Journal of World Business 45 (2010) 49–58

Implications of perceived competitive advantages, adaptation of marketing tacticsand export commitment on export performance

Antonio Navarro a,1, Fernando Losada b,2, Emilio Ruzo b,*, Jose A. Dıez b,3

a Departamento de Administracion de Empresas y Marketing, Facultad de Ciencias Economicas y Empresariales, University of Sevilla, Avda. Ramon y Cajal, n8 1, 41018 Sevilla, Spainb Facultad de Administracion y Direccion de Empresas, University of Santiago, Avda. Alfonso X o Sabio s/n, 27002 Lugo, Spain

A R T I C L E I N F O

Keywords:

Perceived competitive advantages

Adaptation of marketing tactics

Export commitment

Export performance

A B S T R A C T

The aim of this exploratory paper is to fill an important gap in the international marketing literature by

examining the influence of firm behavior in foreign markets (export commitment and adaptation of

marketing tactics) on perceived competitive advantages and export performance. Using a sample of 150

Spanish export firms, the study found that firms that are more committed to their foreign markets are

more willing to adapt elements of the marketing program. These firms also perform better in foreign

markets. Moreover, the results also point out that adapting marketing tactics does not have direct effects

on export performance, although it does have on the achievement of perceived competitive advantages

in foreign markets, which positively influence export performance.

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1. Introduction

In today’s business environment, characterized by the increas-ing globalization of markets and interrelation of economies,internationalization strategies are becoming particularly impor-tant. Even those firms choosing to operate exclusively in their owndomestic market face the challenges of international competitive-ness. In this context, exporting is a fundamental strategy forensuring firms’ survival and growth.

From this perspective, both the size and the rapid growth ofglobal exporting call for an effective commitment of resources andthe design of successful international marketing strategies thatallow companies to create, communicate, deliver, and exchangemarket offerings that have a superior value for customers, clients,marketers, etc. (Morgan, Kaleka, & Katsikeas, 2004). This way,competitive advantages in foreign markets may be achieved, witha positive influence on current and future export performance(Morgan, Vorhies, & Schlegelmilch, 2006). However, in theinternational marketing field, the extant knowledge about thedeterminants of firm’s competitive position on foreign marketsand their influence on export performance is very scarce(Leonidou, Katsikeas, & Samiee, 2002; Morgan et al., 2004). The

* Corresponding author. Tel.: +34 982223996x24461; fax: +34 982285961.

E-mail addresses: anavarro@us.es (A. Navarro), fernando.losada@usc.es (F.

Losada), emilio.ruzo@usc.es (E. Ruzo), josealberto.diez@usc.es (J.A. Dıez).1 Tel.: +34 954554436; fax: +34 954556989.2 Tel.: +34 982223996x24420; fax: +34 982285961.3 Tel.: +34 982223996x24424; fax: +34 982285961.

1090-9516/$ – see front matter � 2009 Elsevier Inc. All rights reserved.

doi:10.1016/j.jwb.2009.04.004

majority of studies about export performance have focused on a setof very diverse variables (Aaby & Slater, 1989; Cavusgil & Zou,1994; Katsikeas, Leonidou, & Morgan, 2000; Sousa, Martınez-Lopez, & Coelho, 2008). One of the main purposes of this study is toovercome this gap by developing a conceptual model to analyzethe influence of managers’ perceived competitive advantagesreached in foreign markets on export performance. Moreover,strategic decisions directed at adapting marketing tactics to therequirements of the different country-markets will have an effecton the achievement of these competitive advantages (Griffith,Jacobs, & Richey, 2006; Shoham, 1999, 2002). Finally, theinternational orientation of the firm will influence the level ofadaptation of marketing tactics and export performance (O’Cass &Julian, 2003).

To achieve these objectives, the work is organized as follows.The next section presents a theoretical review of the variablesincluded in the study: export performance, perceived competitiveadvantages, adaptation of marketing tactics, and export commit-ment. This review provides the basis for the formulation of variousresearch hypotheses, which are tested using a sample of 150Spanish export firms. The paper then presents the theoreticalmodel, with the various relations proposed between the constructsanalyzed, defines the measurement scales used, describes themethodological aspects of the empirical study, and presents theresults obtained. The final section discusses the most importantconclusions that can be drawn from the results obtained, analysesthe implications for management, and offers a series of recom-mendations. The work ends with limitations and future lines ofresearch.

A. Navarro et al. / Journal of World Business 45 (2010) 49–5850

2. Literature review and formulation of hypotheses

2.1. Export performance

Madsen (1998) regards export performance as a fundamentalaspect for decision-making in international trade. Researchers donot agree on its conceptual or operational definition (Katsikeaset al., 2000; Shoham, 1998), which frequently leads to incoherentand contradictory results (Katsikeas et al., 2000; Walters & Samiee,1990). One of the main reasons given for this is the absence of anagreed measure to evaluate this variable (Matthyssens & Pauwels,1996; Zou, Taylor, & Osland, 1998). Comparing studies usingdifferent indicators is difficult as is generalizing their conclusions(Styles, 1998; Zou & Stan, 1998).

Cavusgil and Zou (1994) define export performance as theextent to which the firm achieves its objectives when exporting aproduct to a foreign market. Economic (profits, sales, costs, etc.) orstrategic (expansion of market, increase in market share abroad,etc.) considerations through the planning and execution of itsinternational marketing strategy are the focal points.

Although the majority of researchers accept that exportperformance is multi-dimensional in nature, it can be conceptua-lized and operationalized in many ways (Rose & Shoham, 2002;Sousa, 2004). Export performance must include managerialsatisfaction because it provides a benchmarked measure ofperformance against organizational expectations and affects theselection of future strategies (Shoham, 1999). In particular, oneapproach that is increasingly relied upon is the aggregation ofsatisfaction with various performance measures into a singlemeasure of export performance (Diamantopoulos & Winklhofer,2001; Katsikeas et al., 2000). This is the approach incorporatedhere. Satisfaction is defined as a compound psychological variableassessing the effectiveness of a marketing program in terms ofperformance (Bonoma & Clark, 1988; Lages & Montgomery, 2004).

