Innovative product marketing strategy: multinational companies in Bangladesh

Pages656-671
DOIhttps://doi.org/10.1108/JABS-07-2018-0193
Published date07 October 2019
Date07 October 2019
AuthorMaria Fregidou-Malama,Ehsanul Huda Chowdhury,Akmal S. Hyder
Subject MatterStrategy,International business
Innovative product marketing strategy:
multinational companies in Bangladesh
Maria Fregidou-Malama, Ehsanul Huda Chowdhury and Akmal S. Hyder
Abstract
Purpose This paper aims to deal with international marketing of products, analyzinghow adaptation/
standardizationand network development are achievedwhen marketing products in Bangladesh.
Design/methodology/approach By applying a qualitative method,the study was conducted at four
multinationals,British American Tobacco, PerfettiVan Melle, Tetrapak and Reckitt Benckiser,operating in
Bangladesh. Data were collected through semistructured interviews, direct observation and official
documents. The analysis was conducted through construction of themes that were identified from the
data set.
Findings The study demonstrates that business relationships related to a local market should be
adaptedto customer preferences. The researchsuggests that a balanced combination of productquality
and development of new, innovative products adapted to the needs of the market and the customers
establishes trust and networks. Cultural and market context were found to influence multinational
companies (MNCs)sto standardize the quality of the products and adapt marketingmix components to
the needsof consumers.
Research limitations/implications The paper contributes to international marketing literature with a
model of product marketing based on context, trust, networks and adaptation/standardization. The
model introduces the cultural dimension of femininity/ masculinity and the innovation of products and
market structure. The study is limited to one emerging market. Further studies should explore other
emergingmarket economies and MNCs.
Practical implications The results suggestthat to meet the challenges of emerging marketeconomies
and achievesuccess, managers should takepeople and market needs into consideration.
Originality/value This paper extends product marketing literature by presenting a context-based
model for MNCs’product marketing.
Keywords Networks, Context, Adaptation, Multinational companies,Emerging market economies,
Product marketing, Standardization, Trust
Paper type Research paper
1. Introduction
The growth of emerging economies is a major aspect of global business (Hitt et al., 2000;
Sheth, 2011). It is estimated that by the year 2035, the gross domestic product (GDP) of
emerging markets (EMs) will surpass that of all advanced markets (Wilson and
Purushothaman, 2003). For global marketers and researchers working with multinational
companies (MNCs), marketing products to EMs are extremely important and challenging
(Engardio, 2007). These markets have distinctive characteristics and institutional structures
that do not exist in developed markets (Rottig, 2016). They suffer, for example, from such
conditions as institutional instability, informal social institutions requiring informal legitimacy
or institutional pressures and differentstakeholder expectations, all of which the MNCs must
understand.
The growth of emerging markets offers great opportunities to develop or discover new
theoretical perspectives and practices in marketing, offering a new outlook for marketers
Maria Fregidou-Malama,
Ehsanul Huda Chowdhury
and Akmal S. Hyder are all
based at the Department of
Business and Economics
Studies, University of
Ga
¨vle, Ga
¨vle, Sweden.
Received 9 July 2018
Revised 27 November 2018
Accepted 3 March 2019
PAGE 656 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 13 NO. 4 2019, pp. 656-671, ©Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-07-2018-0193
even in advanced markets (Sheth, 2011). MNCsfrom developed countries tend to enhance
their market coverage by direct or indirect marketing of their products in countries and
regions around the world (Westney, 1993). The rapid growth and the unique context of
emerging economies make theminteresting and create opportunities for MNCs.
In emerging markets, MNCs face competition from unbranded local products and services
(Hoskisson et al.,2000). To succeed in EMs, MNCs need to design, produceand/or market
products that are superiorto those offered by competitors, taking into account the priceand
the characteristics of theproducts (Ambastha and Momaya, 2004). Therefore, it is important
for MNCs as product marketers to use different strategies and policies to provide
customers with innovative products and superior value to gain competitive advantage in the
market (Sheth, 2011). Although the productitself is important, different dimensions that add
to a product’s value should be considered in relation to consumers’ necessities (Saren and
Tzokas, 1998).
Product innovation is an idea, practice or product updating that is perceived as new by
consumers (Lamb et al., 2005). In marketing literature, innovation has been important for
sustainable development. Innovation is often considered a tool for new product development,
because it affects marketing strategy (Golob and Podnar, 2007). Despite the great importance
of innovations, new product development is one of the riskiest endeavors of modern
corporations (Hingley and Lindgreen, 2002). According to Vrontis et al. (2009), MNCs should
choose a contingency approach while developing a marketing strategy in emerging markets. A
key question, therefore, for MNCs when deciding to establish businesses in EMs is whether they
should market products by following a standardized marketing mix or by adjusting the mix.
As far as we know, no model of product marketing strategy for MNCs in emerging markets
exists. Fregidou-Malama and Hyder (2015) have developed a model for the international
marketing of health-care services showing that cultural values, trust and networks are
important for performing in international markets. They argue that firms need to both
standardize and adapt to the local culturein their marketing of services. In this research, we
analyze the effect of context, trust and networks on developing product marketing strategy
for MNCs in EMs. Our study is inspired by the conceptual model on the process of
international health-care services marketing created by Fregidou-Malama and Hyder
(2015). Expanding on existing research by focusing on the gap in research on product
marketing of MNCs in EMs, this study addressestwo research questions:
RQ1. How does cultural context affecttrust, networks and product marketing strategy in
emerging markets?
RQ2. Which factors are essential when developing product marketing strategy in
emerging markets?
This research deals with the marketing of products by four MNCs that operate in the emerging
market of Bangladesh. The market of Bangladesh was chosen because of its high rate of
growth in GDP. The Bangladeshi market is expected to grow by 7 per cent during the years
2019, 2020 and 2021 (Asian Development Bank, 2018), compared to Pakistan, which is
expected to grow by 4.7 per cent in 2019, Malaysia by 5 per cent in 2019 and Vi etnam by 6.6
per cent in 2019. This makes the Bangladeshi market interesting to foreign firms.
Our research makes two theoretical contributions, it:
1. explores the influence of cultural context on marketing of products; and
2. develops a model of innovative product marketing strategy for MNCs in EMs.
2. Theoretical background
The theoretical framework for the development of product marketing strategy for MNCs in
relation to standardization and adaptation and emerging economies is context related and
VOL. 13 NO. 4 2019 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 657

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT