How research in emerging markets advances

Intern. J. of Research in Marketing 23 (2006) 337 – 356 www.elsevier.com/locate/ijresmar

Marketing renaissance: How research in emerging markets advances marketing science and practice Steven Michael Burgess a , Jan-Benedict E.M. Steenkamp b,⁎ a

b

Business Administration in Marketing, Graduate School of Business, University of Cape Town, South Africa University of North Carolina at Chapel Hill, Campus Box 3490, McColl Building, Chapel Hill, NC 27599-3490, USA

Abstract In the last decades, our discipline has made tremendous progress in addressing scientific and managerial marketing problems. However, our knowledge of marketing phenomena derives almost exclusively from research conducted in high income, industrialized countries. We believe it is paramount for the future of marketing science and practice that we conduct more research in so-called emerging markets (EMs). EMs present significant departures from the assumptions of theories developed in the Western world that challenge our conventional wisdom. In this article, we take the view that marketing science is built on the generalizability of our findings across studies, across cultures, across national boundaries. EMs are natural laboratories in which theories and assumptions about their underlying mechanisms can be tested, generalizations derived and boundary conditions identified. We propose a framework delineating four stages through which EM research contributes to the growth of marketing science. The four stages are 1) theory development, 2) acquisition of meaningful data, 3) analysis of the data to test one's theories, and 4) learning. Through the process of deductive logic, general theories are operationalized in specific settings while, through the process of inductive logic, specific findings are used to arrive at more general conclusions. We discuss the unique issues and contributions of EM research for each of the four stages of this framework. Subsequently, we elaborate on the implications of EM research for development and implementation of marketing strategies. Our discussion reveals that some research has started to address these issues, but we have only begun to scratch the surface. In this spirit, we present an agenda for future research in EMs. © 2006 Elsevier B.V. All rights reserved. Keywords: Emerging markets; Emerging economies; Developing countries

1. Introduction The globalization of the marketplace is one of the most important challenges facing companies today. Globalization is due to many factors including worldwide investment, production and marketing, falling national boundaries, regional unification (e.g., ASEAN, EU, NAFTA), advances in telecommunication technologies and the internet, increases in world travel, and the growth of global media (Yip, 2003). Firms cannot ignore this trend toward globalization. Even when they decide to opt out of the global marketplace, they will still face increased competition in their home markets from (local and foreign) companies reaping benefits of global strategies. Given the importance of globalization for marketing, it is not surprising that various marketing scholars and editors have urged us to ⁎ Corresponding author. Tel.: +1 919 962 9579; fax: +1 919 962 7186. E-mail address: [email protected] (J.-B.E.M. Steenkamp). 0167-8116/$ - see front matter © 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.ijresmar.2006.08.001

study marketing issues on an international basis, rather than staying “in relative security of our own backyards” (Bolton, 2003; Dekimpe & Lehmann, 2004; Farley, 1997; Gatignon, 2000; Monroe, 1993; Steenkamp, 1998, 2005; Winer, 1998). In response to these exhortations, marketing academics have begun to devote more attention to international marketing. This research has yielded a valuable stock of theoretical and empirical findings, of which an important portion has been published in the International Journal of Research in Marketing (see Alden, Steenkamp, & Batra, 2006; Bijmolt, Paas, & Vermunt, 2004; Cano, Carrilat, & Jaramillo, 2004; Deshpandé & Farley, 2004; Desiraju, Nair, & Chintagunta 2004; Farley, Hayes, & Kopalle, 2004; Nunn & Sarvary, 2004; Ozsomer & Simonin, 2004; Steenkamp & ter Hofstede, 2002; Stremersch & Tellis, 2004; Van Everdingen, Aghina, & Fok, 2005; Verlegh, Steenkamp, & Meulenberg, 2005 for some recent examples). It is fair to say that international marketing has become an important domain within marketing science.

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However, the existing body of research suffers from an important limitation, viz., most of it has been conducted in high income, industrialized countries (HICs). Although it is understandable that researchers in our maturing discipline would initially focus on the world's most advanced economies, we believe it is paramount for the future of marketing science and practice that we conduct more research in so-called emerging markets (EMs). Although EMs vary in human development and national income, we will focus on common characteristics that shape their institutional context and the ultimate success of marketing programs there. Institutions are “the most enduring features of social life…giving ‘solidity’ [to social systems] across time and space” (Giddens, 1984, p. 24). EM institutional contexts present significant socioeconomic, demographic, cultural, and regulative departures from the assumptions of theories developed in the Western world and challenge our conventional understanding of constructs and their relations (Wright, Filatotchev, Hoskisson, & Peng, 2005). Conceptually, this renders it less than obvious that our established theories and empirical generalizations are applicable to these markets (Steenkamp, 2005). Practically, it implies an urgent need for more research because success in EMs is crucial to the future of many of our companies. As we will argue in this article, we need to conduct more research in EMs, both to further advance marketing as an academic discipline and maintain its managerial relevance. The remainder of this article is organized as follows. First, we briefly discuss what constitutes emerging markets. Then, we will propose a framework of marketing science as a process. Next, we will discuss the unique issues and contribution of EM research for each of the four stages of this framework. Subsequently, we elaborate on the implications of EM research for marketing practice. We will consider the content and implementation of marketing strategies. Finally, we will draw conclusions and propose an agenda for future research in EMs. To keep the discussion manageable, we focus on systematic differences between EMs and HICs and how this contributes to marketing science and practice. It is outside the scope of this article to discuss differences between EMs.

2. What are emerging markets? There are a plethora of country classification schemes and the use of the term “emerging markets” has been inconsistent in the marketing literature and practice (e.g., Batra, 1999; Peng, 2000). Financial institutions such as ING and Morgan Stanley distinguish between emerging markets and developed countries, using three criteria. To be categorized as a developed country, 1) the country's income per capita has to exceed $10,000, 2) the country has to follow a stable and responsible macroeconomic policy, and 3) the market capitalization of publicly traded companies and the volume of shares traded on the stock exchange have to “sufficient.” If one or more of these criteria is not met, the country is considered an emerging market. Thus, countries like Israel and South Korea would pass the income criterion but nevertheless belong to emerging markets. The political situation is not sufficiently stable to have confidence that the macroeconomic development is irreversible. This approach makes no adjustment for purchasing power parity or currency fluctuations, as e.g., the World Bank (2006) does. Moreover, an agreed operationalization of the second and third conditions eludes us at present and firms would have difficulty accessing and analyzing such information, even if it was. The World Trade Organization (WTO) classifies its members as either “developed” or “developing”, on the basis of selfselection. There are no WTO definitions of “developed” or “developing” countries. Two-thirds of the WTO's 149 member countries are designated as developing countries, of which 50 are designated as “least-developed” countries. Emerging markets are for all practical purposes synonymous with developing countries. Fig. 1 shows arguably the two most influential country classifications, proposed by the United Nations and the World Bank, respectively. The United Nations distinguish between four categories of countries, based on their score on the human development index. The human development index is a quantitative measure of the average achievements of a country on three basic dimensions of human development, namely life expectancy at birth, adult literacy rate and educational attainment, and gross

Fig. 1. Alternative country classifications, their number, and GDP per capita range.


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Fig. 2. Basic processes in scientific marketing research in emerging markets.

domestic product (GDP) per capita at purchasing power parity (PPP). Countries low or medium on human development would usually be considered as emerging countries, while high human development countries might be considered as developed countries. However, there are exceptions. For example, countries like Panama and Mexico rate high on human development, but are still considered emerging markets.1 The World Bank (2006) has developed a classification of countries, based on gross national income per capita (GNI), adjusted for currency fluctuations. This classification shows considerable overlap with the classification scheme of the United Nations, but is easier to use and because it focuses on available monetary resources in a country, it is more directly relevant for marketing. Our definition of emerging markets was influenced by the desire to classify countries in a way that would allow others to easily obtain data and classify countries of interest. We define EMs broadly as countries in which PPP-adjusted GDP per capita, converted to U.S. dollar and smoothed for three-year currency fluctuations, is equal to or less than the highest ranked country classified as “middle income” by the World Bank, currently Equatorial Guinea ($19,780). Because the World Bank classifies countries based on GNI, which is adjusted for currency fluctuations but not purchasing power parity, Fig. 1 shows some overlap in high income and middle income countries. We use GDP per capita, as opposed to gross national income, because GDP excludes remittances from other countries. Remittances from abroad can be up to 30–40% of GNP (Mahajan & Banga, 2006). Thus, GDP is a better measure of domestic growth and economic performance. We use GDP after adjustment for purchasing power parity and currency fluctuations as these adjustments communicate development levels better across countries for the purposes of most marketers.

1 See http://hdr.undp.org/ for more information on the measurement and classification procedure used by the United Nations.

Our group of 152 EMs includes all countries classified as “middle income” or “low-income” by the World Bank (2006), as “middle human development,” “low human development,” or “developing” by the United Nations (2005), and as “developing countries” by the WTO (2005). Geographically, EMs comprise the “transition economies” of the former Soviet Union, the Eastern Bloc, and Asia and the so-called “developing countries” of Africa, Asia, the Middle East, and Latin America. 3. The process of scientific marketing research applied to emerging markets Philosophers of science have long argued that science is a process. The marketing science process involves development of theoretical explanations of marketing phenomena, empirical testing of these explanations, and extension and/or revisions of generalized explanations (Bass & Wind, 1995). This process consists of four stages (see Fig. 2; Bagozzi, 1980). The process usually starts with theory development. At this stage, it is important to carefully delineate one's theoretical constructs and the mechanisms underlying the hypotheses. It makes sense to draw on the large body of existing theoretical and empirical research as the point of departure, as this is how science progresses. However, previous research must be assessed critically for relevance to the institutional context in which research is being conducted, taking special care to explicate hidden assumptions, such as levels of human development and culture. After all, the institutional context is arguably the most important aspect on which EMs differ from HICs. For example, in the marketing literature, advertising plays a large role in the theory on the diffusion of innovations (Gatignon & Robertson, 1985), but media penetration is much lower in many EMs (Arnould, 1989). The second stage concerns acquisition of meaningful data. Through deductive logic – going from general assertions to relatively more specific instances – the marketing scholar moves from a theory to a specific operational research design.

