Examining Performance of U.S. Multinationals in Foreign Markets

Abstract

In the U.S., a basic tenet of business philosophy is that profitability is related to market share. The generality of this finding in markets outside the U.S. is examined based on a sample of product businesses drawn from the PIMS (Profit Impact of Marketing Strategy) data base. All businesses belong to firms whose corporate headquarters are located in the U.S. The relation between 7 marketing mix variables and market share and ROI (return on investment) is compared. In general, the relationship between market share and ROI appears to hold in European and other foreign markets. The marketing mix variables associated with these measures of performance, however, as well as the strength of the relationship, vary by market area.