For decades, Haier, a Chinese appliance-manufacturing giant, has tried with little success to break into the American market. According to Tuck marketing professor Peter Golder, the company finally made headway with a lower-cost investment in an appliance manufacturer in New Zealand—a country similar, both culturally and economically, to the United States.
"The things Haier will learn in New Zealand will help the firm succeed in the U.S. market," says Golder, who teaches the core Marketing Concepts and Strategy course and the Global Marketing elective at Tuck. "Similarly, if a U.S. company gained market knowledge in Taiwan or Vietnam, it would be very helpful for what that company could accomplish in China."
Golder recently received the American Marketing Association's (AMA) 2011 Excellence in Global Marketing Research Award for his article addressing this topic: "Whose Culture Matters? Near-Market Knowledge and Its Impact on Foreign Market Entry Timing." Published in 2002 in the Journal of Marketing Research, and co-authored by Debanjan Mitra of the Warrington College of Business Administration at the University of Florida, the piece was the first to examine how experience in one market enables companies to gain the requisite knowledge to subsequently operate in another, similar market—or "near-market."
"It was a big effort to put the dataset together, and it was satisfying to win the award"
Golder and his co-author employed a hazard model to evaluate the impact of the extensive data they compiled—dynamic near-market measures and other economic and cultural variables—on 722 foreign-market entries of 19 multinational firms. "It was a big effort to put the dataset together, and it was satisfying to win the award, but the major satisfaction is that more people are likely to look at the article," says Golder, at Tuck since 2009.
Golder received the award at the AMA Summer Marketing Educators' Conference on August 6 in San Francisco for research he and Mitra, a Ph.D. student at the time, conducted between 1998 and 2002 while Golder was a faculty member at New York University. The award was granted on the basis of long-term impact; the study has been cited widely in research and used in managing international firms. Golder hopes that companies looking to move beyond a domestic focus will continue to learn from its findings.
Golder says that even companies like Walmart struggle when attempting to break into new countries. "You can't leverage what is happening inside an Arkansas Walmart—for one, the size of the aisles—to be successful at a Walmart in Argentina, which has higher shopping frequency," he says. "Success in the U.S. may very well be a company's undoing in another country."
Golder, whose areas of expertise include new products, global marketing, and marketing strategy, is the recipient of other AMA awards, including the Berry-AMA Book Prize for best book in marketing.