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The researcher needs to specify (and justify) the choice of the EM country(ies) in which data are collected, define the unit of observation, choose appropriate data collection methods, develop valid measurement instruments, and collect data. By imposing our etic view on EMs, shaped by extensive data collection practice in HICs, we run the danger of collecting wonderful, but invalid data. The third stage concerns data analysis. Cross-national comparability of data is clearly a key issue. The extreme withincountry heterogeneity which characterizes most EMs also has ramifications for the statistical methods used to analyze one's data. This stage will show that EMs not only provide a natural laboratory for developing new theories and data collection methods, but also a challenging setting, calling for cutting-edge new analytical techniques. Results are subsequently interpreted, leading to the fourth stage in which learning takes place. The findings are critically evaluated and new insights are generated. Through the process of inductive logic, marketing science uses these specific findings to arrive at more general conclusions concerning the validity of previous empirical generalizations and existence of boundary conditions, if any. This leads to extension or revision of generalized explanations, which subsequently can be tested with new data. This last stage also holds the potential for, what Brown and Hagel (2005) call, “innovation blowback.” Improved theory, data collection, and data analysis techniques, will also strengthen marketing science in HICs. 4. Theory development 4.1. Identification of constructs 4.1.1. Using existing constructs Much EM research uses theoretically-grounded constructs originally developed in HICs. Often this makes perfect sense as there is no reason to assume that these constructs are not applicable to EM settings. There is quite some evidence concerning the universality of many consumer-related constructs. Based on the universal human needs of individuals as biological organisms, requisites of coordinated social conduct, and requirements for the smooth functioning and survival of groups, Schwartz (1992) has identified ten motivationally distinct types of values that reflect a continuum of related motivations. This continuum gives rise to a circular structure capturing the notion that the pursuit of different value types can be compatible or in conflict, depending on how close the value types are. Nothing in his theory suggests that this value structure is context specific. On the contrary, being derived from universal human needs, it should be equally applicable to EMs. Research in EMs has indeed supported his claim (Burgess & Steenkamp, 1999; Schwartz et al., 2001). Research in EMs also has supported the validity of other constructs such as the Big Five personality factors (McCrae & Terracciano, 2005) as well as consumer constructs such as ethnocentrism (Batra, Ramaswamy, Alden, Steenkamp, & Ramachandar, 2000). In a programmatic series of studies dealing with organizational constructs, Deshpandé, Farley, and colleagues studied organizational culture, organizational climate, market orienta-

tion, innovativeness, and firm performance, in HICs as well as EMs (see Deshpandé & Farley, 2004 for an excellent overview). These authors found that their organizational constructs are relevant across a wide range of countries, attesting to the universality of the constructs. For example, everywhere, organizations turn out to be a mixture of four organizational cultures, viz., externally-oriented competitive market and entrepreneurial ad-hoc cultures, and internally-oriented bureaucratic hierarchy and consensual clan cultures. Theoretical equivalence is an issue when constructs are less firmly grounded in theory. A point in case are lifestyles: “A lifestyle is broadly defined as a mode of living that is identified by how people spend their time (activities), what they consider important in their environment (interests), and what they think of themselves and the world around them (opinions)” (Assael, 1992, p. 294). Constructs so loosely defined and bereft of rigorous theoretical grounding are unlikely to provide a basis for further theoretical advances or meaningful cross-national insights, due to the radically different contexts of HICs and EMs. When constructs are only informally defined, it becomes very difficult to develop hypotheses to be tested in EMs based on previous research, as we may be using apples to explain oranges. 4.1.2. Identifying new constructs EMs offer a fertile ground to develop new constructs that has been overlooked in earlier research. For example, in Africa it is important to understand the construct of ubuntu, a pervasive spirit of caring and community, harmony and hospitality, humility, respect and responsiveness (Mangaliso, 2001). It stresses group embeddedness, kinship ties, linking reward systems to group performance, and consensus-based decision making. In the consumer context, ubuntu has relevance in the aspects of life that interest marketers, such as family decision making and reliance on word-of-mouth communication. In the organizational context, notwithstanding that senior managers typically make final buying decisions when national cultures are high on hierarchy and embeddedness, ubuntu suggests opportunities for new research into intraorganizational networks of information sharing and consensus building within buying centers. In the sales management context, aligning organizational marketing practices to ubuntu provides significant competitive advantages related to intrinsic motivation, loyalty, and long-run effectiveness. Including ubuntu in African intra- and inter-organizational models will increase their validity and explanatory power. Similarly, it is difficult, if not impossible, to understand organizational relations in China without guanxi, a concept “which carries expectations that, sometime, favors will be returned” (Ambler, Styles, & Xiucun, 1999). An interesting question is whether these and other constructs are purely indigenous constructs or can also be fruitfully employed in other EMs and perhaps even in HICs. After all, ubuntu values are also relevant in HICs (Schwartz, 1992) and inter-organizational relations in Western markets also have certain guanxi characteristics (Kumar, Scheer, & Steenkamp, 1995; Scheer, Kumar, & Steenkamp, 2003). Moreover, substantial EM populations have migrated to HIC markets, as birth rates have


declined there in recent decades. Interestingly, even Hofstede's (2001) seminal cultural analysis was enriched by inclusion of EM countries. Analyzing data from (mostly) HICs, he distinguished four cultural dimensions: power distance, individualism/collectivism, uncertainty avoidance, and masculinity/ femininity. Subsequent work in Eastern Asia identified a fifth dimension, long-term orientation (or Confucian dynamism), which turned out to be relevant for HICs as well. 4.2. Hypotheses development Institutional context (viz., socioeconomic, cultural, legal) has not been explicitly acknowledged when developing many of our theories. Thus, we implicitly assume that our theories generalize across nations. Generalizability may be strong or weak. Strong cross-national generalizability means that the magnitude of the relation between two constructs is the same across countries. Weak cross-national generalizability implies that the direction (positive or negative) of the relation between two constructs is the same across countries, although the magnitude of the effect may differ across countries. There is some evidence that strong empirical generalizations may not be unrealistic in HIC contexts (Bijmolt, Van Heerde, & Pieters, 2005; Deshpandé & Farley, 2004; Gielens & Steenkamp, 2004; Steenkamp, Nijs, Hanssens, & Dekimpe, 2005). It is questionable though whether strong cross-national generalizability extends from findings obtained in HICs to EMs. For instance, several studies have attested to the generalizability of Bass' diffusion theory to EMs (Dekimpe, Parker, & Sarvary, 1998; Dekimpe, Parker, & Sarvary, 2000; Talukdar, Sudhir, & Ainslie, 2002). The magnitude of key diffusion parameters differs, though, between HICs and EMs. The average penetration potential in EMs is only one-third of that for HICs, and the adoption rate is slower than might be expected based on results in HICs (Talukdar et al., 2002). Higher ethnic diversity in EMs inhibits the social communication processes by which consumers belonging to different groups learn about an innovation (Dekimpe et al., 2000). As another example, Hult, Keillor, and Hightower (2000) found that attribute importances differ considerably between Malaysian and French consumers. Malaysian consumers place more importance on tangible product attributes, such as product price, functionality, and safety, which is predictable given the differences in product knowledge, disposable income, usage occasions, and social influences on consumer decision making. Even when consumers express similar wants and needs, economic realities ultimately may be more influential on actual behavior. Microeconomic theory predicts that the price elasticity of demand should be higher in EMs, due to tighter budgetary constraints. For most products, EMs have a considerable pool of consumers who have never consumed the product before. Generic advertising may draw some of them into the marketplace, suggesting higher generic advertising elasticities than typically found in HICs. Hanssens, Parsons, and Schultz (2001, p. 329) propose, as empirical generalizations, an average short-run (long-run) elasticity of brand advertising of .1 (.2). We expect that brand advertising elasticities are higher in

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EMs. Many consumers have only limited first-hand experience with the brand, which increases the information function of advertising. Thus, weak cross-national generalizability may be a more realistic assumption in EMs. We believe that the most realistic assumption is partial weak generalizability, in that some previously-established propositions/hypotheses are supported in direction albeit not in magnitude, while some hypotheses are not supported. This, actually, offers the potential to further marketing science as the EM context can lead to richer theoretical and empirical insights. An excellent example of such work is Arnould's (1989) research on diffusion of innovations in Niger. Arnould collected ethnographic data over a number of years, examining different aspects of the diffusion process. He subsequently compared his findings with Gatignon and Robertson's (1985) seminal propositional inventory for diffusion research. He concluded that a number of the original Gatignon and Robertson propositions are supported, while others need to be reformulated to render them applicable to vastly different contexts, such as Niger. Combining previous HIC insights with his work in Niger, Arnould came up with a broadened theory of preference formation and the diffusion of innovations that might be tested in other (EM or HIC) markets. An important strength of Arnould's study is that he explicitly evaluated his findings in the light of earlier work. This avoids reinventing the wheel, a tendency not uncommon in EM research. Another strength is that his work was among the first to explicitly consider the institutional context in which market-mediated behavior took place. 4.3. Structuring the institutional context In principle, the institutional context is an important consideration in any study, especially when it differs significantly from that of previous research. EMs are natural laboratories that allow us to assess the generalizability of marketing theories and the extent to which they are bounded by the institutional context of HICs, most notably the U.S. Consequently, we learn more about underlying mechanisms and develop true contingency theories of marketing. In this section, we identify some institutional characteristics that typify EMs, although some EMs may not share every characteristic we mention due to idiosyncratic influences on their developmental trajectory. Expanding on work by the sociologist Scott (2001) and the institutional economist North (1990), we distinguish three distinct but interrelated “pillars of institutions” that provide structure to society, albeit in different ways — the socioeconomic, cultural, and regulative systems. Social theorists have identified each of these systems as a vital ingredient of a country's institutional context (Etzioni & Lawrence, 1991; Scott, 2001) (Table 1). The socioeconomic system comprises macroeconomic and demographic characteristics, levels of within-country diversity, and dynamics caused by rapid social, political, and economic change. The cultural system represents culturally supported beliefs, attitudes, habits, norms, and behaviors. It maintains that external cultural frameworks shape internal interpretive processes and shared understanding. The regulative system involves

