Your task is to offer a detailed critique of a peer-reviewed article, which you can locate in the CSU Online Library. The article must be related to international marketing. In your critique, address

Keywords:marketing capabilities, international marketing, marketing strategy, marketing performance Online Supplement: http://dx.doi.org/10.1509/jim.17.0056 T he concept of capabilities in the marketing literature is not new. Drawing on theory and empirical work in strategic management, researchers have generally viewed capabilities as complex bundles of skills and knowledge embedded in the organizational processes by which a firm’s available resources are transformed into valuable outputs (Day 1994). As capabilities are developed over time and become embedded in organizational pro- cesses and routines, they are difficult for rivals to observe and imitate, thereby enabling firms that possess them to enjoy sustainablecompetitive advantage (Grant 1996; Grewal and Slotegraaf 2007;Peteraf 1993). Marketing researchers have conceptualized marketing capabilities in terms of a firm’s ability to use available resources to per- form marketing tasks in ways that achieve desired mar- keting outcomes (Morgan, Katsikeas, and Vorhies 2012).

The literature suggests that marketing capabilities are es- pecially valuable (Dutta, Narasimhan, and Rajiv 1999),inimitable (Morgan, Vorhies, and Mason 2009), and nonsubstitutable in creating sustainable competitive ad- vantage and superior firm performance (Krasnikov and Jayachandran 2008; Moorman and Rust 1999). In in- ternational markets, marketing capabilities have also been shown to improve firm performance by enhancing the level and sustainability of realized positional advantages (for a review, see, e.g., Tan and Sousa 2015).

Over the past 18 years, marketing scholars have intensified their focus on conceptualizing marketing capabilities and empirically examining their role in explaining firm perfor- mance. This growth in research attention has been mirrored in the international marketing literature. However, the extent to which conceptual and empirical approaches to studying marketing capabilities in the international context differ—and should differ—from those in domestic market contexts remains unclear. This is an important gap in existing knowledge in both theoretical and practical terms.

From a theory perspective, it is difficult for researchers to Neil A. Morganis Professor and PetSmart Distinguished Chair of Marketing, Kelley School of Business, Indiana University (email:

[email protected]).Hui Fengis Assistant Professor of Marketing, Debbie and Jerry Ivy College of Business, Iowa State University (email:

[email protected]).Kimberly A. Whitleris Assistant Professor of Marketing, Darden School of Business, University of Virginia (email:

[email protected]). Matthew Robson served as associate editor for this article. Journal of International Marketing ©2018, American Marketing Association Vol. 26, No. 1, 2018, pp. 61–95 DOI: 10.1509/jim.17.0056 ISSN 1069-031X (print) 1547-7215 (electronic) Marketing Capabilities in International Marketing 61 accurately conceptualize and measure marketing capabil- ities without knowing whether and how they may be dif- ferent in international (vs. purely domestic) market contexts.

In addition, without an understanding of whether and how the mechanisms linking marketing capabilities with per- formance outcomes may (or may not) differ in international marketing contexts, it is difficult for researchers to know what types of mediators and moderators to study.

From a managerial perspective, managers want to know both what types of marketing capabilities may be appropriate for their firms and how to build, maintain, and leverage them—and the answers to these questions may vary based on the degree to which they operate in international markets and how they are organized to do so. Without understanding whether and how these international-related contingencies may matter, it is impossible for international marketing re- searchers to provide appropriate guidance to managers.

We address this important gap in knowledge, in an effort to clarify thinking and provide guidance for future research in this theoretically interesting and managerially important area. As a starting point, we examine published research to identify and explore key differences between international and domestic marketing capabilities regarding their concep- tualization, types, measurements, development, and relation- ships. We then further explore a number of important research questions arising from this analysis: (1) What are the drivers of marketing capability development in international markets?

(2) Can marketing capabilities help improve firm performance in the international markets, and if so, how? (3) What con- ditions may enhance or weaken the marketing capability–firm performance relationship in international markets?

To accomplish this, we first review the literature to examine how marketing capabilities have been studied in international marketing contexts. Second, given important gaps identified in literature-based knowledge, we supplement this literature- based analysis with insights from practice generated through in-depth interviews with executives in firms with varying degrees of internationalization. These inputs are then used to synthesize existing knowledge regarding marketing capa- bilities in international marketing, identify key knowledge gaps, and develop an agenda for future research in this important domain.

REVIEW OF EXISTING RESEARCH Overview Our literature review focuses on the most influential journals publishing international marketing research since1999. To ensure the representativeness, completeness, and high quality of studies included in our review, the criteria for journal selection were based on previous ratings of journals in marketing and international business disciplines (Kirca and Yaprak 2010). In the marketing discipline, we chose six out of the ten most influential marketing journals from Baumgartner and Pieters’s (2003) study (i.e.,Journal of Marketing, Journal of Marketing Research,Marketing Science,Journal of the Academy of Marketing Science, Journal of Retailing,andIndustrial Marketing Man- agement). The remaining four journals in that study (i.e.,Journal of Consumer Research,Harvard Business Review,Management Science,andAdvances in Consumer Research) on average have published only .8% of in- ternational marketing–relatedarticlesfrom1975to2004 and are not typical publication outlets for marketing strategy studies (Leonidou et al. 2010). Because all six journals are based in the United States, we further added one international journal,International Journal of Research in Marketing, which is considered a top marketing journal in Europe (Kumar, Sharma, and Gupta 2017; Roberts, Kayande, and Stremersch 2014).

From the international business discipline, we added three of the six top journals from Dubois and Reeb’s (2000) study (i.e.,Journal of International Business Studies,Journal of International Marketing,andIn- ternational Marketing Review).Thesearethemostin- fluential international business journals (Leonidou et al.

2010) focusing on marketing rather than management, whereas the remaining journals (i.e.,Management In- ternational Review,Journal of World Business,andIn- ternational Studies of Management and Organization) focus on management.

These considerations led us to select ten journals:

Journal of Marketing, Journal of Marketing Research, Marketing Science, Journal of the Academy of Mar- keting Science, Journal of Retailing, Industrial Marketing Management, International Journal of Research in Mar- keting, Journal of International Business Studies, Journal of International Marketing, and International Marketing Review. Eligible articles were identified by an issue-by- issue manual search for qualitative and empirical articles that have“marketing capability(ies),”“marketing com- petence(s),”“capabilities,”and/or“competences”in their title, abstract, and/or keywords. We performed this search in EBSCO and the journals’websites.

Following procedures recommended for literature review articles (e.g., Katsikeas et al. 2016; Lipsey and Wilson 2001), when further examination was required, two 62 Journal of International Marketing experienced researchers separately examined the articles to determine inclusion. Five criteria had to be satisfied for a study to be eligible for this review: (1) the focus of the study is on marketing capabilities, 1either as a primary objective or as part of a wider research design; (2) the study examines firms engaged in international business—that is, the firms’ operations and/or markets span multiple countries (e.g., multinational corporations [MNCs]) or the firm has export ventures, international new ventures/international joint ven- tures (IJVs), or international logistics/outsourcing businesses— or the study examines firms from multiple countries; (3) the unit of analysis is at theinternationalmicrobusiness level (e.g., export venture, international venture), that is, the international context is a focus of the study rather than only a part of the sampling or a control variable; (4) the study is evidence based (vs. purely conceptual) in nature, such as empirical studies using primary and/or secondary data, or qualitative research such as case studies and meta-analyses; and (5) the research was published since 1999 (because very few studies of marketing capabilities were conducted before this period; Vorhies, Harker, and Rao 1999).

A total of 57 articles remained after this filtering process.

Average interrater agreement was 93%, and we dis- cussed all remaining discrepancies to reach consensus.

Finally, we supplemented the search process by scanning the reference lists of the collected articles to identify any additional relevant articles missed through the keyword searches. This produced an additional 7 articles from top management journals (Strategic Management Journal, Journal of Management,andDecision Sciences), for a total of 64 articles included in this review. For each of these 64 published studies, we then cataloged (1) how they define marketing capabilities and the theories on which the conceptualization draws; (2) the types of marketing capabilities identified and/or examined; (3) the marketing capability operationalization and analysis method used (for empirical studies); and (4) findings re- ported in the empirical studies with respect to antecedents, consequences, moderators, and mediators connected with marketing capabilities in international marketing. Theanswers to these four questions are summarized in the various tables and discussed in more detail next. Marketing Capabilities Definition and Theory.In the general marketing literature, marketing capabilities are viewed in terms of a firm’sability to use available resources to perform marketing tasks in ways that achieve desired marketing outcomes (Day 1994; Morgan, Katsikeas, and Vorhies 2012). They therefore represent the processes that a firm uses to define, develop, communicate, and deliver value to its target customers by combining, trans- forming, and deploying its available resources (e.g., Bahadir, Bharadwaj, and Srivastava 2008; Morgan and Slotegraaf 2012). In the international marketing context, most studies define firm-level marketing capabilities in the same way as they are defined in the general marketing literature in domestic market contexts and simply emphasize that the marketing activities and the processes by which they are accomplished take place in international markets to fulfill international customers’needs and achieve international marketplace goals (e.g., Lages, Silva, and Styles 2009; Shi et al. 2005; Zou, Fang, and Zhao 2003). Thus, firm-level marketing capabilities in international marketing are generally viewed in terms of a firm’s ability to use available resources to understand and fulfill foreign market customer needs better than its rivals.

Tables 1–3 provide a review of different marketing capa- bilities identified in the international marketing literature.

A range of different theories are used to ground con- ceptualizations of marketing capabilities and hypothe- size concerning their relationships with other phenomena in international marketing (see Web Appendix A). Un- surprisingly, as in the general marketing literature the majority of these draw on RBV theory. A large number also draw on dynamic capabilities (DC) theory, which, given the difficulties associated with measuring dynamic phenomena, can cause problems in matching theory to operationalization in many studies using primary survey research designs. A range of other theories used in domestic marketing contexts have also been applied in the internal marketing context, including organizational learning and the knowledge-based view.

However, in a surprising number of studies (10 of the 64 studies in our sample), it is unclear what specific theory is being drawn upon to support the conceptualization of marketing capabilities in international markets.

