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Getting to Global: An Evolutionary Perspective of Brand Expansion in International Markets
Author(s): Janell D. Townsend, Sengun Yeniyurt and Mehmet Berk Talay

Source: Journal of International Business Studies, Vol. 40, No. 4 (May, 2009), pp. 539-558
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d??
-W
Journalof International Business Studies (2009) 40,
Business All rights
? D2009 Academy
riantsreserved0047-2506 -T^
Academyof International
www.jibs.net
to global:
Getting
of brand
expansion
Janell D Townsend1,
Sengun Yeniyurt2and
Mehmet
Berk Talay3
and International Business, Oakland

University, Rochester, USA; 2School of Business,
Marketing
Rutgers University, Piscataway, USA;

3Department of Marketing, HEC Montr?al,
Canada
Correspondence:
S Yeniyurt, Department
of Marketing,
of Business,
Rutgers University,
Room 230,
Janice Levin Building,
USA.
NJ 08854,
Piscataway,
School
The
Tel: +1 732 445 4171;

Fax: + 1 732 445 5946
An
perspective
markets
evolutionary
in international
Abstract
The globalization of brands is an evolutionary process that isdetermined by
environmental and firm-levelfactors, including a brand's position in the firm's
global brand architecture. A framework isdeveloped incorporating aspects of
environmental uncertainty,mimetic behavior, and experiential learningas they
relate to the globalization of brands. Global brand architecture is introduced
as an important strategic consideration of a brand's position and stage of
internationalization.The hypotheses are testedwithin the context of the global
automotive industry,employing an event history analysis with time-varying
covariates. The results reveal complex effectswith respect to the role ofmarket
attractiveness, experiential learning, and mimetic behavior in globalization
patterns. Overall, this study suggests that firmscan accelerate the process of
creating global brands ifthey enter the three major continents in the early
stages of internationalexpansion.
Journalof InternationalBusiness Studies (2009) 40, 539-558.
doi: 10.1057/jibs.2008.87
Keywords:
global
market entry
brands;
globalization;
global
expansion;
hazard
rate models;
INTRODUCTION
as a comprehensive
term to refer to the
as
of
of
markets
nation-states
break
process
integration
global
consumer
down barriers to international
and
trade,
preferences
converge (Douglas & Craig, 1989; Levitt, 1983; Ohmae,
1989). This
a
is
to
due
combination
of
factors, including:
development
Globalization
has emerged
in communication,
and
information,
transportation
a
shift
toward
market
and
economies;
technologies;
privatization
in
of
the
emergence
deregulation
emerging markets;
global
the availability of transnational media;
and a prolifera
consumer;
tion of global products
In this relatively
(Zou & Cavusgil,
2002).
nascent
are
into more
diverse
companies
paradigm,
moving
to improve
markets
survival prospects
and
growth
through
diversification
of the competitive
landscape.
The advent of global brands is one of the results of the changing
environment.
Global branding
is becoming more predominant
as
firms focus on core brands, and increasingly
unambi
implement
international
as a strategic means
brand architectures
of
guous
across
brand
international
markets
facilitating
consistency
(Douglas,
In fact, global brands may be the most
2001).
Craig, & Nijssen,
outcome
of corporate
to adjust to
readily observable
attempts
advances
Received:
Revised:
6 January 2007
5 February 2008
Accepted: 19 February2008
Online
publication
date:
13 November
2008

Getting
540
to global
as they are the face with which a firm

globalization,
an
portrays
image to a more diverse customer base.
Yet global brands do not just appear; they evolve
over time as the result of a process of globalization.
a
Within
firm's portfolio
there are brands
at
in the global brand architecture.
different positions
These positions may change over time, and influ
ence further changes
in position.
Understanding
and managing
are
brands in the global marketplace
the
environmental
forces
among
major
affecting
brands
and their strategies for the development
Srivastava, & Ruekert,

1994), and thus
the
of
brand architec
phenomenon
understanding
tures and how brands globalize
is important
for
(Shocker,
academics
Global
and managers
alike.
in
marketing
strategies have
emerged
to environmental
drivers combined with
response
firm-level resources, including the competitive envir
onment
and
firm knowledge
(Zou &
acquired
Global
brand
1996,
2002).
Cavusgil,
positioning
strategies have been explored (Alden, Steenkamp, &
Batra, 1999), as have global brand image strategies
(Roth,
1992).
Even while
the value-added
of the
(Townsend, Yeniyurt,
program processes
Deligonul, & Cavusgil, 2004) and activities associated
with global branding has begun to receive academic
marketing
attention
there
(Aaker & Joachimsthaler,
1999),
remains a paucity of empirical research explaining
the phenomenon
of how brands become global.
The literature has conceptualized
the globaliza
tion of the firm as the transformation
of leading
to multi
from domestic,
business
organizations
to those with broad global
national
enterprises,
scale and scope (Ghoshal,
1987; Perlmutter, 1969).
This being the case, it can be expected that at least
some of the brands owned by a firm will follow a
similar trajectory, moving
through the globaliza
tion process
incremental
steps of inter
through
nationalization
1977). Itmay
(Johanson & Vahlne,
that the timing for developing
be possible
global
brands could be truncated, as Knight and Cavusgil
an alternative
(2004)
where
suggest
phenomenon
market
firms acquire
international
a
rate
at
than
firms
that
much
faster
knowledge
born-global
internationalization
path.
this
still suggests
streamlined,
perspective
Although
It is this process
there is a process to globalization.
follow
we
the
traditional
address with
D Townsend et al
brands_Janell
this study.
such an
Although
global brands have become
of
strategy, the
marketing
important component
literature is yet to address how brands become
to the literature with
this
contribute
global. We
a
evolution
of
the
global
study by considering
brand
brand
sion:
by
exploring
globalization
that is, how
further contribute
levels of influence
the
nature
of
evolutionary
international
expan
through
a brand globalize? We
does
by concurrently
studying three
and constraints on international
brand
the market
the
environment,
expansion:
and
the
the
behavior
of
environment,
competitive
firm. Previous
a multilevel
studies that employed
model of evolution considered
such things as plant
location decisions
inter
(Henisz & Delios,
2001),
an
national
in
con
expansion
inter-organizational
text (Martin, Swaminathan,
& Mitchell,
1998), and
international
entries into transitional
economies
& Dekimpe,
(Gielens
2007);
yet no
previous
the role of
study we are aware of has considered
the brand in a multilevel
model
of globalization.
we
to
the
contribute
literature
Finally,
by present
of a global
ing a hierarchical
conceptualization
brand architecture
that can serve as a foundation
for future research and a normative
framework for
use
to
to
their
managers
develop
global brand
portfolios.
This study is conducted
in the context of the
automotive
is especially
industry, which
to
because
of
the
interesting
study
variety of
global
and brands already operating

companies
globally,
as well as the many new companies
entering and
into international
In recent
markets.
expanding
a
multitude
closed or unat
of previously
history,
on the horizon
emerged
to consider
for managers
for market
entry, and
more are following as they develop
and a middle
tractive markets
have
class emerges. Markets

that once had a clearly
defined set of competitors now have a multifarious
In this turbulent environment
base of participants.
it is clearly important formanagers
and academics
alike to understand
the factors that impact on the
global
brand
evolution
of brands,
architecture
and the role that global

can play in this
management
process.
of this article is framed in the

framework of
First, a conceptual
on
co
based
brand
architecture
dynamic
global
as a means
to understand
is introduced
evolution
international
the complex
impact
phenomena
a
in
environment.
globally competitive
expansion
The
remainder
following manner.
The
dataset
follows.
development
an
to test
model
utilized
and
empirical
employed
are presented
in the subsequent
the hypotheses
are then presented,
section. Results of the model
Hypothesis
a discussion
of the findings and managerial

offered.
Limitations
and directions
is
implications
for future research conclude.
and
Journalof International Business Studies

_Getting to global
brands
THE EVOLUTION OF A GLOBAL BRAND

ARCHITECTURE
brand architecture
of a firm is con
as a structural configuration
of a brand
in the
where
each
brand's
portfolio
position
architecture is based on a continuum
of geographic
The
global
ceptualized
gic
rationale
that
harmonizes
Brand
scope
Domestic
brand
Regional
brand
geographic
Is operationalized
ing program across geographic markets, and is not

present in all triad markets
(Rugman & Collinson,
brands are typically early in the
2004). Regional
but are offered in
process,
multiple countries in one geographic region (Rugman
& Collinson,
2004). A domestic brand serves only
one national market. Table 1
provides
conceptual
definitions of each level of the brand architecture.
Our conceptualization
is consistent with Douglas
et al. (2001), who
suggest that the international
brand architecture
includes
the brand's
level in
region.
as a brand
Multi-regional
brand
May
does
sold across
in several markets,
be present
not have a centralized
or
standardized
geographic
Sold across
program
marketing
markets.
several
but
across
in
country markets,
multiple
regions.
Is in a more advanced
stage than a regional brand.