2.2. Perceived competitive advantages

A firm possesses a competitive advantage when it has certainresources and capabilities that are unique and difficult to imitateand it can present an offer to the market that provides more valueto its customers than competing offers (Barney, 1991). In theexporting area, a critical research question is whether thecompetitive position of the firm plays an important role indetermining its export performance. However, the present state ofknowledge regarding export competitive advantage is still veryincomplete (Ling-yee & Ogunmokun, 2001) because although thelink between competitive advantage and export performanceseems reasonably well documented, the empirical link has notbeen substantiated by many studies (Moen, 1999; Morgan et al.,2004).

In this context, competitive advantages are derived from thevalue offered to customers in the target export market and the cost ofdelivering this realized value (Aulakh, Kotabe, & Teegen, 2000; Day &Wensley, 1988). Kaleka (2002) and Morgan et al. (2004) point outthat the competitive advantages deriving from exports constitutethe position the firm achieves in relation to the combination of cost,product and service elements in a particular foreign market. Costadvantage involves the resources consumed in producing andmarketing firm value offered and affects price and perceived value inthe export market. Product advantage denotes quality, design, andother product attributes that differentiate the firm value offeredfrom those of competitors. Service advantage includes service-related components of the value offered, such as delivery speed andreliability and after-sales service quality.

Moreover, evaluating a firm’s competitive advantage impliescollecting information about customers’ perceptions of the firm’s

products and services, or investigating the explanatory factors(resources and capabilities) of each firm’s position in the marketcompared to its competitors. For that reason, we adopted anapproach that previous research has also taken (Albaum, Tse,Hozier, & Baker, 2003; Katsikeas, Piercy, & Ioannidis, 1996; Ling-yee & Ogunmokun, 2001). We define export competitive advantageas a firm’s perceived (managers’ perceptions) competitive strengthrelative to competitors in export markets.

Competitive advantages are direct antecedents of exportperformance (Morgan et al., 2004; Zou, Fang, & Zhao, 2003)because the relative superiority of a firm’s value offereddetermines target customers’ buying behaviors (Piercy, Kaleka,& Katsikeas, 1998) and the outcomes of this behavior for the exportperformance (Albaum & Tse, 2001; Cavusgil & Zou, 1994; Moini,1995).

The above leads to the first research hypothesis:

H1. Perceived competitive advantages have a positive effect onexport performance.

2.3. Adaptation of export marketing tactics

Levitt (1983) points out that making standardized or globalizedexport competitive strategies is possible and profitable, becausethe firm will then be able to gain scale economies in production,marketing, management, and research and development, as well asto create a coherent brand image in all the countries in which thefirm sells its product (Samiee & Roth, 1992; Schuh, 2000). In thisrespect, various researchers recommend using a standardizationstrategy when the firm’s target foreign markets behave similarly(Kustin, 2004; Ozsomer & Simonin, 2004). The standardizationmarketing program involves the offering of identical product linesat identical prices through identical distribution systems, sup-ported by identical promotional programs in several differentcountries (Levitt, 1983).

Opponents of standardized strategies have pointed out thatthough socioeconomic trends in some market segments may beconverging, national cultures, local market conditions, publicpolicies and regulations across markets and consumer reactions tostandardized strategies may be diverging (Buzzell, 1968; Douglas& Wind, 1987; Griffith et al., 2006; Sheth, 1978). For this reason,Albaum and Tse (2001) point out that adaptation is inevitable aftera firm successfully enters its foreign markets. The adaptation ofmarketing tactics implies the change of any attribute of product(label, brand name, etc.), price, distribution and/or promotionalprogram to fit the particularities of each country-market (culture,individual income, consumer tastes and preferences, etc.) (Sho-ham, 1999).

In any case, two extreme positions, standardization versusadaptation, are impossible to implement strictly, because, as thecontingency approach indicates, the degree of adaptation versusstandardization is a function of a product’s characteristics,industry, market, organization, and environmental characteristics(Calantone, Kim, Schmidt, & Cavusgil, 2006; Jain, 1989; Ozsomer &Simonin, 2004; Schuh, 2000; Zou & Cavusgil, 1996; Zou, Andrus, &Norvell, 1997). In this context, researchers prefer to speak aboutdifferent degrees of standardization or adaptation in the exportmarketing strategy (Lages & Montgomery, 2004; Sorenson &Wiechmann, 1975; Theodosiou & Leonidou, 2003; Vrontis, 2003;Zou et al., 1997). Consequently, we evaluate export marketingstrategy along the standardization-adaptation continuum, con-centrated in the degree of adaptation of four marketing tactics(product, price, distribution and promotion). In this sense, we viewthe adaptation of an export marketing strategy in terms of thedegree to which the marketing tactics are adapted for exportmarkets to accommodate differences in environmental forces,

Fig. 1. Graphical description of model.

A. Navarro et al. / Journal of World Business 45 (2010) 49–58 51

consumer behavior, usage patterns, and competitive situations(Cavusgil & Zou, 1994).

Several benefits can be derived from the adapting of the exportmarketing tactics: (1) they allow the firm to adjust its offer to theparticular characteristics of each market, which reduces foreignconsumers’ uncertainty, or psychological distance (Madsen, 1989);(2) they improve relationships with local intermediaries (Shoham,1999), and (3) the firm can attain a greater profitability, as a betterproduct–market match can result in greater customer satisfaction,which can give greater pricing freedom vis-a-vis competitors(Leonidou et al., 2002). Therefore, adaptation of export marketingtactics enhances export performance (Albaum & Tse, 2001;Calantone et al., 2006; O’Cass & Julian, 2003; Shoham, 1996,1999, 2002; Zou & Cavusgil, 2002). For this reason, we proposedthat adapting the price, communication, product and distributionto the needs and expectations of foreign consumers is positivelyassociated with performance in international markets.