The one theoretical viewpoint that is not used in the general marketing literature in domestic market contexts 2that has 1Marketing capabilities include but are not limited to pricing, new product development, promotion, distribution, channel, brand management, and market-based learning ca- pabilities (for a comprehensive list, see Morgan and Slotegraaf 2012). We excluded terms relating to idiosyncratic capabil- ities, such as“MNC/exporter,”“exploration/exploitation,” “globalization/internationalization,”“multicultural,”“(dynamic) net- working,”“technology/IT,”“MNC/global human resource management,”“(marketing) alliance (formation),”“dynamic/absorptive/ learning,”“knowledge management,”“commercial,”“local supplier/ distributor,”“international partners,”and“global supply chain” capabilities (e.g., Usui, Kotabe, and Murray 2017). 2The only exceptions here concern studies of firms that are based in an emerging market. Marketing Capabilities in International Marketing 63 Table 1.Representative Qualitative (Case Study) Research on Marketing Capabilities in International Marketing Marketing Capabilities (MCs) Identified Selected Findings Authors Dynamic MCs (incremental, renewing, and regenerative)Case studies from six international new ventures from Ireland, Swe- den, and Denmark suggest that different stakeholder groups (allied, cooperative, neutral, and entrepreneur) can influence the learning processes (single-, double-, and triple-loop) of the firm and can determine the nature of dynamic MCs needed for global competitive advantage.Evers, Andersson, and Hannibal (2012) The ability to sense and meet customers’demandsInterviews with 48 European, Chinese, and other managers and experts from Chinese emerging market firms operating in Europe suggest that limited motivation, few opportunities, and restricted ability constrain firms from building and deploying MCs. Authors propose that causal ambiguity, internal perception gaps, and lack of or fragmented general marketing expertise constrain building MCs, while inertia, market resistance, and limited specific marketing expertise constrain deploying MCs.Kaufmann and Roesch (2012) Global brand management strategy/capability and regional MCsGlobal brand strategy development at Kimberly-Clark entails sharing information and best practices, implementing common brand planning processes, assigning responsibilities for global branding, and creating and implementing effective brand-building strategies.

Kimberly-Clark’s approach, predicated on accountable empower- ment and capacity building, improves local MCs while also instilling better processes and disciplines centrally.Matanda and Ewing (2012) Market-based learning capabilityFindings from a case study of four business process outsourcing firms in India (two Indian, one multinational, and one U.K. joint venture) suggest that effective knowledge transfer and diffusion and the development of market-based organizational learning capabilities are driven by the strength of a firm’s quality management capabilities.Malik, Sinha, and Blumenfeld (2012) Various MCs The authors examine case studies of 47 B2B firms (42 global firms) and identify six key marketing capabilities that tie to 14 distinct in- novation-based sustainability strategies, sustainable consumption behavior, and firm performance.Mariadoss, Tansuhaj, and Mouri (2011) Seven dynamic capabilities for multichannel transformationUsing case studies of three international firms and one U.K. firm, the study identifies seven dynamic capabilities for multichannel trans- formation and finds that three integrative capabilities are critical to route-to-market multichannel transformation: IT-related, organi- zational structure, and metrics/rewards.Wilson and Daniel (2007) Global account MCs: intelli- gence acquisition, coordina- tion, and reconfigurationStudy of 33 global firm cases finds that companies that proactively and systematically implement these processes (intelligence acquisition, coordination, and reconfiguration) are likely to outperform their competitors in the global marketplace.Shi et al. (2005) Cross-firm dispersed new product codevelopment capabilities across countriesStudy of multiple and dispersed activities in the cross-firm new product development process across the United Kingdom, the United States, and China shows that firms’interorganizational ability to collec- tively specify and synchronize development activities drives collab- orative cross-firm new product development efforts.Perks (2005) 64 Journal of International Marketing Table 2.Representative Survey-Based Marketing Capabilities Research in International Marketing Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Architectural capabilities (i.e., planning capability and implementation capability) and MCsSubjective:Cost advantage, differentiation advantage, and venture financial performance (ROI, return on sales, margins, reaching financial goals)Cross-sectional:446 U.K.

export venturesPlanning and implementation capabilities play important roles in minimizing strategic goal– realized strategic position gaps. Businesses with stronger marketing capabilities are better able to achieve differentiation advantages and thereby enjoy superior performance.Spyropoulou et al.

(2017) Informational, product devel- opment, and customer rela- tionship capabilitiesSubjective:Intended cost efficiency and intended marketing differentiationCross-sectional:312 British manufacturers involved in exportingMCs strongly influence exporters’intentions to emphasize both cost efficiency and marketing differentiation. Firms with an already established market position reveal a clear effect of informational capability on marketing differentiation and of product development capability on efficiency intentions.Kaleka and Morgan (2017) E-commerce MCsSubjective:Export venture e-commerce performance; Objective:SalesCross-sectional:340 Australian export venturesSpecialized e-commerce MCs directly increase degree of distribution and communication efficiency, which in turn leads to enhanced export market performance.Gregory, Ngo, and Karavdic (2017) Export MCs: Export market intelligence, product develop- ment, communication, pric- ing, distribution and after-sale service capabilitiesSubjective:Export performanceCross-sectional:333 Vietnamese exporting firmsAfirm’s relational capability not only strengthens the efficiency of export performance as related to pricing, intelligence, and communication capabilities but also is the strongest predictor of export performance among those capabilities.Pham, Monkhouse, and Barnes (2017) Meta-analysis of MCsSubjective:New product performance50 studies with 341 marketing capability– new product perfor- mance effect sizes from 17 countriesMCs have a stronger influence than techno- logical capabilities on new product perfor- mance; this effect is moderated by institutional context factors. The relative advantage de- creases and even reverses with increasing growth rates, further decreases with stronger rule of law in a country, and increases in societies emphasizing self-expression vs.

survival values.Eisend, Evanschitzky, and Calantone (2016) a Marketing Capabilities in International Marketing 65 Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Knowledge competence (cus- tomer knowledge competence and competitor knowledge competence)Subjective:Firm performance (two-year sales growth, ROI, profit)Cross-sectional:674 NPD and/or launch managers in the United States (N = 288) and China (N = 386)Knowledge competencies mediate the positive relationships between orientations and market-based innovation. Market-based in- novation mediates the positive relationships between customer and competitor knowledge competencies and overall firm performance.

In U.S. vs. Chinese firms, customer (compet- itor) orientation leads to both higher customer (competitor) knowledge competence and enhanced market-based innovation.Ozkaya et al. (2015) Meta-analysis of product, pricing, distribution, and communication capabilitiesSubjective:Export performance (financial and nonfinancial)11 studies of 135 effects of MC–competitive advantage–performance relationshipTwo types of competitive advantage (i.e., low-cost advantage and differentiation advantage) posi- tively mediate the effect of MCs (except for distribution capability) on financial and nonfi- nancial export performance.Tan and Sousa (2015) a Market sensing, customer en- gaging, and partner linking capabilitiesSubjective:NPD performanceCross-sectional:324 U.S.

firms and 569 Chinese firmsMC is positively associated with NPD performance.

Exploitation and exploration respectively mediate the marketing capability–NPD performance relationship. Customer-based structure, decentralization, and interfunctional integration positively moderate the marketing capability– NPD performance relationship.Mu (2015) MNCs’product innovation capabilityN.A.Cross-sectional:86 Taiwan-based MNCsThere is a negative direct relationship between subsidiary tacit-knowledge level and MNCs’product innovation capability.Sheng et al. (2015) Product development capability N.A.Cross-sectional:471 Portuguese exporting manufacturing firmsProduct development capability is positively and significantly associated with export venture performance.Vicente, Abrantes, and Teixeira (2015) 66 Journal of International Marketing Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Distribution network, brand management, and product innovation capabilitiesObjective:Probability of presence in emerging markets (EMs)Cross-sectional:271 Italian manufacturers involved in exportingFirms that expanded their business in EMs showed a significantly higher endowment of MCs compared with firms exporting only in advanced markets. Moreover, firm size is irrelevant: even small firms can reach EMs by leveraging an appropriate set of capabilities.Bortoluzzi et al.

(2014) Product management capabilitySubjective:IJV performance (ROI and sales growth)Cross-sectional: 156 IJVs in ChinaTechnology and customer orientations have a positive effect on IJV product differentiation capability, and this effect is contingent on foreign parent control.Chen, Chen, and Zhou (2014) Market-based capabilities: in- formation, relationships, and new product development (NPD) capabilitiesSubjective:Export performance (strategic and satisfaction)Cross-sectional:150 small and medium-sized exporters in AustraliaAccess to location-specific advantages (i.e., access to sources of supply, government agencies, export-related services and infra- structure, managerial labor skills, and net- work opportunities) is an essential antecedent for the firm’s ability to develop export-related resources and capabilities that drive export performance outcomes.Freeman and Styles (2014) Channel networking capabilitySubjective:Export performance (profitability, profit growth, and margins); Objective:Export performance (export sales turnover and aver- age total export profit)Longitudinal:160 small and medium-sized exporters in Ghana in years t and t + 3; Cross-sectional:117 firms in Bosnia and HerzegovinaInnovativeness is most beneficial for firms operating in competitive and dynamic export markets; those in less competitive and more static markets do not benefit from their in- novation activities to the same extent.

Stronger networking capabilities and a more organic structure also enhance the innovativeness–export performance relationship.Boso et al. (2013) Marketing Capabilities in International Marketing 67 Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Architectural MCs: marketing planning and market infor- mation acquisition, interpre- tation, and dissemination; specialized MCs: pricing, product development, chan- nel and delivery management, after-service selling, and mar- keting communicationSubjective:Market and financial performanceCross-sectional:219 U.K.

exporting manufacturersArchitectural and specialized MCs positively impact export ventures’internal marketing strategy implementation, which in turn pos- itively impacts external marketing strategy implementation effectiveness and export venture market and financial performance.

Architectural (specialized) MCs also directly determine export venture financial (market) performance. MC integration is positively related to marketing strategy implementation effectiveness.Morgan, Katsikeas, and Vorhies (2012) Various MCsSubjective:Market performance (market share) and financial performance (two-year lagged return on assets)Cross-sectional:192 Chinese firms and IJVs or foreign wholly owned firms in ChinaMC has a positive impact on both market and financial performance, and both pure imita- tion and creative imitation, when coupled with strong MCs, positively affect market performance.Lee and Zhou (2012) Customer relationship man- agement, product develop- ment management, and supply chain management capabilitiesSubjective:Firms’international growthCross-sectional:159 young international firms in ChinaEarly foreign market entry enhances a young venture’s MCs, which in turn leads to in- ternational growth. Young ventures im- prove their MCs more when senior managers are highly committed to foreign markets. Impact of MCs on the performance outcomes of early internationalization is greater in ventures targeting developed vs.