as a brand
Is operationalized
offered
continents,
multiple markets, multiple
not present
in all major
three regions
(North America,
Europe, and Asia).
Global
brand
Acts
all on one
few country markets,

continent.
in
yet
as an anchor
coat-tail
effects
for the portfolio, with

for all related brands.
Is in the mature
nents, but the core essence of the brand identity

even
remains
if the execution
is
unchanged,
to
local
models
(de Chernatony,
adapted
marketing
In our framework a global brand acts as an anchor

for the portfolio, with coat-tail effects for all related
brands, and is in the mature
stage of the globaliza
tion process. A multi-regional
brand may be present
in several markets,
across several continents,
but
does not have a centralized or standardized market
presence
only in one (home) market.
Is an ex-domestic
brand that is relatively
process.
early in the internationalization
in one
thereof, that
symbol, design, or a combination
identifies a seller's product
and differentiates
it
from competitors'
(Kotier & Armstrong,
products
& Bernath,
Halliburton,
1995). This is not to say
that product adaptations
are not made
for specific
a global brand
markets or regions; fundamentally,
conveys a stable image globally through its distin
include such things
guishing characteristics, which
as attributes, associations,
and specific identifiers
such as logos.
only one national market.

local management.
Is operationalized
as a brand with
Serves
May be sold inmultiplemarkets, but only
set of criteria whereby

of
increasing
knowledge
a
will
markets
hierarchical
structure,
global
yield
and employ
the standard definition
of a brand,
as a name,
which
is broadly
considered
term,
A global brand
is denoted
or
2004).
by goods
services
that are sold across multiple
country
on the three major
markets
conti
industrialized
Definition/criteria
Has
brand
portfolio
in the organization,
decisions
and
management
across different geographic
locations. We
extend
this to propose
that brand architecture
position
and status follow the basic tenets of incremental
to the globalization
internationalization,
applied
&
Vahlne,
1977). We propose a
(Johanson
process
541
Table 1 Global brand architecture
and
et al.
degree of consistency.
Douglas
(2001) suggest that brand architecture is the process
a strate
and outcome
associated with establishing
scope
**
janellP Townsend et al_
stage
of
internationalization.
Is operationalized
multiple
continents
as a brand
country markets
(North America,
on
sold
across
three major
and
Europe,
Asia).
organization,
its geographic
scope,
and
its product
scope.
an observable
As an example,
shift in the global
of some automotive
brands is illustrated
presence
by the progression of market entries made by BMW
over 24 years
this is an
(see Figure
1). While
illustration of only one brand,

the evolutionary
nature of the market positions
adopted by BMW
is evident
in the pattern
that emerges,
and
is
of the intensity of new market
representative
entries in this industry. The evolution
from an
to a regional to a
international
to a
multi-regional
is
brand
in
observable
the
nature
of
global
clearly
the progression
of BMW's
international
expansion
pattern.
The
framework we suggest postulates

a relation
a
between
firm's
ship
global brand architecture, or
the structure of the organization's
of
portfolio
on geographic
brands
based
and new
position,

Getting
542
to global
JanellD Townsend et al
brands
1990
1995
2004
Remaining markets in thedataset
Markets where brand entered
Figure 1 The internationalexpansion of BMW from 1981 to 2004.
an iterative process occurs

entries, where
on experiential
learning. Each new entry or
decision
future entry deci
influences
non-entry
in the architecture. This
sions, and brand position
market
based
does not exist in isolation,

process of adaptation
but is embedded
in the competitive
and market
to which
environments
the firm belongs
(Yeniyurt,
It is, further,
Townsend,
Cavusgil, & Ghauri, 2008).
a function of the firm's global brand architecture.
Each
in the
relative
brand's
strategic position
firm's
the
portfolio
propensity
evolve globally.
is made
there
architecture
to
Each
is a
should
influence
and
expand
internationally,
time an expansion
decision
re-evaluation
of the brand
architecture, which
in the architecture,
initiatives. The
in time
point
may alter the brand's position

and influence future expansion
in place at any given
architecture
is a result of the historical
and
geographical
dispersion of the firm's brands. Future
international
decisions
will be based
expansion
on the brand's position
in the global architecture at
that point in time.
we
In order to explain this complex phenomenon
a
framework,
employ
co-evolutionary
dynamic
which
for the integration

of multiple
Drawn
from evolutionary
perspectives.
this perspective
economics,
posits an interaction
between
the environment,
the industry and the
firm through the dynamics
of variation,
selection,
allows
theoretical
and retention (Nelson & Winter,

1982). Globaliza
tion of a brand does not occur in isolation, but is
factors with
part of a broad
system of related
influences both from and on the brand

varying
architecture.
The basic premise behind
this per
a
is
that
with
spective
coping
global marketplace
and developing
the skills necessary
to implement
international
transformation
from one level of the
to the next
brand
architecture
is an adaptive
on
based
interaction
with
environmental
process,
this is an iterative
Conceptually,
of
evaluation
and
action,
feedback, follo
process
wed by further action or inaction, as dictated by
factors such as the market environment,
competi
Therefore the
tion, and organizational
capabilities.
characteristics.

Getting
to global
brands
of a brand
in the global environment

which
is a function
phenomenon,
evolution
complex
is a
of
aspects of the environmental

uncertainty,
facets of a firm's
actions, and various
competitor
learning. In this study, the first level of
experiential
on
the market
is
based
environment,
analysis
dynamic
which
of uncer
level is that
of market-level
consists
factors
The second
tainty and attractiveness.
inwhich actions of
environment
of the competitive
brands that compete with the focal brand influence
the
the brand's
actions. The third level includes
firm and
brand experiential
learning, along with
the position of the brand in the firm's global brand
or the geographic
structure of the
architecture,
The emerging
firm's brand portfolio.
conceptual
framework is illustrated in Figure 2.
to occur, brands must operate in
For co-evolution
a heterogeneous
industry where there is interaction
and
influence
among
Additionally,
competitors.
in the industry set must have
contained
to changing
to learn to adapt
capability
the brands
the
environmental
conditions
(Volberda
as
such
globalization
nature
of the
Lewin,
2003).
in
automotive
diverse
is
industry
&
The
contemporary
organizational
heritage,
production,
In concert
culture and strategic planning.
with the opening of global markets,
there has been
an increasing
level of cross-border
competition
product,
national
associated with a
among brands. The uncertainty
the behavior
of the
environment
drives
global
as
firm's brand entries and associated
architecture
seek to negotiate
the balance
between
managers
opportunities
actions may
bandwagon
new market
moves,
threats. Observing
competitor
or
in mimicking
behavior,
a brand moves
effects where
into a
or region, in response
to competitor
and
result
effectively
extending
its position
and
janellD Townsend et al
possibly
tecture.
variable
j Competition
its position
changing
Therefore
competitor
in our framework.
globalization
Market
Environment
International
expansion
decisions
include a num
ber of important factors, many of which are related
to mitigating
the effects of uncertainty
about the
et
market environment
al., 1998). Market
(Martin
as
location
advan
attractiveness,
conceptualized
is one of
tages such as stability or market potential,
in international
the most important considerations
market
entry and global

expansion
(Dunning,
1988). On the other hand, the internationalization
with doing
process has inherent risks associated
in new, foreign markets

&
(Johanson
factors,
1977). Therefore market-specific
and contextual
considerations,
including economic
to be accounted
have
for in a global
expansion
business
Vahlne,
framework.
In deciding which markets

to enter and when,
take
into
consideration
the
managers
demand conditions of a particular country (Guiltinan,
to generate
sales
of a market
1999). The potential
brand
for a brand is an important factor to

when making
brand and product
introduction
decisions
Essen
for foreign markets.
as
market
determined
attractiveness,
tially,
and
revenues
considered
foreign brands.
Mimetic behavior j
Uncertainty
2
Conceptual
of a brand.
HYPOTHESES DEVELOPMENT
Hypothesis
on a brand's
Figure
process
framework.
a basis for determining

it can be expected
that
provide more abundant
that would
larger markets
are more
demand
conditions
? N
market
entry
\
in the brand archi

is a critical
action
(Volberda & Lewin, 2003). Effectively, with respect

to brand globalization,
this means
that as manage
ment accumulates
from past actions, it
experience
refines future strategies.
Therefore
experiential
in the brand architecture
learning and position
are
as critical
introduced
in the
components
by market size, will provide

market potential. Therefore
Experiential
?
543
experience
Finally, decisions based on managerial
to anticipate
and models
developed
uncertainty
effectively create systems of control that act as a
means
to avoid
blind
environmental
selection
be
Market environment
likely
to
attract
size has a positive effect

to be introduced in a new
la: Market
propensity
country.
Contextual
determining
factors also play a significant role in

the relative uncertainty
of a market.

