New strategy for cross-border marketing relies on interdependent ecosystem
LAWRENCE — The COVID-19 pandemic, coupled with supply chain obstacles, has made the international marketplace even trickier for businesses to navigate. But Murali Mantrala, Ned Fleming Professor of Marketing, advocates that companies consider a new approach.
“Marketing ecosystem orchestration (MEO) is creating the environment for the whole marketplace to grow and become better,” Mantrala said.
“And in the process, it ‘lifts all boats.’”
His article titled “Cross-border marketing ecosystem orchestration: A conceptualization of its determinants and boundary conditions” introduces a new concept-based approach to inform and guide cross-border marketing strategy. It looks at how Starbucks, Uber, Airbnb, Amazon and Apple function in today’s digitally interconnected worldwide markets. It’s published in the International Journal of Research in Marketing.
“From the perspective of our research, the old model of thinking was that multinationals have to expand abroad and pick and choose what kind of partnership or arrangement they enter,” said Mantrala, who co-wrote the article with colleagues Kelly Hewett, G. Tomas M. Hult, Nandini Nim and Kiran Pedada.
“They basically invest in their own assets and partnerships to build what we call the value chain. But when you look around since about the last 10 years — maybe even 20 years — a lot of the most successful companies are those that are not relying simply on developing their own chain. They’re actually fostering or seeding growth in areas which might benefit them but also could benefit other parties independently.”
Mantrala interviewed a dozen CEOs and CMOs from different companies while looking at case studies of how these businesses adapted to new environments using MEO.
“The most misunderstood thing about the international marketplace is that somehow companies can simply bulldoze their way through other countries and just do things for themselves,” he said. “I think the entire environment has to be supported.”
For example, Starbucks, the Seattle-based company that is the world’s largest coffeehouse chain, thoroughly tailors its approach to expansion based on what country is involved. In Spain, Portugal and India, Starbucks adopted exclusive marketing partnerships.
“Like in India, Starbucks relied more on these joint ventures; it didn’t do much in terms of trying to build up the coffee-drinking habits of the country or in coffee growing," he said. "But in China, which was really a tea-drinking place, it figured out that first it has to create the market through marketing ecosystem orchestration."
This produces the most lasting kind of market. Otherwise, countries such as China sometimes force companies to leave that are becoming too successful on their home turf.
“China actually welcomed the way Starbucks is going about doing things,” Mantrala said. “It not only helps Starbucks, but helps a lot of farmers and other workers. This approach is not necessarily meant for everyday marketing but for CMOs or CEOs thinking of launching or entering new markets.”
This strategy isn’t exactly a modern invention. It's been used in past decades by subsidiaries of multinationals — such as the London-based consumer goods company Unilever and US corporation General Electric — to penetrate rural sectors of emerging markets like India and Bangladesh. In more recent times, tech company platforms such as Uber and Amazon often use an MEO approach in different country markets.
The impetus for Mantrala’s research didn’t start with coffee; it started with newspapers.
“The industry had advertisers and readers, but they really were getting hammered by online news sources. Newspapers needed new strategies to figure out how to keep financially viable,” he said of his platform-based research.
Mantrala discovered that the financial fallout was not as bad as newspaper publishers assumed because they kept thinking their success was based on getting more advertisers. They were abandoning investments in the editorial side only to realize advertisers were there in order to get to the readers, and readers were only attracted by strong editorial content.
“What they should really be investing in is the editorial content, and they were doing the exact opposite,” he recalled.
Based on this research of networking and building two sides of a market, Mantrala was recruited to be part of a thought leadership conference in his home country of India at the Indian School of Business. This developed into a group tasked with “new thinking for international strategies,” which became this current team working on marketing ecosystem research.
A faculty member at KU since 2020, Mantrala specializes in quantitative marketing strategy, specifically retailing channels, marketing resource allocation and salesforce management.
The professor believes marketing ecosystem orchestration represents the perfect corporate strategy for the here and now.
“There’s all this emphasis on sustainability, especially among the younger generation," Mantrala said. "MEO is very consistent with that sustainability and ‘justice for all’ kind of thing. Because what you’re really advocating is that if you want to be healthy and profitable and grow, it sometimes pays off to invest in other actors and activities in the market.
“It supports people who support you.”