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This study addresses a long-standing debate in the literature regarding the appropriateness and
performance consequences of marketing strategy standardization vs. adaptation. Much of the
relevant literature represents the headquarters viewpoint and broadly assesses antecedents of
standardization or adaptation across widely varying markets. Using strategic fit as the theoretical platform for analysis, the study investigates international marketing strategy for a specific
product or line within subsidiaries of U.S., Japanese, and German multinational corporations
(MNCs) operating in the U.K. The results indicate that degree of strategy standardization is
significantly related to similarity between markets with respect to regulatory environments, technological intensity and velocity, customs and traditions, customer characteristics, a products
stage in its life cycle, and competitive intensity. On the critical question of performance consequences, the findings suggest that superior performance results from strategy standardization
only to the extent that there is fit or coalignment between the MNCs environmental context and
its international marketing strategy choice. Copyright 2006 John Wiley & Sons, Ltd.
868
the degree of international marketing standardization, its potential drivers, and the performance outcomes.
Prior research has typically addressed the issue
of standardization vs. adaptation from the headquarters standpoint. We extend current knowledge
by focusing more directly on subsidiary activities
and adopting a strategic fit framework to understand the performance consequences of international marketing strategy at the subsidiary level.
Recent studies highlight the increasingly strategic role of subsidiaries in global operations (e.g.,
Delios and Beamish, 2001; Hewett and Bearden,
2001; Ozsomer
and Simonin, 2004), as these have
assumed a variety of important marketing tasks
in MNCs drive to develop multinational flexibility (Bartlett and Ghoshal, 1991). For instance,
Whirlpool encourages its subsidiaries to undertake
product and process innovation at the local level,
with a view to enhancing its global competitiveness and performance (Govindarajan and Gupta,
1998).
Next, we discuss key issues in the deployment of marketing programs at the subsidiary level, present the theoretical base for
this study, and review the research on international marketing strategy and performance.
We then formulate research hypotheses. Subsequently, we describe the research method and
present the results. Finally, we discuss the findings and their implications and consider limitations of the study and directions for future
research.
869
870
Ozsomer
and Simonin, 2004) focus specifically on
MNCs.
In addition, there are two key conceptual issues
that warrant consideration. First, except for Hewett
and Bearden (2001), who examine moderating
effects of the degree of strategy standardization,
there is a consistent pattern among researchers
to investigate direct relationships of some international marketing strategy variable(s) with some
indicator(s) of performance. Six studies focus
on adaptation of one (or more) marketing strategy element and its direct impact on performance, while the remaining seven examine performance outcomes of marketing standardization.
This stream of research contributes to our knowledge of antecedents and performance consequences
of either standardization or adaptation of international marketing programs. However, conceptualization and testing of direct relationships between
strategy and performance assumes that a particular strategy enhances performance, while the other
inhibits it. This approach is contrary to the strategic fit paradigm, which posits that performance
in international markets will be enhanced only
1
A table delineating key aspects of the empirical contributions
on international marketing strategy standardization/adaptation
and performance is available from the authors upon request.
871
allied resources needed to run local manufacturing operations (Samli, Wills, and Jacobs, 1993).
A standardized strategy is more likely when the
prevailing economic conditions in target markets
are similar (Sriram and Gopalakrishna, 1991). The
importance of economic conditions is also reflected
in prior studies aimed at developing clusters of
nations that share, inter alia, economic similarity
as the basis for using standardized programs (e.g.,
Sethi, 1971; Day, Fox, and Huszagh, 1988).
Hypothesis 1: Similarity of economic conditions in the home and host markets is positively
related to the degree of marketing strategy standardization.
RESEARCH HYPOTHESES
Regulatory environment
We focus on the degree of marketing standardization realized at the subsidiary level and examine
drivers of actual international marketing programs
and performance consequences of fit between realized strategy and context from the standpoint of
subsidiary management. Based on the literature
review and field interviews, we hypothesize two
sets of factors as influencing the degree of marketing standardization: first, macro- (general) environmental factors, which consist of larger societal
forces that impact the firms marketing strategy
including economic, regulatory, and technological
elements, as well as customs and traditions of the
environment in which the MNC operates; second,
micro- (task) environmental factors, which comprise forces close to the firm that affect its ability
to serve foreign markets including customer characteristics, marketing infrastructure, the life cycle
of the product, and the intensity of competition.
