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Journal cover: Multinational Business Review

Multinational Business Review

ISSN: 1525-383X

Online from: 2003

Subject Area: International Business

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The rate of penetration by multinationals into emerging markets: evidence from BRIC

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Title:The rate of penetration by multinationals into emerging markets: evidence from BRIC
Author(s):Johny K. Johansson, (McDonough School of Business, Georgetown University, Washington, DC, USA), Laurence Leigh, (Suliman S. Olayan School of Business, American University of Beirut, Beirut, Lebanon)
Citation:Johny K. Johansson, Laurence Leigh, (2011) "The rate of penetration by multinationals into emerging markets: evidence from BRIC", Multinational Business Review, Vol. 19 Iss: 3, pp.272 - 289
Keywords:Brazil, China, Emerging markets, Global brands, Globalization, India, Local brands, Market shares, Multinational firms, Regional marketing, Russia
Article type:Research paper
DOI:10.1108/15253831111172694 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:Thanks are due to Henry H.W. Sung, now with Johnson & Johnson, for data collection and insightful comments and ideas. Thanks also to Hussein Al Ashmar for resourceful research assistance. Funds provided to the first author from the Coca Cola Visiting Chair in Marketing at American University of Beirut are gratefully acknowledged.

Purpose – The purpose of this paper is to provide an empirical assessment of the degree to which global firms have penetrated markets in emerging countries in the new millennium. The focus is on the “big four” emerging countries of Brazil, Russia, India, and China (BRIC), and the study examines penetration in three product categories: beer, hair care, and carbonated soft drinks.

Design/methodology/approach – The conceptual development draws on a normative-descriptive framework, predicting the behavior of multinationals from normative models of their strategic behavior. Predictions are evaluated against market share data for the multi-domestic product categories.

Findings – Multinationals with strong global brands will introduce their global brands and be successful also in multi-domestic local markets where preferences differ across countries. However, the key to success is not always their global brands, but could equally likely be an acquired local brand. Some local brands successfully defend their markets, and even venture abroad into neighboring regions.

Research limitations/implications – Globalization does not mean the success of global brands as much as success of global firms. In the end, the penetration of local emerging markets is not necessarily from global brands, but from global companies with acquired local brands.

Originality/value – The paper establishes that any fear of elimination of valued local brands is overblown. It also helps dispel the myth that emerging countries cannot develop strong international brands on their own. But one issue remains: the financial clout of global firms is difficult for emerging firms to counter.

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Qualitative research in international marketing.