How does Marketing Strategy Influence Firm Performance? Implementation of Marketing Strategy for Firm Success

Abstract

Marketing strategy has been a focus of organizations and a tool for attaining overall firm performance. Our study contributes to the existing study of marketing strategy by supporting a relationship between marketing strategy factors and overall firm performance. Deduction from existing literature enabled a construction of a conceptual model that explains overall firm performance. Promotion, pricing, distribution, and product standardization and adaptation have an impact on sales, customer and financial performance of firms. The study suggests that the impact is mediated by marketing strategy implementation success. At the same time the impact of moderating factors of product homogeneity, stage of product life cycle and competitive intensity are present. The most influential studies on standardization argue that world markets have been harmonized and the customers from distant parts of the world increasingly demand and prefer similar products through low- cost positioning, low prices and high-quality offerings (Jain 1989; Ohmae 1985). In the perspective of standardization, for the firm pursuing a global marketing strategy, marketing processes and programs have been standardized across different national boarders in regard to the product offering, promotional mix, pricing strategy and distribution structures. However, as for studies that favours the concept of adaptation in pursuing the global marketing strategy toward advancing firm performance calls for the differentiated approach of marketing strategy. The fundamental tenet of global marketing strategy for the model developed in this study is that the international marketing process and program of the company should be either standardized or adapted to markets depending on the customer requirements. There are two concepts to which marketing strategy components such as product offering, pricing, promotional mix and channels of distribution should be based on to achieve firm performance. The two concepts are standardization and adaptation to which the global marketing strategy is streamlined toward the scope of performance regarding sales, financial and customer. The foundation of the research model of this current study is based on the theory that marketing strategy plays a critical role on firm's performance in the global market that is vastly supported by the study of Zou and Cavusgil (1996). Next, the research model is purposively developed to explore whether marketing strategy should be based on standardization or adaptation to attain firm performance across national boundaries.