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Table 1 Comparison of institutional subsystems Institutional subsystems

Emerging markets

Socioeconomic subsystem Dynamics Rapid social, political, and economic change Demographics Young, growing, large pool of under-educated Diversity Extreme differences in household size and income, living standards, access to human development resources Cultural subsystem Hierarchy vs. Hierarchy emphasized egalitarianism Embeddedness Embeddedness emphasized vs. autonomy Regulative subsystem Rule of law Moderate abuse of public office for private gain, moderate reliance on legal rights enforceable in courts of law, investor rights lower, legal outcomes more unlikely Stakeholder Government, civil society, influence on supply chain stakeholders corporate influence high. governance

High income markets

Moderate social, political, and economic change Older, stagnant, welleducated Smaller differences in household size and income, living standards, access to human development resources Egalitarianism emphasized Autonomy emphasized

Low abuse of public office for private gain, high reliance on legal rights enforceable in courts of law, investor rights higher, legal outcomes more likely Government, civil society, supply chain stakeholders influence moderate

the capacity to establish formal rules, inspect society members' conformity to them, and if necessary, impose sanctions. It includes the presence and efficacy of regulatory institutions and the associated legal system that exist to ensure stability, order, and continuity of societies. The international business literature typically has emphasized the study of regulative and socioeconomic systems, while marketing has been more concerned with the cultural system (Steenkamp, 2001). Although the socioeconomic, cultural, and regulative systems are embedded and interconnected in societies, affecting groups and individuals, we discuss the systems separately to keep the discussion tractable. 4.3.1. Socioeconomic system We distinguish three broad aspects of the socioeconomic system in our work: dynamics, demographics, and diversity. The dynamics aspect refers to rapid economic and sociopolitical change in EMs. Economically, GDP growth generally is 1.5–3 times the average growth in HICs. Sociopolitically, many EMs (e.g., China, South Africa, the former Soviet Union and its client states) are addressing undesirable legacies of the past as part of a process of transition from centrally-controlled economies to more democratic, market-based economies. As a consequence, many people are transiting from agrarian and feudal pasts to modern consumer lifestyles within the span of a generation. This has important implications for social identities, values, and consumer behavior (Burgess & Harris, 1999). The demographics aspect focuses on the relative youth of EM populations, which results from rapid growth, often ex-

ceeding 1% annually. The youthful composition of EMs has important consequences for marketing. For instance, the majority of the population is in the earliest stages of the family life cycle and 25%–45% of populations are aged 15 or below. The diversity aspect concerns the extreme variation within EM populations, which typically presents as two segments with vastly different living standards (i.e., a dual market, Batra, 1999). We will call these two prototypical segments “the elite” and “the mass market.” The relatively well-off, and typically urban, elite segment have a formal education and spending power comparable to HICs and comprise 5%–10% of the population. Their high living standard is explained by the unequal distribution of wealth in EMs. Typically, the top 10% of the population receives over 30–40% of national income, which implies a living standard comparable to an HIC country with approximately $20,000 annual PPP-adjusted GDP per capita. The elite have product preferences and economic resources that are similar to HICs and place importance on Western countryof-origin (Alden et al., 2006; Batra et al., 2000; Steenkamp, Batra, & Alden, 2003). In the wealthiest EMs, the elite reach a critical mass that makes local product development and production feasible and stimulates rapid transition to consumer-based societies marked by the development of infrastructure (e.g., advanced education, healthcare, transport, communications) and institutions (shopping malls, consumer protection bodies, computer-mediated commerce). The mass market segment comprises up to 90–95% of EM populations. They are fundamentally poor by HIC standards, with spending power in the region of $1,000–$4,000 (PPP) per capita annually. As many as two-thirds lack sustained access to an improved water source or sanitation and 15%–70% live on less than $1 (PPP) a day (World Bank, 2006). Low human development slows their advancement by limiting access to skills, education, and basic necessities. In many EMs, up to 50% or more of the population may be illiterate and many people may not have completed secondary school. The mass market segment typically lack skills and their employment opportunities in the formal sector are limited. Accordingly, high unemployment (20%–70%) drives widespread participation in informal sector activities in which barter and other non-cash payments are common (Burgess, 2005). The extreme differences in the living standards of the elite and mass market segments shape consumption in EMs. The elite are ready markets for the latest Western goods. They are media savvy and are usually well-informed about fashion and product trends elsewhere. They adopt many aspects of Western lifestyles, although local culture is a rich and often growing influence on their purchase and consumption behavior (Alden et al., 2006). Their motivations for using Western products are similar to consumers in HICs. For example, a trip to McDonald's typically is motivated by convenience, low prices, speed of service, and confidence in product and process standardization, as elsewhere. In comparison, the lower living standards of the mass market segment encourage mass transit use and walking considerable distances during daily activities, which promotes preferences for small package sizes, frequent shopping, and patronage of


retail outlets near mass transit hubs. Culture, low product knowledge, and demographic characteristics (e.g., constrained incomes, large family size, low formal education) promote group decision making about purchases of relatively small nominal value. Products not normally considered luxuries, such as shampoo or a visit to McDonald's, may take on luxury connotations and be reserved for special occasions such as a marriage or birthday or otherwise impart special meaning. 4.3.2. Cultural system Attempts to understand the cultural system traditionally focus on values. Cultural value priorities underlie most aspects of everyday life and relate to generalized beliefs people hold about themselves, their social and physical environment, and the spiritual world (Bond et al., 2004). There have been many approaches to national culture (Leung, Bhagat, Buchan, Erez, & Gibson, 2005), the cultural framework developed by the Israeli psychologist Schwartz (e.g., Sagiv & Schwartz, 2000; Schwartz, 2004) being the one most firmly grounded in theory. His theory identifies three bipolar dimensions of cultural values that derive from three universal societal problems: the nature of the relations of the individual to the group (autonomy versus embeddedness), guaranteeing responsible behavior that preserves the social fabric (hierarchy versus egalitarianism), and managing the relations of people to society and the environment (mastery versus harmony). EMs may be distinguished from HICs on two of these dimensions. HICs tend to emphasize cultural autonomy and egalitarianism. Autonomy cultures view people as independent, bounded entities that are expected to cultivate and express their own preferences, feelings, ideas, and abilities, and find meaning in their own uniqueness. Egalitarianism in HICs fosters cooperation and concern for the welfare of others by encouraging recognition of others as moral equals and pursuit of equality, social justice, responsibility, help, and honesty. Egalitarian cultures emphasize voluntary cooperation between people and organizations. Organizations are often flatter with less centralized authority structures, and are likely to express egalitarianism by acknowledging the legitimacy of cooperative negotiation. In contrast, EMs emphasize cultural embeddedness and hierarchy (Schwartz, 2004). Cultures that emphasize embeddedness view people as entities rooted in collective groups and expect them to derive meaning in life largely from social relations, group identification, pursuit of group goals, and participation in a shared way of life. Embedded cultures emphasize maintenance of the status quo and discourage behaviors that disrupt in-group solidarity. Cultural hierarchy emphasizes responsible behavior by legitimizing the unequal distribution of power, roles, and resources according to hierarchical systems of ascribed roles within a society. Cultural value priorities affect behaviors that interest marketers by shaping and justifying individual, group, and organizational beliefs and goals. As embedded cultures, EMs emphasize social order, respect for tradition, security, obedience, and wisdom. Emphasis on hierarchy socializes people to take a hierarchical distribution of roles for granted and comply with the obligations and rules attached to their roles and status.

