Market globalisation and the interrelation of economies have significantly accelerated internationalisation processes throughout the world. In this context, exporting is a traditional channel for entry into foreign markets and a fundamental strategic option for ensuring the survival and growth of companies that have chosen to internationalise (Cavusgil and Zou, 1994). Many companies consider exporting as a way to counteract growing competition from abroad in domestic markets, broadening their market coverage and improving profitability. Exporting is not an end in itself, however, as the ultimate objective of all exporting companies is to achieve competitive advantages in the country-markets where they compete (Morgan et al., 2004). Effective and efficient marketing strategies must be designed so that companies can adapt to the needs of foreign markets in order to achieve ongoing improvements in export performance with their available resources and capacities (Shoham, 1999; Navarro et al., 2010a). Any adaptation must be based on knowledge of the economic and cultural differences and distances between domestic and foreign markets. Companies therefore have to generate market intelligence to process relevant information on customers, competitors and suppliers and make that information available throughout the organisation to enable strategic decision-making in the export activity. However, studies on these interrelations are lacking, leading to a significant research gap (Haverila and Ashill, 2011). This present study aims to cover that gap by analysing the role of market intelligence in the interrelationships between export managers' perceived market distance, strategic behaviours (adaptation versus standardisation of the marketing mix) and export performance.
The work is divided into four parts. Firstly, based on the literature review, we define the study variables, the theoretical framework for the research, the proposed conceptual model and the hypotheses. Secondly, we describe the research methodology and define the sample, the information obtained and the analytical tools used to test the hypotheses. Thirdly, we report the results and interpret them to provide the main conclusions and managerial implications. And finally, we present the main limitations of the study and future lines of research.
Theoretical framework and research hypotheses
2.1. Export performance
Export performance is an essential aspect of international decision-making (Madsen, 1998). Cavugil and Zou (1994) define export performance as the extension by which firms achieve their objectives by exporting their products and brands to foreign markets. It includes economic aspects (e.g. profit and sales) and strategic aspects (e.g. international positioning, increased market share due to exports and achievement of objectives), involved in planning and executing export marketing strategies. The reviewed literature (Zou et al., 1998; Rose and Shoham, 2002; Sousa, 2004) suggests three basic aspects of export performance: (1) it is a multidimensional concept that requires quantitative measurement (e.g. sales, profitability and growth) and qualitative measurement (e.g. perceived success, satisfaction and achievement of objectives); (2) assessment must address a given time horizon rather than the short term (Lages and Montgomery, 2004); (3) measures of performance should reflect managerial perceptions of achievement of the exporting objectives (i.e. managerial satisfaction with export performance) (Lages et al., 2008).
This present study takes into account the above three aspects (1) it examines two dimensions of export performance, a quantitative one--growth in export sales, and a qualitative one--managerial satisfaction; (2) export performance is evaluated over a period of time, the last three years; (3) managerial perceptions are taken into account (managerial satisfaction) in various measures of company success in foreign markets (e.g. reputation and image, international expansion and market share).
2.2. Exporting Company Marketing Mix Strategic Decisions: Adaptation versus Standardisation
Standardisation of the marketing programme consists in offering identical product lines at equivalent prices using similar distribution systems supported by identical communication programmes (e.g. advertising and promotion) in a variety of different countries (Theodosiou and Leonidou, 2003). Several authors recommend a standardisation strategy when target markets show similar characteristics and behaviours (Kustin, 2004; Ozsomer and Simonin, 2004). However, critics of standardised marketing strategies in the international sphere point out that despite convergence in the socio-economic trends in some market segments, there are still significant inter-country differences generated by different national cultures, local market conditions, the application of very diverse public policies and legal regulations, and different consumer reactions to similar marketing stimuli mean that standardised strategies can be counter-productive (Navarro et al., 2010a). For that reason, Albaum and Tse (2001) point out that adaptation is inevitable for exporting companies to achieve success in foreign markets. Such adaptation involves modifying product attributes (e.g. label or brand), price, distribution and communication programme to suit the particular features and demands of each country-market (culture, per capita income, consumer tastes and preferences).
In any case, strict application of the extreme positions of standardisation or adaptation is impossible because, as the contingent approach indicates, the degree of adaptation (versus standardisation) is a function of the characteristics of the products, the industry, the market, the company and the environment where the company operates (Calantone et al., 2006). In this context, researchers prefer to speak of different degrees of adaptation (standardisation) of the marketing strategy associated with the exporting activity (Lages and Montgomery, 2004). Bearing in mind these premises, this research evaluates export marketing strategy along the standardisation-adaptation continuum, focusing on the degree of adaptation of the marketing mix (product, price, distribution and promotion) to demands in different country-markets arising out of the environment, consumer behaviour, use patterns and competitors (Cavusgil and Zou, 1994).
The literature suggests that a company's ability to achieve and maintain competitive advantages in foreign markets is closely linked to the execution of a differentiated marketing strategy which requires it to adapt to the needs and desires of the target markets (Morgan et al., 2004; O'Cass and Julian, 2003; Sousa et al., 2008). In particular, when an exporting company adapts its marketing mix to each country-market's idiosyncrasy, its products are more likely to be perceived as being higher value than those of local competitors and therefore it can expect a good result from the exporting activity (Theodosiou and Leonidou, 2003). Thus, various benefits are associated with adaptation of export marketing tactics: (1) it enables the exporting company to adjust its supply to the particular characteristics of each market, reducing uncertainty among foreign consumers (Madsen, 1998), (2) relationships with local intermediaries-distributors improve (Shoham, 1999), and (3) the company can achieve greater profitability by offering products perceived as different and adapted to customer demand and can therefore apply a surcharge in relation to its direct competitors (Leonidou et al., 2002). Thus exporting companies can improve export performance by adapting their marketing mix strategy (Zou and Cavugil, 2002; Navarro et al., 2010a). Therefore, we establish the following research hypothesis:
H1: A marketing mix strategy adapted to foreign market needs has a positive impact on export performance.
2.3. Market distances and their effect on export companies' strategic marketing mix decisions
Management perceptions have a fundamental impact on decision-making and management behaviour (Griffith and Lusch, 2007). For example, in their study White et al. (2003) show that marketing managers' cognitive styles affect their interpretation of market information and their response to it. In the case of exports, export managers' perceived advantages or obstacles condition business behaviour (Leonidou, et al., 1998). One of the major obstacles to a company's progress in foreign trade operations is management's perception of how difficult it is to enter and expand in new country-markets (Dow, 2000). These perceptions are usually associated to economic, legal and sociocultural differences between the domestic market and the target market, and are known as market distances. The literature refers to market differences as a focal point during the process of international expansion (Ellis, 2007).
Currently, study of the effect of market distances on export activity is a growing area, and is particularly important in the debate over standardisation versus adaptation of marketing mix strategies (contingent perspective) (Chung, 2003, 2005, 2009, 2010; Sousa and Lages, 2011; Chung et al., 2012). Some authors claim that differences between domestic and foreign markets generate psychological barriers for export managers, thereby promoting non-proactive attitudes towards exporting (Ozsomer and Simonin, 2004). These conservative attitudes usually result in a reluctance to change product attributes, vary prices or use different types of promotional and advertising strategies according to each market idiosyncrasy (Sousa and Lengler, 2009). These psychological barriers associated to market distances usually lead to a lack of commitment to exporting and a tendency to adopt standardised strategic marketing mix decisions, similar to those used in the domestic market (Albaum et al., 2003; Leonidou et al., 2002), not...
The importance of market intelligence in Spanish firms' exporting activity.
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