FRAMEWORK FOR
PERFORMANCE &
INTERNATIONAL MARKETING
Introduction
“A firm increases its likelihood of survival when it
goes international”
Reference Article.
Justin Paul & Erick Mas (2019) Toward a 7-P
framework for international marketing, Journal of
Strategic Marketing
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Globalization
“Globalization has made firms’ search for foreign
market opportunities necessary in order to survive”
“...there has been rapid increase in international
transactions taking place in the recent years”
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Global Strategies
“...firms have had to rethink their global strategies”
“We argue that a firm from an emerging economy
should carry out an analysis based on the first “P”
constructs from our framework before going global so
that they can perform better after internationalization”
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7-P FRAMEWORK
Figure 1:”Paul & Mas, 2019”
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1.POTENTIAL
Refers to the opportunities and activities in the host
market that create a favorable or unfavorable position for
incoming firms.
• Identify
• Timing
• Political and economic
• Less Developed Countries
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Proposition 1:
“ Firms from emerging countries could find high
probability of success in other developing as well as
Less Developed Countries”
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2.PATH -Strategy, Fund sources, Type of firms
“Firms from Developing countries traditionally
begin internationalization using exporting as their
first mode of entry, then set up subsidiaries later”
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Proposition 2:
“ Firms from emerging countries needs to formulate
specific strategies to expand into developed
countries”
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3. Process
• LATAM companies are often slow to internationalize
(Anand et al., 2006).
• Focus on being competitive on current market.
• Gradually expand abroad, mainly to USA.
• Latecomer firms from emerging markets forced to
internationalize early.
• Catch up strategy.
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Proposition 3:
“Firms from developing (emerging) countries, in
general, do not have the propensity to be born
global, as they are primarily regional.”
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4. Pace
• Speed of internationalization.
• Determinant factors:
Technology
• Competition
• Mediating perception of entrepreneurs
• Moderating forces of knowledge
• Network
•
• CPP Model by Justin Paul & Rosarito Sanchez (Conservative,
Predictable & Pacemaker markets)
•
Speed at which a firm’s international expansion by switching from one
entry mode to another
•
How many countries a firm enters per year
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Proposition 4:
• “Firms from developing (emerging) countries, use
exporting as an entry mode to begin the process
of internationalization and use more than one
entry mode or switch entry modes over the
years.”
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5.Pattern
• Relates to “what” and “where”
• What product or service is sold internationally?
• Where it is sold?
• Example, Main LATAM industries abroad (Vasquez-
Parraga and Felix’s 2004):
• Products: food, beverages, raw materials, and agriculture
• Services: construction, financial, and
software/technology firms
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Example
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Proposition 5:
“Firms from Developing countries, tend to succeed
primarily in exporting agricultural items rather
industrial products.”
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6. PROBLEMS
Figure 2: Problems of Internationalization for Emerging Market Firms (EMFs)
Paul & Mas, 2017
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Problems (Continued).
1.Cognitive Bias
• Foreign firm’s product is seen as inferior based on
country of origin (Thomas et al., 2007).
• To combat this bias, firms must position their product
properly to combat the negative implications on
product quality
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Problems (Cont).
2.Liability of Foreignness
• Social costs associated with lack of knowledge/experience in
the host country (Miller et al., 2008).
• Additional costs incurred due to entry barriers (taxes;
government imposed regulations such as labor, environmental,
safety and health laws). (Brenes et al., 2009).
• Difficulties faced by Firms from developing countries when
negotiating with Multinational Enterprises from developed
countries.
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Problems Cont.
3. Resource limitations/constraints
• Third major Problem of internationalization of
companies from Developing countries.
• Emerging Market Firms usually experience initial
losses in internationalization.
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Proposition 6:
“ Firms from Developing (emerging) countries in
particular, Small and Medium-sized Enterprises
often face problems such as Cognitive bias,
Liability of Foreignness and financial constraints
while trying to internationalize their business.”
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7. Performance.
What determines performance?
Other six Ps:
1. Potential
2. Path
3. Process
4. Pace
5. Pattern
6. Problems
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Proposition 7:
“ Internationalization positively affects the
performance of the firms from developing
(emerging) countries”
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Implications & Directions
• Comprehensive research integrating more than two Ps
• Firm performance AFTER internationalization should be
studied
• Further development of the 7 P-Model of
Internationalization
• Extending framework to encompass the
internationalization of any enterprise
• Cover additional areas of international business
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Conclusion
• Globalization has sparked an interest in internationalization
• The 7 P-Model of Internationalization was presented to
explain the Potential, Path, Process, Pace, Pattern,
Problems, and Performance of the internationalization of
firms, from emerging markets
• Firms need to identify opportunities in terms of their
potential and follow the 7P Model to make strategic choices
for internationalization
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Contact me
• Facebook.com/drjustinpaul
• Web: drjustinpaul.com
• Email:
[email protected]
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Reference
•Justin Paul & Erick Mas (2019) Toward a 7-P
framework for international marketing,
Journal of Strategic Marketing
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