Macro-environmental factors and degree of
standardization
Economic environment
The economic environment of a host market affects
market potential and demand for industrial and
consumer products. It reflects standards of living
and employment and income levels which, in turn,
influence customer priorities in terms of the products they consider essential or desirable, as well
as the prices they can afford and are willing to
pay (Jain, 1989). The economic environment of
the host country impacts the firms cost structure,
as it affects the cost of raw materials, labor, and
Copyright 2006 John Wiley & Sons, Ltd.
Similarity in laws and regulations is a factor conducive to the pursuit of standardized strategies;
however, laws and regulations governing marketing activities vary significantly across countries
(Harvey, 1993; Yip, 2003). Despite this variation,
three sets of laws and regulations are likely to
be of primary importance in developing a marketing strategy. The first concerns regulations protecting the nontangible intellectual and tangible
properties of the firm, as well as laws that guard
the firm from predatory practices of competitors (Fraser and Hite, 1988). The second group
refers to laws and regulations designed to protect
the customer; for example, advertising regulations
(e.g., for tobacco products in certain countries) are
often introduced to protect one or more customer
groups (Yip, 1989). Customer protection may also
influence technical aspects of product design, its
packaging, branding, services, and warranties, as
well as its pricing and distribution (Hill and Still,
1984). The third set pertains to technical standards, including constituents that must or must not
be used in products, as well as size, shape, and
related attributes (Boddewyn and Grosse, 1995).
The literature suggests that differences in laws and
regulations across markets are a key obstacle to
deploying uniform strategies (Cavusgil, Zou, and
Naidu, 1993; Johnson and Arunthanes, 1995).
Hypothesis 2: Similarity of regulatory environments in the home and host markets is positively
related to the degree of marketing strategy standardization.
Strat. Mgmt. J., 27: 867890 (2006)
DOI: 10.1002/smj
872
strategy (Ozsomer
and Simonin, 2004). A higher
degree of standardization is likely when there is
similarity in institutions within the markets targeted. Similarity in intermediary services, research
firms, media, and logistical support in host markets accommodates standardization (Jain, 1989;
Yip, 1989). In contrast, differences in the availability, cost, and competencies of these institutions from one country to another hamper the
use of standardized strategies (Douglas and Wind,
Strat. Mgmt. J., 27: 867890 (2006)
DOI: 10.1002/smj
873
their marketing programs (Yip, 2003). In particular, when a competitor internationally standardizes
its marketing approach for greater efficiency and
lower costs to gain a competitive advantage position, others are likely to follow the same path.
However, faced with greater competitive intensity
and a desire to be more market-oriented, local
managers are under pressure to adapt marketing
strategies to the local market environment (Yip,
1989).
Hypothesis 8: Similarity of the level of competitive intensity in the home and host markets
is positively related to the extent of marketing
strategy standardization.
Strategy fit and performance outcomes
Performance is the single most important consideration in assessing the suitability of a specific
strategy. However, as noted earlier, our thorough
literature review suggests that, despite the importance of performance implications of a given international marketing strategy (Jain, 1989), the topic
has received limited empirical attention, particularly in an MNC context, and results are contradictory and inconclusive. An appropriate strategy for a particular firm depends on the context
in which the plan is implemented (Dess, Lumpkin, and Covin, 1997; Miller, 1986; Naman and
Slevin, 1993). The strategic fit paradigm posits
that firms can enhance performance by achieving
coalignment or fit between their strategies and the
particular environmental contexts in which they
have chosen to operate. Therefore, coalignment
between environmental conditions and degree of
marketing program standardization is expected to
enhance firm performance in international markets.
Hypothesis 9: Superior performance results from
the fit between the degree of international marketing strategy standardization and the environmental context in which it is implemented.
