Determinants of brand localization in international markets

Abstract

A key marketing strategy decision area for firms in the international marketplace concerns the standardization or localization of brands across national markets. Drawing upon international marketing and brand management literature, this study conceptualizes and examines brand localization using the four brand elements. From the contingency perspective, a set of internal and external environmental determinants are hypothesized to influence the localization of brands in foreign markets. Based on field interviews with Korean exporters, we conduct a survey method to collect data via e-mail from Korean firms engaged in exporting. The final sample consists of 232 exporters across diverse industries. The results from a structural equation model indicate that firms' extent of internationalization, research and development intensity, firm size, foreign market similarity vis-a-vis home market, and market uncertainty are significantly related to brand localization. Thus, the proposed factors are significant predictors of brand localization by Korean firms in international markets.