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Social power, authority, humility, and wealth are very important values in hierarchical cultures. Companies are more likely to have a centralized structure, to emphasize the chain of authority and assign well-defined roles in a hierarchical structure, and demand compliance in the service of goals set from the top. Decision making is more autocratic and there is less willingness to share decision making. These differences in the overall endorsement of cultural values in society also shape institutional arrangements and policies, laws, customs, and social norms. 4.3.3. Regulative system The structures, processes, and legal rules that comprise the regulative system reflect socioeconomic and cultural systems that are prevalent in a society by affecting transaction costs and providing a source of motivation and justification for alternative formal regulative institutions (Licht, Goldschmidt, & Schwartz, 2005). We focus on two regulative system aspects that relate to corporate governance and investor rights: rule of law and stakeholder influence on corporate governance. Rule of law refers to the enshrinement of legal rights in formal laws and codes that regulate individual and group behavior and provide formal institutions for their enforcement. Attempts to understand rule of law traditionally have focused on variation in laws and their enforcement across countries. The 23 EMs (e.g., Argentina, Brazil, Russia, Hungary, Poland, India, China, Indonesia, Thailand, South Africa, Zimbabwe) among the 49 countries studied by La Porta, Lopez-de-Silanes, Shleifer, and Vishny (1998) generally had moderate scores for shareholder rights, creditor rights, judicial system efficiency, enforcement of laws, risk of appropriation or contract repudiation, and accounting standards. La Porta et al. attributed much of what they observed to the shared influence of common legal families (e.g., common law, civil law, French family origin). Licht et al. (2005) argued that formal legal institutions are insufficient to explain variation in rule of law. Instead, they advance a new rigorous way of addressing informal social institutions, using Schwartz' cultural values. According to their theory, cultural embeddedness in EMs discourages head-on confrontation (viz., the embodiment of economic interests in strict legal form) and enforcement in courts of law, while cultural hierarchy promotes giving power to authorities who are charged with controlling uncertainty. A final element of rule of law concerns corruption, which Transparency International (2006) defines as the abuse of public officials for private gain. Corruption deters economic growth by creating inefficiencies. Most EMs show moderate levels of corruption, as measured by Transparency International's (2006) corruption perception index. Recent conceptual work suggests that, although common EM institutional characteristics (e.g., oligopolistic industries, manager's seeking to gain access to external resources in resource-constrained firms) relate positively to levels of corruption, corruption can be resisted by carefully planning organizational structures, corporate cultures, and compliance systems (Luo, 2005). Stakeholder influence on corporate governance concerns formal and informal influence that individuals and groups exert on the firm with the purpose of shaping its corporate governance

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structures and processes. In EMs, the low human development of the majority of the population, uneven infrastructure development, and competition for scarce resources compel governments to rely on civic society and commercial organizations to assist in achieving social and economic development goals. In turn, business often needs the cooperation of government, civil society, donor funding agencies, and other value-chain stakeholders in order to serve the needs of the mass market segment, who lack the financial resources and authority to build the roads, schools, and hospitals that they need. Hoskisson, Eden, Lau and Wright (2000) observed that government and other stakeholders exert greater influence in EMs than in HICs. They contend that this makes institutional analysis preeminent in helping to explain influences on enterprise strategies and performance, especially in the early stages of market emergence. 4.4. Moderating role of a country's institutional context A society's institutional priorities reflect the basic issues and problems that it must confront, and social and economic reward contingencies it uses, to regulate human activity and facilitate the smooth and effective functioning of society (Steenkamp & Geyskens, 2006; Triandis, 1989). This presents individual and organizational members of institutional systems with the need to identify and respond to conflicts and compatibilities between their own evaluative structures and the priorities of the institutional system. In this way, institutional priorities encourage beliefs and behaviors that are aligned with shared priorities and conducive to their maintenance, while discouraging those that are not (Scott, 2001). Thus, as standards, these priorities influence how individual and organizational beliefs and behaviors are evaluated and what kinds of expressions are encouraged or discouraged. These positive or negative institutional reinforcement mechanisms give rise to interactions between society-level and micro-level variables. 4.4.1. Consumer studies Several studies have theorized and empirically tested the moderating role of aspects of a country's institutional context on consumer-level relations, using data on HICs and EMs. Lee and Green (1991) found that the effects of personal and grouporiented attitudes on purchase intentions are moderated by national culture. In the embedded EM country (Korea), the opinions of relevant others mattered more than the person's own attitude. In the autonomous HIC (U.S.), only the person's own attitude significantly influenced purchase intentions. Alden, Hoyer, and Lee (1993) reported that ads in EMs (Korea, Thailand) show individuals of unequal status and people in groups significantly more often than ads in HICs (Germany, U.S.). This is consistent with EMs's emphasis of hierarchy and embeddedness, respectively. Steenkamp and Geyskens (2006) examined the antecedents of the perceived value consumers derive from visiting a brand manufacturer's Website in an international context, involving data collected from individuals from 23 HICs and EMs on three continents. They found that individuals living in more individualistic, autonomous cultures gave more weight to pleasure,

to privacy/security protection, and to website customization than people from collectivistic, embedded cultures. People from countries that are high on national identity gave more weight to whether there was cultural congruity between the site and themselves, while the effect of perceived privacy/security protection on perceived value is stronger for people from countries with a weak rule of law. Steenkamp and Burgess (2002) found that in South Africa, household income has a much stronger effect on innovative behavior than consumer dispositions. Previous research in HICs had not suggested this result (e.g., Steenkamp, ter Hofstede, and Wedel, 1999). However, it can be explained by the classic budget constraint in economics. 4.4.2. Organization studies Deshpandé and Farley (2004) reported that customer orientation and innovativeness had a consistent pattern of positive effects on performance in HICs and EMs. However, innovativeness appeared to be more important in the HICs while market orientation was more important in EMs. Deshpandé and Farley explained this difference by pointing out that in EMs, marketing is less developed and investments in marketing may have higher pay-offs. Recent research in EMs suggests a complementary institutional rationale. In cultures that emphasize embeddedness and hierarchy, managers prefer to rely on vertical sources of guidance (superiors, formal rules) and widely-held cultural beliefs (Smith, Peterson, & Schwartz, 2002). Thus, market orientation in EMs may help overcome the inertia of vertical information sources and traditional practices so that firms can understand and respond to customer preferences. The emphasis of social connectedness in EM institutions also increases the importance of stakeholder relations. Luk, Yau, Tse, Sin, and Chow (2005) found that customer orientation, competitor orientation, and employee orientation have robust interaction effects on financial and market performance in China. Peng and Luo (2000) found that Chinese managers' personal ties with government officials have a stronger effect on performance than advertising, pricing, payment terms, or delivery. Ties with other managers also affect performance by increasing product quality. Thus, a stakeholder approach to market orientation (Greenley, Hooley, Broderick, & Rudd, 2004), emphasizing strong relational networks with donors, supply chain members, and beneficiaries, may be an effective way to pursue appropriate product and process innovations and keep prices low by leveraging internal and external resources to run efficient operations. Even for an established and “rational” theory like transaction cost economics, there is evidence for the moderating role of country characteristics. Using meta-analysis, Geyskens, Steenkamp, and Kumar (2006) found that the institutional environment of the company systematically and predictably affects the role transaction cost considerations play in governance decisions. The ability of transaction cost theory to explain departure from market governance is lower in countries characterized by a strong rule of law, high societal cynicism, and high cultural mastery. If the firm opts for non-market governance, the transaction dimensions are more diagnostic for predicting relational governance in countries lower on


societal cynicism. Further, the explanatory power of transaction cost theory is higher for hierarchical (relational) governance in countries that are characterized by high (low) cultural hierarchy. Collectively, the consumer and organization studies reviewed in this section underline the need to test even our most established theories in EMs. To achieve this, we need to collect meaningful data. 5. Acquisition of meaningful data 5.1. Choice of the countries In EM research, the choice of the country or countries for theory testing often is guided by resources, previous collaborative relationships, or even convenience. Given the vital role that institutional context plays in shaping one's results, a more systematic approach is needed, depending on the goal of the study. We distinguish between generalizability studies and contingency studies (cf. Van de Vijver and Leung, 1997). Generalizability studies examine the (weak or strong) generalizability of research findings obtained in previous, typically industrialized, countries to EM countries. In this case, country choice is largely a matter of convenience, as institutional factors are neither part of one's conceptual framework nor are they explicitly considered (Van de Vijver & Leung, 1997). Evidence for generalizability is of course stronger the more the institutional context of the EM country differs from industrialized countries. An example of a generalizability study is Steenkamp and Burgess (2002) who examined the crosscultural generalizability of optimum stimulation level theory (Steenkamp & Baumgartner, 1992) to an EM context. Meaningful and theoretically predictable nomological relations were obtained with values, sociodemographics, and exploratory consumer behaviors, providing evidence on the generalizability of this consumer theory to EMs. This type of study has a disadvantage. If generalizability is not established, it usually is not clear why this is the case. In contingency studies, institutional factors are explicitly incorporated in the theoretical framework. A priori hypotheses are developed as to the moderating role of specific institutional factors on the effect of micro variables. Countries are sampled to maximize the variation on the focal institutional factors. Some contingency studies involve two countries, which creates the challenge of ruling out alternative explanations (Van de Vijver & Leung, 1997). A stronger test of contingency studies involves inclusion of a larger number of countries, allowing for a multi-level framework, in which the variation of the effects (intercepts or slopes) is explained by country characteristics. An example is Steenkamp and Geyskens (2006) who showed that evaluation of brand manufacturer websites is systematically and predictably moderated by a country's rule of law, cultural individualism, and national identity. Given the large number of 23 countries, alternative explanations are not obvious. Parsimony suggests that the variation in these effects across countries are indeed due to the institutional factors considered rather than to other, unobserved constructs.