_Cetting to global
544
brands
includes all factors preventing or disturbing a

a foreign
firm's learning about and understanding
environment
&
Vahlne,
(Nordstrom
1994). A major
of
assumption
theory is that
firms enter markets
that are psychically
close to
This
their home market
first and then gradually expand

into other markets with a higher degree of psychic
&
distance
from the home market
(Johanson
& Weidersheim-Paul,
1977;
Johanson
is
distance
those factors
Cultural
1975).
among
to be a significant source of uncertainty
considered
derived from the environment.
is the difference
which
Cultural
distance,
Vahlne,
orientation
cultural
of the home
is
the
the
among
country
target country,
to the uncertainty
factors that can contribute
related to entering a new market
(Kogut & Singh,
a
to
has
found
be
It
been
1988).
significant factor
a
results indicate
number of studies. Empirical
in
more
are
that companies
likely to enter countries
between
the
and
that are culturally similar to their home country

in the early stages of the internationalization
1993; Kogut & Singh,
(Erramilli & Rao,
process
has also been shown to
distance
1988). Cultural
an
factor in international
partner
important
Bell, &
1996).
(Barkema,
Pennings,
an
remains
culture
national
Further,
important
behavior
factor affecting consumer's
(Yeniyurt &
to
and it would
be expected
Townsend,
2003),
be
selection
formarket
consideration
impact on management's
an
constitute
Cultural
differences
important
entry.
barrier to foreign-market entry, as managers'
per
ceptions are also influenced by their cultural beliefs
1991; Triandis, 1989).
(Markus & Kitayama,
foreign
Large differences exist among potential
conditions. The
in terms of their economic
markets
size of the country, along with general economic
are some of the
and market dynamism,
well-being
use
to
differentiate
factors managers
country
are
that companies
It can be concluded
markets.
more
comfortable
economic
in countries
conditions
similar
that have
to
their
general
home
that economic
been
suggested
a significant
factor in market
for managers
selection decisions
(Cavusgil, Kiyak,
it can be expected
& Yeniyurt, 2004). Therefore,
their
firms are more
that
likely to expand
brands into countries that have a lower economic
It has
market.
are
similarities
distance.
lb: Cultural distance has a negative
Hypothesis
to be introduced in
effect on a brand's propensity
a new
country.
le: Economic
distance has a negative
Hypothesis
in
effect on a brand's propensity to be introduced
a new
country.
The
Role of Competition
There is inherent uncertainty associated with enter
ing a new market, and competitors' actions can signal
the management
of the focal brand regarding the
relative attractiveness
tives. Recent competitor
of different strategic alterna

actions act as a facilitator of
organizational
learning of the market structure and
in customer
the future trends and opportunities
mimetic
needs
behavior
(Gr?ve, 1998). Essentially,
has the potential to mitigate market uncertainty.
Since managers
tend to be aware of organizations
in their own industry, they are inclined to imitate the

actions of other firms within their competitive group
this is considered to
1993). Conceptually,
(Haveman,
a
be
ideas proliferate from
effect, where
contagion
one organization
to another (Haveman, 1993; March,
1981; Rogers, 1962). What
emerges is a bandwagon
process, where organizations
adopt innovations due
to the number of firms in their industry that have
the innovation:
cycles occur when
already adopted
of adopters raise bandwagon

these
pressures
pressures cause the number of
to
1993;
grow (Abrahamson & Rosenkopf,
adopters
the
view
of
&
Oliva, 2004). Thus,
Lange, Mcdade,
increases
in the number
and
1983)
isomorphism
(DiMaggio & Powell,
a
means
to
elucidating one of the under
provides
lying reasons why brands are introduced to markets
mimetic
with
intensifying competition.
Based on the tenets of mimetic
behavior, we
to
will
be
inclined
that
companies
postulate
of
the
effects
uncertainty by introducing
mitigate
in markets
there are other
where
their brands
entrants
the presence of
present. Although
foreign
local competition may provide
legitimacy for the
it
is
that such a
market's
attractiveness,
possible
a
national
constitutes
compe
presence
significant
it can be
and
titive advantage
(Porter, 1990),
inferred that it may
foreign
actually discourage
entries. In this study we define mimetic
market
behavior
imitation,
through
frequency-based
is consistent with previous market
entry
studies and based on the number of other brands
that have adopted a given strategy (Davis, Desai, &
which
1993;
Francis, 2000; Haveman,
2001; Lu, 2002). We expect:
Henisz
& Delios,
2a: The presence of local competition

Hypothesis
has a negative effect on a brand's propensity to be
in a new country.
introduced

_Getting to global
brands
recent
that
perspective postulates
as
enter
is
firms
knowledge
gained
important
in a global environ
and operate
foreign markets
In this frame
ment
&
Vahlne,
(Johanson
1977).
is
work, knowledge
through current
perpetuated
to foreign markets.
as having
accepted
This
two
is generally
knowledge
distinct dimensions:
general knowledge and market
is accumu
General knowledge
specific knowledge.
the experiences
lated via
regarding marketing
in
methods
and characteristics
of doing business
international
location.
On
markets,
regardless
the other hand,
of
geographic
market-specific
is accumulated
in
knowledge
through experiences
a specific country or geographic
region. Experien
tial learning is an important capability
that firms
in their international
need if they are to succeed
endeavors
1977).
(Cavusgil,
1980;
Johanson
&
Vahlne,
It has been
shown that local experience
has
positive effect on re-entry and increased resource
to a market (Guillen, 2003). Therefore
commitment
itwould be expected that firms are likely to increase
to a market by launch
their resource commitments
findings suggest that the effects of culture

can be mitigated
through
experiential
a market close to a target country.
about
learning
Mitra and Golder
(2002) found near-market know
a
to
be
better
indicator of foreign-market
ledge
distance
Global
Experience
The internationalization
and commitment
"**.
___
__.--?s
2b: The presence of foreign competi

Hypothesis
tion has a positive effect on a brand's propensity
to be introduced
in a new country.
activities
___
and entry timing than cultural distance

choice
as a
itself. We
include near-market
knowledge
measure
in
of past experiential
this
learning
study,
to
since this neighboring
should help
presence
a
new
the
target
mitigate
uncertainty presented by
market.
is determined by the
Near-market
presence
a
or
of
the
brand
presence
sibling
parent company
on the same continent
as the target market.
For
of the Malaysian
market could
example, knowledge
increase
the
likelihood
of
the Thai or
entering
help
Chinese markets. Therefore corporate presence on
to have a positive
is expected
the same continent
effect on the likelihood of near-market entry:
3b: Near-market
on a brand's
effect
positive
in a new country.
introduced
Hypothesis
knowledge
propensity
has
to be
allows
firms to overcome
experience
on economic
barriers and be focused
considerations
(Davidson,
1983) when
making
their market entry and brand launch decisions. As
firm gain a greater global reach through foreign
Global
brands and products

in a country
ing additional
a
where
have
This can be
presence.
they already
to intra-organizational
attributed
mimetic
beha
to which strategic business units are
vior, according
subject to pressures to conform to the institutional
norms of the multinational
(Kostova
organization
& Zaheer, 1999). Intra-organizational

isomorphism
has been shown to exist with respect to entry mode
selection at the strategic business unit level (Davis
et al., 2000).
that
Similarly, it has been indicated
firms tend tomimic earlier entry mode choices they

in a country market
in their future re-entries
made
to the same market (Lu, 2002). Therefore we expect:
of a parent firm's
presence
Hypothesis
a
in
a
market
has
brand(s)
positive effect on the
to be introduced
focal brand's propensity
in a
new country.
3a: The
cultural
market
of experiential
entries, their accumulation
knowledge intensifies (Eriksson, Majkgard, & Sharma,
in line with
the tenets of the
Hence,
2000).
can
it
be posited
that
theory,
entries
experiences
gained
through past market
facilitate future global endeavors.
Yet a saturation
as the total number
effect can be expected,
of
is limited, and brands

potential
foreign markets
cannot be launched
in new markets
infinitely. Past
market
entries are expected
to facilitate
future
entries in the early stages of globalization,

and
have a saturation effect in the later stages of the
process.
3c: Past global expansion

Hypothesis
a non-monotonic
(inverse-U-shaped)
to be introduced
brand's propensity
efforts have
effect on a
in a country.
Brand Architecture
much
of the literature
to
related
Although
that cul
supports the notion
tural distance
is a significant factor inmarket entry
decisions
(Johanson & Vahlne,
1977; Johanson &
1975; Kogut & Singh,
Weidersheim-Paul,
1988),
The
of a firm's brand portfolio

in a
is a key factor in the firm's
international
it
marketing
strategy, as
a structure to leverage strong brands into
architecture
global
overall
environment
provides
other markets,
assimilate
acquired
brands,
and

to global
Getting
546
brands
et al.,
integrate strategy across markets
(Douglas
internationalize,
2001). As firms and their brands
an architecture
is established
for their global
role in future
portfolio, which plays a substantial
international
decisions
expansion
internationalized
brand
regionally
new
continent
and
that
efforts. A
enters a
Thus
becomes
multiregional.
international
branding
strategy is formed
an
process that results from
through
evolutionary
to enter new country markets based on
decisions
firm's
the either
emergent
or
intended
initiative
Each
on
impacts
Future inter
strategies.
international
expansion
decisions.
future internationalization
of a brand is therefore expected
national
expansion
in the firm's
to be a function of its strategic position
We
brand
architecture.
anticipate:
global
4: Brands that are in more advanced
Hypothesis
of
(i.e., higher in the global
stages
globalization
are more
brand architecture)
likely to be intro
in new countries
than brands
that are
duced
in less advanced
stages of globalization
in the brand architecture).
(i.e., lower
in the firm's global brand

position
interna
is an indicator of previous
architecture
a
as
as
well
tional expansion
efforts,
prima facie
for future international
proxy of strategic plans
On the one hand, there is an expecta
expansion.
A brand's
with
the
tion of experiential
learning associated
of a brand as indicated by its
evolution
structural position. On the other hand, the position
future strategic
should
represent management's
If
intent, based on earlier international
expansion.
relative
a brand's intended level of global scope has not yet

will be inclined
then management
been achieved,
to mitigate
further and find means
to expand
and economic
barriers such as cultural distance
distance.
Therefore we
a brand's position
explore whether
the
in the global brand architecture will moderate
This is
distance.
effects of cultural and economic
that as a brand changes
it can be expected
because
in the architecture, itwill be in the form
its position
of a progression based on phases of internationali
to multi
to regional
zation
(i.e., from domestic
regional to global), and the effects of cultural and
distance on the market entry decisions
economic
will
decrease. We
expect:
5a: The effects of cultural distance on

