International Marketing Standardization and Financial Performance of Mobile Network Operators - an Empirical Analysis

Abstract

This study explores the degrees to which service firms standardize marketing instruments in their foreign subsidiaries. It also analyzes associations between international standardization of marketing instruments and company financial performance criteria in an industry study of mobile network operators. 15 mobile network operator corporations with substantial international business activities and 65 of their respective foreign majority-controlled affiliates were included in the empirical analysis. Results show that levels of international marketing standardization vary substantially among the four program areas of the marketing mix. Product policy is most standardized internationally with an unweighted index value of 60.47%, while pricing procedures still reach a level of 54.07%. International standardization of distribution (42.19%) and promotion policy (33.33%) is significantly lower. No significant relations between international marketing standardization and performance of mobile network operators were found at the corporate level of analysis. However, at the subsidiary level of analysis international product standardization and, to a lesser degree, price standardization are significantly and positively related to the foreign affiliates' EBITDA margin and market share when the PLS approach is used to construct latent standardization measures comprising weighted additive combinations of various marketing mix indicators.

Keywords: Adaptation, international marketing, mobile network operators, partial least squares, standardization, telecommunication services

JEL Classification: L96, M31