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5.2. Unit of observation The primary unit of decision making in individualistic, Western countries is typically the individual consumer or manager. Consequently, academic research in marketing has largely focused on individual decision making. However, group decision making is relatively more important in EMs, which are often characterized by high cultural embeddedness and by complex webs of personal and business obligations. Moreover, due to the influence of socioeconomic and cultural institutions, family decision making units are larger in EMs. It is not uncommon that countries will have an average household size of six or more people, spanning three generations. We need more theorizing and better marketing research tools 1) to conceptualize, measure, and analyze these social networks, 2) to understand their role in group decision making, and 3) to examine the reciprocal and dynamic relations between individual and group norms, attitudes, and behavior. Such research will also benefit marketing research in HICs, since blogs, buzz, and other social network phenomena are rapidly gaining importance. 5.3. Data collection It is well-known that obtaining data from EMs is more challenging than collecting data in HICs. The choice of data collection method thus requires more careful consideration in EMs, and may change as a particular research project proceeds, due to within-country diversity of EMs. In this section, we briefly explore some of these issues in respect of secondary and primary data. Detailed secondary data on EMs are freely available from government and international trade organizations such as the World Bank and the United Nations. These data can be very helpful when trying to get an overall view of a country and when planning data collection. However, it is important to consult the technical reports for EM data in these standardized data sources, as data may vary in recency and accuracy across countries in a report or even be estimated, and to ascertain how representative the data are for the total population. For instance, although consumer credit bureaus can provide marketing data for many EMs, data typically is limited to the minority of consumers with accounts at financial service providers or commercial/retail credit firms. Primary data collection is hampered by the absence of sampling frames, lack of reliable and fast transportation in parts of EMs, unreliable mail delivery, and low penetration of the Internet. The extreme heterogeneity of EM populations increases the importance of considering possibly hidden institutional context effects that are masked in primary data, even when multi-nation data is provided in standardized formats by global multinationals across countries and does not appear to differ meaningfully in content or quality. For instance, supermarket scanner data collected in EMs typically reflects substantial differences in shopper profiles, not only across countries but within and across stores in a country. If shopper profiles are related to systematic differences in potentially confounding institutional context variables, then it becomes necessary to collect shopper and purchase data concurrently or, at the very

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least, in a way that allows confounding variables to be controlled in the analysis. In this vein, approaches such as the flexible hierarchical Bayes variance components approach recently proposed by Steenburgh, Ainslie, and Engebretson (2003) to take full advantage of masked information (e.g., in postal codes) hold considerable promise. On the positive side, collecting quantitative, primary data in EMs may be less daunting than one might think. Market research tends to be much cheaper. For example, while businessto-business interviews cost about $200–400 in France or Japan, the cost per interview in Thailand or Vietnam EMs is about $40, a reduction of 50–90%.2 The marketing research infrastructure in EMs is also rapidly improving. Local research firms are available in virtually all EMs and global market research companies increasingly have agencies in EMs as well. Gallup International has member agencies in most Eastern European countries, India, China, Indonesia, and Vietnam, South Africa, Kenya, Nigeria, Zimbabwe, Argentina, Mexico, among others. It claims to have fieldwork capacity in most other countries. The research network of other leading agencies such as AC Nielsen, GfK, Research International, and Taylor Nelson Sofres also spans dozens of EM countries. However, operations in EMs often do not offer a multinational research firm's full range of services. For example, although GfK is active in over 60 EMs, its vaunted consumer tracking service is only available in about a dozen Eastern European countries. Primary data collection should not necessarily involve structured surveys or scanner data. Qualitative techniques appear more suitable than quantitative techniques to uncover new constructs. Simply testing one's existing theories in a vastly different context may lead to an imposed-etic view — i.e., committing the fallacy of assuming that constructs and theories developed in HICs are automatically valid in EMs too. EMs typically have evolved differently than HICs and have more recent experiences with institutional forces such as colonization, widespread poverty, and frontier expansion. Historical analysis and content analysis are examples of qualitative approaches that can be employed to explore the effects of institutions on consumers and organizations at the individual and group level. For instance, Zhou and Belk (2004) used content analysis to understand how consumer perceptions of advertising content were affected by the competing goals of global cosmopolitanism, which drives consumption of status goods for the sake of mianzi (prestige face), and the desire to invoke more traditional Chinese values. Arnould (1989, 2001), Arnould and Mohr, (2005) used ethnographic data collection methods to study consumer and market behavior in Niger. Joy (2001) used depth interview techniques to identify four types of social ties that have distinctive influences on gift giving behavior in Chinese culture. A word of caution is in order. Imposed-etic, standardized data collection methods are problematic and we can learn a lot about marketing phenomena by studying EMs with an open mind. However, the opposite view – extreme emic – which holds that everything is different in EMs, is equally problematic. 2

We thank an anonymous reviewer for providing this information.

In our experience, the extreme emic philosophy is more common than the imposed-etic view, especially among qualitative researchers. Marketing science progresses by building on previous work. Assuming that everything is different in EMs fails to recognize the social, cultural, and economic universals that are also part of human civilization. It leads to reinventing the wheel and proliferation of new constructs, simply because of origin elsewhere. Qualitative procedures may be fruitfully employed 1) if used prudently as to avoid statements regarding the generalizability of a phenomenon, and 2) in conjunction with follow-up quantitative data collection. Rigorous, quantitative construct validation is critical in the development of new constructs and theories. Econometric and psychometric modeling techniques should be used 1) to assess discriminant validity with existing scales, 2) to evaluate the power of the new constructs over and above existing constructs in explaining key criterion variables, and 3) to test rival models in nomological nets (Steenkamp & Baumgartner, 2000). 5.4. Measurement We have seen that EM populations on average are characterized by lower levels of formal education. Unfortunately, many established measurement instruments (see Bearden & Netemeyer, 1999 for an excellent overview) require a fairly high degree of respondent sophistication. They often are too long and too difficult for use in EMs. Consider the important construct of values. Values are among the most central determinants of consumer behavior. They underlie a large and important part of human cognition and behavior, and have been found to be valuable in explaining a variety of attitudes and behaviors in the consumer context (Burgess, 1992). The Schwartz Value Survey (SVS; Schwartz, 1992) is the most rigorous instrument to measure consumer values. Respondents rate the importance of 57 values as “a guiding principle in my life,” on a 9-point scale, ranging from − 1 = opposed to my values, 0 = not important, 3 = important, 6 = very important, and 7 = of supreme importance; the other categories are unlabeled. This judgment task requires one to think about and evaluate abstract value concepts without providing specific life context references within which to weigh one's application of them. However, although people combine, apply, and choose among guiding principles in life on an almost constant basis, they usually are only loosely aware that they are doing so and seldom are so precise and self-conscious (Schwartz, 1994). Accordingly, respondents find this task novel and intellectually demanding and take 25 min to complete it, on average. There are serious problems with completing the SVS in EMs, especially among the less educated and the elderly, and in rural areas (Schwartz, Lehmann, & Roccas, 1999). In response to these limitations, Schwartz et al. (1999) developed a new instrument, called the Portraits Values Questionnaire (PVQ). The PVQ includes short, textual portraits of 29 different people. Value importances are measured indirectly, as they are inferred from the self-reported similarity to a person of the respondent's gender holding a particular value to be important. Each portrait


describes a person to whom certain goals, aspirations, and wishes – all expressive of the same single value type – are important. For example, “Being very successful is important to her. She likes to stand out and to impress other people”, describes a person who considers achievement values important. For each portrait, respondents answer: “how much like you is this person?” They check one of the six boxes labeled: very much like me, like me, somewhat like me, a little like me, not like me, and not like me at all. The PVQ takes less time to complete (usually less than 10 min) than the SVS, is less demanding cognitively, and has been used successfully in EM contexts (Schwartz et al., 1999, 2001; Steenkamp & Burgess, 2002). Steenkamp and Baumgartner (1995) developed and validated a 7-item short-form of a 95-item scale to measure optimum stimulation level, which has subsequently been used in South Africa (Steenkamp & Burgess, 2002). A short-form of the Big Five personality questionnaire also has been developed (BenetMartinez & John, 1998). Researchers have sometimes constructed their own short-form of existing consumer behavior scales on an ad-hoc basis, by including only the highest loading items in their EM study (e.g., Alden et al., 2006; Batra et al., 2000). Shorter, simpler scales are also needed in organizational research, as otherwise the response rate among time-harassed managers will drop to unacceptably low levels. Take market orientation, one of the most widely used organizational constructs in marketing. Based on a pool of 44 items drawn from three established market orientation scales, Deshpandé and Farley (1996) developed a short-form 10-item scale that exhibited high loadings on the first factor, good reliability, and low nonresponse. This scale might be fruitfully employed in EMs. Existing, Western, scales may not only be too long and complex, they also may contain items that are inappropriate in EM contexts. Consider this item from the well-known Paulhus (1991) social desirability scale: “I never read sexy books or magazines.” It is potentially offensive and assumes easy availability of such materials. An item like “I am not a safe driver when I exceed the speed limit” may not be offensive, but is inappropriate because it assumes that everybody has a car, which simply is not the case in EMs. It also appears that the direction of the items can cause problems in EMs. Several studies (Steenkamp & Burgess, 2002; Wong, Rindfleisch, & Burroughs, 2003) have found that negatively worded items cause problems in EMs. The reason for this phenomenon is not clear, but it is worrisome as item reversal is an effective way to neutralize acquiescence bias (Baumgartner & Steenkamp, 2001). In sum, some work has started to address the validity and usefulness of measurement instruments for EMs. Existing scales may require at least partial adaptation to the EM context. Typically, adaptation has been approached informally, selecting items that appear cross-culturally appropriate and exhibit high factor loadings in previous (Western) studies. De Jong, Steenkamp, and Veldkamp (2006) recently proposed a more systematic approach. They integrate a hierarchical item response theory (IRT) model with optimal test design to construct country-specific, short-form measurement instruments