Hypothesis
to be introduced in a new country
the propensity
are weaker
for brands that are in more advanced
(i.e., higher in the global

brand architecture)
than for brands
that are in
less advanced
(i.e., lower in
the brand architecture).
5b: The effects of economic
distance
Hypothesis
on the propensity
to be introduced
in a new
for brands that are in more
country are weaker
in
(i.e., higher
the global brand architecture)
than for brands
that are in less advanced
in
lower
the
brand
(i.e.,
architecture).
advanced
DATA AND METHOD

Variables
The
variable.
are tested
Dependent
above
presented
global automotive
research
questions
in the context of the
industry from 1981 to 2004. The

is the propensity of a brand to
dependent
enter a specific country market at a given point in
time. We focus on the factors affecting the strategic
to introduce brand x in
decision
of a company
variable
the agent at risk is the

The
is
combination.
variable
brand-country
in
recorded as 0 if the brand was not introduced
1 in the
that particular market yet, and becomes
is introduced
in the same
year that the brand
is dropped
combination
market. The brand-market
country
i at time t Therefore
after the brand
from the dataset
market.
that
is introduced
in
dataset
proprietary
specific
the global
of automotive
dispersion
for
this
study by R L Polk
provided
a
of
Polk Automotive
division
Marketing
Systems,
containing
brands was
the worldwide
Intelligence,
of
sourcing
independent
automotive
leader
market
on
data
the
in the
global
market.
is
attractiveness
Market
variables.
the
two types of variables
indicating
distance.
market
size, and cultural and economic
The market size is captured using the total number
in a given
of cars registered in the target market
each
for
Car
country-year
year.
registrations
were
from the Euro
extracted
combination
The
Database.
monitor
by
developed
approach
to compute
Kogut and Singh (1988) was utilized
Independent
captured via
and
the target market
between
cultural
from Hofstede's
home
(1991)
country
in
scores. This method
the differences
averages
on
for the variation
cultural scores by adjusting
that is, individualism,
each of the four dimensions,
cultural
distance

_Getting to global
distance,
power
distance
differences
between
and
avoidance,
uncertainty
masculinity.
Economic
brands
and dynamism
of the overall
size, well-being,
to
of a country market, and have been employed
assess the potential
et
of a market
al.,
(Cavusgil
data are from World
Bank's
2004). The economic
World Development
Indicators Database.
we
To account
for the effects of competition,
focus on the presence of local and foreign compe
the
was
in terms of
competition
captured
of local automotive
number
in a country at a given point
total
present
Foreign competition was captured

total number of foreign brands, with
brands
in time.
in terms of the
the exception
of other brands owned by the focal firm, present
in a country in a given moment.
This approach
is
similar to the operationalization
of density
in
similar empirical
the number
of
studies, where
an
a
in
at
competitors present
given point
industry
in time is used
near-market
incremental
was measured
as the absolute
the populations,
GDP
per
rates
and
of
GDP
each
of
the
capita,
target
growth
markets
and the home
country of a particular
are important indicators
company. These measures
titors. Local
JanellD Townsend et al_ _*3_
to investigate mimetic
effects (e.g.,
Gielens & Dekimpe, 2007; Guillen, 2003; Henisz &
Delios, 2001).
In terms of global experience,
two different types
are accounted
for: market-specific
and
experience
general global experience. Market-specific
experi
ence
is further discriminated
by host-market
and
near-market
Host
experience
experience.
is captured
market
in terms of the
experience
number of brands the firm already has in the host

as a percentage
of the total number
of
market,
brands the company owns. This operationalization
in the host
captures the intensity of the presence
market while
for
scale
considerations.
adjusting
is captured via two dummy
Near-market
experience
or not the brand or
variables
whether
indicating
the company
is already present in the continent of
are in line
the target market.
These measures
with extant research in international market entry
2007; Mitra & Golder,
(e.g., Gielens & Dekimpe,
2002). This measure
captures both company-level
547
accumulation
knowledge
benefit from a near-market
and
the
presence
entries of a
at the brand
level. Previous market
the previous
interna
brand are used to measure
a
at
in
tional expansion
experience
given point
time. The squared
term of this variable
enables
the test of the non-monotonic
effect and is also
in the analysis. This
is similar to the
included
to
approach
employed
by Yeniyurt et al. (2008)
capture saturation effects.
In order to capture the effects of the global brand
to clearly define
itwas first necessary
architecture,
the brands
in the industry and
the structural
portfolio stratification. In the automotive

industry
a brand is defined by the "make", as opposed
to the
"model" or "nameplate",
which
refers to specific
refers
lines, or the "manufacturer", which
product
to the company which owns the brands. While
this
is standard
it
is
sometimes
vernacular,
industry
difficult to follow because
of the overlap between
and brand names, and the position of

manufacturer
some product
the one hand, manufac
lines. On
turers often have brands with the same name as the
on the other,
company
(e.g., Ford, Toyota, Nissan);
some models
have
such a rich tradition
and
heritage that they have almost become brands, in

and
of
themselves
(e.g., Corvette,
Mustang,
C?maro).
Adding to the complexity, there has been
considerable
consolidation
in the automotive
industry, and brands that were once independent
are now brands within the portfolio of a
companies
global manufacturer
(e.g., Volvo, owned by Ford;
controlled
and Daewoo,
Nissan,
by Renault,
controlled by General Motors)
(see Table 2).
A global brand has been defined as having at least
20% of its sales in each of the three regions of the
broad "triad" of the EU, North America, and Asia
& Collinson,
with
2004).
Therefore,
(Rugman
to
we
brand
differenti
architecture,
respect
global
ate the position
of the brand in the global brand
architecture
in three continents:
by its presence
North America,
and
Asia.
If a brand
is
Europe,
in
all
of
these
it
is
continents,
present
major
identified as having a global brand scope. A brand
that is offered in multiple
continents,
but does not
Table 2 Automotive Industry

Terminology
Also known
Manufacturer
OEM
as
(original
Model, Model
Examples
equipment
manufacturer),
nameplate
company
Brand
Make
Ford, General
Motors,
Mercury,
Volvo,
Montego,
M3,
Toyota,
Buick, Toyota,
Rendezvous,
DaimlerChrysler
Lexus,
Corvette,
Chrysler,
300,
Audi
Xterra,
STS

_Getting to global
548
brands
a global
scope, is identified as a multi
brand.
If
the brand
is sold in multiple
regional
one
in
all
located
countries,
continent, the brand is
as
if the brand
is
categorized
Finally,
regional.
one
in
it
marketed
is identified as a
country,
only
yet have
local (domestic) brand. In the analysis,

was used as the base case.
local brand
are included in the analysis as

of
Country
origin is included as a set of
as Europe and Asia, with
variables
coded
dummy
North America being the base case. The number of
owns is also included
in the
brands the company
A series of variables
controls.
in the
variations
there are wide
firms. World
automotive
sizes across
to account
for global
is included
as
analysis,
portfolio
production
economic
conditions.
Sample
we employ
a
To test the developed
hypotheses,
that tracks 135 automotive
compa
panel dataset
nies from 26 countries over a 24-year period (1981
the global
dataset
includes
original
in 55
these
of
brands
of
the
presence
companies
cultural
countries on an annual basis. Hofstede's
scores are available
for only 42 host and
dimension
so data for 13
22 home countries on 6 continents,
2004).
In our case, the dependent

variable
is the
a
to
enter
market.
The
propensity
specific
signifi
cance
can be analyzed
of the estimates
using
conventional
testing (Tuma & Hannan,
hypothesis
in time.
1984).
The determination
of the probability distribution