emerging markets.Zhou, Wu, and Barnes (2012) Specialized MCs: pricing, product development, distribution, and marketing communication capabilitiesN.A.Cross-sectional:891 firms across four coun- tries (China, Germany, Hong Kong, and the United States)Social capital—managerial tie utilization, trust, and solidarity—is a strong driver of the four MCs. Managerial tie utilization and solidarity tend to be more important when the national culture’s power distance is low, collectivism is high, and uncertainty avoidance is low, whereas the effect of trust is not subject to national cultural variations.Kemper, Engelen, and Brettel (2011) 68 Journal of International Marketing Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Informational, customer relationship, and product development capabilitiesSubjective: Export venture perfor- mance (market share, profitabil- ity, and revenue)Cross-sectional:312 U.K.-based exporting manufacturersExporting experience nurtures customer rela- tionships and informational capabilities, and availability of finance facilitates informational and product development capabilities and enables exporters to achieve service advantage and superior venture performance in the overseas markets.Kaleka (2011) Overseas market-related ex- ploitative and explorative capabilities, and product- development exploitative and explorative capabilitiesSubjective:Market effectivenessCross-sectional:254 Portuguese export manufacturersEntrepreneurial orientation is a precursor of exploitative and explorative product devel- opment and overseas market–related capa- bilities. Product development explorative capabilities and overseas market–related exploitative capabilities have a positive effect on new product differentiation, which in turn enhances market effectiveness.Lisboa, Skarmeas, and Lages (2011) Business identification, relationship-building, and product-market development capabilitiesSubjective:Export market performance and export financial performanceCross-sectional:223 U.K. exporting firmsAdoption of specific national export-promotion programs strengthens firms’export-related resources and capabilities, which in turn drive development of a sound export marketing strategy, competitive advantages, and superior export performance.Leonidou, Palihawa- dana, and Theodo- siou (2011) Pricing, new development capability, and marketing communication capabilitiesSubjective:Financial performance, strategic performance, and product performance; Objective: return on assets (ROA) for 271 firmsCross-sectional:491 export ventures based in China (240 Chinese and 251 non-Chinese firms from United States, Europe, Japan, and Hong Kong)MCs mediate the market orientation (MO)–performance relationship, while competitive advantages partially mediate the MC–performance relationship. Coor- dination mechanism strengthens and cost leadership strategy weakens the effect of MO on NPD and marketing communica- tion capabilities, respectively. Market tur- bulence attenuates the effect of MO on NPD capability, while competitive inten- sity strengthens this effect.Murray, Gao, and Kotabe (2011) Marketing Capabilities in International Marketing 69 Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Product offering, pricing, dis- tribution, communication, and marketing planning and implementation capabilitiesSubjective:Marketplace performanceCross-sectional:300 Australian and 259 Vietnamese manufacturing firmsMC mediates the effects of the firm’s MO on its performance; interaction of innovation and MCs significantly influences firms’market- place performance more than each does individually; MO partially mediates the relationship between entrepreneurial orientation and innovation and MCs.O’Cass and Ngo (2011) International customer-support capabilitySubjective:Improved organiza- tional learning and performanceCross-sectional:173 international new ventures from China and IndiaInvestments in international customer support capabilities are associated with improved organizational learning and performance.

Globalization pays off when entrepreneurial firms from emerging economies invest in ongoing support of their most important international customers.Khavul et al. (2010) Information acquisition and adaptive capabilitiesSubjective:International perfor- mance (growth, market share, profitability, ROI, and satisfaction)Cross-sectional:775 young and small international- izing entrepreneurial exporters in ChinaAdaptive capability mediates the relationship between institutional capital/managerial ties and international performance.Lu et al. (2010) Dynamic MCs: product development management, customer relationship, and supply chain management capabilitiesSubjective:Competitive advantage; Objective:Sales/assets and profits/assetsCross-sectional:114 manufacturing IJVs in ChinaResource magnitude and resource comple- mentarity of an IJV positively influence its Dynamic marketing Capabilities (DMCs), which positively impact IJVs’competitive advantage and financial performance. Market dynamism positively moderates the DMC– performance relationship.Fang and Zou (2009) Organizational learning capa- bilities for innovation, rela- tionship capabilities, and 1uality capabilitiesSubjective:Export performance (economic and relationship performance)Cross-sectional:419 small to midsize Portu- guese exportersRelationship capabilities improve product innovation, product quality, and relation- ship performance. Quality capabilities and relationship capabilities affect product quality, which improves relationship performance.Lages, Silva, and Styles (2009) 70 Journal of International Marketing Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Meta-analysis of MCsSubjective and Objective:Firm performance114 studies from United States and other countriesMC has a stronger impact on firm performance than R&D and operations capabilities. Other study characteristics (market/efficiency performance; subjective/objective data; firm size; U.S./non-U.S.; SBU/firm-level data; in- dustry) do not influence MC–performance relationship.Krasnikov and Jaya- chandran (2008) a Market linking and marketing capabilitiesN.A.Cross-sectional:709 firms across the United States, Japan, and ChinaProspectors have greatest technical and IT capabilities; defenders are superior in mar- ket linking and MCs across all countries.

U.S. firms have greater market linking ca- pabilities than Chinese and Japanese firms for prospectors and defenders, but not for reactors. Japanese and Chinese firms have greater MCs than U.S. prospectors and analyzers.Song et al. (2008) Network, outside-in, inside- out, and spanning capabilitiesSubjective:Economic international performanceCross-sectional:198 Spanish and 383 Bel- gian international firmsMCs have a positive impact on international commitment, international entry modes, and economic international performance.Blesa and Ripolles (2008) Local market competenceSubjective:Manufacturer compet- itiveness in export marketCross-sectional:142 relationships between U.S. manufacturer and independent foreign distributor in export marketAll three governance mechanisms (trust, knowledge sharing, and contract-based rela- tionship) contribute to firms’ability to exploit local market opportunity. Local market competence enhances the manufacture’s competitiveness in the export market.Wu et al. (2007) Customer linking, market sensing, and channel-bonding capabilitiesSubjective:Profit, sales, and ROI relative to objectives of joint ventures (JVs)Cross-sectional:466 U.S. JVsMCs positively impact JV performance. MCs have weaker impact on JV performance in technologically turbulent environments. The interaction of marketing and technological capabilities significantly impacts JV perfor- mance only in the high-turbulence environment.Song et al. (2005) Marketing Capabilities in International Marketing 71 Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Market linking and marketing capabilitiesObjective:Profit margin, three- year ROI, ROA, relative market share, customer retention, sales growth, and profit margin/sales/ ROI relative to strategic business unit (SBU) objectivesCross-sectional:709 firms in three countries (China, Japan, United States)Defenders and reactors have significantly higher MCs and market linking capabilities than other strategy-type groups; they are also the best performers across all performance mea- sures, even though they also represent the group that faces the most uncertain market- ing, competitive, and technological environment.DeSarbo et al. (2005) CRM processes (capabilities), including customer relation- ship initiation, maintenance, and termination capabilitiesSubjective:Overall performance, market share, growth, and cur- rent profitability;Objective:

ROACross-sectional:SBUs from 211 (Model 1) and 98 (Model 2) B2C firms from four indus- tries in Austria, Ger- many, and SwitzerlandImplementation of the three CRM processes (especially initiation and maintenance) has a positive impact on firm performance.

CRM-compatible organizational alignment moderates the initiation/termination– capability–performance relationship positively. CRM technology negatively (positively) moderates the initiation (termination)–capability–performance relationship.Reinartz, Krafft, and Hoyer (2004) Informational, relationship- building, and product development capabilitiesSubjective:Positional advantages and export venture performance (economic, distributor and end-user performance)Cross-sectional:287 exporters that export through foreign distributorsMCs affect export venture competitive strategy choices and the positional advantages achieved in the export market, which in turn affect export venture performance outcomes.Morgan, Kaleka, and Katsikeas (2004) Marketing competenceSubjective:International performanceCross-sectional:106 Danish and 186 U.S.

born-global exportersBorn-global international performance is enhanced in the wake of managerial emphasis on foreign customer focus and marketing competence.Knight, Madsen, and Servais (2004)IMR Relationship learning capabilitySubjective:Relationship performanceCross-sectional:315 relationship dyads in Scandinavian sellers and European buyersLearning capability of a relationship has a strong, positive effect on performance.Selnes and Sallis (2003) 72 Journal of International Marketing Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Marketing planning and marketing implementation capabilitiesSubjective:Time to market, re- sponse to competitors’product change, number of successful new products, new product revenueCross-sectional:287 British and 173 Chinese export venturesIndividual and organizational experiential knowledge and organizational information knowledge drive marketing planning and implementation capabilities, which in turn contribute to export venture perfor- mance. Marketing planning capabilities improve marketing implementation capabilities.Morgan et al. (2003) Export MCs: pricing, distribu- tion, communication, and product development capabilitiesSubjective:Positional advantage (mediator) and financial performanceCross-sectional:176 ex- port ventures of 50 Chinese exporters from 20 industriesThree of the four export MCs (product de- velopment, distribution, and communica- tion) impact firms’low-cost and branding positional advantages positively, which in turn impact firms’financial performance.Zou, Fang, and Zhao (2003) Service quality competence and customer competenceSubjective:Inimitability of a firm’s competitive advantage;Objec- tive:Entry mode (franchising and management contracts)Cross-sectional:139 ho- tels from 46 countries (55% from developing countries)Service quality competence contributes most to the inimitability of a firm’s competitive ad- vantage; firms with higher service quality competence are more likely to choose man- agement contracts over franchising. This effect is stronger for larger firms and in service-sensitive markets. Service quality competence and customer competence are seen to be more difficult to transfer via fran- chising than other competences.Erramilli, Agarwal, and Dev (2002) Informational, customer relationship–building, prod- uct development, and supplier relationship–building capabilitiesSubjective:Export competitive advantage (cost, product and service)Cross-sectional:202 U.K. exporting manufacturesInformation capabilities drive service ad- vantage, product development capabilities drive product advantage, and supplier re- lationship capabilities drive cost advantage.

Customer relationship-building capability drives all three types of competitive advantage.Kaleka (2002) Marketing Capabilities in International Marketing 73 Table 2.Continued Key Marketing Capabilities (MCs) Identified Performance Measure Study Design and Sample Selected Findings Authors Transnational product innova- tion capabilityN.A.Cross-sectional:90 transnational product introductions from 45 MNCsOrganizations that use cross-national teams, teams with members who have prior overseas experience, and teams whose members com- municate frequently with overseas managers in order to acquire information about tacit differ- ences among countries have greater transna- tional product development capabilities.Subramaniam and Venkatraman (2001) Price competitiveness, product quality, product variety, market support, customer service, and product technol- ogy capabilitiesSubjective:Export performance (financial outcome, strategic outcome, and satisfaction with outcomes of exporting)Cross-sectional:381 U.S.

manufacturers involved in exportingMCs have a positive impact on export perfor- mance. Firms’integration of Internet tech- nology into marketing activities strengthens the influence of competitor/interfunctional orientation on the firms’marketing compe- tencies. Firm size and firm degree of export dependence further strengthen the positive impact of MCs on export performance.Prasad, Ramamurthy, and Naidu (2001) Market orientation, strategic decision time horizon, and market positioning capabilitiesSubjective:Financial (profit and ROI) and market (sales and market share) performance rela- tive to competitorsCross-sectional:1,619 firms in Hungary, Poland, and SloveniaWholly owned foreign firm subsidiaries and IJVs have higher levels of MC than state- owned firms in the three central European countries. Firms with higher MCs enjoy higher financial and market performance.Fahy et al. (2000) aMeta-analyses that we include along with the other 41 survey-based studies because they mainly review survey-based research in marketing capabilities in international marketing.

Notes: N.A. = not applicable. 74 Journal of International Marketing Table 3.Representative Outcome-Inferenced/Secondary Data–Based Marketing Capabilities Research in International Marketing Marketing Capabilities and How Measured Performance Measure Study Design and Sample Selected Findings Authors Dynamic marketing capability (DMC) is measured as marketing intensity (mar- keting expenditure/total sales).Subjective:Foreign affiliate performancePanel:254 foreign-owned affiliates (FOAs) in India during 2000–2008Effective deployment of DMC leads to better sales performance in wholly owned FOAs than in IJVs, and in nonmetropolitan than in metropolitan areas.Konwar et al.