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based on a common pool of items. Items are selected subject to researcher-specified constraints, such as the length of the scale or the minimum amount of information retained in the shortform. Despite the fact that the items can differ between countries, construct scores can still be compared across countries and across different studies, due to calibration of the model on a common scale, and the sample-invariant characteristics of IRT parameters. 6. Data analysis 6.1. Heterogeneity Compared to HICs, EMs exhibit a much greater degree of within-country heterogeneity on key aspects of human development such as income and educational attainment, as well as on other aspects, varying from marketing infrastructure to lifestyle. In such a context, “fixed-effects” models and techniques are problematic. The established method for assessing scale reliability is Cronbach's alpha, which ignores heterogeneity. This may be one of the reasons why scale reliability in EMs often is lower than in HICs (Alden et al., 2006; Batra et al., 2000; Deshpandé & Farley, 2004). Factor analysis and OLS regression are arguably the most frequently employed multivariate techniques in marketing research to uncover relations between items and constructs. In their standard form, both assume fixed-effects. When there is considerable heterogeneity in the sample, these techniques will yield biased results. Heterogeneity can be discrete or continuous (Wedel, Kamakura, & Böckenholt, 2000). Discrete heterogeneity implies that there is a limited number of more or less homogeneous groups in a country. If the source of heterogeneity can be identified a priori, analyses should be conducted on each group separately. Results can be compared across groups if the measurement scales exhibit invariance across groups (Steenkamp & Baumgartner, 1998). For example, Steenkamp and Burgess (2002) studied the nomological relations involving optimum stimulation level and exploratory behavior in South Africa, a country characterized by extreme within-country diversity. They argued that cultural–ethnic groups are a systematic source of heterogeneity. They first established measurement invariance across these groups, and subsequently estimated and compared nomological relations for each group separately. A second approach to account for discrete heterogeneity is by estimating relations on groups that are formed post-hoc, using finite mixture modeling techniques. Jedidi, Jagpal, and DeSarbo (1997) have developed a finite mixture structural equation model to account for unobserved heterogeneity in measurement and structural relations. Ter Hofstede, Steenkamp, and Wedel (1999) proposed a finite mixture model to estimate the psychological associations between product attributes, benefits of consumption, and value priorities, incorporating within- and between-country heterogeneity. Allenby and Rossi (1999), among others, have argued that the assumption of discrete heterogeneity is overly restrictive. They advocate the use of continuous heterogeneity distributions, allowing the effect of a parameter to vary across entities.

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The standard assumptions are that the distribution of the parameters is unimodal and normal. Procedures like random coefficients regression analysis and hierarchical Bayes can be used to estimate the modus and variance of the normal distribution. To the best of our knowledge, neither finite mixture models nor continuous heterogeneity models have been used to deal with heterogeneity within EM countries. This is remarkable as the advantages of these complex models are likely to be much more compelling in the EM setting than in the HIC context in which they were developed and tested. 6.2. Measurement invariance Measurement invariance refers to whether the observed scores are comparable across groups (Steenkamp & Baumgartner, 1998). Marketing scholars recognize that this is an important issue in cross-national comparisons but, in fact, it is equally relevant when comparing disparate groups within one country. Measurement invariance is especially pertinent in EM research, given within-country heterogeneity and the vast differences in institutional context with HICs in which most previous research has been conducted. Lack of measurement invariance can be due to cross-group (national) differences in responses to 1) individual items and/or to 2) complete sets of measures (Baumgartner & Steenkamp, 2001, 2006; Steenkamp & Baumgartner, 1998). Steenkamp and Baumgartner (1998) outlined a procedure to test for measurement invariance at the level of individual items, using multi-group confirmatory factor analysis. If specific invariance constraints are met, this procedure yields construct scores corrected for lack of measurement invariance. These scores can be used in subsequent analyses, such as means comparisons and estimation of structural relations. Baumgartner and Steenkamp (1998) extended this approach to combined emic–etic scales. They showed how the multi-group confirmatory factor analysis model can be modified to yield cross-nationally comparable scores on scales consisting of a combination of country-specific and cross-nationally standardized measures. Lack of measurement invariance can also be due to crossnational differences in response styles (Baumgartner & Steenkamp, 2001). Response style refers to a person's tendency to systematically respond to questionnaire items on some other criterion than what the items were supposed to measure (Paulhus, 1991). Stylistic responding tends to affect all items and as such is not easily detected by the procedure outlined by Steenkamp and Baumgartner (1998), which is based on differential item functioning. The most prevalent response styles are acquiescence bias, extreme responding, and social desirability responding (Paulhus, 1991). There is evidence that countries may differ systematically on these response styles. Steenkamp, De Jong, and Baumgartner (2006) found that leading EM countries such as China, Argentina, Poland, and Brazil are among the highest in socially desirable responding. Countries like China also are high on acquiescence bias. These systematic results can be explained by a country's culture (Chen, Lee, & Stevenson, 1995; Steenkamp et al., 2006), which provides yet more evidence that marketing research results are affected by a country's institutional context.

Baumgartner and Steenkamp (2001), Rossi, Gilula, and Allenby (2001), and Ter Hofstede et al. (1999) have described procedures to purge observed scores from stylistic responding. More recently, De Jong, Steenkamp, and Fox (2007) proposed a model that corrects for cross-national differences in responses to individual items and sets of items. This procedure no longer requires cross-national invariance. The model also takes into account that rating scales often lack interval-scale properties. They applied this procedure to data from 11 countries, including EM countries like Brazil, China, Russia, and Thailand and showed that failing to account for response styles leads to erroneous conclusions. The foregoing discussion may suggest that measurement invariance is only an issue for survey data. Unfortunately though, that is not the case. It is our experience that scanner data are difficult to compare across HIC countries, let alone between HICs and EMs or among EMs. One reason is that definitions of categories (e.g., what are soft drinks?) and store types (e.g., what is considered a discounter?) are not standardized across countries. Further, the coverage of scanner data may systematically vary across countries. In EMs, retail scanner data (if available) will only cover a small part of the total market, as few stores have this technology. But even in HICs, this yields problems. Powerful discounters like Wal-Mart in the U.S. and Aldi in Germany are not included in retail scanner data. Obviously, this threatens the within-country usefulness of retail scanner data, and reduces the comparability with countries where retail coverage is much higher. Measurement invariance concerns also apply to secondary data. Employment data are sometimes manipulated for political purposes and the wealth of countries is difficult to compare due to different tax morals, (although these concerns are not limited to EMs only).3 The very fact that the data have been collected by a reputable organization does not assuage the need for evaluating metric invariance, e.g., by comparing estimates from different sources and by constructing composite indices. Multigroup confirmatory factor analysis can also be used to examine the measurement invariance of secondary data, provided the number of observations is sufficiently large and multiple indicators/estimates per construct are available. 7. Learning from results 7.1. Direct interpretation Learning can occur at several levels. At the most basic level, we learn something about the phenomenon at hand in the country in question. In our discipline, there is a strong focus on statistical significance. Findings that are significant at p b .05 are considered important while findings with a significance level above .05 – or, more liberally, above .10 – are not. Similarly, scales are considered to demonstrate internal reliability when coefficient alpha exceeds .70. Generally, these are reasonable 3 For example, an article in the Wall Street Journal Europe (1999) stated that “The government and international institutions explicitly recognize that a large part of the Italian economy goes unreported, and add a certain percentage to GDP to make up for these leakages when measuring its size.” Needless to say, such adjustments are estimates, suffering from reliability problems.


conventions in well-researched, Western contexts. In fact, one could argue that traditional significance testing against a null result makes little sense if previous research has established that the effect is different from zero (Farley & Lehmann, 1994). However, there are several reasons why traditional significance levels are of more doubtful value in EMs. First, since we do not know much about marketing phenomena in an EM context, in a Bayesian spirit, any information lifts marketing science above relative ignorance. Traditional significance testing minimizes the probability of erroneously concluding that there is an effect. This ignores the scientific and managerial “costs” of overlooking effects that are in reality present (Type-II error). Second, the power to detect effects generally (although not invariably) is affected adversely by lower reliability and within-country heterogeneity, both of which are especially pertinent in EMs. Hence, it is reasonable to accept more liberal significance criteria when conducting research in EMs (e.g., p b .20). After all, conventions are just that and our goal must be to advance science. This recommendation is similar in spirit to Lodish et al.'s (1995) use of p b .20 for managerially relevant decisions and to Nunnally's (1978) suggestion to accept lower reliabilities in the early stages of research than in later research stages. Perhaps it was also in this spirit that Deshpandé and Farley (1999, p. 10) defended the low reliability of their measures in a Vietnamese study “… reliabilities of the scale measurement in Vietnam, while directionally correct, were weaker than in Japan.” 7.2. Marketing relevance of theoretical explanations A second level of learning takes place by examining the marketing relevance of our theoretical explanations. An effect may be significant but does it really matter? We can assess this by evaluating the effect size, for which the correlation coefficient r is the most common metric. It is relatively simple to convert t-values and other significance statistics associated with multivariate analyses into r (Lipsey & Wilson, 2001). Researchers often more or less blindly adopt Cohen's (1988) interpretation of effect sizes: small: r = .1; medium: r = .3; large: r = .5, where small is often equated with irrelevant.4 We believe that this interpretation does not accurately reflect the marketing relevance of our theoretical explanations. First, small r's actually can represent a substantial effect. For example, Rosenthal (1991) showed that a correlation of .10 corresponds to an increase of the hit rate by 10%. Second, in EMs, scale reliabilities are often lower and this will generally (although not always) decrease effect sizes. Third, marketing costs are not taken into account. We will illustrate this with a simplified example, based on real company experience. Consider a large consumer packaged goods company that regularly introduces new products in the Brazilian market and typically spends annually $20 million on new product development and introductions. It conducts a study into drivers of new product success and finds an effect size of r = .11 for income. A

4

Note that Cohen (1988) himself does not suggest this.

