BAM 2004 Conference
University of St-Andrews
Workshop:
Managing Retail Image Internationally
Associate Professor Ulf Johansson
Department of Business Administration
Lund University
Sweden.
Email: Ulf.Johansson@fek.lu.se
Focus and purpose of the workshop
This workshop is suggested to focus on an important element in international marketing,
i.e, managing consumer image across countries and cultures. The starting point as a new
research projekt – joint between Sweden, Canada and the UK – on studying global retailer’s
image in selected countries/cultures. The workshops purpose is to review current knowledge
and chart new areas of development – and the starting point would be this current research
project described in short below
Globalisation and internationalisation –standardisation vs. adaptation
Since Lewitt’s famous article (1983) on globalisation the arguments for standardisation
and adaptation respectively in international marketing has been repeated many times and the
research in this area is vast (e.g. Cavusgil et al 1993, Caateora, 1983; Dalgic, 1992; Oviatt &
McDougall, 1993; Paliwoda, 1992; Welch & Luostarinen, 1988; Onkvisit & Shaw, 1989;
Ozsomer et al, 1991; Solberg, 2000; Steenkamp, 2001, McAuley, 2001, Jain, 2000; Terpstra,
1999). Some of the basic arguments has to do with whether it is possible or not to adopt
standardised marketing offers across the globe to different cultures. A standardised marketing
offer may not be perceived as a standardised offer by the recipient (the consumer in this case)
but rather giving the recipient a range of possibilities as how to interpret the offer. The
opposite may be true with an adapted marketing offer were the adaptation may hold a way for
the company to control the consumers own interpretation of the offer. If we agree that cultural
differences may be important in international marketing and may have implications on
consumer behaviour (e.g. Solomon et al, 2000; Usunier, 2000) then we open up for
standardised and/or adjusted/differentiated goods and offers being interpreted differently in
different cultures.
International image – a many faceted thing
Image as discussed here refers to the consumers view of the company and its products.
As is evident from the discussion above, this image may or may not be the same as the one
that the company wants the consumer to have. And that in essence is the problem of
internationalisation argued here: if we agree that there is the possibility that different people
in different cultures may interpret the offer differently than image will differ – but how?
The discussion above leads to a very difficult situation for internationally active
companies were it is easy to jump to the wrong conclusions. While a standardised offer may
seem preferable according to company economies of scale etc it may lead to an array of
consumers images of the goods or offer. This may create a situation were the company has a
completely different image of the company and its products than do consumers. And how
should the international company respond to that? While a good or an offer that have been
adjusted to increase the ‘fit’ may give the company increased control (at least in theory) it
may mean that the consumer is robbed of ways of interpreting and adapting the offer to the
cultural context. Whereas a more standardised offer makes it possible for the consumers to
interpret and use the goods or the offer in accordance with the cultural context, it may turn out
to be counterproductive as a way of producing a standardised image and achieving economies
of scale.
International retailing – marketing towards consumers
Retailing is by definition aimed towards the end consumer and after a slow start,
international retailing is perceived to be increasing. During the last decade it has been the
focus for a growing volume of academic work. To date, research has concentrated on the
who, where and why issues; the motives for internationalisation, the geographical spread of
retailing and market entry mechanisms (e.g. Alexander, 1990; 1997; Bengtsson et al, 2000;
Brown & Burt, 1992; Burt, 1991; Dawson, 1994; McGoldric & Davies, 1995; Pellegrini,
1991; 1994; Solmon & Tordjman, 1989; Sternquist, 1998; Treadgold & Davies, 1988,
Treadgold, 1989; 1990; 1991; Williams, 1992; Wrigley & Lowe, 2002). There is now
widespread acceptance within the academic community that the “how” questions - focussing
on the process of internationalisation, what happens when a retailer is established in a foreign
market and how international retailers behave within a foreign market - need addressing.
As a starting point in understanding the internationalisation process, typologies of
international retailing have been devised which purport to identify the nature and approach of
the international retail business (e.g. Hellferich et al, 1997; Alexander & Myers, 2000).
These, generally combine elements of the marketing and business process approach to
internationalisation, particularly the standardisation versus differentiation debate in
international marketing (e.g. Salmon & Tordjman, 1989), with business cultural issues (based
upon Hofstede, 1980). The recognition that market differences, whether in consumer
behaviour and responses, and/or business practices can effect the acceptance and performance
of an international retailer in a foreign market, again focuses attention on the degree of
standardisation that may be attempted within a foreign market.
From the consumer perspective, research has focused upon the competitive advantage of
the internationalising retailer, and the degree of innovation that the company's offer brings to
the market. Innovation may be in the form of a novel "new to the market" trading format
(such as a category killer), or a business or management process (which changes costs
structures or management behaviour). As retail innovation is relatively easy to copy, retailers
increasingly develop themselves as brands with an associated image. In domestic markets
retailers, in all sectors, are developing the "added value" and intangible elements of their offer
which allow differentiation from competition and provide clear identification and recognition
cues for consumers. An issue for internationalising retailers is the extent to which the values
and traditions associated with the domestic brand are transferred into foreign markets.
The trials and tribulations of the British retailer Marks and Spencer in international
markets provides a clear illustration of these issues. A highly successful (almost
"untouchable") retailer in the domestic market has continually failed to master foreign
markets. In three different studies of the company, common themes emerge (McGoldrick &
Ho, 1992; McGoldrick, 1998; Burt & Encinas-Carralero, 2000). First, consumers in different
markets react to and perceive the company/brand differently, customers have different
traditions and culture based behaviours, and respond to retail innovation relative to different
reference points. Second, there is a time dimension to internationalisation. A consumer’s
understanding of a company or brand develops with experience. All retailers have a
grounded history (Dupuis and Prime, 1996), but this does not automatically travel.
An issue for international retailers is a wider context in which they will operate, i.e.
culture (e.g., Usunier (2000). This context makes cultural factors, values and traditions
important prerequisites for the brand. The degree to which these values and traditions
correspond with their brand is important. With knowledge of this, these values and traditions
can be used in communication activities in order to create a positive image in a foreign
market. These are examples of cultural issues of importance.
All this boils down to several interesting questions for a work shop concerning – for
example - what elements of retail image that will travel and what elements will not? Also,
what are the roles of contextualisation of consumer image of a brand and what are the
management implications and challenges as retailers become more international?