Therefore, the following research hypothesis captures this idea:

H2. Adapting the marketing tactics has a positive effect on exportperformance.

On the other hand, the firm’s goal is to survive, secure its assets,and grow (Bradley, 1984), it being necessary to gain a competitiveadvantage through the provision of superiority value to customers.Bharadwaj, Varadarajan, and Fahy (1993) make it clear that theattainment of sustainable competitive advantages is not an end initself, but a means to an end. Morgan et al. (2004) point out that inthe exporting area it is essential to analyze the firm’s ability toachieve and sustain competitive advantages through the efficientand effective execution of planned export competitive strategy.Whether to adapt and how much to adapt export marketingstrategy are instrumental strategies serving this goal (Douglas &Wind, 1987; Jain, 1989; Walters & Toyne, 1989). In this respect,O’Cass & Julian (2003) and Morgan et al. (2004) argue thatdeveloping a differentiated marketing that is adapted to thecharacteristics of the foreign markets also leads these exporters todesign differentiated offers compared to their competitors, as wellas meeting these consumers’ needs more closely, and helps firmsobtain competitive advantages in those markets.

Thus, the third research hypothesis is as follows:

H3. Adapting the marketing tactics has a positive effect on expor-ters’ perceived competitive advantages compared to their maincompetitors.

2.4. Export commitment

Researchers consider commitment from two different perspec-tives: attitudinal and behavioral (Stump et al., 1999). Commitmentis a strategic factor that can orientate the allocation of resourceswithin the organization. From the attitudinal perspective, exportcommitment can be defined as managers’ willingness to dedicatefinancial, managerial and human resources to the export activity(Donthu & Kim, 1993). On the other hand, from the behavioralperspective (used in this study) export commitment is defined bythe resources (financial, managerial and human) the firm currentlydedicates to foreign trade operations (Cavusgil & Zou, 1994) toachieve the results expected by its managers (Evangelista, 1994),as well as the difficulty in finding alternative uses for theseresources (Pauwels & Matthyssens, 1999).

A firm’s export commitment can be shown in many differentways, but nothing reflects a firm’s export commitment like its desireto adapt to meeting the wants, needs and expectations of its foreigncustomers (Atuahene-Gima, 1995; Beamish, Craig, & Mclellan,1993), which will mean adapting those elements of the marketingprogram that require modification (Cavusgil & Kirpalani, 1993).

Thus, the fourth research hypothesis is as follows:

H4. The firm’s export commitment has a positive effect on theadaptation of the marketing tactics to the needs of foreign markets.

Moreover, as Lages and Montgomery (2004) point out, exportcommitment will increase managers’ willingness to make effortsto achieve the international objectives they have set for their firm,offering strategic guidelines that will orientate their decision-making in the foreign markets. All this will improve the efficiencyand effectiveness of the resource allocation, providing an essentialstimulus to boost both international sales and managers’ satisfac-tion with the firm’s export performance. Various studies findevidence of this positive relation between export commitment andexport performance (Aaby & Slater, 1989; Cavusgil & Zou, 1994;Donthu & Kim, 1993; Evangelista, 1994; Louter, Ouwerkerk, &Bakker, 1991; Navarro, 2000; O’Cass & Julian, 2003).

Consequently, the final research hypothesis is as follows(Fig. 1):

H5. The firm’s export commitment has a positive effect on exportperformance.

3. Empirical study

3.1. Variable measurement

Studies like the current one, which use latent variablesmeasured using different indicators, need to define the type ofrelation that will be established between the construct and theobservable variables that represent the construct. Thus, twoperspectives are possible for establishing this relation in functionof the nature of the indicators employed: reflective or formative.

Conventional measurement practice is based upon reflectivemeasurement, whereby observed measures (i.e., indicators) areassumed to reflect variation in latent constructs. Thus, thedirection of causality is assumed to run from the construct tothe indicators and, hence, changes in the construct are expected tobe manifested in changes in all indicators comprising a multi-itemscale (Edwards & Bagozzi, 2000). Practically all published scales inmarketing and business research (Diamantopoulos, 2008) arebased on reflective measurement.

An alternative measurement approach that has been recentlygaining increasing attention uses formative indicators. In thisapproach, the indicators are assumed to cause variations in theconstruct rather than the other way round. In other words, theindicators form or determine the construct and the latter ismodeled as a (typically linear) combination of its indicators plus adisturbance term (Bollen, 1989; Bollen & Lennox, 1991). Although

4 These companies have their headquarters in the north-west of Spain.5 The empirical study uses the statistics package PLS-Graph (Chin & Frye, 2003).

A. Navarro et al. / Journal of World Business 45 (2010) 49–5852

several methodological papers on formative measurement haveappeared in recent years (e.g., Diamantopoulos & Winklhofer,2001; Jarvis, Mackenzie, & Podsakoff, 2003; MacKenzie, Podsakoff,& Jarvis, 2005; and Diamantopoulos & Siguaw, 2006), the proper-ties, advantages, and limitations of formative measures are still notwell understood. More importantly, as several studies have shown(e.g., Jarvis et al., 2003; Podsakoff, Shen, & Podsakoff, 2006),measurement models in empirical efforts are often mis-specified(i.e., a reflective structure is assumed when a formative approachshould have been adopted), probably as a result of researchers’ lackof familiarity with formative measurement models. Besides, informative scales analysis, what must be taken into account is boththe contribution of each indicator in scale formation as well as theproportional structural effects of formative indicators (Franke,Preacher, & Rigdon, 2008). To sum up, it is necessary to advance inthe knowledge of formative indicators and constructs (Diamanto-poulos, 2008) through the development of empirically testedmodels, even with reflective scales (Bruhn, Georgi, & Hadwich,2008; Martın, Gremler, Washburn, & Cepeda, 2008; Wilcox,Howell, & Breivik, 2008).

