and analyze potential reasons for such differences. Notably, we find indication of substantial variations in marketing mix effectiveness in a manner related to level of economic development. In trading areas including countries of different development levels, this suggests that marketing programs should, in general, not be transferred internationally. This finding has direct implications about the likely impact of the European Union on Pan-European marketing standardization.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1995/95-31.pdf

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Copyright INSEAD. All rights reserved