Marketing Agility in MNC Subsidiaries

by | Feb 17, 2023

International Marketing Agility

The main challenge of multinational corporations (MNCs) is to balance local opportunity-seeking initiatives with global efficiency-oriented imperatives. Only if a subsidiary develops reliable local insights and a deep understanding of local customers can it effectively manage customers and contribute to the organization’s success. In short, subsidiaries need to be market-oriented to create and maintain superior customer value. Thus, local subsidiaries can be understood as MNCs’ operational backbone and market pulse. At the same time, MNCs desire to gain economies of scale and leverage synergies by standardizing their marketing programs – i.e., their product offering, promotional mix, price, and distribution structures – across markets.

The main challenge of our business is to strike a perfect balance of optimizing global scale while being locally relevant to the customer. We don’t want to be “hopelessly local” or “mindlessly global.”

— Vindi Banga, former Vice President of Marketing, Unilever

The balancing act between generating and responding to local insights and exploiting standardized marketing programs calls for some form of marketing agility. This research proposes that the simultaneous pursuit of local responsiveness and standardized marketing programs reflects the notion of international marketing agility, referring to “an endless and swift movement between global and local, such that international opportunities are seized, and threats are avoided, without losing focus and momentum” (Gomes et al. 2020, p. 270).

Under this lens, this research examines how market orientation (MO) and marketing program standardization (MPS)—two critical yet seemingly incompatible marketing capabilities—are related to each other and to subsidiary performance simultaneously. To do so, we collected data from executives in subsidiaries of major Western MNCs operating in Japan, an advanced market, and Turkey, an emerging market. Both countries are important players in the world economy with a long history of foreign direct investment. Companies like Bayer, Coca-Cola, Ford, Henkel, IBM, Novartis, and Unilever have operated in both countries for decades. Subsidiaries of such companies have built strong local roots and have accumulated a rich repertoire of knowledge, experiences, and successful strategies in local markets. The long history of MNC subsidiaries in Japan and Turkey makes these markets suitable for testing our model. We analyzed this data using multigroup structural equation modeling.

Contrary to the notion that MO and MPS are incompatible, we find a positive relationship between responsiveness and MPS in both countries. In Japan, an advanced market, both responsiveness and MPS are positively related to profitability and market share. MPS also functions as a partial mediator between responsiveness and profitability in this market. In Turkey, an emerging market, MPS is negatively related to profitability, suggesting a need for adapting marketing programs to local specificities. In short, the performance consequences of MPS tend to be positive in advanced markets and negative in emerging markets.

Overall, these results and follow-up discussions with executives from established MNCs support the conceptualization of MO and MPS as reflections of international marketing agility in subsidiaries. We show that MO and MPS are not mutually exclusive but that a subsidiary’s responsiveness is positively associated with its MPS. In addition, we find the performance consequences of MPS to be positive in an advanced market and negative in an emerging market. As a result, MPS operates as a partial mediator that translates the effects of responsiveness into enhanced subsidiary performance only in Japan but not in Turkey. This finding underscores the need for responsiveness in emerging markets.

Full reference: Özsomer, Aysegül, Bernard Simonin, and Timo Mandler (2023), “Marketing Agility in Subsidiaries: Market Orientation and Marketing Program Standardization as the ‘Twin Engines’ of Performance,” Journal of International Marketing, 31 (2), 6–24.

Cite for: Marketing agility, market orientation, local responsiveness, marketing program standardization, multinational corporations, subsidiaries, effectiveness (market share) and efficiency (profitability) measures of performance, advanced vs. emerging markets, managerial survey, follow-up interviews

Continue Reading? You May Also Like…

Three Decades of Loyalty Program Research

. Loyalty programs offer rewards to consumers for purchasing and engaging with a brand on a recurring basis. These rewards can be tangible, such as discounts and vouchers, or intangible, such as granting them a particular status associated with...

How Do Consumers Respond to Brand Origin Misclassifications?

The country-of-origin (COO) effect is one of the most widely studied phenomena in international marketing and consumer behavior research. Extant research suggests that country associations can significantly affect consumers’ product evaluations and...

Global vs. Local Branding in the Era of Post-Globalization

Countries in Asia, the Middle East, and South America continue to experience substantial growth in terms of globalization and profound transformations of their consumer markets. In these globalizing markets, consumers tend to hold more favorable...

How Luxury Brands Can Succeed in Social Media

Many luxury brands use social media channels, such as Facebook, Instagram, or Twitter, to communicate with consumers worldwide. The relevance of social media channels for luxury brand communication is likely to increase even more as luxury brands...

Not All Wrongdoing Companies Are Equal in the Public Eye

Corporate crises are extraordinary critical events in a company’s life that may lead to consumers’ physical and psychological harm, financial loss, or environmental damage. Such crises often receive much media attention and cause consumers to...

Resources for Marketing Researchers

Recommended Reading

Do you want to learn a new method or wish to refresh your knowledge about research theory? My curated reading list covers various topics related to academic writing and publishing, research design, and data analysis.


Are you looking for measurement scales for your next survey or experiment? Maybe you can find it in my personal scale repository. Chances are good if you are interested in branding or international marketing.

Data Sources

Are you looking for secondary data related to the phenomenon you are studying? I compiled various free and paid data sources that offer information about countries, firms, and brands.

Want to learn more about my courses and workshops?