function of the transition rate over time is a critical
in event-history
A semi-para
decision
analysis.
metric method
has
such as the Cox
(1972) model
of
the
few
distribution
very
assumptions
regarding
the hazard rate over time, by allowing
for a salient
rate
that is identical
function
for all the
not follow
in the population,
does
yet
&
Rohwer, 2002).
any prescribed
shape (Blossfeld
Figure 3 shows the smoothed hazard rate estimates
over time of a brand to exhibit a new market entry.
Given the non-monotonic
shape of the hazard rate,
means
for
the Cox model
provides
adequate
base
members
estimation.
The
from
and four home countries were excluded
to
the number of companies
the dataset, decreasing
some
to
229.
that
of
brands
and
119,
Considering
are time
in the model
included
the covariates
into
have
been
divided
the
data
yearly
varying,
variable has
spells. Each time-varying independent
a
brand
entered
When
been updated yearly.
specific
a specific market, the corresponding
brand-country
was discontinued.
This yields 115,691
combination
and
combinations)
(brand-country-year
spells
host-coun
entries. The inclusion of
1934 market
inten
and competitive
try-related socio-economic
observations
the missing
increased
to
size
the sample
56,532 spells, for
729 market
and
191 brands,
companies,
sity variables
and decreased
lihood maximization
to the event times
model
utilizes
like
partial
the
data according
by sorting
(Blossfeld & Rohwer, 2002).
statistics for the variables

descriptive
the correlation
in the analysis
and
included
in Table 3.
coefficients are presented
An event history
time-varying
analysis with
Cox Model
line with
similar studies
(Carroll & Hannan,
Mitra
&
and in accordance
1989;
Golder,
2002),
esti
hazard
smoothed
with
the non-monotonic
we
to
the
Cox
model
mates,
identify the
employ
on the
of
variables
different independent
effects
In
hazard
rate. Hence:
=
XXj(t) h(t)exp[?Yx4(t-l)}
the
in order to estimate
is employed
variables on the prob
effects of the independent
a market
entry. This
ability of a brand exhibiting
to analyze
tool
the
best
model
of
provides
type
&
time-based phenomena
Rohwer, 2002).
(Blossfeld
is similar to multivariate
The technique
regression,
covariates
is the unobserved
dependent
an
event
of
occurring at a specific point
probability
the
variable
(1)
rate of being
hazard
is the brand's
introduced in the given market; h is the unspecified
baseline hazard; and YX/i(t?l) is the vector of time
at t?1 for brand x and
varying covariates evaluated
/.
the covariates and
between
A
country
1-year lag
to ensure temporal prece
the event is employed
where
dence
in the analysis.
RESULTS
entries. The
but
Cox
The
host
107
D Townsend et al
Janell
Effects
results of the Cox model's
partial likelihood
the
are illustrated
in Table 4. During
estimation
the standard errors were clustered for
estimation,
Main
The
inter
to account
for company-level
Breslow
the
in
and
the
observations,
dependencies
the event ties was utilized.
for breaking
method
a satisfactory fit to the data,
has
model
the
Overall,
each
company
statistic that is significant

with a Wald
chi-squared
of the
level in both
at the 0.001
confidence
specifications.

14
13
12
10
Correlations
0.28
0.45
0.0260
-0.0391
-0.1257
-0.0139
0.0005
0.0038
-0.0906
-0.1560
-0.0731
20
Multi-regional
36.69
151.08
0.0244
-0.0234
0.2660
0.1229
0.0365
-0.0469
0.0887
-0.1233
0.1106
0.0578
0.0819
0.0750
-0.0840
0.4595
29
Country
of
origin
Asia
0.26
0.44
0.0042
0.0870
0.5010
0.0836
0.0062
0.2096
0.0310
0.0984
-0.0307
-0.0968
-0.0350
-0.0602
0.0355
-0.0333
Regional
brand
x
Cultural
0.55
-0.0382
1.12
0.2776
-0.1035
0.0685
-0.0177
-0.0281
-0.0630
-0.0588
-0.0666
-0.0990
-0.1230
-0.0451
-0.1711
-0.2614
27
Regional
brand
x GDP
growth
0.79
1.89 -0.0154
-0.0326 18
0.0464
-0.0503
0.0822
-0.0464
28
Country
of
origin
Europe
0.56
0.50
0.0433
-0.0845
-0.4414
-0.2383
-0.0400-0.1093
x GDP
per
capita
-0.0276
0.0572
-0.0070
0.3490
-0.0488
-0.0537
26 brand
Murti-regional
brand
x2.92GDP 6.39
0.73
1.92 brand
-0.0356
0.0947
-0.0609
0.0407
-0.0266
-0.0389-0.1499
21
Regional
brand
x
Population
47.84
154.33
0.0205
-0.0260
0.2459
0.1577
0.0097
-0.0286
0.0906
-0.1049
-0.0420
-0.0990
-0.0756
-0.0600
-0.1073
-0.1639
31
World
auto
production
52.50
16.27
0.0666
-0.0255
-0.0750
-0.1726
-0.0527
0.0845
0.0167
-0.0510
-0.0624
-0.0656
0.0157
0.0398
-0.0866
-0.0240
Global
13
0.31
0.11
-0.0756
0.0372
1.0000
0.1383
-0.0317
0.2253
0.2495
0.5928
0.6542
-0.1978
-0.0630
0.1476
0.0365
scope
brand
Global
22
-0.0731
5.08
-0.1553
0.8492
GDP
1.49
0.0594
0.1939
0.2928
0.0289
0.2132
0.6064
0.6337
-0.2501
-0.0548
0.0741
0.0550
capita
x
per
brand
Multi-regional
14
0.0020
0.41
0.22
1.0000
-0.1829
-0.0248
-0.1139
0.0375
0.1481
0.1447
0.0735
0.1947
-0.0600
-0.0238
-0.0068
0.0055
scope
brand
Global
25
-0.1417
0.0078
0.0634
-0.0653
1.44
0.7748
0.1737
0.2063
GDP
0.39
0.1373
0.5039
0.5381
-0.2014
-0.0339
0.0682
0.2283
x
growth
rate
-0.0925
Global
brand
x
Population
22.92
118.37
-0.0326
0.0196
0.1994
0.1883
0.0717
0.0028
0.1059
-0.2177
0.4792
0.5124
0.1642
0.1325
0.5597
-0.1024
Multi-regional
brand
x 30
GDP No.
per of2.26brands5.51
-0.0175
0.1068
-0.0348
-0.0355
-0.1581 0.5152
company
owns
4.20 -0.0089
5.33 19
-0.0576
-0.0067 0.0617
-0.0167
0.3322 0.2909
0.0079
-0.1189-0.0223
17
Multi-regional
brand
x
Cultural
0.47
1.09
-0.0477
0.2977
-0.1135
0.0433
0.0593
-0.0277
-0.0590
-0.0729
0.1477
0.0518
0.1373
0.1232
-0.1507
0.8241
al
distance
0.24
0.80
-0.0776
0.1952
-0.0277
0.1071
-0.0661
-0.1798
0.5529
0.2517
0.0596
0.1729
11
Brand
dispersion
6.24
8.61
-0.0478
0.0257
-0.0508
0.1992
0.0318
12
-0.0674
0.1138
(Brand
dispersion)2
-0.2932
113.06
310.05
0.2327
-0.0377
0.0211
0.2710
0.0178
1.0000
0.1948
0.0466
-0.0259
0.0612
-0.2492
0.2006
0.2069
0.9304
1.0000
0.1470
Regional
continent
0.67
0.47
-0.1119
-0.0694
-0.1620
Brand
90.2443
in
-0.0531
-0.1481
0.50
0.51
-0.1885
-0.1540
0.1129
1.0000
continent
-0.1296
0.1056
-0.1363
0.4133
0.0593
0.1209
-0.2466
Foreign
7
-0.0823
0.0493
22.11
42.08
1.0000
0.2771
-0.2173
-0.3100
-0.0604
competition
brands
of
%
8
in
0.13
-0.2108
-0.0744
0.0285
0.21
1.0000
0.1140
0.0517
-0.1259
-0.1643
country
company
Local
61.0000
0.1633
-0.1374
0.6413
4.72
4.08
competition
-0.0768
-0.0564
1
distance
GDP
5
3.30
0.1748
-0.0987
2.87
1.0000
0.2231
growth
0.2558
rate
distance
GDP
4
8.09
10.74
1.0000
0.3530
0.2639
-0.0494
capita
per
Std.
dev.
Mean
Table
3
Descriptive
statistics
correlations
and
3Population
distance
248.69
374.43
0.0180
-0.006
1.0000
distance
Cultural
2
2.08
-0.1364
1.31
1.0000
Country
10.75
1.0000
1.56
market
car
brand
distance
Population
x
distance
growth
rate
distance
capita
distance
distance
distance
distance
distance
Variables

