Large established firms entry into franchising: an exploratory investigation of strategic and operational issues

Although franchising is traditionally associated with newly emerging businesses which need to finance growth, this marketing technique is being increasingly utilized by large established firms as a method of business development. This article analyses the business objectives which led a sample of such firms in the UK to introduce franchising as a means of channel management. The modes of franchising-including the master franchise-selected by these firms as well as their operational and organizational experiences are investigated. In particular, there is an examination of the major managerial/cultural issues which these firms encountered in trying to reconcile the decentralized organization and operating methods implicit in the franchising concept with the centralized decision making and organization of a corporate concern. The implications for management of this dichotomy are explored.     

Small Firm Marketing in China: A Comparative Study

This paper examines the influence of Chinese cultural values on marketing practices in different socio-cultural settings and business contexts, for example the United Kingdom, Hong Kong and China. 20 Chinese small firms in China were selected and their owner-managers were interviewed. Findings of interviews undertaken by Brooksbank et al. (1992) with 20 British small firm chief marketing executives, and Siu (1997) with 26 Chinese owner-managers in Hong Kong, were collated to form a database for comparison purposes. The research results suggest that the specific marketing practices of Chinese small firms in mainland China are different from those of their counterparts, for example, British and Hong Kong Chinese small firms. A tentative model is developed explaining the factors that appear likely, on the basis of this research, to affect the marketing performance of small firms in China.     

Entrepreneurial Marketing in the Public Sector: The Lessons of Headteachers as Entrepreneurs

This article argues that headteachers of primary schools have been at the forefront of the marketing/entrepreneurship interface since attempts to introduce competitive market forces into the maintained education system. It examines primary school headteachers' marketing strategies and compares them to those of owner managers of small firms. Case studies of ten schools illustrative of a variety of provision and market conditions provided the empirical data over a five year period. The headteachers shared many of the marketing problems of owner-managers of small firms. Headteachers found that the most effective marketing strategies consisted of: i) marketing to improve relationships with existing parents, staff and governors as an essential precursor to any external marketing effort; ii) parental involvement in the school which improved the likelihood of word of mouth recommendations; and iii) influencing such recommendations by marketing to improve parental and other involvement in the school. As word of mouth is also the most important source of new business for small firms, there are opportunities for lessons from the public to the private sector.     

Job Creation Process in a Transition Economy

In many European countries, SME policy is close to being a synonym for job creation. Most empirical research on the job-generation potential of small firms over the last decade has been done in the stable and favorable economic conditions of market economies. The paper investigates the role of small firms in more difficult circumstances. On an empirical data set for Slovenia, the paper tries to show that small firms have been the most important employer during the transition period, a finding that very likely can be extrapolated for other European transition economies. Over the last decade Slovenia has transformed from a labor-managed economic system to a market-oriented economy. If we compare the firm-size structure in a socialist-like economy to the firm-size structure in a mature market economy close to equilibrium, we notice a typical absence of small- and medium-sized firms, with the exception of craft shops. That was how Slovenia appeared in the early nineties. Charac-terized by the removal of administrative barriers, transition encouraged a spontaneous entrepreneurial wave through an expanding small business sector. The ensuing changes in employment distribution changed the firm-size structure.     

Toward a Model of Understanding Strategic Decision‐Making in Micro‐Firms: Exploring the Australian Information Technology Sector

This study explores strategic decision‐making (SDM) in micro‐firms, an economically significant business subsector. As extant large‐ and small‐firm literature currently proffers an incomplete characterization of SDM in very small enterprises, a multiple‐case methodology was used to investigate how these firms make strategic decisions. Eleven Australian Information Technology service micro‐firms participated in the study. Using an information‐processing lens, the study uncovered patterns of SDM in micro‐firms and derived a theoretical micro‐firm SDM model. This research also identifies several implications for micro‐firm management and directions for future research, contributing to the understanding of micro‐firm SDM in both theory and practice.     