According to Diamantopoulos (1999), scholars use reflectivescales in the international marketing literature, while very few useformative indicators, although they are suitable for measuringcertain variables. Using reflective scales is not inherently superior,nor indeed is the measurement model necessarily the mostappropriate. Moreover, using a formative approach is potentiallyvery attractive when building measures of highly complexconstructs, as occurs for example in the case of export performance(Diamantopoulos, 1999).

The current research considers just one reflective construct—the firm’s export commitment. The research considers the otherlatent variables (export performance, perceived competitiveadvantages, and adaptation of marketing tactics) to be formativein nature, which implies that the dimensions or indicators definingthe construct do not need to correlate.

First, based on Cadogan, Diamantopoulos, and Siguaw (2002),export performance was measured through export managers’satisfaction with the effectiveness of a marketing program in termsof five objectives: growth of export sales, image of firm in foreignmarkets, profitability of export business, market share, andinternational expansion.

Second, following Ling-yee and Ogunmokun (2001), subjec-tive measures of export-related competitive advantages com-pared to rivals are valid, reliable, and externally oriented. Thecurrent work measures competitive advantages in foreignmarkets using the perception that the managers responsiblefor exports have about their firm’s position compared to its mainrivals and with respect to six indicators, following the work ofKatsikeas et al. (1996), Ling-yee and Ogunmokun (2001) andAlbaum et al. (2003).

Third, most of the studies (Lages & Montgomery, 2004;Leonidou et al., 2002; Theodosiou & Leonidou, 2003; Zou et al.,1997; among others) measure adaptation of the marketingprogram through the level of standardization or adaptation ofdifferent dimensions of the marketing tactics. On the basis of thepreliminary interviews with export managers from 10 firms in thepilot survey to test the questionnaire, we decided to include justfour indicators to measure the degree of adaptation of thecomponents of the firm’s marketing program to foreign markets,one for each variable.

Export commitment was analyzed from a behavioral perspec-tive. Thus, a set of five items was used to measure exportcommitment, based on Donthu and Kim (1993), Evangelista (1994)and Bello, Chelariu, and Zhang (2003).

The appendix describes the scales used to measure the firm’sexport performance, the firm’s perceived competitive advantages

in foreign markets, the level of adaptation of the marketing tacticsto the foreign markets, and the firm’s export commitment.

3.2. Data collection and hypothesis testing

The current work involves an empirical study of export firms totest the proposed hypotheses, the sample being representative ofthe population of Spanish exporters.4 Regarding Spanish exporters’activity, following the data of the Ministry of Industry, Tourism andCommerce (2008), what can be underlined is the existence of astrong business concentration (64% of total exporting is done by 1%of exporters) and a strong geographical concentration (70% ofexporting is directed to countries belonging to the EU), as well asthe main exporter sectors being the equipment industry (22%), theautomotive industry (18%) and the food industry (14%). Regardingthe Spanish exporters’ characteristics, the majority is micro andsmall enterprises (84%) (De lucio, Mınguez, & Alvarez, 2007), aswell as those companies that have export departments (51%) andstaff with specific training in the international field (71%) (Alonso &Donoso, 1998).

After building and refining the data on the export firms, ourtotal population consisted of 1,734 firms. A multi-industry samplewas used, in order to increase observed variance and to reinforcethe generalization of the results (Morgan et al., 2004). The datacollection was through a personal interview of the exportmanagers of 150 firms selected at random (the sample errorobtained was �7.65%). The international orientation of the finalsample is well demonstrated by the identification of 69 differentcountries by the firms in the sample, as well as their export markets.

A single-key informant was selected in each firm to commenton the export activity. The use of a single-key informant alsoallowed us to reduce the potential for systematic and randomsources of error (Huber & Power, 1985). To ensure the reliability ofthe data source, the respondents should be senior managers incharge of exporting. Thus, a specific section of the questionnairewas used to ask about their title, knowledge, involvement andresponsibilities in exporting.

After building the different scales and obtaining the corre-sponding information, the next task was to analyze the data. Thecurrent work tests the hypotheses by structural equationmodeling, using the statistics tool PLS (partial least squares),5

for two main reasons: this tool can be used on small samples,which is the case here (150 firms); and the tool is suitable foranalyzing and evaluating models containing both formative andreflective latent variables (Diamantopoulos, 1999; Diamantopou-los & Winklhofer, 2001).

PLS models are analyzed and interpreted in two stages (Barclayet al., 1995), which is consistent with the recommendation in theliterature for analyzing structural equations: first evaluate themeasurement model, and then evaluate the structural model.

3.2.1. Evaluation of measurement model

Evaluation of the measurement model involves determining towhat extent the proposed constructs are measured correctlythrough the observed variables. This means analyzing whether theconstruct meets the reliability and validity conditions.

3.2.1.1. Analysis of individual reliability of items. Evaluating theindividual reliability of the items for constructs with reflectiveindicators involves analyzing the loadings or simple correlations ofthe indicators with the construct the items aim to measure.Carmines and Zeller (1979) establish that the standardized loadingshould be greater than or equal to 0.707 to accept an indicator as

Table 1Reflective construct: individual reliability of items.

Export commitment Final scale: loadings

COMM1 Eliminated

COMM2 Eliminated

COMM3 0.9170

COMM4 0.9324

COMM5 0.9187

Table 2Formative constructs: weights and collinearity test.

Constructs Weights Collinearity (VIF)

Marketing tactics adaptation

PROD 0.2409 2.418

PRIC 0.4433 2.014

DIST 0.0802 2.313

PROM 0.5660 1.648

Perceived competitive advantages

ADV1 0.1708 1.167

ADV2 0.1900 1.896

ADV3 0.1620 1.986

ADV4 0.2886 2.192

ADV5 0.5028 1.694

ADV6 0.3292 1.539

Export performance

EP1 0.5750 1.627

EP2 0.2290 1.746

EP3 0.0530 1.570

EP4 0.5469 2.477

EP5 0.5506 1.979

A. Navarro et al. / Journal of World Business 45 (2010) 49–58 53

part of a construct. This means that the variance shared betweenthe construct and its indicators is greater than the variance of theerror. Table 1 reports the results obtained after running variousiterations and eliminating those items not exceeding Carmines andZeller’s (1979) minimum value.