RESEARCH METHOD
Context
The data were gathered through a survey of manufacturing subsidiaries of U.S., Japanese, and German MNCs operating in the U.K. We focused on a
Strat. Mgmt. J., 27: 867890 (2006)
DOI: 10.1002/smj
874
Field interviews
In-depth field interviews, lasting between 60 and
120 minutes, were conducted with four senior marketing executives based at headquarters and 11
subsidiary-level marketing managers. Interviews
complemented our literature review and helped
us develop a comprehensive set of measures covering critical dimensions of international marketing strategy. The interviews indicated that MNCs
do not implement identical marketing strategies
across markets and that some inter-market variation in marketing programs was common even
among firms that tended to adopt more standardized strategies. In addition, the MNCs home market was normally the firms largest markets and
was typically identified as the epicenter of corporate strategy and policy for global operations.
The field procedures not only helped us develop
Copyright 2006 John Wiley & Sons, Ltd.
875
in the sample are capital goods (31%), consumer durables, apparel, and household products
(25%), manufactured materials (14%), technology hardware (12%), automobiles and components
(9%), and health care products and pharmaceuticals (9%).
Informant evaluation
As per Heide and Weiss (1995), the final part
of the questionnaire included two questions that
assessed the informants knowledge of (1) the subsidiarys and (2) its parent firms home market
conditions and marketing policy for the focal product (line). A seven-point Likert-type scale, ranging from not at all knowledgeable (1) to very
knowledgeable (7), was used in each case. Two
other questions assessed the informants involvement in (1) the subsidiarys marketing policy decision process and (2) its dealings with the parent company, utilizing seven-point scales anchored
by minimally involved (1) and highly involved
(7). Using Kumar and associates (1993) threshold (i.e., individual responses above the mid scale
point) for high informant competency, a total of
22 questionnaires were eliminated because they
exhibited a rating of four or below for at least
one item. The mean composite rating for informant quality was 5.67, providing confidence in the
competence of our key informants.
Response rate
We mailed the questionnaire and a self-addressed
prepaid envelope to the key informant in each of
the 526 firms identified. Of these, 334 (63%), 71
(14%), and 121 (23%) were subsidiaries of U.S.,
Japanese, and German MNCs, respectively. We
offered a summary of the results as an incentive to participate. Reminder/thank-you postcards
to informants, two follow-up mailings, and two
further reminders yielded 198 responses (38%
of the 526 firms). We excluded five questionnaires because of considerable missing data, and
eliminated another 22 as they failed our post
hoc tests of informant quality. Thus, 171 usable
questionnaires were obtained (33% response rate).
Response rates for subsidiaries of U.S., Japanese,
and German MNCs were 33 percent (110 firms),
31 percent (22 firms), and 32 percent (39 firms),
respectively. Response patterns mirror the proportions of U.S., German, and Japanese subsidiaries
in the sampling frame. The industries included
Copyright 2006 John Wiley & Sons, Ltd.
876
and customer protection (e.g., Baalbaki and Malhotra, 1995; Johnson and Arunthanes, 1995).
A three-item scale assesses the technological intensity and velocity of the industry (i.e., product group
identified by the respondent) in which the MNC
operates. The scale includes items assessing the
extent to which: the MNC competes in a technologically intensive sector; technology is changing rapidly; and technological developments provide significant opportunities (e.g., Cavusgil et al.,
1993; Samiee and Roth, 1992).
Customs and traditions (CUTRAD)
A three-item scale measures the extent of similarity in customs and traditions between home and
overseas markets. The items are customers values, beliefs, and attitudes, aesthetic preferences,
and level of education (e.g., Hill and Still, 1984;
Keegan et al., 1987).
Customer characteristics (CUST)
A four-item construct describes the homogeneity of customers in home and host markets. The
items are customer requirements, product evaluation criteria, price sensitivity, and purchasing
habits (Ozsomer,
Bodur, and Cavusgil, 1991; Johnson and Arunthanes, 1995).
Marketing infrastructure (MARKET)
A three-item construct measures the degree of similarity in economic conditions between the MNCs
home and host market environments. The items
were borrowed from previous research (e.g., Douglas and Wind, 1987; Jain, 1989) and include the
level of industrial development, purchasing power
of customers, and communications infrastructure.