(2017) MCs are measured by the number of months ahead the firm (1) planned its product mix and target markets; (2) al- located the necessary human resources; and (3) made the necessary investment.Subjective:Firm performance (market share)Cross-sectional:19,653 firms from 73 emerging economies on four continentsThe MC–firm performance relationship is mod- erated by the level of institutional development in an emerging market. Superior MCs have a stronger performance impact in countries with higher levels of economic development and in individualistic societies, and weaker impact in countries with strong legislative systems.Wu (2013) Parents’advertising intensityObjective:City class of subsidiary locationCross-sectional:6,955 subsidiaries nested within 318 multinational enterprisesParent firm’s MCs moderate the positive rela- tionship between a multinational enterprise subsidiary’s motive for targeting local markets and its propensity to be located in a global city.Goerzen, Asmus- sen, and Nielsen (2013) Marketing communication, selling, and market information management capabil- ities are measured using SFE. Each of the MCs is estimated by how efficiently the firm converts marketing resource into sales.Objective:Dealership network perfor- mance (firm efficiency)Panel:45 dealers (from Canada, Mexico, and United States) of a furni- ture firm (n = 155) in 4 yearsDealers have decreasing MCs over time, but their relative MC ranking is generally steady.Akdeniz, Gonzalez- Padron, and Calantone (2010) Cost-leadership competences are measured by production costs/sales and SGA/sales relative to industry median. Differentia- tion competences are measured by R&D expense/sales and new product outputs/ total outputs.Objective:Export propensity and ex- port intensity, and export performance (return on sales)Panel:18,644 exporters (domestic private enter- prises and foreign wholly owned subsidiaries) in China from 2001 to 2005Firms with realized competencies of cost leadership and differentiation more likely to export and have high levels of export intensity. While this holds true for domestic firms, foreign firms with differentia- tion competencies have low levels of export inten- sity, and only those with cost leadership competencies have higher levels of export propen- sity and export intensity.Gao et al. (2010) Using SFE, MCs are estimated by how effi- ciently the firm converts its marketing ex- penditure (SGA), intangible resources (Tobin’ s q), relationship expenditure (cost of receivables), and installed customer base (sales growth) into sales.Objective:

ProfitabilityCross-sectional:102 logistics firms in United Kingdom (76% went for interna- tional diversification)MCs positively influence firm performance. Firm efficiency enhances the positive impact of mar- keting capabilities on a firm’s profitability.Nath, Nachiappan, and Ramanathan (2010) Marketing Capabilities in International Marketing 75 Table 3.Continued Marketing Capabilities and How Measured Performance Measure Study Design and Sample Selected Findings Authors Parents’advertising intensityObjective:Entry mode: full acquisi- tions vs. greenfield joint venturesCross-sectional:101 joint ventures and 168 wholly owned subsidiaries owned by Japanese subsidiaries in the United StatesJapanese parents spending more on advertising are more likely to procure marketing assets from U.S.

firms through acquisitions. Japanese firms oper- ating an advertising-intensive home business also more likely to enter advertising-intensive U.S.

industries.Chen (2008) Client-specific capability (prior experience with client) is measured by repeat clients.Objective:Project contribution (reve- nues minus costs)Panel:57 clients of a global software service firm in India during 1996–2001Client-specific capability is modestly related with project performance.Ethiraj et al.

(2005) MCs are measured by advertising expen- diture/sales.Objective:Return on assets and market- to-book valuePanel:14 major global pharmaceutical firms in 1985–1991MC does not have a significant impact on firm performance.De Carolis (2003) MCs are reflected in industry brand (ad- vertising expenses/sales) and sales force (selling expenses/sales and sales force/ total employee) level.Objective:Entry mode choiceCross-sectional:2,175 en- tries by British, Japanese, and German investors into United StatesStrong marketing capabilities in the entered in- dustry in the United States enhance the propor- tion of entries by acquisition.Anand and Delios (2002) Advertising expenditure.Objective:Entry mode (joint venture vs. wholly owned subsidiary)Cross-sectional:269 Japanese affiliates in United States (101 are joint ventures)Japanese parent firms that spent more on advertising in the United States prior to U.S. entry are less likely to choose joint ventures over wholly owned subsidiaries. Japanese parent firms that spent more on advertising in Japan prior to U.S. entry are more likely to choose joint ventures over wholly owned subsidiaries.Chen and Hennart (2002) MCs are measured by marketing intensity (ad expense/sales).Objective:Financial and operational performance (return on assets and sales/ operating costs)Panel:49 U.S. MNC firms in 12 different industries (over a seven-year period ending in 1993)Firms with higher MC and R&D capabilities are better able to realize the inherent benefits of multinationality regarding financial and opera- tional performance.Kotabe, Sriniva- san, and Aulakh (2002) 76 Journal of International Marketing been used in a few international marketing studies in our sample is the institution-based view. This perspective is based on institutional theory, which focuses on institutional pressures, such as industry or societal norms, regulations, and requirements, to which firms must adapt to attain legitimacy, operate, and serve customers in a country marketplace (e.g., Peng 2003). Such institutional forces may vary across different country marketplaces and can affect informal and formal marketing exchanges and thereby impact both the design and processes of an organization (e.g., Hult 2011).

Comparing specific marketing capabilities identified in the international marketing versus general marketing literature, we find only seven marketing capabilities that are specific/unique to studies in international marketplaces and that could therefore potentially be considered“international marketing capabilities”(vs. simply general marketing capabilities in an international context): (1) MNCs’transnational product innovation capability (Sheng et al. 2015; Subramaniam and Venkatraman 2001), (2) global brand manage- ment capability (Matanda and Ewing 2012), (3) over- seas market–related exploitative and explorative capabilities (Lisboa, Skarmeas, and Lages 2011), (4) international customer- support capability (Khavul et al. 2010), (5) adaptive capa- bility (Lu et al. 2010), (6) local market competence (Wu et al. 2007), and (7) global account management capability (Shi et al. 2005). Details of the research on these capa- bilities are summarized in Table 4. In the following section, we review the literature on marketing capabilities in in- ternational marketing in more detail from three perspectives:

(1) the classification of marketing capabilities; (2) the mea- surement and analysis of marketing capabilities; and (3) the antecedents, mediators, moderators, and consequences of marketing capabilities in international marketing.

Classification.As the notion of marketing capabilities is still relatively new to the marketing discipline (Morgan 2012), research in this area is still rather fragmented. However, the literature reveals several ways to classify different marketing capabilities. For example, adopting a market orientation perspective, Day (1994) classifies capabilities as outside-in, inside-out, and spanning capabilities and identifies market sensing and customer linking as the most important outside- in marketing capabilities. Day (2011) extends his earlier classification by proposing three subsets of marketing ca- pabilities: (1) static marketing capabilities, which include specialized/functional capabilities and cross-functional capabilities; (2) dynamic marketing capabilities, such as the ability to reconfigure and improve existing marketing capabilities; and (3) adaptive marketing capabilities, which deal with proactive vigilant marketing learning through ex- perimentation and active interactions with network partners.In a different approach drawing on qualitative fieldwork based on interviews and focus groups with managers, Vorhies and Morgan (2003, 2005) classify marketing ca- pabilities into two categories: specialized capabilities and architectural capabilities. Specialized capabilities refer to the lower-order, functionally focused, marketing mix–related processes and routines such as pricing, advertising, product management, and channel management. Architectural ca- pabilities such as marketing strategy planning and imple- mentation capabilities deal with higher-order processes and routines that orchestrate and coordinate the firm’sspe- cialized marketing capabilities and their associated resource inputs. Morgan and Slotegraaf (2012) and Morgan (2012) build on this to provide a more extensive taxonomy by (1) adding a third type of marketing capability: cross-functional capabilities, such as brand management and customer re- lationship management (CRM), that bring together multiple different functional inputs; and (2) classifying marketing capabilities not only by their lower- to higher- order nature but also by the different levels at which they exist—individual, group, organization, and in- terorganizational levels—providing the most compre- hensive framework available to date for classifying various marketing capabilities.

Consistent with Morgan and Slotegraaf’s (2012) classifi- cation system, we classify the marketing capabilities in the representative set of studies we identified in the international marketing literature by their lower- to higher-order nature and the organizational levels at which they exist. Table 5 is adapted from Morgan and Slotegraaf (2012, p. 94) and summarizes the characteristics, examples, and representa- tive studies of various types of marketing capabilities in the international market context.

Table 5 reveals that existing research on marketing capa- bilities in international markets has a heavy focus on midlevel marketing capabilities (35 of the 64 articles reviewed), compared with research in domestic markets, which has generally focused to a greater degree on lower-level marketing capabilities. While many articles examining marketing capability in international markets also study lower-level marketing capabilities (23 of the 64 articles), very few focus on higher-level m a r k e t i n g c a p a - bilities (6 of the 64 articles). This is consistent with- —and may even be due to—the equally scant research on higher-level marketing capabilities in domestic market contexts in the general marketing literature.

Lower-level marketing capabilities are characterized by the specialized functional marketing processes used to design and implement individual marketing-mix (four Ps) activities Marketing Capabilities in International Marketing 77 Table 4.Representative Empirical Research on International Marketing Capabilities Marketing Capabilities Specific/Unique to International Markets DefinitionCaptures Dynamics in Marketing Capabilities?Capabilities Assessed Relative to Rivals?Causal Relationships Hypothesized/Tested? Authors MNCs’product innovation capability/transnational product innovation capabilityThe capability to develop and introduce new products that fulfill needs across multiple country markets ·Concept: no Yes Hypothesized: no Sheng et al. (2015); Subramaniam and Venkatraman (2001) ·Measures: no Global brand management capabilityAbility to standardize brands across markets without up- setting (but, rather, inspiring) local managers and/or consumers ·Concept: yes N.A. (case study) N.A. (case study) Matanda and Ewing (2012) ·Measures: N.A.

Overseas market–related exploitative and explor- ative capabilitiesOverseas market–related ex- ploitative (explorative) capa- bilities reflect the firm’s ability to refine and extend (acquire) its existing (entirely new) overseas market and customer knowledge, skills, and processes ·Concept: yes No ·Hypothesized: yes Lisboa, Skarmeas, and Lages (2011) ·Measures: no ·Tested using cross- sectional data: yes International customer- support capabilityAll activities to ensure that a product is available for trouble- free use over its useful life span ·Concept: yes No ·Hypothesized: yes Khavul et al. (2010) ·Measures: no ·Tested using cross- sectional data: yes Adaptive capability The firm’s ability to coordinate, recombine, and allocate re- sources to meet the different requirements of foreign markets ·Concept: yes No ·Hypothesized: yes Lu et al. (2010) ·Measures: yes ·Tested using cross- sectional data: yes Local market competence The ability of a manufacturer to recognize and exploit local market opportunities ·Concept: no No ·Hypothesized: yes Wu et al. (2007) ·Measures: no ·Tested using cross- sectional data: yes Global account manage- ment capabilityIntelligence acquisition, coordi- nation, and reconfiguration ·Concept: yes N.A. (case study) N.A. (case study) Shi et al. (2005) ·Measures: N.A. Notes: N.A. = not applicable. 78 Journal of International Marketing Table 5.Classification of Marketing Capability Levels in International Marketing Level of Marketing Capabilities Characteristics Examples Representative Studies High-level Dynamic marketing capa- bilities, market learning, resource reconfigura- tion, and capability en- hancement (Day 2011; Morgan 2012; Morgan and Slotegraaf 2012)Individual Adaptive selling, process thinking, mar- keting skills developmentN.A.