On the other hand, evaluating the individual reliability of items informative constructs requires analyzing the weights,6 whichindicate the relative importance of each indicator in the formationof the latent variable. Refining the scales is not recommendable inthe case of formative variables, as information is lost when anyindicator is eliminated (Bollen & Lennox, 1991). Wixon and Watson(2001) recommend using an alternative process that involvesspecifying the domain of content of the formative latent variable andspecifying the indicators so that they cover the defined scope of thelatent variable. The current work complies with this condition.According to Diamantopoulos and Winklhofer (2001), MacKenzieet al. (2005) and Diamantopoulos and Siguaw (2006), the onlyproblem with formative constructs is the possible existence ofcollinearity. The work calculated the values through a linearregression analysis,7 ensuring that the variance inflation factors(VIF) are less than 5 (Belsley, 1990). Table 2 shows that all theformative indicators included in the study (perceived competitiveadvantages, adaptation of marketing tactics, and objective andsubjective export performance) have a VIF of less than five.

3.2.1.2. Analysis of reliability of constructs. This evaluation is onlypossible with reflective indicators, since in constructs with

6 The weights in formative constructs mean the same as the coefficients (b) in a

canonical correlation analysis. In fact, the estimation of the latent variable is

obtained in the PLS program through the linear combination of the different

observed variables (formative indicators), taking into account the weight of each of

them in the formation or creation of the construct.7 To study the multicollinearity the work ran a number of linear regression

analyses, taking each formative indicator as an independent variable and one of the

observed variables as the dependent variable. This analysis used the statistics

package SPSS 12.0.

formative indicators the formative measures cannot be assumedto have covariance. These indicators will not be correlated (Chin,1998). This evaluation used the composite reliability, which shouldreach a value of 0.8 (Nunnally, 1978), a condition that the exportcommitment scale meets (composite reliability = 0.945). Addi-tionally, the scale has a Cronbach alpha of 0.915.

3.2.1.3. Convergent validity. The work analyzed the convergentvalidity using the average variance extracted (AVE), whichmeasures the proportion of the variance that a construct obtainsfrom its indicators compared to the proportion due to themeasurement error. Fornell and Larcker (1981) recommend valueshigher than 0.5, which would mean that more than half thevariance of the construct is due to its indicators. The data complywith this requirement in the current study, since exportcommitment has an AVE of 0.851.

3.2.1.4. Discriminant validity. To evaluate the discriminant validityof constructs with reflective indicators, the average varianceextracted must be greater than the squared correlations betweenthe construct and the other constructs making up the model(Fornell & Larcker, 1981). Export commitment complied with thiscondition.

On the other hand, to evaluate the discriminant validity ofconstructs with formative indicators, researchers analyze thematrix of standardized correlations between the different latentvariables. These should not exceed 0.9, or the constructs would beexplaining redundant information and not be distinct constructs(Luque, 2000), so the formative constructs also comply with thiscondition, and the current research can accept the discriminantvalidity of the proposed measurement instruments.

3.2.2. Evaluation of structural model

After demonstrating the validity and reliability of the measure-ment model, the next step was to examine whether the structuralmodel supports the proposed research model, thereby verifyingthe relations between the latent variables. The work tested themodel considering the intensity of the path coefficients (orstandardized regression weights) and the variance explained(R2) of the endogenous (or dependent) variables. Falk and Miller(1992) establish that values of the variance explained should begreater than or equal to 0.1 to be adequate, lower values indicatinga poor predictive level for the dependent latent variable.

The results obtained show that adaptation of the marketingtactics is the only variable that does not reach Falk and Miller’s(1992) minimum threshold, which indicates that the firm’smarketing strategy in foreign markets is conditioned by otherfactors not included in the study (Table 3).

Analysis of the contribution of the predictor variables to thevariance explained of the endogenous variables involved analyzingthe regression coefficients (or standardized regression weights) andthe correlations between the latent variables. Chin (1998) estab-lishes that these coefficients should equal at least 0.2, but ideallyexceed 0.3, to be acceptable. Table 4 shows that the relationsbetween latent variables meeting this condition are as follows: allthe relations in which commitment acts as an exogenous latentvariable; the relation between adaptation of marketing programtools and perceived competitive advantages; and the relation

Table 3Variance explained of dependent variables.

Endogenous constructs R2

Marketing tactics adaptation 0.0585

Perceived competitive advantages 0.2996

Export performance 0.3789

Table 4Path coefficient values for direct relations proposed in model.

Proposed relations Path coefficients Correlations t-value %Variance explained

Perceived competitive advantages! export performance 0.322 0.515 2.446* 16.58

Marketing tactics adaptation! export performance 0.074 0.338 0.610*** 2.50

Marketing tactics adaptation! perceived competitive advantages 0.547 0.547 9.970** 29.92

Export commitment!marketing tactics adaptation 0.242 0.252 3.079* 6.09

Export commitment! export performance 0.364 0.517 2.889* 18.82

* Significant at 0.01 level.** Significant at 0.001 level.*** Not significant.

A. Navarro et al. / Journal of World Business 45 (2010) 49–5854

between perceived competitive advantages and export perfor-mance. In contrast, the relation between adaptation of marketingtactics and export performance fail to meet this condition.

To determine the contribution of the predictor variables to thevariance explained (R2) of the endogenous variables in theproposed model, researchers must calculate the absolute resultof multiplying the path coefficient (between two constructs) by thecorrelation between the two constructs (Falk & Miller, 1992). Thisresult determines the variance of the endogenous constructexplained by the predictor variable (see Table 4). Falk and Miller(1992) argue that a predictor variable should explain at least 1.5%of the variance of a dependent variable. In our study, all theproposed relationships achieved this condition.

