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Keywords France, Germany, Marketing strategy, Headquarters, Subsidiaries, United Kingdom
Abstract This paper presents the findings of a study of the marketing strategies and headquarters-subsidiary relationship of 186 German and 113 French subsidiaries operating in the UK. German companies were found to pursue market-focused strategies with an emphasis on product quality. Meanwhile, their French counterparts adopted a more short-term orientation with a stronger emphasis on cost-related strategies. Both sets of companies displayed a high degree of ethnocentricity towards the UK market with regard to strategic and product-related issues. However, high levels of autonomy were observed in French and German subsidiaries in other areas of marketing decision making. Some differences by industry sector were observed, with service organisations more likely to adapt their product/service offering to meet the needs of UK customers. Chemical and related companies were observed to have the highest level of autonomy with regard to marketing decision making.
Introduction
This paper presents the findings of a study of the international marketing strategies and headquarters-subsidiary relationships of French and German companies. As the two leading economies in Western Europe, a comparison of the international activities of companies in these two countries is particularly insightful. The specific objectives of the research are, therefore:
* to compare the marketing strategies and organisational characteristics of French and German companies in the UK market;
* to assess the extent to which French and German companies adapt their marketing strategies to meet the needs of UK customers; and
* to determine what lessons can be learned by indigenous companies from their international competitors.
The study is limited to one overseas market, the UK, in order to hold constant any differences in marketing strategies or organisation that are peculiar to particular markets.
Background
Overseas companies make a very important contribution to the UK economy, accounting for 17 per cent of manufacturing employment, a third of manufacturing capital expenditure and 26 per cent of manufacturing output (IBB, 1998).
Furthermore, foreign-owned organisations account for approximately twofifths of the UKs top 100 exporters (IBB, 1998). The UK is considered to be a particularly attractive market for overseas investors because it is generally an open market - open both to innovation and competition (OECD, 1996). In addition, there are fewer barriers to trade...