distance
distance
distance
rate
0.7163
Variables
Correlations
15
17
16
18
21
20
19
25
27
23
22
26
24
28
29
30
0.0588
0.0323
-0.0241
World
31
-0.0485
-0.0394
-0.0746
-0.0514
auto
-0.0075
-0.0682
-0.0466
0.0170
-0.0736
-0.0166
0.0101
production
-0.0442
-0.0015
30
No.
of
brands
company
owns
0.0343
0.2588
-0.0063
0.0351
0.1967
0.0276
0.0730
0.3230
0.0585
0.1052
0.2079
-0.0059
0.0234
-0.2548
-0.2102
1.0000
29
Country
of
origin
Asia
-0.2018
0.0443
-0.0166
-0.1395
0.0177
0.0865
0.0084
-0.0151
-0.0221
-0.1447
0.0380
0.0228
-0.1124
-0.6671
1.0000
28
Country
of
origin
Europe
0.0841
-0.1069
0.0731
0.0298
-0.0801
-0.0677
-0.1323
-0.0948
0.0438
-0.0327
-0.0592
0.0460
0.0492
1.0000
brand
0.6287
0.6799
Regional
27
-0.1833
-0.1247
0.4257
GDP
-0.1237
0.6181
-0.1589
-0.1128
-0.1022
-0.0815
x
-0.1727
1.0000
growth
rate
26
Multi-regional
brand
x
GDP
growth
-0.2338
-0.1119
0.6704
-0.1868
-0.0731
0.3790
-0.1171
-0.1109
-0.1727
0.6402
-0.1012
1.0000
Global
brand
-0.1168
0.7200
25
GDP
0.5360
-0.1326
growth
-0.1100
0.7059
-0.0831
-0.1659
-0.1226
-0.0651
1.0000
rate
x
24
Regional
brand
x
GDP
per
capita
0.7387
-0.1355
0.6910
-0.1992
-0.0886
-0.1111
0.5781
-0.1344
-0.1876
1.0000
brand
-0.2029
Multi-regional
GDP
0.7332
-0.1272
23
-0.1215
-0.2540
-0.1205
0.5536
1.0000
-0.0795
per
x
GDP
al
per
capita
-0.1819
-0.1453
-0.1280
0.6517
-0.0714
-0.0911
1.0000
0.7726
Population
brand
distance
x
-0.1350
-0.0918
-0.0720
0.5008
brand
Global
-0.0958
19
Population
-0.0844
0.4773
-0.1199
distance
1.0000
x
-0.1504
Population
0.3926
0.3299
-0.1201
-0.0600
All
Note:
coefficients
correlation
significant
the
0.05
at
with
level,
exception
bold
of
are
ones.
-0.0470
-0.0753
1.0000
brand
distance
1.0000
Cultural
0.7990
-0.2154
Regional
18
-0.1465
x
Cultural
Multi-regional
1.0000
17
-0.1290
-0.2696
brand
x
distance
brand
Global
Cultural
1.0000
16
-0.1834
x
Table
Continued
3
g
Regional
15
brand
scope
1.0000
distance
capita
distance
distance distance
distance
rate
distance
distance
distance

1.0000
_Getting to global
brands
__
__!_
Market
Environment
size, cap
Regarding market attractiveness, market
tured in terms of a country's car market, has an
>. 0.015 -
0.010
1990
1995
Analysis time
Figure
Smoothed
hazard
GDP
growth
rate distance
cally significant
lb
Hypothesis
rate estimates.
tance. Hypothesis
Table
Partial
likelihood
estimates
effects on
the propensity
Coeff.
Variables
Market
of main
on
new
market
entry
to
failing
support
provide
is
effect of cultural distance
=
and
(j8 -0.0957,
negative
p=0.057).
significant
is negative
The effect of population
distance
and
=
=
0.100),
(? -0.0008,
p
marginally
insignificant
the impact of GDP per capita distance
is positive
and insignificant at the 0.10 level, and the effect of
insignificant
impact
=
=
(j8 0.0207,
0.623),
p
for Hypothesis
la. The
of a brand
to exhibit
Robust
is negative
(0 =-0.0610,
is supported
lc is supported
a new market
and
statisti
Therefore
p<0.001).
for the cultural dis
for GDP
growth
entry
std. err.
P>\*\
attractiveness
0.0207
car market
Country
Cultural
distance
Population
distance
0.623
-1.90
0.057
-0.0610
0.0169
-3.61
-0.0089
0.0114
0.0046
-0.78
-0.0008
GDP per capita distance

GDP growth ratedistance
0.0077
Competition
Local competition
Foreign
0.49
0.0503
0.0005
0.0066
-0.0957
0.0319
competition
C loba I experience
0.0420
-1.64
0.100
1.17
0.243
6.95
<0.001
0.438
<0.001
0.6332
0.3339
1.90
0.058
Brand
0.6533
0.1239
5.27
< 0.001
in continent
Company
Brand dispersion
-0.2391
0.2425
0.0264
0.0005
of company
brands
in continent
in country
(Brand dispersion)2
0.1413
-0.001
-0.99
5.35
-2.50
0.324
<0.001
0.012
Brand architecture
Global brand scope

brand scope
Multi-regional
brand
scope
Regional
Control
auto
production
Observations
Subjects (country-brands)
Market
0.1901
0.5504
0.5001
0.4003
1.07
0.284
1.32
0.188
0.47
0.635
variables
of origin Europe
Country
Country of origin Asia
owns
No. of brands company
World
0.5893
0.6580
entries
Log pseudo-likelihood
Wald x2
1.3979
0.2106
0.3767
0.0692
0.0502
0.0247
2.80
0.005
0.0083
6.07
< 0.001
0.7501
3.56
<0.001
3.71
<0.001
56,532
6558
729
-5047.91
d.f.
2078.18
19
Sig.
<0.001

552
rate distance, yet not supported

GDP per capita distance.
to global
_J__Getting
brands
for population
and
The Role of Competition
of local
indicate
that the extent
a
has
effect
competition
negative
insignificant
=
=
a
on
brand's
-0.0089,
0.438)
(0
p
propensity
to be introduced in a new market, failing to provide
2a. The extent of foreign
support for Hypothesis
a
has a
in
target country market
competition
The
results
significant
positive
=
(/? 0.0319,
p<0.001),
2b.
for Hypothesis
on
market
providing
strong
effect
entry
support
Global
Experience
results provide support for Hypothesis
3a, the
in
of company brands already present
percentage
the country have a significant positive effect on a
=
to enter the market
brand's propensity
(/? 0.6332,
=
in the continent of
0.058). A brand's presence
p
a
has
the potential
market
target
positive impact on
The
in an entry
the probability of that brand engaging
Yet
at a given point in time (? = 0.6533, p<0.001).
in the continent on
the effect of company presence
at the 0.10
new market
entry is insignificant
=
level (? = -0.2391,
confidence
0.324). Therefore
p
is
3b
Hypothesis
strongly supported at brand level,
at organizational
level. Brand
but not supported
a
has
non-monotonic,
inverse-U-shaped
dispersion
of entry to a market
effect on the likelihood
=
and
for linear
effects,
(? 0.1413,
p< 0.001
= 0.012 for
=
There
-0.0013,
effects).
?
p
quadratic
a non-monotonic
fore Hypothesis
3c, indicating
efforts on new
effect of past global
expansion
market
entry, is supported.
Control Variables
the control
In the main
effects specification,
variables have significant effects on market
entry,
=
and
with European
brands
p< 0.001)
(?8 0.7501,
=
a
Asian brands
1.3979, p<0.001)
(0
exhibiting
interna
to
expand
significantly higher propensity
a company
tionally. The total number of brands
=
world
the
owns
total
and
0.0692,
(j8
p=0.005)
=
automotive
(/? 0.0502, p< 0.001) also
production
have significant positive effects on new entry.
Brand Architecture
effects indicate that the
The analyses for the main
in
brand hierarchy
the
brand
of
the
(i.e.,
position
or regional
brand,
brand, multi-regional
global
brand) has an insignificant
impact on the propen
a
a
to
enter
of
brand
specific market. Therefore
sity
the results of this study fail to provide

4.
Hypothesis
support
for
Interaction Effects
effect of brand archi
To test for the moderation
we
tecture on cultural
and economic
distance,
that
estimate a second
incorporates
specification
the related interactions. The results of this model
can be seen in Table
5. The
effects
interaction
indicate that the position of the brand in the brand
of this variable
architecture is a selective moderator
on the cultural
and economic
distance-market
entry relationship. Therefore global brands are least
of the potential
affected by the cultural distance
=
=
host market
0.001). Multi-regional
(0 0.4210, p
and regional brands are also affected less than the
=
local brands
distance
(0 0.3290,
by cultural
=
= 0.005
=
and 0 0.3940,
0.005,
p
p
respectively),
this moderation
effect is not as strong as
although
the other hand,

it is for the global brands. On
brand
is the only brand category
multi-regional
distance
the effect of population
that moderates
in a brand's
international
efforts
expansion
=
interactions
between
The
0.0018,
(0
p<0.05).
and
distance,
global brand scope and population
are
distance
and
brand
scope
regional
population
at
the
0.10
confidence
and
negative
insignificant
level. The brand architecture does not significantly
the effects of GDP per capita and GDP
on new market
rate
distance
entries, all
growth
moderate
at the 0.10 confidence

effects being
insignificant
that the results
level. Therefore it can be concluded
5a but fail to
for
Hypothesis
provide strong support
A
of
the hypoth
5b.
summary
support Hypothesis
eses and results can be seen in Table 6.
DISCUSSION
This study contributes to the literature in a number
of ways, and the findings suggest some interesting
of brands and brand
points for the management
a
in global marketplace.
architectures
First, we find
a
that brands
co-evolutionary
through
globalize
of international
By exploring
expansion.
of brands
evolution
affecting the global
a 24-year
over
international
expansion
through
Volberda
we
and
Lewin
the
heed
call
by
period,
to
about
extend
co-evolutionary
(1999)
knowledge
our study, we have
gained
processes.
Through
process
factors
about the nature of the evolu

greater knowledge
tion of brands in a global environment,
particularly
to the role of the environment,
with
respect
and
learning. Market
experiential
competition,
attractiveness,
learning, and mimetic
experiential