Group (team/function) Channel transformation Wilson and Daniel (2007) Organization (firm) Market learning, marketing resource reconfiguration, and capability augmentationEvers, Andersson, and Hannibal (2012); Fang and Zou (2009); Lages, Silva, and Styles (2009); Shi et al. (2005) Adaptive marketing mix to foreign markets Lu et al. (2010) Exploitative and explorative (product de- velopment and overseas market–related)Lisboa, Skarmeas, and Lages (2011) Interorganizational Interorganizational learning/benchmarking Selnes and Sallis (2003) Midlevel Architectural/orchestrat- ing or strategic market- ing capabilities (Morgan 2012; Morgan, Katsi- keas, and Vorhies 2012; Morgan et al. 2003)Individual Customer complaint resolution N.A.

Group (team/function) Team selling Akdeniz, Gonzalez-Padron, and Calantone (2010) Organization (firm) Market environment scanning or market sensing (information)Kaleka (2011); Kaufmann and Roesch (2012); Lu et al. (2010); Malik, Sinha, and Blumenfeld (2012); Mu (2015); Wu et al.

(2007) Strategic marketing planning (segmenta- tion, targeting, and positioning)Fahy et al. (2000); Gao et al. (2010); Knight, Madsen, and Servais (2004); Morgan, Katsikeas, and Vorhies (2012); Song et al. (2008); Spyropoulou et al. (2017) Marketing strategy implementation, con- trol, and evaluationsDeSarbo et al. (2005); Lages, Silva, and Styles (2009); Morgan et al. (2003); Song et al. (2008); Wu (2013) Cross-functional market- ing capabilities (Day 1994, 2011; Morgan 2012)Organization (firm) Brand management Bortoluzzi et al. (2014); Erramilli, Agarwal, and Dev (2002); Matanda and Ewing (2012) Customer relationship management (CRM) Kaleka and Morgan (2017); Leonidou, Palihawadana, and Theodosiou (2011); Mu (2015); Reinartz, Krafft, and Hoyer (2004); Shi et al. (2005); Zhou, Wu, and Barnes (2012) New product development (NPD) Eisend, Evanschitzky, and Calantone (2016); Freeman and Styles (2014); Sheng et al. (2015); Subramaniam and Ven- katraman (2001); Vicente, Abrantes, and Teixeira (2015) Interorganizational Channel bonding, channel relationship management, channel networkingBlesa and Ripolles (2008); Bortoluzzi et al. (2014); Boso et al.

(2013); Kaleka (2002); Mu (2015); Song et al. (2005); Zhou, Wu, and Barnes (2012) Dispersed NPD Perks (2005) Marketing Capabilities in International Marketing 79 Table 5.Continued Level of Marketing Capabilities Characteristics Examples Representative Studies Lower-level Specialized/functional or tactical marketing skills in implementing market- ing-mix activities (Vorhies and Morgan 2005)Individual Overseas personal selling and call handling N.A.

Group (team/function) Overseas store management and merchan- dise managementN.A.

Organization (firm) Pricing Kemper, Engelen, and Brettel (2011); O’Cass and Ngo (2011); Pham, Monkhouse, and Barnes (2017); Prasad, Ramamurthy, and Naidu (2001); Tan and Sousa (2015); Zou, Fang, and Zhao (2003) Selling Akdeniz, Gonzalez-Padron, and Calantone (2010); Lee and Zhou (2012); Mariadoss, Tansuhaj, and Mouri (2011); Morgan, Katsikeas, and Vorhies (2012) Advertising and promotion Anand and Delios (2002); Chen (2008); Chen and Hennart (2002); De Carolis (2003); Goerzen, Asmussen, and Nielsen (2013); Kotabe, Srinivasan, and Aulakh (2002); Lee and Zhou (2012) Market research N.A.

Marketing communication Kemper, Engelen, and Brettel (2011); O’Cass and Ngo (2011); Pham, Monkhouse, and Barnes (2017); Tan and Sousa (2015); Zou, Fang, and Zhao (2003) Product management Chen, Chen, and Zhou (2014); Erramilli, Agarwal, and Dev (2002); Morgan, Katsikeas, and Vorhies (2012); Murray, Gao, and Kotabe (2011) Market information/knowledge managementAkdeniz, Gonzalez-Padron, and Calantone (2010); Ozkaya et al. (2015); O’Cass and Ngo (2011) Pham, Monkhouse, and Barnes (2017) Customer service Ethiraj et al. (2005); Khavul et al. (2010); Prasad, Rama- murthy. and Naidu (2001) E-commerce marketing capability Gregory, Ngo, and Karavdic (2017) Interorganizational Distribution/channel management/delivery Kemper, Engelen, and Brettel (2011); Mariadoss, Tansuhaj, and Mouri (2011); Song et al. (2005); Zou, Fang, and Zhao (2003) Notes: This table is adapted from Morgan and Slotegraaf (2012, p. 94). N.A. = not applicable. 80 Journal of International Marketing (e.g., Morgan, Katsikeas, and Vorhies 2012; Vorhies and Morgan 2005) such as pricing (e.g., Zou, Fang, and Zhao 2003), advertising and promotion (Chen 2008; De Carolis 2003), and selling (e.g., Lee and Zhou 2012). In the in- ternational market context, most research on lower-level marketing capabilities focuses on firm-level capabilities, particularly in the areas of advertising, marketing communi- cations, and product management capabilities in foreign markets. In contrast, we observe no research on functional market research capabilities or on individual- and group-level marketing capabilities, such as overseas salesperson skills and overseas store management skills, perhaps because of the different nature of international selling (i.e., foreign sales) or difficulty getting data on overseas retail stores.

Midlevel marketing capabilities are characterized by ar- chitectural or strategic marketing capabilities (Morgan, Katsikeas, and Vorhies 2012; Morgan et al. 2003) such as market sensing (e.g., Kaufmann and Roesch 2012; Malik, Sinha, and Blumenfeld 2012; Song et al. 2005), marketing strategy planning (e.g., Morgan, Katsikeas, and Vorhies 2012), and strategy implementation capabilities (e.g., Spyropoulou et al. 2017); cross-functional capabilities such as brand management (e.g., Erramilli, Agarwal, and Dev 2002), CRM (e.g., Reinartz, Krafft, and Hoyer 2004; Leonidou, Palihawadana, and Theodosiou 2011), and new product development (Kaleka 2011); and interorganizational capabilities such as channel bonding and networking (Blesa and Ripolles 2008; Boso et al. 2013; Zhou, Wu, and Barnes 2012). We find that in the international context, environ- mental scanning or market sensing capabilities are the most frequently studied midlevel capabilities. This makes sense given the increased complexity of the environment when dealing with international markets. Meanwhile, brand management capability is the least frequently studied midlevel marketing capability, which mirrors the equally scant re- search in a domestic market context (Morgan, Slotegraaf, and Vorhies 2009) and may be due—at least in part—to the relative lack of established scales for this capability. In comparison with domestic marketing capability research, studies in international marketing have paid relatively more attention to interorganizational capabilities such as channel bonding and channel relationship management and networking capabilities, perhaps due to the importance of relying on local partners to understand and facilitate mar- keting operations in overseas markets in exporting—the most widely used mode of international market entry.

However, in general, marketing capability research in international markets is clearly dominated by firm-level marketing capabilities, with very few studies examining individual-level and group-level marketing capabilities. Inaddition, very few studies have focused on exploring higher- level, dynamic marketing capabilities associated with reconfiguring resources and enhancing current marketing capabilities. Examples of such higher-level marketing capa- bilities are market learning capabilities (e.g., Morgan 2012), adaptive capabilities (Lu et al. 2010), and interorganizational learning capabilities (e.g., Selnes and Sallis 2003). Marketing capability research in domestic markets has also studied some individual-level higher-order capabilities like adaptive selling (e.g., Spiro and Weitz 1990) and process thinking (e.g., Dickson et al. 2009). Research in our sample of studies in the international marketing context has not examined such marketing capabilities.

In general, such higher-order marketing capabilities are difficult to observe and measure; thus, most studies of dynamic marketing capabilities adopt in-depth case study research designs (Evers, Andersson, and Hannibal 2012; Shi et al. 2005; Wilson and Daniel 2007). With few ex- ceptions (e.g., Fang and Zou 2009), studies using primary survey data designs often conceptualize marketing capa- bilities as“dynamic”(or at least draw on dynamic capa- bilities theory) but measure them in a static way that does not reflect the“dynamism”proposed in the conceptu- alization (see detailed examples in Table 4) (e.g., Lages, Silva, and Styles 2009; Lisboa, Skarmeas, and Lages 2011; Selnes and Sallis 2003). Nevertheless, theoreti- cally dynamic marketing capabilities are widely considered to be the ultimate source of competitive advantage in complex and rapidly changing global markets as they allow firms to continuously update their lower-order marketing capabilities and thus overcome path dependencies and avoid“competency traps” (Danneels 2002; March 1991; Morgan 2012). Given this, more research is clearly needed in the realm of higher-order dynamic marketing capabilities in both domestic and international markets.

Measurement and Analysis Method.Our review of the literature reveals that researchers have generally adopted one of three approaches to empirically in- vestigate marketing capabilities: (1) direct observation using primary case studies, (2) direct primary survey methods, and (3) inference-based approaches using secondary data. The first approach measures mar- keting capabilities through in-depth case studies, and we identified eight such studies in the international marketing research in our sample (for a review, see Table 1). While such case studies provide in-depth understanding of firms’specific marketing capabilities in international markets, they suffer from small sample size and generalizability problems. Marketing Capabilities in International Marketing 81 The second approach uses primary survey measures of mar- keting capabilities (for a review, see Table 2), and this is the most frequently used method in studies in international marketing (64%, or 41 of the 64 articles reviewed). Marketing managers responsible for the international market(s) in question generally serve as key informants, and they are asked to rate how well their companies perform various marketing activities, often relative to their major competitors (e.g., Fang and Zou 2009; Spyropoulou et al. 2017). Given the wide- spread use of this method in international marketing research, we further examined the types of operationalizations used in primary survey measures of marketing capabilities in our sample (see Web Appendix B). All 41 studies that use survey approaches use multi-item scales, with the majority (63%) employing seven-point scales and either“much worse/much better”or“strongly agree/strongly disagree”scale anchors.

Almost half the studies we reviewed (49%) use absolute (vs.

relative to rivals) measures of capabilities (i.e., how well various activities are performed) when asking managers to evaluate their marketing capabilities. 3The majority of the studies (71%) draw on existing conceptualizations and/or measures, primarily from the general domestic marketing capa- bilities literature.

The primary survey approach is a direct method to assess marketing capabilities, and itis flexible in enabling re- searchers to assess different types of marketing capabilities in various cultures and countries. However, there are two main problems with this method. First, with very few ex- ceptions (e.g., Boso et al. 2013), due to the difficulty of col- lecting data from the same firms at different points in time over long time frames, survey studies use cross-sectional research designs, mostly with single informants, and are therefore prone to common method bias. Second, data collected via primary surveys cannot empirically establish causal re- lationships that may be hypothesized with marketing ca- pabilities. In addition, this research design approach often limits the number of different control variables that can be included in the data collection.

