Mind the Standardization Gap: An Emerging Market Phenomenon

Abstract

This paper investigates perceptual differences between consumers and subsidiary managers regarding a global brand's standardization level in a subsidiary market. Results reveal that emerging market consumers perceive global brands as less standardized than they are. A perceived standardization gap exists concerning the product characteristics and positioning. Antecedents and consequences of the "standardization gap" are analyzed using triadic data obtained from managers, consumers, and advertisements in an emerging market. Perceived credibility, quality, and prestige of the brand are related to the size of standardization gaps. Importantly, positioning standardization gaps decrease emerging market consumers' attitudinal brand equity, their willingness to pay, and the brand's market share in the subsidiary market. Cultural and economic distance and advertising standardization influence consumers' standardization perceptions differently for product and positioning. Managers can manage positioning standardization perceptions by standardizing advertising in emerging markets. However, standardized advertising is not that effective for steering product related perceptions.