Getting
Table
estimates
likelihood
Partial
to global
of interaction
brands
effects on
the propensity
Coeff.
Variables
Market
of a brand
to exhibit
Robust
a new market
553
entry
std. err.
P>\A
attractiveness
0.0077
car market
Country
Cultural
distance
distance
Population
-0.0919
0.0432
0.0979
0.0008
0.0194
0.0534
-0.0051
0.0118
-0.43
0.668
0.0310
0.0042
7.44
<0.001
0.6570
0.3176
2.07
0.039
0.5880
0.1443
4.08
<0.001
-0.4306
-0.0016
GDP per capita distance

GDP growth ratedistance
-0.0001
0.18
-4.40
-1.96
0.00
-1.72
0.859
<0.001
0.050
0.997
0.085
Competition
Local
competition
Foreign
competition
Global
experience
of company
brands
in continent
Brand
in country
0.2338
0.0261
0.0005
-1.36
-2.68
0.007
0.7712
0.5229
-0.38
0.705
-0.1874
-0.36
0.720
-0.1100
0.5330
-0.21
0.836
0.4210
0.1254
3.36
0.001
0.3290
0.3940
0.1171
2.81
0.005
2.80
0.005
-0.79
0.429
0.0690
0.1407
0.0010
0.0008
0.0015
0.0216
0.0235
0.0300
0.0669
0.0044
0.0574
0.08
0.939
0.0011
0.1021
0.01
0.992
0.6524
0.2437
2.68
0.007
0.4274
3.11
0.002
in continent
Company
Brand dispersion
-0.3185
(Brand dispersion)2
-0.0014
0.1423
5.45
0.173
< 0.001
Brand architecture
Global brand scope

International
brand
Regional
Moderation
Global
brand
-0.2920
scope
scope
effects
x Cultural
brand
brand
Multi-regional
distance
x Cultural
distance
Regional brand x Cultural distance

Global brand x Population distance
brand
Multi-regional
Population
-0.0008
0.0018
distance
Regional brand x Population distance

Global brand x GDP per capita distance
-0.0011
brand x GDP per capita distance

Multi-regional
x GDP per
brand
Regional
capita distance
0.0098
0.0152
-0.0475
Global brand x GDP growth ratedistance
brand x GDP growth

rate distance
Multi-regional
x GDP
brand
rate distance
Regional
growth
Control
of origin Europe
of origin Asia
Country
No. of brands
auto
company
1.3309
owns
production
Observations
0.46
0.649
0.65
0.518
-1.58
0.113
1.03
0.303
0.0714
0.0255
2.80
0.005
-0.0078
0.0083
-0.94
0.345
56,532
6558
729
Subjects
(country-brands)
Market
entries
Log pseudo-likelihood
Wald x2
-5013.89
d.f.
5889.88
31
Sig.
<0.001
effects
0.027
0.480
variables
Country
World
2.20
-0.71
constitute
conjunction
architecture.
with
the
the
issues
concepts
in
investigated
of global brand
Potential
managerial
decisions
are an important
conditions
in product
consideration
introduction
(Guiltinan,
1999), but the results of this
demand

Getting
554
Table
and
Hypotheses
to global
results summary
Result
Hypothesis
HI a: Market
brand's
a positive
to be
propensity
effect on
size has
Not
introduced
in a
new country.
HI b: Cultural distance
brand's
has a negative
effect on a
to
in a
be
introduced
propensity
new country.
HI c: Economic
distance
a brand's
new
H2a:
brands
propensity
has a negative
effect on
to be introduced
in a
country.
Supported
Partially
supported
Not
has
of local competition
presence
effect on a brand's
propensity
negative
in a new country.
be introduced
The
supported
to
supported
has a
of foreign competition
presence
on a brand's
to
effect
propensity
positive
Supported
H2b:
The
H3a:
The
be
introduced
presence
a market
has
brand's
in a new country.
in
of a parent firm's brand(s)
a positive effect on the focal
to be
propensity
introduced
Supported
new
H3b:
has a positive
knowledge
a brand's
to be
propensity
effect on
H 3c:
introduced
in a new
Past global
expansion
country.
efforts has
Partially
supported
a non
monotonic (inverseU shaped) effecton a

brand's
new
H4:
to be
propensity
country.
that are
Brands
inmore
introduced
advanced
introduced
that are
H5a:
in new
of
stages
in less advanced
propensity
to be
propensity
to be
Not
supported
than brands
countries
globalization.
The effect of cultural
Supported
in a
globalization are more likelyto be

stages
distance
on
of
the
Supported
in a new
introduced
that are in
for brands
isweaker
country
more
advanced
stages of globalization.
on the
distance
H5b: The effect of economic
in a new
introduced
that are
isweaker
for brands
country
more
advanced
stages of globalization.
1977; Johanson & Weidersheim-Paul,

1975;
Vahlne,
& Vahlne,
and our findings
Nordstrom
1994),
of this effect. We
also
further evidence
provide
contribute to this literature stream by revealing the

distance variables on
effects of economic
negative
market entry. Our study indicates that brands are
less likely to enter into markets with population
sizes and economic
conditions much different from
their home
market.
The
of economic
impact
is particularly
distance
interesting, implying that
are
more
to introduce
inclined
their
managers
in markets
brands
with
to their home
economic
mobiles.
market.
conditions
for
explanation
auto
this finding could be that many
established
are from Western
and
motive
brands
countries,
be more
to
enter
these brands would
other
likely
markets
that can support the expense
of auto
similar
countries
in a
country.
Near-market
D Townsend et al
Janell
An
that the newer brands

from
It appears
and India are following a
such as China
similar
similar pattern, and entering economically
Eastern
in Africa
and
before
Europe
It could also
into more developed markets.
moving
from countries with
similar
be that consumers
markets
are prepared to accept similar

conditions
levels of product quality and service. This could be
an interesting topic area for future research.
economic
The results of this study also reveal the existence

in international brand
behavior
of strong mimetic
with previous
studies
efforts.
Consistent
expansion
&
1998;
1993; Gr?ve,
(Abrahamson
Rosenkopf,
1981;
1993; Lange et al., 2004; March,
Haveman,
Rogers, 1962), our results indicate that brands tend
to mimic
Not
supported
in
fail to provide
support for the idea that
are more
internationally
likely to expand
the uncertainties
into larger markets. Considering
associated with foreign entry, it can be postulated
study
brands
that, in the automotive

industry, actual market size
not provide
information
sufficient
does
alone
for a new
attractiveness
the
potential
regarding
brand in a foreign market. This suggests that other
factors must be part of the decision-making

process
as brands globalize.
literature suggests that
The internationalization
international
cultural distance hinders
expansion
&
into a foreign market
of a brand
(Johanson
the market entries of their competition.

context
international
in
the
of the
Hence,
it
is
that
of
brands,
competi
suggested
expansion
to overcome
the
is utilized
tive mimetic
behavior
into a
associated with an expansion
uncertainties
new market.
not
the other hand, our analysis does

that the
support for the hypothesis
On
provide
deters foreign-market
presence of local competition
case
that local competition
entry. It may be the
a means
to identify the infrastructure
provides
issues within a country that will help to sustain an
industry.
In the
of
international
expansion
of
there is strong evidence
a!s
evolution
progresses.
global
learning
experiential
of internationalization
The behavioral
perspective
from earlier
that
acquired
suggests
knowledge
entries. Yet
future market
entries enables
market
a
from
saturation
effect
our
suggest
findings
automotive
context
of
brands,
efforts. This could

previous international expansion
be due to there being a limited number of potential

