Increasing marketing spending can help incumbent firms respond effectively and achieve strong financial performance when their markets are liberalized to foreign competition.

1. From:
Can marketing help incumbent
firms respond to foreign firms
entering the market?
“the retail sector…should not be given away to the foreign
players while it is too young to compete on a level-playing field”
-Kishore Biyani, CEO of largest incumbent retailer in India, in
response to foreign entrants to the Indian retail industry
Ramani and Srinivasan (2019)

2. From:From:
 What is liberalization? Opening a market to foreign
competition.
 Foreign entrants following liberalization have superior capital, technology, and
management practices
 For incumbent firms, relatively inexperienced at operating in open markets, foreign
entrants represent learning opportunities
 How does liberalization affect incumbent firm performance?
 Increases competition, leading to poorer profitability and revenues
 May threaten incumbent firm survival, causing them to exit the market
Liberalization
Ramani and Srinivasan (2019)

3. From:From:
 A study of 3,927 Indian incumbent firms between 1989 and 2000
examined how marketing can help incumbent firms effectively face
liberalization
 For incumbent firms with greater knowledge of domestic
institutions and market forces: increasing their distribution
improved profitability
 For incumbent firms with prior exposure to foreign markets and
firms: increasing their promotions, i.e. discounts and consumer
rebates, improved profitability
How marketing can help to combat
threats from liberalization
Ramani and Srinivasan (2019)