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segmented approach, based on income, translates into a predicted increase in new product success of 11%, generating expected savings of $2.2 million. Thus, even if an effect size of .11 may not seem large, the marketing savings can be substantial. 7.3. Empirical generalizations The most abstract level of learning is when the researcher attempts to integrate the findings obtained in the specific EM study with previous research to arrive at, or update (weak or strong) empirical generalizations. Bass and Wind (1995, p. G1) eloquently outlined the role of empirical generalizations in the evolution of marketing science: “Science is a process in which data and theory interact leading to generalized explanations of disparate types of phenomena. Thus, empirical generalizations are the building blocks of science.” Perhaps this more than anything else underlines the importance of EM research. To be a true science, marketing must establish generalizability and boundary conditions in disparate settings. EMs offer research contexts which are widely disparate to the ‘traditional’ research context of the HICs. We believe that examining empirical generalizations to EMs is necessary to arrive at, what Farley and Lehmann (1994) call, “cross-national laws” of marketing. If at least weak generalizability holds for both HICs and EMs, we can start to have confidence in the universality of a theory. If on the other hand, the results do not hold, we can establish boundary conditions. In both cases, marketing as a science progresses. Let us illustrate this with two EM studies. Steenkamp and Burgess (2002) found that consumers' optimum stimulation level significantly affect the extent to which they engage in exploratory behavior. This result was found across three cultural–ethnic groups and replicated previous research in HICs. Given the vastly different contexts in which this effect is found, we may start to formulate this relationship as a crossnational law, subject to further confirmation in other EMs. On the other hand, the study by Burgess and Nyajeka (2006) suggests boundary conditions on drivers of a company's market orientation. Research in Western countries has supported the adverse effects of formalization and centralization on market orientation. Burgess and Nyajeka showed that this does not apply to countries characterized by cultural hierarchy and embeddedness and lower formal education of employees. In such countries, formalization and centralization are consistent with cultural expectations and moderate levels of market orientation may stimulate information acquisition and dissemination by informing employees with less formal education about market orientation and clarifying their role in its delivery. The emphasis on cultural hierarchy also suggests that employees may prefer relatively higher levels of formalization and centralization, because they will rely on rules to proscribe their roles and behaviors within the hierarchical structures they value. 8. Implications for marketing practice Marketing research in EMs not only plays a considerable role in the evolution of marketing science, it is also of great

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relevance to marketing practice. In this section, we will consider a number of issues specific to the development and implementation of marketing strategies in EMs. 8.1. Development of marketing strategies for EMs 8.1.1. Focusing on the affluent segment To compete in EMs, global companies should develop two distinct strategies. Firstly, for the elite segment typically concentrated in urban areas, companies can build profitable positions by rolling out their global marketing strategies. These consumers tend to prefer global brands over local brands, due to the associations of global brands with higher quality and prestige (Batra et al., 2000; Steenkamp et al., 2003). Global brands also communicate cosmopolitan sophistication and modernity. Although these qualities are sought after in most countries, they are appreciated by the elite who often admire HIC lifestyles and the products that symbolize them. This generalized status preference for global/foreign brands has been reported in a wide range of EM countries such as China, India, Korea, Vietnam, Congo, Ethiopia, Nigeria, Zimbabwe, Romania, Turkey, and Peru (Batra et al., 2000). Distribution channels in large cities often are advanced and price sensitivity among the elite segment typically will be modest. In fact, purchasing brands that cannot be purchased by the majority of the population caters to the elite's typical desire for social distinction. Note that catering to the elite segment and building global brands is not the prerogative of companies based in HICs. EM firms can build equally compelling international brand images. Consider the fast-food chain Nando's. Starting from South Africa, it has rapidly expanded to over 30 countries on five continents, challenging one of the perennial symbols of global culture, McDonald's. Some EM companies underline their credentials by emphasizing their emergence on the global stage. For example, for its Chinese-language home page, computer maker Lenovo selected a map of the world with pictures of its PC towering over globally recognized landmarks as the Eiffel Tower, the Statue of Liberty, and the Sydney Opera House. Its global ambitions were expressed in the slogan: “in step with global technology” (Lane, St-Maurice, & Dyckerhoff, 2006). Nevertheless, the traditional business focus on relatively expensive, large unit, over-engineered global brands is unlikely to be successful in EMs beyond the elite segment, at least for the foreseeable future. 8.1.2. Innovation blowback: focusing on the base of the pyramid A second way to compete in EMs focuses on serving the needs of the mass market segment with a radically different strategy. This entails the challenge of developing (disruptive) strategies to serve the extremely price sensitive and resourceconstrained mass market segment while maintaining profitability. Although this can be daunting, it can be done. The lower-income segment of EMs is an ideal market for disruptive innovations for at least two reasons (Hart & Christensen, 2002). First, if a firm has developed a profitable business model to cater to this segment in one EM, its business model can be expected to travel well to other places. After all, it

has built up the skills necessary to offer a product profitably at very low prices and the proposition is likely to be attractive in other EMs. Also, the proposition may be attractive to the significant low price/value-focused segment in HICs. For example, the Dacia Logan is a no-frills car priced at about 5,000 that Renault developed for Eastern Europe but later introduced into Western Europe too. Second, disruptive innovations also compete against nonconsumption. In EMs, nonconsumption is a realistic option for the vast majority of the mass market segment. Disruptive innovations potentially expand the market by offering a product to consumers who would otherwise be left out of the market. Many Eastern Europeans purchasing the Dacia Logan would not be able to buy a car otherwise. They are quite happy to own a simpler, more modest version of cars marketed in HICs. In less affluent EMs, penetration of even basic consumer products, such as toothbrushes, remains low. This challenges global manufacturers to develop basic, low cost products that satisfy the needs of the mass market segment without jeopardizing endorsements in HICs. For example, marketing affordable toothbrushes at affordable prices may require “transitional” designs without modern design elements that improve performance (e.g., angled necks and bristles, end-rounded bristles) but also increase production costs beyond affordable levels. As existing products from high-end markets are out of reach for all but a small segment of the EM market, disruptive innovations will encounter limited competition from established products. Consequently, they can incubate their businesses in the relative safety of low-income segments (Hart & Christensen, 2002). As such, EMs provide an invaluable ground to develop a low cost, efficient business model that can be transferred to the low-income segment of other EMs. In the longer run, these business models even can be moved upward, in EMs as well as in HICs, by successively attacking market tiers that are the least attractive to established high-end products. It is in this vein that Brown and Hagel (2005) introduced the term “innovation blowback” in that they expect that EMs will become important catalysts for disruptive innovations. Companies that are able to develop the new innovation skills to be successful in these markets are likely to gain competitive advantage in the global marketplace. Although Western companies are active in EMs, EM-based companies may be benefiting optimally from the disruptive potential of their huge ‘base of the pyramid’ potential. For these companies, it is either survive or go bankrupt. Companies ranging from India's Mahindra and Mahindra (tractors) and Ranbaxy (generic pharmaceuticals) to Egypt's Orascom (telecom) and Brazil's Embraer (aerospace) have learned to make a profit at prices unheard of the HICs. Orascom earns a margin of 49% selling cellular services for 2–3 cents a minute, while Ranbaxy profitably sells generic ciprofloxacin (to treat bacterial infections) for $0.69 for 10 tablets compared to the going price of $51 in the U.S. (Engardio, 2006). 8.2. Implementation of marketing strategies The best-crafted and most appropriate strategy will not lead to superior performance if it cannot be implemented in the


operational context. EM contexts are marked by institutional turbulence, complexity, and within-country diversity that can attenuate and even disrupt implementation (Wright et al., 2005). Hence, performance is likely to be superior when organizational structures and processes encourage strategic flexibility, innovation, and entrepreneurship and implementation stresses continual market-oriented intelligence gathering, dissemination, sensemaking, and responsiveness (Liu, Luo, & Shi, 2002; Luo & Peng, 1999). We distinguish four key factors that critically affect the implementation of marketing strategies in EMs: leadership, organizational systems, intraorganizational relations, and learning. Leadership concerns top management attitudes and behavior. Top management emphasis and commitment is important to the implementation of marketing strategy in any organization, but even more so in EMs, due to socioeconomics (low formal education, high unemployment) and culture (high embeddedness and hierarchy). Accordingly, it is important for top management to understand how institutional, normative, and organizational elements of context animate implicit, culturally-endorsed beliefs affecting leadership acceptance and effectiveness (House, Hanges, Javidan, Dorfman, & Gupta, 2004). Top management may need to be more explicitly involved in management and policy setting than in HICs, in order to encourage effective implementation. Cultural preferences for risk avoidance may make this especially true when strategies emphasize entrepreneurship and risk-taking (Hofstede, 2001). Top management also needs to clearly understand corporate governance issues and the governance effects of domestication and internationalization strategies (Wright et al., 2005). Organizational systems concern organizational structure, reward, and training systems. Cultural preferences for order and hierarchical coordination in working relations suggest that higher levels of centralization and formalization may be appropriate in EM organizational structures and processes (Burgess & Nyajeka, 2006). Consequently, employees may prefer to work in small groups and teams when implementing strategies and to be evaluated and rewarded, at least partially, on group performance (Ping Ping Fu et al., 2004; Wei, Chen, & Zhang, 2004). Training can play an important role in addressing competency deficits in functional skill areas and helping overcome difficulties in intraorganizational relations that derive from within-country diversity (Cadogan, Sundqvist, Salminen, & Puumalainen, 2005). Intraorganizational relations comprise process-related choices about internal connectedness, coordination, and conflict management. When these choices are appropriate to the institutional context, they improve implementation by facilitating social capital formation, trust building, and endorsement of shared goals and organizational culture (Inkpen & Tsang, 2005; Kirca, Jayachandran, & Bearden, 2005). Hierarchy and embeddedness naturally encourage market orientation by facilitating information dissemination and use and encouraging cooperation during implementation (Nakata & Sivakumar, 2001), but it remains necessary to promote this natural tendency by designing processes that will encourage cooperative relations. The way that individuals define themselves affects their thoughts and interactions with others. The characteristics of EM societies accentuate social and relational identities, which often