877
model contained 26 items measuring the eight firstorder constructs in our study and two second-order
measurement models were also estimated for the
multidimensional constructs of degree of marketing program standardization and performance (see
Appendix 3). In all cases we used the elliptical
reweighted least-squares estimation procedure in
EQS, proven to yield unbiased parameter estimates
for both multivariate normal and non-normal data
(Sharma, Durvasula, and Dillon, 1989).
Performance (PERFORM)
Performance is viewed as a multidimensional,
higher-order construct comprising three dimensions: sales performance (SALPE), measured in
terms of sales volume, sales growth, and new
product sales; financial performance (FINPE),
assessing profitability as a percentage of sales,
return on investment, and profit growth; and customer performance (CUSPE), pertaining to customer satisfaction and customer retention. The
items were extracted from the literature on marketing (e.g., Day and Wensley, 1988), strategy
(e.g., Venkatraman and Ramanujam, 1987), and
standardization (e.g., ODonnell and Jeong, 2000;
Samiee and Roth, 1992). Following the recommendation of Clark and Montgomery (1999)
and Day and Nedungadi (1994) for the use of
a competitor-centered performance measurement
approach, respondents were asked to assess the
performance of their firm (subsidiary) vis-`a-vis
that of its main direct local market competitor in
each of these areas.2
878
Y1 = a1 + 1 X1 + 2 X2 + 3 X3 + 4 X4 + 5 X5
+ 6 X6 + 7 X7 + 8 X8 + 1
where:
Y1 = degree of marketing strategy standardization
(MARKSTR);
X1 = economic environment (ECON);
X2 = regulatory environment (REGUL);
X3 = technological intensity and velocity (TECH);
X4 = customs and traditions (CUTRAD);
X5 = customer characteristics (CUST);
X6 = marketing infrastructure (MARKET);
X7 = stage of product life cycle (PLCS); and
X8 = competitive intensity (COMP).
As shown in Table 2(a), the value of the relevant
test statistic (F8,162 = 21.10, p < 0.01) suggests
that the null hypothesis is rejected. The model
exhibits satisfactory explanatory power accounting
for 49 percent of the variance in international
marketing strategy. The variance inflation factor
(VIF) for each independent variable was computed
to assess multicollinearity. Mason and Perreault
(1991) recommend a VIF score less than 10 as
an acceptable threshold. The highest VIF score
occurs for regulatory environment (VIF = 1.99),
suggesting multicollinearity did not pose a problem
in this study.
The regression model was also evaluated on the
basis of three tests for the detection of the absence
of misspecification. As exhibited in Table 2(a),
the White (1980) heteroscedasticity test ( 2 44 =
3.33, p > 0.05) fails to reject the null hypothesis of homoscedastic residuals. The JarqueBera
Tests of hypotheses
Regression analysis was used to test our research
hypotheses. We first examined factors driving
degree of standardization and then assessed
whether presence of fit affects performance.
Drivers of standardization/adaptation
To test Hypotheses 18, the following multiple
linear regression model was estimated using
Table 1. Intercorrelations for the study constructsa
Construct
1. ECON
2. REGUL
3. TECH
4. CUTRAD
5. CUST
6. MARKET
7. PLCS
8. COMP
9. MARKSTR
10. PERFORM
a
1.00
0.55
0.02
0.50
0.44
0.57
0.26
0.07
0.41
0.05
1.00
0.06
0.59
0.46
0.51
0.31
0.21
0.59
0.11
1.00
0.07
0.01
0.01
0.09
0.16
0.15
0.04
1.00
0.50
0.51
0.36
0.06
0.55
0.07
1.00
0.50
0.33
0.09
0.51
0.11
1.00
0.27
0.06
0.46
0.15
1.00
0.06
0.39
0.13
1.00
0.24
0.05
1.00
0.17
879
0.93
0.03
0.28
0.14
0.20
0.18
0.09
0.16
0.12
2.47
0.35a
3.61
2.48
2.62
2.53
1.24a
2.72
2.03
H1
H2
H3
H4
H5
H6
H7
H8
(+)
(+)
(+)
(+)
(+)
(+)
(+)
(+)
Results
No support
Supported
Supported
Supported
Supported
No support
Supported
Supported
2 44 = 3.33a
2 2 = 1.55a
F9,153 = 2.25a
5.44
0.43
42.73
6.23
H9
Supported
2 2 = 1.60a
2 2 = 1.04a
F2,167 = 0.51a
880
DISCUSSION
The findings from this research broaden and
deepen our understanding of how international
marketing strategy is linked to performance
and underscore the need to reconsider current
thinking regarding the deployment of effective
strategies in international markets. Much of
the early standardization research focused on
the efficiencies associated with this strategy
rather than on the performance consequences
of adopting either standardized or customized
strategies in foreign markets. Additionally, the
findings of various investigators are almost
always based on information provided by
the headquarters. Thus, there has been no
conclusive examination as to how and under
what conditions the adoption of a particular
international marketing strategy might benefit the
firm.