The third broad approach to assessing firms’marketing capabilities relies on proxy measures from secondary data to infer a firm’s marketing capabilities (for a review, see Table 3) since no secondary data directly measuring firms marketing capabilities currentlyexist. There are generally two different methods used in this approach. One method uses marketing resource inputs such as advertising or selling, general, and administrative (SGA) expenditures/sales (e.g.,De Carolis 2003; Gao et al. 2010; Goerzen, Asmussen, and Nielsen 2013; Kotabe, Srinivasan, and Aulakh 2002) and selling expenses/sales (Anand and Delios 2002) or simply advertising expenses and time spent(Chen 2008; Chen and Hennart 2002; Wu 2013). Theinference is that the more a firm allocates resources to something, the more likely it is to be or become good at that thing. This is the most widely adopted method of measuring marketing capabilities using secondary data in international marketing. The second method uses marketing-related outcomes such as repeat client pro- portions (Ethiraj et al. 2005) to proxy how well a firm performs its marketing activities. This assumes that firms with better observed marketing-related outcomes have superior processes required to perform the activities that may deliver such out- comes. Both approaches have limitations in that the level of both (a) marketing resource deployments and (b) marketing- related outcomes represent only a part of the conceptualization of marketing capabilities as the firm’s ability to use available resources to achieve desirable marketing outcomes.

For this reason, scholars in the general domestic market context have begun to adopt“input-output”approaches using stochastic frontier estimation (SFE) as a third way to use secondary data to measure capabilities. This approach measures marketing capabilities bycalibrating how well a firm transforms a given set of resources (e.g., advertising, sales expenses, trademarks) into certain desirable marketing- related outputs. Using SFE, this method estimates the maximum observed efficient frontier among firms in an industry in converting resources into desirable mar- keting output objectives in a sample of firms and then compares this maximum value with the actual resource- to-output performance of each firm in a sample. Greater deviations from the efficiency frontier value represent lower marketing capabilities.

This measurement approach offers several benefits. First, it is well aligned with the conceptualization of capabilities in that it calibrates how well a firm is able to deploy its available re- sources to implement marketing activities that achieve desired marketing outcomes relative to how well rivals do so.

Thus, each firm is benchmarked in terms of its marketing capabilities against the best possible practices of firms with similar resources in the industry or sample of firms.

Second, because it uses secondary data, this method can enable researchers to examine the drivers and impact of marketing capabilities over longer time periods across firms—which is almost impossible to assess using pri- mary data through case studies or surveys.

However, while this method has many merits and is gaining popularity in domestic market marketing capabilities 3This is often inconsistent with the implicit or explicit conceptu- alization and definition of marketing capabilities used in a study as being anchored on a relative-to-rivals basis. 82 Journal of International Marketing research (e.g., Dutta, Narasimhan, and Rajiv 2005; Feng, Morgan, and Rego 2015, 2017; Xiong and Bharadwaj 2011), only two of the studies we reviewed of marketing capabilities in international markets have adopted this method (Akdeniz, Gonzalez-Padron, and Calantone 2010; Nath, Nachiappan, and Ramanathan 2010). This may be due to the difficulty of obtaining multiple input and international market output secondary data to calibrate marketing capabilities or to the complexity/newness of this method.

We also examined the major methods of analysis used in exploring the relationships between marketing capabilities and other phenomena in the published international mar- keting research represented in our sample (see Web Ap- pendix C). Most studies in our sample use structural equation modeling, which reflects the relative popularity of studies using primary survey research designs. Regression- based approaches (both hierarchical and nonhierarchical) are also frequently used. The relative infrequency of econometric modeling approaches (including mixed models and fixed or random effects) also makes sense given the infrequent use of panel and time-series data in the studies in our sample.

Antecedents, Moderators, Mediators, and Consequences.

The role of marketing capabilities in explaining firm perfor- mance has been of increasing interest to marketing scholars, as many have questioned the value of firms’marketing activitiesand investments (Rust et al. 2004). Generally, the literature suggests that firms with stronger marketing capabilities are better able to create value for customers and other stakeholders and thereby achieve and sustaincompetitive advantage and superior financial performance(Day 1994; Morgan 2012).

Though still relatively scant, a growing number of empirical studies have examined the impact of various marketing capabilities on different kinds of firm performance (mainly subjectively assessed) ranging from product-market per- formance indicators, such as sales revenue, market share, sales growth, and customer satisfaction, to financial per- formance outcomes, such as cash flow, profitability, and return on investment (ROI) (Krasnikov and Jayachandran 2008). Research in international marketing also generally shows that marketing capabilities improve firms’financial and nonfinancial performance in international markets (Tan and Sousa 2015).

Figure 1 synthesizes existing research on marketing capa- bilities in international marketing. Table 6 summarizes representative studies on the antecedents, mediators, and moderators of marketing capabilities in domestic versus international market contexts. This reveals that research on the antecedents of marketing capabilities in both do- mestic and international markets is scarce and has had a very limited focus. This lack of knowledge regarding the drivers of marketing capabilities is surprising given their Figure 1.Synthesis of Research on Marketing Capabilities in International Marketing • Resources • Market knowledge • Market orientation • International commitment • Foreign market contact • Entrepreneurial orientation • National export-promotion programs• Competitive advantages • Implementation effectiveness • Strategy • Innovation • International commitment • Entry mode Marketing Capabilities Firm Outcomes • Market environment • Institutional conditions • Country environment • Export dependence • Firm reputation • Efficiency •Strategy Marketing Capabilities in International Marketing 83 Table 6.Research on Marketing Capabilities in Domestic Versus International Markets Domestic Marketing Capability Research International Marketing Capability Research Characteristics Representative Studies Characteristics Representative Studies Antecedents Resources Morgan, Kaleka, and Katsikeas (2004)Resources Fang and Zou (2009); Freeman and Styles (2014); Gregory, Ngo, and Karavdic (2017); Kaufmann and Roesch (2012); Kemper, Engelen, and Brettel (2011); Khavul et al. (2010); Lu et al. (2010); Shi et al. (2005); Wu et al. (2007) Market knowledge Vorhies, Orr, and Bush (2011)Market knowledge Ethiraj et al. (2005); Morgan et al. (2003); Sheng et al.

(2015); Subramaniam and Venkatraman (2001); Wu et al.

(2007) Market orientation Trainor et al. (2011) Market orientation Chen, Chen, and Zhou (2014); Murray, Gao, and Kotabe (2011); O’Cass and Ngo (2011); Ozkaya et al. (2015); Prasad, Ramamurthy, and Naidu (2001) Strategy type Vorhies, Morgan, and Autry (2009)Internationalization motivation/ commitmentKaufmann and Roesch (2012); Khavul et al. (2010); Knight, Madsen, and Servais (2004); Wu et al. (2007); Zhou, Wu, and Barnes (2012) Foreign participation/contact Fahy et al. (2000); Wu et al. (2007) Entrepreneurial orientation Lisboa, Skarmeas, and Lages (2011); O’Cass and Ngo (2011) National export-promotion programsLeonidou, Palihawadana, and Theodosiou (2011) Mediators N.A. Competitive advantages (e.g., low-cost, differentiation, positional, brand, service)Kaleka (2011); Leonidou, Palihawadana, and Theodosiou (2011); Lisboa, Skarmeas, and Lages (2011); Morgan, Kaleka, and Katsikeas (2004); Tan and Sousa (2015); Zou, Fang, and Zhao (2003) N.A. Strategy (e.g., competitive strategy, product strategy, differentiation, exploitation, exploration)Lages, Silva, and Styles (2009); Leonidou, Palihawadana, and Theodosiou (2011); Morgan, Kaleka, and Katsikeas (2004); Mu (2015) N.A. Implementation effectiveness and marketing efficiencyGregory, Ngo and Karavdic (2017); Morgan, Katsikeas, and Vorhies (2012); Spyropoulou et al. (2017) N.A. Innovation Ozkaya et al. (2015) N.A. International-related (e.g., commitment/involvement, entry mode)Blesa and Ripolles (2008) 84 Journal of International Marketing Table 6.Continued Domestic Marketing Capability Research International Marketing Capability Research Characteristics Representative Studies Characteristics Representative Studies Moderators Market environment (e.g., turbulence, competitive intensity)McKee, Varadarajan, and Pride (1989); Trainor et al. (2011)Market environment (e.g., market turbulence, uncertainty, compet- itive intensity)Boso et al. (2013); DeSarbo et al. (2005); Erramilli, Agarwal, and Dev (2002); Fang and Zou (2009); Kaleka and Morgan (2017); Murray, Gao, and Kotabe (2011); Song et al. (2005) Moment of entry Ruiz-Ortega and Garc´ ıa-Villaverde (2008)Institutional factors (e.g., organi- zation alignment and technology, coordination mechanism, cus- tomer structure, decentralization, interfunctional integration, part- ner relationship, ownership type)Boso et al. (2013); Fahy et al. (2000); Konwar et. al (2017); Mu (2015); Murray, Gao, and Kotabe (2011); Pham, Monkhouse, and Barnes (2017); Reinartz, Krafft, and Hoyer (2004); Wu (2013) Comprehensiveness and budgeting rationality of marketing plan contentSlotegraaf and Dickson (2004)Country-specific macroenviron- mental factors (e.g., socioeco- nomic system, legislative and regulative system, national cul- ture/social values, economic de- velopment level, metropolitan location)DeSarbo et al. (2005); Eisend, Evanschitzky, and Calantone (2016); Erramilli, Agarwal, and Dev (2002); Gao et al.

(2010); Kemper, Engelen, and Brettel (2011); Konwar et. al (2017); Ozkaya et al. (2015); Song et al. (2008); Wu (2013); Zhou, Wu, and Barnes (2012) Marketing employee devel- opment capabilityOrr, Bush, and Vorhies (2011)Efficiency Nath, Nachiappan, and Ramanathan (2010) Strategy Murray, Gao, and Kotabe (2011) Degree of export dependence Prasad, Ramamurthy, and Naidu (2001) Firm reputation Erramilli, Agarwal, and Dev (2002) Marketing Capabilities in International Marketing 85 theoretical importance in explaining marketing’srolein firm performance. Most research on the antecedents of marketing capabilities has been limited to firm resources (e.g., Fang and Zou 2009), market knowledge (e.g., Morgan et al. 2003), and market orientation (e.g., Murray, Gao, and Kotabe 2011). Beyond these variables, explorations of the antecedents of marketing capabilities are frag- mented. Domestic marketing capabilities research has explored strategy type as a driver (Vorhies, Morgan, and Autry 2009), while international marketing ca- pabilities research has studied internationalization motivation/commitment (e.g.,Kaufmann and Roesch 2012; Khavul et al. 2010), foreign participation/contact (e.g., Fahy et al. 2000; Wu et al. 2007), entrepreneurial orientation (Lisboa, Skarmeas, and Lages 2011; O’Cass and Ngo 2011), and national export-promotion programs (Leonidou, Palihawadana, and Theodosiou 2011) as drivers.