_Getting to global
brands
to introduce brands
in which
country markets
in this study,
based on other factors not considered
risk.
such as infrastructure and political
the experiential
learning acquired
Additionally,
is
via having near-market and host-market presence
in
the
in
A
this
presence
strong
study.
incorporated
facilitates future brand launches. The

a
of
brand on the same continent of the
presence
the likelihood
increases
target market
potential
on the same continent.
In
of further expansion
host market
to the effects of organizational

learning,
of manage
this could possibly be an indication
of scale. Although
the
ment's
search for economies
on
is
continent
the
the
of
presence
corporation
addition
also part of the analysis, the effect of this presence

knowl
is insignificant. This suggests near-market
a
at
at
is
level
than
driver
the
brand
stronger
edge
brand
the corporate
level, and could be because
are closer to the market dynamics
and
managers
than are the company
learning
opportunities
executives.
The evolution
in the brand
in terms of its position

in
has been considered
of the brand
architecture
our
and provides
interesting
findings.
analysis,
initial
Upon
analysis, our results are contrary to
The direct effects of a brand's position
expectations.
are insignificant;
in the global brand architecture
further as a brand evolves, it is not more
likely to
This
could
be due
internationally.
expand
possibly
to the effects of saturation
for a given strategy:
essentially, a given strategy has been achieved, and
are not inclined
managers
order to engage
However, based
to change this strategy in

in further international
expansion.
on our findings, a moderation
by
to exist. Brands that

brand position
does appear
even at the regional
have begun to internationalize,
level, tend to be less affected by the negative effects
in their international
of cultural distance
expan
sion activities - most markedly
for global brands.
it can be concluded
Therefore
that additional
experiential
learning emerges from having a global
in the major world markets, mitigating
presence
on international
the effects of cultural distance
This not only supports previous
litera
expansion.
ture related to internationalization,

but also begins
to extend the concepts
to brand globalization.
Perhaps one of the most
interesting findings of
this study is that gaining knowledge

of business on
a continent
a further
in developing
aid
will
on
continent.
that
While
near-market
presence
knowledge has been found to be a significant factor
inmarket
entry timing (Mitra & Golder, 2002),

additional
study provides
insights specifically
our
for
D Townsend et al_
_Janell
_ ^
"~
"
~~
555
brand management
a global
developing
that is strategically intent on

brand. It appears that the near
from entry on a con
gained
market
knowledge
true for all three major
tinent holds
continents.
to accelerate
the globalization
Thus,
process,
can establish market positions
in
brand managers
all three continents
In
points.
then expand
from those
economic
environment
this may be an effective
and
the dynamic
by globalization
to accelerate
the brand
strategy
a
means
and
for
process,
developing
more quickly.
presented
globalization
global brands
of this study also have

significant
for
managers. We provide a normative
implications
framework for categorizing brands in a global brand
architecture, and the findings of the study provide
The
results
guidance
that have
for market
a strategic
entry activities. Companies

intent to move
into interna
tional markets, or change

the global marketplace,
their brands'
should
note
in
position
that global
is likely to follow their market entries.

a critical factor in global expansion
is
Experience
efforts, and seasoned
players are more
likely to
overcome
cultural barriers, and pursue economic
competition
rents via new market entries and brand introduc

tions. Brand managers
to establish
who
aim
a regional presence
should focus their efforts on
first.
setting roots in one market on that continent
is established
Once a presence
in a country located
on the target continent, remaining country markets
easier to penetrate.
Similarly, companies
aim at establishing
footholds on the three
that is, North America, Europe,
continents,
major
and Asia, as this constitutes a crucial step in global
will
be
should
and
expansion,
global scope aid
a
experiences
gained by having
in establishing
subsequent market
entries.
LIMITATIONS AND FUTURE DIRECTIONS

This
of being
study suffers from the limitation
in a single industry, which may hinder
performed
the generalization
of its results. Nevertheless,
focusing on a single industry enables a more refined
analysis of the research questions
by employing
an extensive dataset covering a
significant portion
of the global market in terms of manufacturers
and
a
with
time
country markets,
along
meaningful
horizon.
Alternative
studies may
consider
the
of
different
implications
industry settings.
Another
limitation
is that Hofstede's
cultural
scores are available
a
for
set of
limited
only
countries,
1983,
and
have
raising doubts
not
about
been
updated
their relevance
since
in the

"**_Getting to global
556
brands
environment.
Hofstede's
Also,
contemporary
are based
on work-related
dimensions
values
of
the employees
of one company, which may not
necessarily
represent the entire national
popula
1998) and global orientation

(Workman, Homburg,
& Gr?ner,
of the
1998; Zou & Cavusgil,
2002)
team
to
should
be
management
subject
investiga
tion with
to international
of
respect
patterns
and the assumption

that all learning takes place
the workforce.
Future research
prior to entering
should investigate the consistency of these findings
across alternative methods
of computing
cultural
scores and dimensions.
in current
process. Further, brand equity achieved
markets may be transferable to new markets
and
affect the propensity
of the brand to expand.
If a
means
to operationalize
this concept is available,
it
could be included in future studies.
Future research could also incorporate

concepts
resources
and specific factors such as organizational
and core competencies,
strategic intent, and orga
nizational
culture. Additionally, managerial
cogni
a
tion has
effect on
significant
company's
We
tion, and may not overlap with other applications

such as consumer behavior (Steenkamp, terHofstede,
& Wedel,
Further criticisms
include
the
1999).
collection
of data in English
from all countries,
so the effects of
activity patterns,
as
the
(Kedia
cognitive factors such
global mindset
& Mukherji,
1999; Murtha,
Lenway, & Bagozzi,
international
Such strategic factors may mitigate

the
expansion.
distance
negative effects of cultural and economic
on international
and possibly
expansion,
empha
size other relevant factors in the decision-making
ACKNOWLEDGEMENTS
R L Polk Marketing
gratefully acknowledge
a
division
of
Polk
Automotive
Systems,
Intelligence,
for providing the proprietary data
included in this
also thank two anonymous

reviewers
study. We
and Shaoming Zou, Departmental
Editor, for their
constructive comments and insightful guidance.
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the choice
"^
janellD Townsend et al_ _
journal
of Marketing,
ABOUT THE AUTHORS

is an assistant professor of
Townsend
Janell
and
at Oakland
International
Business
Marketing
in
She
earned her
Rochester, Michigan.
University
PhD in marketing
and international business
from
State
Her
research
interests
Michigan
University.
fall within
the nexus
of branding,
innovation
D
and globalization
of the firm. Dr
management,
was born in the USA,
Townsend
is an American
and
has
in the
citizen,
professional
experience
automotive
global
oakland.edu
industry.
E-mail:
townsend?
is an assistant professor of Market

Sengun Yeniyurt
ing at the Rutgers Business School. He earned his
PhD in marketing
and international business
from
State University.
His
current research
Michigan
interests are related to empirical modeling
of market
selection and entry, strategic market positioning,

_Getting to global
558
brands
new product performance, and brand management.

He was born in Romania
and is a citizen of Turkey.
E-mail: yeniyurt@business.rutgers.edu
Marketing
Accepted
is an assistant professor
Talay
at HEC Montr?al.
He earned his PhD
Berk
Mehmet
by Shaoming Zou, Departmental
Editor, 19 February 2008.
of
in
and
international
business
from
marketing
State
His
research
focuses
Michigan
University.
on
new product
the
innovation,
development,
of
and
coevolution
of
firms
competition
dynamics
and products. He was born in, and is a citizen of,
Turkey. E-mail:
berk.talay@hec.ca
This paper has been with the authors for one revision.


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Getting to Global: An Evolutionary Perspective of Brand Expansion in International Markets

Author(s): Janell D. Townsend, Sengun Yeniyurt and Mehmet Berk Talay

This content downloaded from 193.226.62.220 on Tue, 2 Dec 2014 09:16:52 AM

and International Business, Oakland

Rutgers University, Piscataway, USA;

Tel: +1 732 445 4171;

This content downloaded from 193.226.62.220 on Tue, 2 Dec 2014 09:16:52 AM

as they are the face with which a firm

Srivastava, & Ruekert,

and brands already operating

class emerges. Markets

and the role that global

of this article is framed in the

of the findings and managerial

Journalof International Business Studies

This content downloaded from 193.226.62.220 on Tue, 2 Dec 2014 09:16:52 AM

THE EVOLUTION OF A GLOBAL BRAND

ing program across geographic markets, and is not

stage than a regional brand.

few country markets,

for the portfolio, with

nents, but the core essence of the brand identity

In our framework a global brand acts as an anchor

only one national market.

May be sold inmultiplemarkets, but only

set of criteria whereby

Table 1 Global brand architecture

janellP Townsend et al_

illustration of only one brand,

framework we suggest postulates

Journalof International Business Studies

This content downloaded from 193.226.62.220 on Tue, 2 Dec 2014 09:16:52 AM

Markets where brand entered

Figure 1 The internationalexpansion of BMW from 1981 to 2004.

an iterative process occurs

does not exist in isolation,

may alter the brand's position

for the integration

and retention (Nelson & Winter,

influences both from and on the brand

Journalof International Business Studies

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in the global environment

aspects of the environmental

entry and global

in new, foreign markets

In deciding which markets

for a brand is an important factor to

a basis for determining

in the brand archi

(Volberda & Lewin, 2003). Effectively, with respect

by market size, will provide

size has a positive effect

factors also play a significant role in

Journalof International Business Studies

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includes all factors preventing or disturbing a

their home market

first and then gradually expand

that are culturally similar to their home country

tives. Recent competitor

of different strategic alterna

in their own industry, they are inclined to imitate the