Leveraging off the extensive research on strategy fit from the strategic management and organization theory literature, this research focuses
on the nature and performance consequences
of fit between marketing strategy standardization/adaptation and context at the subsidiary level.
In line with the contingency perspective (e.g.,
Drazin and Van de Ven, 1985; Ginsberg and
Venkatraman, 1985), the results clearly support
our main proposition that a given international
Copyright 2006 John Wiley & Sons, Ltd.
881
882
marketing element is generally targeted for investigation. Third, most empirical studies focus on
exporting firms. In contrast, the focus of this
study is on the marketing strategy deployed for
a given product (line) within MNCs. Fourth, the
insignificant findings might be due to a lack
of variability in the research context. Elements
of the economic environment (e.g., purchasing
power of customers) and marketing infrastructure (e.g., competencies of marketing intermediaries) may not vary significantly between home
and host markets of the MNCs in our sample.
A related explanation might lie in the measurement scales employed. We mainly used multi-item
measures based on prior research and field interviews. The literature is void of universal measures for standardization constructs, thus leading to
wide variations in measures deployed and findings
reported.
It is noteworthy that the highest degree of standardization deployed by MNCs was on the product dimension of international marketing strategy.
This evidence is consistent with recent research on
MNCs global marketing strategies (e.g., Hewett
883
CONCLUSION
The overall picture emerging from this study
highlights the performance consequences of fit
between international marketing strategy and environmental context from the perspective of MNC
subsidiary, adding significantly to the emerging
stream of standardization and marketing strategy
literature on the importance of pursuing strategic fit as a means of enhancing performance outcomes. Three macro-environmental factors (regulatory environment, technological intensity and
velocity, customs and traditions) and three microenvironmental forces (customer characteristics,
PLC stage, competitive intensity) are identified
as simultaneously affecting strategic fit and, in
turn, subsidiary performance among MNCs. This
research empirically resolves the long-standing
controversy over the benefits of standardization
versus customization of international marketing
strategies. To our knowledge, this is the first
study offering clear evidence that the presence of
fit between marketing strategy and environmental
context is an important influential force on a firms
Strat. Mgmt. J., 27: 867890 (2006)
DOI: 10.1002/smj
884
performance in international markets and, consequently, offers a basis for the extent to which firms
should pursue international marketing standardization. This evidence is especially timely for MNCs
fighting for growth, development, and success in
an era of increasing globalization of markets and
intensifying competition worldwide.
ACKNOWLEDGEMENTS
The authors thank George Balabanis (City University, London), Susan Douglas (NYU), Mark
Goode (University of Wales, Swansea), Neil Morgan (Indiana University), Doug Vorhies (University of Mississippi), and anonymous SMJ reviewers for their helpful comments on earlier drafts of
this manuscript.
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Mean
S.D.
Reliability
5.70
1.00
0.79
4.51
1.38
0.88
(continued overleaf )
Copyright 2006 John Wiley & Sons, Ltd.