While still small in number, a greater proportion of in- ternational versus domestic studies have explored ante- cedents of marketing capabilities.

Regarding mediators of the marketing capabilities–firm performance relationship, there is relatively little research in domestic market contexts but more such studies in in- ternational markets. Competitive (positional) advantages, business strategy, implementation effectiveness and efficiency, innovation, and international-related factors such as interna- tional commitment, involvement, and entry modes have all been studied as mechanisms by which marketing capabilities impact firm performance. A meta-analysis by Tan and Sousa (2015) finds that two types of competitive advantage (i.e., low-cost advantage and differentiation advantage) positively mediate the effect of marketing capabilities on financial and nonfinancial export performance. In general, understanding of the mediating mechanisms of how mar- keting capabilities impact firm performance is still in its infancy and remains underresearched in both domestic and international market contexts.

Table 6 also highlights the opportunity to investigate boundary conditions impacting the relationship between marketing capabilities and firm performance in in- ternational markets. Market environment (e.g., turbu- lence, competition) is the most frequently examined boundary condition in both domestic and international markets (e.g., Fang and Zou 2009; Kaleka and Morgan 2017). Explorations of other moderators of the marketing capabilities–firm performance relationship are rather frag- mented. In the international market context, various in- stitutional factors (e.g., organization structure, interfunctional integration, ownership type) and country-specific macro- environmental factors (e.g., socioeconomic and legal systems,culture and social values, economic development level) have been extensively examined (e.g., Eisend, Evanschitzky, and Calantone 2016; Ozkaya et al. 2015; Wu 2013; Zhou, Wu, and Barnes 2012). Several other moderators such as firm efficiency, strategy, degree of export dependence, and firm reputation have also been explored in different contexts in international marketing (e.g., Erramilli, Agarwal, and Dev 2002; Murray, Gao, and Kotabe 2011; Nath, Nachiappan, and Ramanathan 2010; Prasad, Ramamurthy, and Naidu 2001). In domestic markets, various moderators, such as market entry timing, marketing plan characteristics, and marketing employee development capability, have been explored (e.g., Orr, Bush, and Vorhies 2011; Ruiz-Ortega and Garc´ ıa-Villaverde 2008; Slotegraaf and Dickson 2004).

However, most of these moderators in international or domestic markets have been examined only once in a single study. Market turbulence is the only moderator that has been repeatedly tested in both domestic and international markets (Fang and Zou 2009; McKee, Varadarajan, and Pride 1989; Song et al. 2005). Unfortunately, researchers have reached conflicting conclusions regarding the impact of market turbulence. For example, Fang and Zou (2009) find that market turbulence enhances the positive impact of marketing capabilities on firms’competitive advantage and financial performance in IJVs in China. In contrast, Song et al. (2005) find that the impact of marketing capabilities on joint venture performance is weaker in more techno- logically turbulent environments in joint ventures in the United States. Thus, no consensus has been reached re- garding the fragmented moderators of the marketing capability– firm performance relationship proposed in various studies. ADDITIONAL INSIGHTS FROM PRACTICE While there is a rich stream of literature in international business and international marketing investigating in- ternationalization, and another in both the general and international marketing literature examining marketing capabilities, these two streams have not generally inter- sected. Given the lack of conceptual and empirical attention to the question of whether and how marketing capabilities may differ in international versus domestic contexts ap- parent in our literature review, we sought additional in- sights on this question from practice. Specifically, we searched for insights addressing the key question“Does marketing capability vary as a company migrates from a local to global focus, and if so, how and in what way?” Thus, from a practical standpoint, we sought to begin to 86 Journal of International Marketing understand whether as firms move from a local to an in- ternational orientation, how and in what ways this impacts the firm’s marketing capabilities (if at all).

Given the lack of existing empirical exploration on the topic, and the importance of generating insight from dif- ferent perspectives, we interviewed five C-level executives (three CMOs and two presidents who were once C-level marketers). The interviews were used to identify common conceptual themes that may serve to better illuminate dif- ferences between domestic and global marketing capabil- ities (Corbin and Strauss 2008). The interview protocol designed was reviewed by two academics and a practitioner (Kalton and Anderson 1986). Each reviewer was taken through the interview guide, asked to comment on clarity and length, and given an opportunity to suggest amendments or additional questions. This reviewer input led to revisions of the interview guides, which were then piloted with a C-level executive.

All the interviews were confidential. The executives inter- viewed were from firms that varied in size, industry, ownership (private/public), and customer type (B2B/B2C) (see Web Appendix D). Important for the research design, we ensured that we had balance across degree of in- ternationalization, with two of the firms in expansionary stages of globalization and three firms in mature and broadly terminal stages of global development. This blend was important because, as we anticipated, the challenges faced by firms on either end of the internationalization spectrum may be different. All the executives interviewed held or had held the top marketing position in their firms (i.e., their official titlescould have been Chief Marketing Officer or Senior Vice President of Marketing).

To source respondents, we contacted executives within our own and our schools’networks. Because respondents were geographically dispersed, the interviews were conducted via telephone. The interview protocol consisted of open-ended questions and was structured in three parts: (1) background information related to the respondent (title, years with firm) and to the firm (industry, type of customer, firm size, degree of internationalization, etc.); (2) the general differences in building and managing global (vs. domestic) marketing ca- pabilities; and (3) how specific characteristics (i.e., organization design/structure, process, talent, communication, and management) and capabilities may be associated with firms at varying levels of globalization (and associated with different stages of migration to a global marketing capability).

The fundamental question we asked is what changes with regardtoafirm’s marketing capabilities when the firmchooses to become more international. While a good deal of research attention has focused on examining firm in- ternationalization, little of it has investigated this from a marketing capability perspective. Interestingly, one of the key insights from the interviews was that the answer to this question largely depended on the firm’sdegreeofin- ternationalization. In our research, three of the firms were fully global, having a majority of their revenue generated from outside the United States and spread across multiple countries. The executives interviewed from these firms were not the architects that shaped the globalization of the firm but, rather, had been placed in positions of authority in an already established global firm. The other two ex- ecutives were members of the C-suite who were trying to increase the global footprints of their firms.

The responses from the two groups varied. Respondents in firms with established global operations found it more difficult to articulate how local versus global marketing capabilities were different. This is likely because they were stewards of already global firms rather than their original globalization architects. However, they suggested that the key ways in which local and global marketing capabilities differed cen- tered on the complexity of the processes required to create, align, and manage marketing capabilities. As one commented:

The process of marketing is identical no matter where you are practicing it. This was the most important ‘aha.’The key is to ensure that everybody is actually using the same process and this is where globalization can lead to complexity. A CMO for one country comes from Unilever and another comes from Procter & Gamble, and another comes from Pepsi. They all bring their own methods for generating consumer insight, their own processes for developing TV ads, their own methods for analyzing data, and even their own approaches to making a recommendation. This is when developing a global marketing capability can become a challenge. The key is to define one process, sell the entire organization on adhering to that one process, and ensure that everybody is trained globally on that process and held accountable for using that one process.

Respondents from the more mature, global firms consis- tently suggested that the difference between local and global marketing capability centered onaligning global leaders in the same direction in terms of using the same marketing processes to help increase speed, agility, and best practices redeployment. As one respondent suggested:

The advantage of having global marketing capabil- ities is in scale, best practice development, and the Marketing Capabilities in International Marketing 87 muscle needed to build superior brands. The tension is that people want to do things their own way. Local is closer to the consumer, has better insight into local customs, habits, and practices, which leads to better granular understanding. However, if every country developed their own marketing capabilities, then you wouldn’t have scale, or repeatable processes, or leverage.…Most countries would be less effective because they wouldn’t be implementing proven best practices. While being global can slow things down (more agile if fighting locally), the benefit is that you learn from other cultures, you have more exposure to different ways of thinking about things, you learn more, and you can reapply to other parts of the world.…Best practices travel. So the priority has to be developing the processes that enable us to capture the learning, synthesize it, and export best practices to the globe. And this is not easy.

As this comment highlights, respondents from the more globally mature companies tended to see mostly positives in developing global marketing capabilities, with the upside benefits of scale and best practice deployment being greater than the downside costs associated with potential lack of flexibility and less localization of marketing processes to deal with differences across countries. In contrast, re- spondents from less globally mature companies focused primarily on the significant resource acquisition (both money and talent) and systems challenges associated with building international marketing capability. In explaining the challenge, one respondent relayed the following story:

At one point, we were essentially a North American firm. While CMO, we decided to launch in two addi- tional countries—one in Asia and one in Latin America.

Now you have three climate regions which requires substantial product versioning. We then opened two other stores in another country. Each addition felt like something that was digestible, but, without knowing it, it added significant complexity. Running 18 promotions per country per year which had to be tailored to the locality…preparing for contingency sales and signage changes every 21 days…and then one country wants to have their own website. You have nuances in the language in social media. There are 500 holidays an- nually across our countries—and they don’tlineup globally. We are a fashion company and so things like sizing vary significantly by country.…Going global was a three-year nightmare. To make this even more concrete, we didn’t have the digital asset management systems or really good marketing automation systems or really good translation or even servers that would enable us to transfer huge images for trade show posters so that French Morocco can get the right poster and youdon’t end up starting a holy war. This isn’t funny. We sent something meant for an Asian country to the Middle East, and I was worried that our stores might get bombed. The big challenge is that building global marketing capabilities takes a lot more money and people than senior management want to throw at it.

It takes time to generate the revenue and yet you need the resources up front. Everything I mentioned could be fixed with more people and more money…but you don’t get that until you start shipping product globally and generating revenue. This is the problem.

In line with this resource constraints-related problem focus, another less globally mature company respondent also focused on their firm’s resource challenge:

It simply takes a lot more resources—both money and people—to deal with the complexity of developing global marketing capabilities. Our goal is to become 50% global, but it is a chicken and egg problem.…I can’t afford to run research studies in every country, I can’t yet afford to establish regional marketing orga- nizations (instead of managing it from the home office). And by not having local marketing folks, we may have to start developing a dealer/co-op pro- gram because we don’t know the market well enough.…We may have to turn over the marketing to these markets. So without the talent, we can’t effectively replicate the marketing that we conduct in the U.S., and therefore can ’t effectively market. I can’t afford the talent until we get the sales.…Back to the chicken and egg problem.

Interestingly, overall, the interviews suggest that firms seeking to become more global by establishing international operations (i.e., moving beyond simply exporting) are more focused on granular levels of lower-level marketing capa- bility development in the countries in which they establish operations. In doing so, they face barriers primarily in obtaining required levels and types of resources to deploy in building such capabilities. In contrast, more globally mature firms are focused on architectural-level capability re- finement and improvement. In doing so, they face barriers in terms of gaining alignment to use common marketing processes when these may not necessarily be the most ap- propriate for the local market conditions. DISCUSSION AND IMPLICATIONS Our review of the representative research literature and qualitative fieldwork interviews reveal important gaps in 88 Journal of International Marketing conceptual and empirical knowledge regarding marketing capabilities in international marketing. In addition to the specific gaps already highlighted in our review of existing research, in the interests of guiding future research, we focus here on the areas that we think hold the greatest promise for developing theoretically interesting and managerially rele- vant new knowledge in this increasingly important domain.