Finally, in order to test the proposed research hypotheses, wecalculated the accuracy and stability of the estimates obtained.This process used the bootstrap technique, which provides thestandard error and the t-values of the model parameters. Table 4shows the results of this analysis.

First, the results obtained provide support for Hypothesis H1,since the relation between perceived competitive advantages andexport performance is positive and significant. Second, HypothesisH2 is rejected. The results didn’t verify that firms that adapt theirmarketing strategy to foreign markets obtain the best exportperformance. The results do support the idea that firms that adapttheir marketing strategy perceive that they obtain greatercompetitive advantages compared to their rivals in internationalmarkets (Hypothesis H3). Furthermore, the results confirm anindirect relation between adaptation of marketing programelements and subjective export performance via perceivedcompetitive advantages. The value of this indirect effect iscalculated by multiplying the standardized regression coefficientsbetween each pair of constructs: adaptation of marketingtactics! perceived competitive advantages! export perfor-mance (0.547 � 0.322 = 0.176).

Finally, the results obtained confirm hypotheses H4 (positiveeffect of export commitment on adaptation of marketing tactics) andH5 (positive effect of export commitment on export performance).Export commitment influences adaptation of the marketingprogram, but the former only explains 6.09% of the latter. Thismeans that this strategy is also influenced by other factors notincluded in the research. On the other hand, the relation betweenexport commitment and export performance is also strengthened,although by only a small amount, by an indirect effect via adaptationof marketing tactics and perceived competitive advantages. Thevalue of this indirect effect of export commitment! adaptation ofmarketing tactics! perceived competitive advantages! exportperformance is 0.0426 (0.242� 0.547� 0.322).

4. Discussion

4.1. Contributions

This work offers important contributions to the internationalmarketing literature, drawn from the comprehensive analysis of

relationships between export commitment, adaptation of marketingstrategy,perceivedcompetitiveadvantagesandexportperformance.

Export performance is directly influenced by perceived (by thefirm’s management) competitive advantages (path coeffi-cient = 0.322) and by export commitment (path coefficient = 0.364)and indirectly by adaptation of marketing tactics (0.1761) and byexport commitment (0.0426). This is consistent with Albaum andTse (2001) and Albaum et al. (2003), who point out that therelationship between adaptation of marketing tactics and exportperformance is better explained by including the competitiveadvantages that the firm possesses in international markets as amediating variable. The explanation power of export performanceby means of these variables is 37.89% (R2 = 0.3789). In the building ofan export performance scale, what plays an essential role is themanagement satisfaction with the growth of export sales(weight = 0.575), as well as international expansion of the firm(weight = 0.5506) and achieved market share (weight = 0.5469).

The competitive position plays an important role in determin-ing export performance, and, from a strategic viewpoint, thecompany must develop operations oriented to attaining thoseadvantages over competitors in foreign markets (Morgan et al.,2004). These actions can be developed from a threefold view. First,by means of the adaptation of marketing program elements tointernational market requirements, this will make it easy todifferentiate the product and to develop loyal customers with ahigher value than the competitors’ (Aulakh et al., 2000; Kaleka,2002). This way, it is necessary to underline the important weightthat strategic operations have over marketing program elements inthe building of a formative scale of perceived competitiveadvantages, with those derived from promotion (weight = 0.2886)standing out. However, a higher contribution to the scale ofperceived competitive advantages is derived from humanresources (weight = 0.5028). This fact shows us that staff andmanagers’ profile and training (Axinn, Savitt, Sinkula, & Thach,1994; Gray, 1997; Patterson, Cicic, & Shoham, 1997), regardinginternational experience, language skills and so on, is essential tothe management and planning of exporting activity (Axinn,Noordewier, & Sinkula, 1996; Beamish, Karavis, Goerzen, & Lane,1999; Evangelista, 1994), as well as to the development of effectivestrategies of international marketing (Griffith et al., 2006; Shoham,1996, 1999). In this way it is a key factor in the building ofcompetitive advantages and, thus, in export performance improve-ment (O’Cass & Julian, 2003). Finally, the third main component inthe building of the scale of perceived competitive advantages iscosts (weight = 0.5028). Considering that the adaptation ofmarketing tactics does not have a direct influence on exportperformance, it would be convenient for a company to progres-sively adopt a global approach, standardizing its marketingstrategy in those markets with similar features (Kustin, 2004;Ozsomer & Simonin, 2004). This way, the company could reacheconomies of scale in manufacturing and marketing and, therefore,cost advantages (Levitt, 1983; Samiee & Roth, 1992; Schuh, 2000).

On the other hand, although the marketing literature increas-ingly recommends adapting the marketing tactics to the wants and

A. Navarro et al. / Journal of World Business 45 (2010) 49–58 55

needs of foreign markets rather than relying on standardization(Lages & Montgomery, 2004; Shoham, 1996, 1999), the currentresearch is not able to confirm the superiority of one strategy overthe other (standardization versus adaptation), since this variabledoes not exert a direct effect on export performance. This may bedue, as Leonidou et al. (2002) indicate, to the moderating effect thatother factors may exert on the international marketing strategy,such as size, international experience, managers’ perceptions aboutinternationalization, the organization’s objectives in foreign mar-kets, as well as the competitive intensity (Morgan et al., 2004) andthe other variables of the environment (Cavusgil & Zou, 1994; O’Cass& Julian, 2003). But coinciding with various studies (Albaum & Tse,2001; Albaum et al., 2003), the current research has found that firmsthat adapt their marketing tactics perceive that they obtain greatercompetitive advantages than their rivals in foreign markets. Thismeans that an indirect relation does exist between adaptation of themarketing program elements and the managers’ satisfaction withthe achievement of their objectives in foreign markets via perceivedcompetitive advantages.