887
Appendix 1: (Continued )
Construct
Selling price to end-users
Profit margins to trade customers
Profit margins to end-users
Sales terms
C. Promotion
(six-item, seven-point Likert type scale, anchored by Very different
and Very similar)
Advertising message
Advertising creative presentation
Advertising media strategy
Sales promotion tools
Publicity and public relations activities
Personal selling techniques
D. Distribution
(four-item, seven-point Likert type scale, anchored by Very different
and Very similar)
Length of distribution channels
Type of middlemen used
Distribution coverage
Control over distribution channels
Inventory controlsa
Order processing systemsa
Macro and task environments
Economic environment
(three-item, seven-point Likert type scale, anchored by Very
different and Very similar)
Level of industrial development
Purchasing power of customers
Communications infrastructure
Per capita incomea
Cost of raw materials and labora
Regulatory environment
(four-item, seven-point Likert type scale, anchored by Very different
and Very similar)
Laws and regulations concerning company protection
Laws and regulations concerning customer protection
Environmental laws and regulations
Technical standards
Technological intensity and velocity
(three-item, seven-point Likert type scale, anchored by Strongly
disagree and Strongly agree)
The industry sector in which our company operates is technology
intensive
The technology in our industry is changing rapidly
Technological developments provide big opportunities for our
company
Customs and traditions
(three-item, seven-point Likert type scale, anchored by Very
different and Very similar)
Customers values, beliefs, and attitudes
Customers aesthetic preferences
Customers educational levels
Product usage patternsa
Customer characteristics
(four-item, seven-point Likert type scale, anchored by Very different
and Very similar)
Customers requirements
Customers purchasing habits
Product evaluation criteria
Customers price sensitivity
Target market segmentsa
Copyright 2006 John Wiley & Sons, Ltd.
Mean
S.D.
Reliability
4.54
1.23
0.83
4.99
1.22
0.83
5.19
1.13
0.71
5.20
1.15
0.79
4.94
1.36
0.80
4.91
1.23
0.76
5.02
1.23
0.87
(continued overleaf )
Strat. Mgmt. J., 27: 867890 (2006)
DOI: 10.1002/smj
888
Appendix 1: (Continued )
Construct
Mean
S.D.
Reliability
Marketing infrastructure
(five-item, seven-point Likert type scale, anchored by Very different
and Very similar)
Competencies of marketing research agencies
Competencies of distribution firms
Availability of suitable advertising media
Structure of distribution channels
Functions performed by middlemen
Stage of product life cycle
(single-item, seven-point Likert type scale, anchored by Strongly
disagree and Strongly agree)
Our product is in the same stage of its life cycle in home and host
markets
Competitive intensity
(three-item, seven-point Likert type scale, anchored by Very
different and Very similar)
Strength of price competition
Pace of new competitive moves in this product area
Frequency of promotion wars in this industry
5.17
1.11
0.85
5.21
1.68
4.89
1.00
0.68
4.84
1.01
0.71
4.56
1.09
0.78
5.10
1.09
0.85
Performance
A. Sales performance
(three-item, seven-point Likert type scale, anchored by Much worse
and Much better )
Sales volume
Sales growth
New product sales
B. Financial performance
(three-item, seven-point Likert type scale, anchored by Much worse
and Much better )
Profitability as a percentage of sales
Return on investment
Profit growth
C. Customer performance
(two-item, seven-point Likert type scale, anchored by Much worse
and Much better )
Customer satisfaction
Customer retention
a
na
Marketing strategy
standardization/adaptation
Product
Promotion
Pricing
Distribution
Overall marketing program
a
U.S.
