Winning Consumers through Experience: Competition between Domestic and International Businesses

Abstract

Retail internationalization has received increasing attention due to its popularity as a business practice. Previous studies have focused on two main factors in the process of retail internationalization: resources and environment. In the resources category, one of the key factors that has been extensively studied is social capital [1]. And in the environment category, one of the most influential environmental factors is cultural distance and its consequence, psychic distance [2]. However, few studies have investigated social capital from the consumers’ perspective and considered the influence of psychic distance perceived by international retailers’ targeted consumers in the host market on their acceptance. This study aims to investigate how to decrease consumers’ psychic distance to obtain initial acceptance from the targeted consumers in the host country. Previous studies have found that perception is shaped through experience [3,4]. Therefore, the main argument in our study is that international businesses should focus on experiential marketing to reduce consumers’ psychic distance. In order to understand this argument in the host market competition, experiential marketing strategies in the domestic businesses framework, as well as in the international businesses framework, will be compared.