Regarding the weight of the elements of the marketing programin the building of the scale adaptation, what must be underlined isthe important role played by strategic decisions about promotion(weight = 0.566) as well as about price (weight = 0.4433). Viathem, besides product adaptation (weight = 0.2409), a company isable to adjust its offer to the particular characteristics of eachmarket, which reduces foreign consumers’ uncertainty, or psy-chological distance (Madsen, 1989), improves relationships withlocal intermediaries (Shoham, 1999), and can lead the firm togreater profitability, as a better product–market match can resultin greater customer satisfaction, which can give greater pricingfreedom vis-a-vis competitors (Leonidou et al., 2002). This willtranslate into the perception of achievement of competitiveadvantages, positively and indirectly affecting export performance.

In the context of firm-specific characteristics, the study’sfindings indicate that a firm’s resources influence its choice ofmarketing strategy. The results confirm that organizations’international behavior in terms of their foreign trade operationsdepends to a large extent on the resources (financial, managerialand human resources) they dedicate to this activity (Donthu & Kim,1993; Evangelista, 1994). These extra-human, managerial andfinancial resources enable companies to improve the depth ofplanning procedures (e.g., in terms of market research and marketanalysis) and uncertainty is reduced. This will allow managers toimplement marketing strategies that are more adapted to theneeds of different markets (Aaby & Slater, 1989; Cavusgil & Zou,1994). Thus, the current research has found that export commit-ment is an essential determinant of the organization’s strategicactions in foreign markets, conditioning the development of amarketing adapted to the needs and expectations of foreignconsumers. The results confirm that those firms that commitresources to export activity are the most proactive in adaptingtheir international marketing strategy to the preferences of theforeign markets, supporting the conclusions of previous studies(Atuahene-Gima, 1995; Beamish et al., 1993; Cavusgil & Kirpalani,1993; Lages & Montgomery, 2004). However, although the link ofthis relation is acceptable (path coefficient = 0.242), its contribu-tion to explaining adaptation of the marketing tactics is very low(variance explained = 6.09%). This indicates the existence of otherfactors not considered in this study that may condition the level ofadaptation of the marketing program tools to the internationalmarkets (Calantone et al., 2006; Jain, 1989; Lages & Montgomery,2004; Ozsomer & Simonin, 2004; Schuh, 2000; Theodosiou &Leonidou, 2003; Vrontis, 2003; Zou & Cavusgil, 1996; Zou et al.,1997).

Finally, the results also confirm the important effect of exportcommitment on export performance. The variable acts directly as a

determinant of the managers’ satisfaction with the achievement oftheir objectives in foreign markets. This conclusion confirms theimportance that other research has attributed to export commit-ment as a determinant of the international success of export firms(Aaby & Slater, 1989; Cavusgil & Zou, 1994; Evangelista, 1994;Donthu & Kim, 1993; Louter et al., 1991; O’Cass & Julian, 2003).

On the other hand, from the methodological perspective thecurrent research is characterized by the following main feature: theadequacy of the proposed measurement scales, which providessupport for the theoretical framework considered to build the model.Second, the current work overcomes one of the weaknesses pointedout by Diamantopoulos (1999). This author notes that research workin the international marketing area is basically characterized by theimplicit or explicit use of reflective indicators, with very few studiesusing formative indicators, despite their adequacy for measuringcertain variables. The current work has considered perceivedcompetitive advantages, adaptation of marketing tactics, and exportperformance as formative constructs, and export commitment as areflective construct. In this respect, this work is one of the few thatanalyses the determinants of the firm’s export performance andincludes both reflective and formative variables.

4.2. Implications for management and recommendations

Carrying out foreign trade operations is one of the traditionalways for firms to expand their activities, and it is particularlyimportant for small and medium-sized firms. But success in theinternational expansion of operations is conditioned by certainfactors, which the managers of export firms should be aware of. Inthis respect, the current research can contribute to improving themanagement of organizations operating in foreign markets.

Specifically, exporters should ideally become strongly com-mitted to their international activities, since this will have a decisiveinfluence on the success of their strategic marketing actions and onthe results of their export activity. In this respect, exportcommitment should be translated into initiatives such as: a specificstructure (e.g., an export department responsible for organizing andplanning the export activity); the employment of managers withexperience or qualifications in international business; the allocationof a specific budget for implementing the export activity; thepromotion of a company culture oriented to international markets;or the establishment of permanent contacts with public or privateinstitutions that can facilitate foreign trade operations.

On the other hand, although its impact on export performanceis not immediate, the export firms’ management should designmarketing strategies adapted to the needs and preferences of theforeign markets. But when the characteristics of the foreignmarkets are similar to the domestic one, a strategy of standardiza-tion is more appropriate, since the firm will then be able to exploitscale economies. Knowledge of foreign markets can help firmsadopt an adaptation approach in their marketing program, so firmsshould invest in market research.

Likewise, although implementing a strategy of marketingtactics adaptation in foreign markets will not have a direct effecton export performance, this strategy will have positive repercus-sions on the managers’ perceptions about their achievement ofcompetitive advantages, indirectly boosting the managers’ satis-faction with the export activity. The firm’s management may findthat this proves to be a permanent stimulus to continue justifyingincreased levels of commitment to their foreign markets.

4.3. Managerial relevance

Going to foreign markets is a great opportunity to exporterfirms in order to enlarge their target market and improve theirprofits. However, this strategy entails higher risks to those

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companies, due to the level of uncertainty that the firm has to facein foreign markets, related to unknown languages, cultures,business uses, or economic, political, and legal environments,among others. In this context, it is really important to identify thekey factors that may affect the attitudes of the companies towardtheir competitive position in international markets and theperformance of export activities.

On the one hand, managers should pay attention to theimportance of export commitment in the field of exporting,underlining the prevalence of an actual or behavioral commitmentrather than attitudinal commitment. That export commitment canbe obtained through several decisions in different areas of thecompany, such as the development of a specific structure forexport operations, the allocation of a specific financial amount forexporting, the selection of managers with formation or experiencein international business, or the development of export marketsinformation system, among others. Therefore, taking decisionsdirected to increase the actual level of firm’s commitment inexporting area will increase perceived competitive advantages inforeign markets and managers’ satisfaction with export perfor-mance, what will be necessary to ensure a continuous attention tointernational business and, this way, the own growth of firm’sactivity. In summary, real involvement in exporting will affectpositive assessment of this activity and its outcomes, reinforcingfuture decisions in export activity and the own survival ofcompany in international business.