First, much greater conceptual attention is required to the fundamental question of whether and how international marketing capabilities are intrinsically different from purely domestic marketing capabilities. Our initial qualitative fieldwork data seem to suggest that the answer is“yes”with respect to there being differences in international vs. purely domestic marketing capabilities. However, it is unclear whether this is in terms of requiringdifferentmarketing capabilities or simply the ability to deal with the increased complexity created by between-country differences in building and managing broadly thesamemarketing ca- pabilities. Our fieldwork interviews indicate that at least the latter is the case. They suggest, for example, that building marketing capabilities across country markets requires greater resources and may constrain (or enable) movement from one stage of internationalization to the next. Our interviews also indicate that identifying marketing best practices and processes across different country market- places and standardizing these across market-facing orga- nizational units is required to enjoy benefits of scale.

On the bigger conceptual question of whether international marketing capabilities are fundamentally different in nature from those in purely domestic contexts, our initial fieldwork did not produce any obvious“yes”answer. The international marketing literature we examined is also generally un- developed in this regard. The seven“different”marketing capability examples we uncovered in our review of repre- sentative studies may be viewed as being primarily different in terms of being contextually adapted versions of domestic marketing capabilities. For example, MNCs’transnational product innovation capability concerns a general product development capability that produces new products that fulfill needs across multiple country markets (Sheng et al. 2015; Subramaniam and Venkatraman 2001). Similarly, over- seas market–related exploitative and explorative capabil- ities (Lisboa, Skarmeas, and Lages 2011) are applications of more general marketing-related capabilities to non- domestic markets. Likewise, both local market competence (Matanda and Ewing 2012; Wu et al. 2007) and adaptive capability (Lu et al. 2010) may be viewed as capturing the ability to apply more general market sensing and responsiveness capabilities to various country marketplaces. Both global account management (Shi et al. 2005) and internationalcustomer support (Khavul et al. 2010) capabilities are ap- plications of general customer management capabilities customized to the particular needs of global customers.

Finally, global brand management capability (Matanda and Ewing 2012) is the application of brand management in a global setting.

All of this would seem to suggest that the primary difference between international and domestic marketing capabilities concerns the ability to create, maintain, and leverage the same set of general marketing capabilities in ways that cope with context-based variance across country markets and organizational differences across units catering to different markets. Yet, it remains unclear whether such international- versus-domestic market context differences are different in either nature or scale between, for example, a firm operating across multiple different product markets in a single country versus a firm operating in a single product-market segment across different country marketplaces. Beyond the need to be adapted to contextual international differences, are there any novel capabilities that are requiredsolelyfor marketing in international markets? Conceptual and empirical re- search on this fundamental question is sorely needed.

Second, while it is true that the antecedents of marketing capabilities and mechanisms by which marketing capabilities may contribute to performance outcomes have generally been a greater focus of researchers in international versus domestic marketing contexts, much remains to be explored. In particular, some of the antecedents explored in a domestic market context have received very little attention in an in- ternational market context. For example, how does the presence of a CMO or marketing department power within the firm affect international marketing capabilities? Similarly, some of the capability–performance mechanisms explored in a domestic market context have received little research attention in international marketing. For example, studies in a domestic market context have shown that an important route by which marketing capabilities contribute to firm perfor- mance is by“adding value”to a firm’s assets, such as market knowledge (e.g., Morgan, Vorhies, and Mason 2009) or brands (e.g., Wiles, Morgan, and Rego 2012). Does this also occur in leveraging firms’assets across country marketplaces?

If so, are marketing capabilities more complementary to some types of assets than others? Do these assets differ between within and across country contexts?

In addition, from a performance-enhancing mechanism per- spective, our qualitative fieldwork suggests that there may be marketing capability economies of scale and scope available to a firm operating across country marketplaces. In particular, our interviews suggest that global firms may be exposed to a Marketing Capabilities in International Marketing 89 greater variety of different marketing practices from which they can select“best practices”and standardize these across their myriad different organizational units across country markets. Essentially, countries operate as test markets through which best practices are identified and then exported to other markets within the firm. These are potential performance-enhancing mechanisms of marketing capabil- ities in international marketing that have received almost no research attention to date. If these marketing capability performance-enhancing mechanisms do exist in global firms, how may they be different in nature and scale from those available to domestic firms operating across multiple dif- ferent product markets in a single country? For example, are domestic firms exposed to less variety in marketing prac- tices but find it easier to transfer best practices among or- ganizational units, or vice versa? In addition, what are the downside costs associated with such cross-country stan- dardization? When may these outweigh the benefits?

Third, our fieldwork and observations across some of the studies we reviewed strongly suggest that a key difference of marketing capabilities in international marketing is the ability to operate effectively and efficiently within and across the organizational units by which firms interact with different country marketplaces. Importantly, this suggests that mar- keting capabilities will likely differ across firms in different stages of internationalization. In our review of the in- ternational marketing literature, we found numerous studies of marketing capabilities within stages of internationalization. For example, a large (and growing) number of studies examine marketing capabilities in exporting manufacturers, and a smaller (but also growing) number of studies do so in MNC and IJV contexts. However, there have been few (if any) studies that examine the extent to which marketing capabilities (and their antecedents, consequences, moderators, and mediators) differ across firms at different stages of internationalization. There may be much to be learned from such studies, including answers to questions such as the following: (1) Does“fit”between marketing capabilities and stage of internationalization impact firm performance? (2) What is the role of marketing capability development in enhancing or inhibiting firms’movement from one stage of internationalization to another?

This naturally also leads to additional questions about the nature of dynamic marketing capabilities. Dynamic capa- bilities theory is oft-cited but has been infrequently em- pirically studied in international marketing research. Firms operating in international markets may be exposed to a greater variety of marketplace environments, all of which may be changing in different ways and at different rates. The need to effectively and efficiently deal with such dy- namic complexity would suggest that dynamic marketingcapabilities may be particularly valuable for firms operating in international markets. Yet, difficulties in measuring such marketing capabilities in a dynamic manner (i.e., observing shifts in firms’resource and capability configurations over time that are driven by marketplace change or anticipated change) using primary case study and survey research de- signs have severely limited our knowledge to date. This is perhaps why we currently know much more about firms’ ability to sense their marketplace environments than we do about how they are able to acquire, improve, and recon- figure marketing-related resourcesand capabilities designed to match the changing marketplace environments they face.

However, it is possible to design even survey-based mea- sures that better capture the dynamic (vs. static) aspects and changing nature of marketing capabilities, and researchers should be encouraged to do so in order to explore how firms evaluate, develop, integrate, monitor, and manage such dynamic marketing capabilities. Alternatively, researchers can explore using secondary data approaches in panel data where firm-specific changes over time may be used to infer such dynamic marketing capabilities, and this may offer another route forward for future research.

Perhaps even more important from a practice perspective is the question of how marketing capabilities—dynamic and operational—can best be built, maintained, improved, and leveraged in firms operating in international markets.

Drawing on the sizable and growing research literature, there appears to be little doubt that marketing capabilities are generally valuable in enabling firms operating in international markets to enjoy superior performance. Research to date is helpful for managers in understanding what types of mar- keting capabilities may be particularly valuable under certain conditions. However, once they understand and believe in the performance-enhancing value of marketing capabilities, man- agers inevitably want to know,“How do I build such capa- bilities in my firm?”While international marketing researchers have studied several antecedents of marketing capabilities, al- most all of these have been from the perspective of different types of knowledge and other resource inputs that are deployed by various marketing capabilities. We have little or no knowledge of how marketing capabilities can be deliberately and proactively built and improved to match the international marketplace environments faced. Yet, theoretically the ability to do so is a core component of dynamic marketing capabilities. It is also among the primary questions that managers would like answered: How should I go about building marketing capa- bilities across country markets? Which skills are portable and which are not? Who should own marketing capability devel- opment and compliance? All these key managerial questions are currently unanswered in existing research.

90 Journal of International Marketing CONCLUSIONS Marketing capability has been a growing area of interest among international marketing researchers. Despite the progress in unpacking the performance implications, drivers, moderators, and mediators of marketing capabilities, our review of the literature and qualitative fieldwork interviews reveal important gaps in conceptual and empirical knowledge regarding marketing capabilities in international marketing.

Clearly, there remains important work to be done in this theoretically important and managerially interesting domain.

This study provides a number of new directions that may be helpful in guiding research attention to those questions that may offer the greatest contributions to both theory and practice in international marketing.

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*Erramilli, M. Krishna, Sanjeev Agarwal, and Chekitan S. Dev (2002),“Choice Between Non-Equity Entry Modes: An Or- ganizational Capability Perspective,”Journal of International Business Studies, 33 (2), 223–42.

*Ethiraj, Sendil K., Prashant Kale, M.S. Krishnan, and Jitendra V. Singh (2005),“Where Do Capabilities Come from and How Do They Matter? A Study in the Software Services In- dustry,”Strategic Management Journal, 26 (1), 25–45.

*Evers, Natasha, Svante Andersson, and Martin Hannibal (2012),“Stakeholders and Marketing Capabilities in In- ternational New Ventures: Evidence from Ireland, Sweden, and Denmark,”Journal of International Marketing, 20 (4), 46–71.

*Fahy, John, Graham Hooley, Tony Cox, Jozsef Beracs, Krzysztof Fonfara, and Boris Snoj (2000),“The Development and Impact of Marketing Capabilities in Central Europe,” Journal of International Business Studies, 31 (1), 63–81.

*Fang, Eric (Er), and Shaoming Zou (2009),“Antecedents and Consequences of Marketing Dynamic Capabilities in International Joint Ventures,”Journal of International Business Studies, 40 (5), 742–61.

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Feng, Hui, Neil A. Morgan, and Lopo L. Rego (2017),“Firm Capabilities and Growth: The Moderating Role of Market Conditions,”Journal of the Academy of Marketing Science, 45 (1), 76–92.

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*Kaleka, Anna (2011),“When Exporting Manufacturers Compete on the Basis of Service: Resources and Marketing Capabilities Driving Service Advantage and Performance,” Journal of International Marketing, 19 (1), 40–58.

*Kaleka, Anna, and Neil A. Morgan (2017),“How Marketing Capabilities and Current Performance Drive Strategic In- tentions in International Markets,”Industrial Marketing Management(published electronically February 20), DOI:

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*Kaufmann, Lutz, and Jan-Frederik Roesch (2012),“Con- straints to Building and Deploying Marketing Capabilities by Emerging Market Firms in Advanced Markets,”Journal of International Marketing, 20 (4), 1–24.

*Kemper, Jan, Andreas Engelen, and Malte Brettel (2011), “How Top Management’s Social Capital Fosters the Devel- opment of Specialized Marketing Capabilities: A Cross- Cultural Comparison,”Journal of International Marketing, 19 (3), 87–112.

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Rasheed (2010),“Going Global with Innovations from Emerging Economies: Investment in Customer Support Capabilities Pays Off,”Journal of International Marketing,18(4),22–42.

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