(I)a
5.75
4.70
4.48
5.10
5.06
(0.96)
(1.05)
(1.44)
(1.11)
(0.82)
German
(II)a
5.90
4.67
4.73
5.21
5.18
(0.90)
(1.25)
(1.22)
(1.25)
(0.86)
Japanese
(III)a
5.10
3.55
4.25
4.10
4.30
(1.14)
(1.53)
(1.34)
(1.36)
(0.85)
F -ratio
Scheffes test
5.27
8.98
0.88
7.39
9.16
889
Measurement Model 2
Measurement Model 3
First-order constructs
Performance
Factor
Standardized
loadingsa
ECON (F1)
EC1
EC2
EC3
0.74 (9.29)
0.58 (6.98)
0.68 (8.43)
REGUL (F2)
RE1
RE2
RE3
RE4
0.74
0.81
0.71
0.58
TECH (F3)
IN1
IN2
IN3
CUTRAD (F4)
CU1
CU2
CU3
CUST (F5)
CU1
CU2
CU3
CU4
(9.85)
(11.02)
(9.30)
(7.18)
0.73 (9.14)
0.84 (10.65)
0.71 (8.84)
0.77 (10.05)
0.71 (9.07)
0.68 (8.52)
0.82
0.85
0.77
0.69
(11.48)
(12.12)
(10.61)
(9.04)
MARKET (F6)
MA1
0.79 (10.76)
MA2
0.79 (10.86)
MA3
0.72 (9.48)
MA4
0.63 (8.06)
MA5
0.68 (8.87)
COMP (F7)
CO1
0.71 (7.43)
CO2
0.66 (7.03)
CO3
0.56 (6.03)
PLCS (F7)
PL1
0.59b
Goodness-of-fit statistics
2 272 = 486.97, p < 0.001
CFI = 0.95
NNFI = 0.94
RMSEA = 0.06
AOSR = 0.05
a
b
Standardized
loadingsa
First-order factors
PRODU (F1)
PRO1
PRO2
PRO3
PRO4
PRO5
PRO6
PRO7
0.41b
0.45 (3.17)
0.59 (4.18)
0.81 (4.61)
0.71 (4.46)
0.60 (4.20)
0.59 (4.18)
PRICI (F2)
PRC1
PRC2
PRC3
PRC4
PRC5
PROMO (F3)
PRM1
PRM2
PRM3
PRM4
PRM5
PRM6
0.77b
0.83 (9.87)
0.72 (8.55)
0.64 (7.54)
0.67 (7.90)
0.53 (3.92)
DISTR (F4)
DIS1
DIS2
DIS3
DIS4
0.60b
0.64 (6.16)
0.83 (7.34)
0.89 (7.49)
Second-order factor
MARKSTR (F5)
PRODU (F1)
PRICI (F2)
PROMO (F3)
DISTR (F4)
0.69
0.61
0.51
0.63
0.80b
0.77 (9.83)
0.86 (11.25)
0.79 (10.13)
0.57 (6.97)
Standardized
loadingsa
First-order factors
SALPE (F1)
SPE1
SPE2
SPE3
0.84b
0.83 (10.77)
0.54 (6.30)
FINPE (F2)
FPE1
FPE2
FPE3
0.94b
0.93 (16.50)
0.60 (8.05)
CUSPE (F3)
CPE1
CPE2
0.85b
0.94 (12.87)
Second-order factor
PERFOR (F4)
SALPE (F1)
FINPE (F2)
CUSPE (F3)
0.97 (10.62)
0.76 (9.03)
0.87 (9.23)
(3.92)
(5.47)
(4.52)
(4.86)
Goodness-of-fit statistics
2 205 = 412.22, p < 0.001
CFI = 0.92
NNFI = 0.91
RMSEA = 0.07
AOSR = 0.07
Goodness-of-fit statistics
2 17 = 29.41, p < 0.044
CFI = 0.99
NNFI = 0.98
RMSEA = 0.06
AOSR = 0.03
890
Intercept
|Standardized residuals|
R2
Adjusted R 2
F -statistic
Misspecification tests
White heteroscedasticity test
JarqueBera normality test
Chow test (mid-point)
PRODUCT
Coefficient
(t-value)
PRICE
Coefficient
(t-value)
PROMOTION
Coefficient
(t-value)
DISTRIBUTION
Coefficient
(t-value)
5.13 (39.95)
0.25(3.35)
0.06
0.06
11.23
4.98 (32.99)
0.11(1.49)
0.01
0.01
2.21
5.16 (37.20)
0.25(3.35)
0.06
0.06
11.22
5.14 (39.89)
0.25(3.35)
0.06
0.06
11.20
2 44 = 0.96a
2 2 = 2.80a
F9,153 = 0.27a
2 44 = 1.63a
2 2 = 3.40a
F9,153 = 0.43a
2 44 = 2.63a
2 2 = 3.18a
F9,153 = 0.67a
2 44 = 2.34a
2 2 = 3.75a
F9,153 = 0.85a
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