On the other hand, managers should also understand theadvantages derived from the adaptation of export marketingprogram. Whereas adaptation of marketing tactics did notinfluence export performance directly, this strategy has a directeffect on the assessment of competitive position in export marketsand, through this assessment, an indirect effect on exportperformance. This way, adaptation of marketing tactics is revealedas a key competitive strategy in exporting area, as opposed to thosearguments supporting a standardization strategy as the best wayto approach export markets. To sum up, developing an adaptedmarketing program will lead the company to design differentiatedoffers comparing to their competitors and to meet in a better wayforeign consumers’ needs, this way obtaining competitive advan-tages and, as a result, better outcomes from export activities.

5. Limitations and future lines of research

The results presented in this work should be interpreted withcaution, since the research has a number of limitations that shouldbe taken into account when evaluating and generalizing itsconclusions. At the same time, however, the limitations discussedbelow can provide the starting point for future research aimed atimproving our knowledge about the determinants of the firm’sexport performance.

The first limitation concerns the type of study carried out. Theinformation collected in this study refers to a specific moment intime. It would be useful to carry out a longitudinal study to analyzehow strategic modifications to the organization and changes in itsbusiness profile can affect its performance in international markets.

The second limitation concerns the sample used. Our study wasbased on a single country, Spain. Despite the internationalorientation of the final sample, considering the high number oftheir export markets, and despite the fact that the majority of theempirical studies in the field of export performance was performedwith single-country samples (Leonidou et al., 2002; Sousa et al.,2008; Zou & Stan, 1998), future studies based on samples fromvarious countries would be able to generalize the findings of thecurrent research.

Third, this study evaluates adaptation of the marketing tacticsto foreign markets considering only, and globally, the price,

distribution, communication, and product. It would have beenmore appropriate to analyze the degree of adaptation of each ofthese marketing program elements through different dimensions(Lages & Montgomery, 2004; Leonidou et al., 2002; Theodosiou &Leonidou, 2003).

The fourth limitation concerns the fact that the model does notconsider other possible factors as antecedents of perceivedcompetitive advantages, the marketing tactics, export commitment,or export performance itself. The research could have considered thecharacteristics of the product being exported, the type of industry towhich the firm belongs, the type of market being targeted (industrialbuyers or consumers), firm characteristics (size, internationalexperience, etc.), the organization’s international competences,the profile and motivations of the management, market orientation,type of relationship between the export firm and its internationaldistributors, and so on. Including these antecedents would probablyimprove on the low or moderate levels of variance explained in someof the endogenous variables of the model.

Moreover, it is also necessary to point out specific limitations offormative scales, either in that the selected indicators to buildconstructs may define it in a complete and proper way or in theconsiderations related to the proportional structural effects offormative indicators. This way, Franke et al. (2008, p. 1231)indicate that ‘‘. . . the specification of the formative construct’s unitof measurement can strongly influence substantive conclusions.The degree of significance varies for each relationship dependingon, the scaling of the formative construct’’. Thus, the smallcontribution of the indicator ‘‘distribution’’ in the building of the‘‘marketing tactics’’ scale (weight = 0.0802), as well as the smallcontribution of the indicator ‘‘satisfaction with profitability ofexport business’’ in the building of the ‘‘export performance’’ scale(weight = 0.053), suggest alternative configurations to these scales,questions that must be addressed in future research.

Finally, a more complete view of the organization’s strategicactions will require analysis of the effect of the market selectionstrategy on export performance, and how export performance canboost management commitment to foreign markets. Moreover,under the perspective of the resource-based view, there is a need toidentify which of the organization’s resources and capabilitiesallow it to achieve a better position than its most directcompetitors in foreign markets (Kaleka, 2002; Ling-yee &Ogunmokun, 2001; Morgan et al., 2004; Morgan et al., 2006;Piercy et al., 1998; Zou et al., 2003).

Appendix A. Measurement scales

Export performance

The following questions aim to measure your firm’s perfor-mance in its export activity.

With the following block of questions, we aim to find out yourfirm’s satisfaction with its export activity in the past three years,using a scale of 1–7 (1 = very dissatisfied; 7 = very satisfied).

EP1 Growth of export sales

EP2 Awareness and image of firm in foreign markets

EP3 Profitability of export business

EP4 Market share associated with export activity

EP5 International expansion of firm

Perceived competitive advantages

Indicate generally your firm’s competitive position comparedto its main rivals in foreign markets in relation to the following

A. Navarro et al. / Journal of World Business 45 (2010) 49–58 57

concepts, using a scale of 1–7 (1 = much worse; 7 = muchbetter).

ADV1 Product differentiation

ADV2 Price

ADV3 Distribution

ADV4 Promotion or communication

ADV5 Human resources

ADV6 Costs

Adaptation of marketing tactics

The following question aims to find out the extent to whichyour firm adapts the four marketing tactics in foreign marketscompared to its home market. Please answer on a scale of 1–7(1 = not at all; 7 = substantially).

PROD Product

PRIC Price

DIST Distribution

PROM Promotion or communication

Export commitment

In the following block of questions we aim to determine yourfirm’s commitment to export activity.

Please answer on a scale of 1–7 (1 = totally disagree; 7 = totally agree)

COMM1 Our firm dedicates more resources to export activity than to the

Spanish market

COMM2 Our firm develops a specific commercial program to conduct its

export business

Please answer on a scale of 1–7 (1 = very low; 7 = very high).

COMM3 The level of time and effort our firm’s management commits to

export activity is:

COMM4 The level of financial resources committed to the export activity is:

COMM5 The level of human resources committed to the export activity is:

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