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are expressed in an individual's connectedness within social networks (Brewer & Brown, 1998). In the organizational context, connectedness communicates important identity information about status and roles, which helps confirm identities, define appropriate others with whom to interact and the nature of those interactions, increase well-being and self-esteem, and enhance cooperation, implementation, and performance (Gelfand, Major, Raver, Nishii, & O'Brien, 2006; Milton & Westphal, 2005). Equally, inability to develop and affirm connections can be a source of distress and negative feelings that frustrate implementation. (Cross, Gore, & Morris, 2003). The EM context also requires adaptation in day-to-day interactions with subordinates who must implement strategies. Consistency in behavior and transparency are considered to be good managerial characteristics in Western contexts. Diplomacy and tact, even evasiveness, and avoidance of negative public evaluations, may be preferable in EMs if it means saving face for an important colleague or subordinate (House et al., 2004). Thus, although top management is required to be more available, physically or symbolically, to act as vertical sources for guidance, facilitate internal connectedness across the organization, and encourage middle managers to take appropriate risks, they must also ensure that their interactions are appropriately designed so as to enhance implementation. Learning systems focus on facilitating learning in the firm. Complexity and dynamism in EMs increase the importance of knowledge-producing behaviors and knowledge-questioning values (Sinkula, Baker, & Noordewier, 1997). The positive effects of learning on performance in EMs increase with experience intensity and diversity (Luo & Peng, 1999), hence it is important to leverage experience within the firm and its supply chain using formal and informal learning and knowledge management systems. 9. Conclusions 9.1. Summary In this article, we argued that marketing scientists need to conduct more research in EMs, both to further the advance of marketing as an academic discipline as well as to maintain the managerial relevance of our discipline. We viewed marketing science as a process, and proposed a framework delineating four stages through which EM research contributes to the growth of marketing science. The four stages are 1) theory development, 2) acquisition of meaningful data, 3) analysis of the data to test one's theories, and 4) learning. Through the process of deductive logic, general theories are operationalized in specific settings, while through the process of inductive logic, specific findings are used to arrive at more general conclusions. We discussed the unique issues and contributions of EM research for each of the four stages of this framework. Subsequently, we elaborate on the implications of EM research for development and implementation of marketing strategies. Our discussion has revealed that some research has started to address these issues, but we have only begun to scratch the surface. In this spirit, we present an agenda for future research in EMs.

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9.2. Research agenda 9.2.1. Theory development In order to move forward, we need to systematically explore the EM institutional context and its effects on marketing phenomena. Although we should be open to constructs and theories developed in EMs, it is natural that the large existing body of work be a primary point of departure. Only in this way can we arrive at contingency theories of marketing that may possibly be applicable across a wide range of countries and environments. Our journey will challenge us to become more truly global in our theory development. The overwhelming body of current marketing research considers consumers as highly independent persons, making their own decisions. Marketing theories that consider group dynamics and social influences are underdeveloped. This limits their applicability in embedded EM contexts, as does lack of clarity about whether constructs developed in HICs are theoretically equivalent in EMs. Theoretical equivalence is difficult to establish but a wide range of procedures, ranging from qualitative techniques to structural equation modeling can be used for this purpose. 9.2.2. Acquisition of meaningful data The appropriate unit of observation in EMs may sometimes, if not often, be the group rather than the individual. But how do we measure group influences and group dynamics? Can we measure them at the individual level using constructs like Fishbein's subjective norm (Assael, 1992) or Bearden, Netemeyer and Teel's (1989) susceptibility to normative influence? In that case, it is worrisome that only 5 out of nearly 200 scales included in Bearden and Netemeyer (1999) deal with social influences. If those effects should be measured at the group level, how should we do that? The choice of the countries typically is driven by convenience rather than by design. A more deliberate approach where countries are purposefully selected to provide maximum variation on relevant institutional factors will increase the generalizability of our findings. One of the great success stories in marketing is that we have developed an impressive body of rigorously validated marketing scales (Bearden & Netemeyer, 1999). However, few of these validation efforts have taken place in EMs. We hope that future editions of the well-known Handbook of Marketing Scales (Bearden & Netemeyer, 1999) will contain more information on the validity of marketing scales in EMs. This will be a major step in opening up EMs to advanced marketing research, and allows EM researchers to build on previous efforts and insights. Notwithstanding the importance of previous work, we expect that scales often will have to be adapted to render them cognitively less demanding. Much work remains to be done to construct shorter, simpler versions of existing scales, using different wording and response formats, as well as new scales for concepts that are particularly relevant in EMs (e.g., guanxi, ubuntu). We except that marketing research in the U.S. and other Western countries will also profit from the development of scales that are cognitively less demanding.

9.2.3. Data analysis Data collected in EM research have a tendency to have higher noise levels. This has four important implications. First, Western standards of reliability (e.g., alpha greater than .7) often are not met in EMs. These standards were developed, based on research among relatively more homogeneous, higher educated groups.5 To what extent is this cutoff criterion realistic for EM research, where so little is known about the context and with considerable within-country heterogeneity? What are the substantive effects of lower reliabilities? Second, measurement invariance is an issue in EM research. In research contexts characterized by higher levels of noise, the multi-group confirmatory factor analysis framework is likely to indicate that even partial measurement equivalence is not achieved. Some research is under way to relax the measurement equivalence constraint altogether (De Jong et al., 2007). Their method is applicable to data measured on 5-point agree– disagree scales. More research is needed, e.g., for other response scales. In addition, although measurement invariance is generally recognized to be an issue for survey data, it is usually ignored for other types of data such as scanner data and secondary data. Future research should investigate the effect of lack of measurement invariance on substantive results for various types of data. Third, higher noise levels in EM research adversely affect model fit and significance tests. We need models that are better able to correct for these influences, and statistical rules-ofthumb that can be used fruitfully and validly with EM data. Fourth, within-country heterogeneity is an important problem in EM contexts. In principle, finite mixture models, random coefficients regression analysis, and hierarchical Bayesian analysis can deal with this. However, do the theoretical advantages of these advanced techniques show up in practice, given that EM data contain more error? Perhaps the simpler but more robust fixed-effects models work better in practice, just like metric conjoint analysis and maximum likelihood structural equation modeling usually outperform their nonmetric alternatives although theoretically, the latter should perform better? 9.2.4. Learning The practice of relying almost exclusively on achieving .05 significance levels in null-hypothesis statistical tests has limited value in EM research. Instead, we need to use all of the information at hand, focusing attention also on effect sizes, statistical power, and the cost of “false negatives” in our research. Where our knowledge of marketing phenomena in EMs is most limited, it seems reasonable to suggest that more liberal significance and reliability criteria may be appropriate. In a similar vein, researchers must not disregard effect sizes that seem small by traditional expectations, but rather seek to understand the relevance of effects in the context of EMs, which often include the largest markets in the world. All these efforts 5 In fact, the standard of .7 may also be problematic for research in HICs. Baumgartner and Steenkamp (2006) show that scale reliability using conventional procedures such as Cronbach's alpha is substantially overestimated, once the error term is properly decomposed.


should contribute to the Holy Grail of marketing science — empirical generalizations. However, a word of caution is needed here. International marketing has gained much of its current respect among marketing academics since researchers started to apply rigorous data collection and analytical techniques to address substantive international issues. The EM context should not be used as an excuse for sloppy research. Rather, given the complexities of the EM research context, we expect a great future for rigorous techniques that extract the maximum information with the minimum data collection burden for the respondent. Surveys in which questions are adapted based on an individual's previous responses (Balasubramanian & Kamakura, 1989) and data collection tasks that use respondents' own vocabulary (e.g., Steenkamp, Van Trijp, & Ten Berge, 1994; Steenkamp & van Trijp, 1996) seem especially useful in EMs. Again, marketing research in HICs may benefit from this too. Science is built on the generalizability of our findings across studies, across cultures, across national boundaries. EMs should be used as a natural laboratory in which theories and assumptions about their underlying mechanisms can be tested. Confidence in the universality of our findings is greatly enhanced when strong generalizability is supported, while we can be encouraged in this respect when (partial) weak generalizability is established. Where generalizability does not exist, we learn about the boundary conditions of our theories. 9.3. Conclusion The hard sciences derive much of their greater respect from their ability to come up with generalizations or “laws.” Apart from using the scientific method, marketing's claim to be a science is grounded in its ability to develop scientific generalizations (Hanssens et al., 2001). In this article, we have detailed how marketing research in EM contributes to marketing science. Just as contact between European and Islamic societies once resulted in the great Renaissance which has shaped today's world, we believe that extending our research and collaborations to these regions in which the majority of humankind reside will lead to a renaissance in marketing theory, marketing research, and marketing practice. References Alden, D. L., Hoyer, W. D., & Lee, C. (1993). Identifying global and culturespecific dimensions of humor in advertising: A multinational analysis. Journal of Marketing, 57(2), 64−75. Alden, D. L., Steenkamp, J. -B. E. M., & Batra, R. (2006). Consumer attitudes toward marketplace globalization: Structure, antecedents, and consequences. International Journal of Research in Marketing, 23(3), 227−239. Allenby, G. M., & Rossi, P. E. (1999). Marketing models of heterogeneity. Journal of Econometrics, 89(1–2), 57−78. Ambler, T., Styles, C., & Wang Xiucun, C. (1999). The effect of channel relationships and guanxi on the performance of inter-province export ventures in the People's Republic of China. International Journal of Research in Marketing, 16(1), 75−87. Arnould, E. J. (1989). Toward a broadened theory of preference formation and the diffusion of innovations: Cases from the Zinder Province, Niger Republic. Journal of Consumer Research, 16(2), 239−267.

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