Marketing in Chinese Small and Medium Enterprises (SMEs): The State of the Art in a Chinese Socialist Economy

This paper adopts the context-embedded approach to examine the marketing practices of 307 small and medium enterprises (SMEs) in the People’’s Republic of China by comparing the survey findings with that of Hong Kong and Guangdong SMEs. Chinese SMEs focus on regional markets to avoid direct competition with Hong Kong SMEs in the international markets and also their Guangdong counterparts in the turbulent nationwide market. To market their own brands, Chinese SMEs have to analyze the market and use superior marketing strategies in the competitive markets. Chinese SMEs do not attain the superior competitive positions as that of their Guangdong counterparts, but they use customer satisfaction surveys and claims investigation to help develop excellence in product performance. Also, Chinese SMEs have to provide value-added products and services and also a well-rounded marketing competitive strategy to gain market shares. The traditional state-owned enterprise structure in China facilitates the development of hierarchical organizational structure and joint decision making process. Thus, care should be taken in assuming that marketing tools and techniques are equally applicable across all places, even in similar cultural contexts. Socio-cultural influences and mediating environmental factors should be considered when attempting to understand the marketing practices of Chinese small firms, specifically when China is in transition to a socialist market economy.     

An Investigation into the Overseas Expansion of Small Asian-Owned U.K. Firms

This paper contributes to the growing body of knowledge in international entrepreneurship by reporting on a qualitative empirical investigation into the overseas expansion processes of small Asian (originating from the Indian sub-continent)-owned firms operating in the U.K. clothing industry. The key decision makers within these firms frequently identified themselves as an active, and important, influence upon the actual activities of their firms as international operators. For some firms though, a more passive approach to internationalisation could be identified, whereby the receipt of unsolicited orders had an effect on some firms' timing of overseas market entry. The balance between the nature of opportunities, that frequently derived from cultural networks, and the constraints of a limited resource base with which to exploit those opportunities, also had a major impact on the direction and pace of certain firms' overseas expansion. The findings suggest a general tendency to adopt an incremental approach to internationalisation within this mature trade sector. The cultural and business experience of managers, however, was found to have an effect on the pace and direction of the overseas expansion. Recommendations on the likely efficacy and effectiveness of public/private sector interaction within the area of international entrepreneurship involving entrepreneurs from Asian backgrounds are offered.     

The Effects of Cultural Dimensions on Ethical Decision Making in Marketing: An Exploratory Study

As more and more firms operate globally, an understanding of the effects of cultural differences on ethical decision making becomes increasingly important for avoiding potential business pitfalls and for designing effective international marketing management programs. Although several articles have addressed this area in general, differences along specific, cultural dimensions have not been directly examined. Hence, the purpose of this study was to examine differences in ethical decision making within Hofstede's cultural framework. The results confirm the utility of Hofstede's cultural dimensions and place ethical decision making within an overall theoretical framework. Sales agents from a high power distance, uncertainty avoidant, Confucian, collectivist culture (i.e., Taiwan) placed more value on company and fellow employee interests (vis-à-vis self interests) than did managers from a masculine, individualistic culture (i.e., the United States). American and Taiwanese managers did not differ in their deontological norms or on the importance that they placed on customer interests. The theoretical and managerial importance of these findings are also discussed.     

The Influence of Alternative Marketing Styles on Internal Competences in Small Manufacturing Firms: the Results of a UK Investigation

Increasingly firms are being encouraged to move away from traditional, transactional marketing and instead adopt a relationship marketing orientation. Concurrently another emerging academic concept is entrepreneurial marketing. Interest in this latter area has, in part, been stimulated by research on marketing processes within the SME sector. It is proposed that the merger of relationship and entrepreneurial marketing might result in 4 alternative marketing styles. To determine whether these styles exist, a mail survey of 300 small UK manufacturing firms was undertaken in the summer of 1996. The survey tool used the Covin/Slevin entrepreneurial measurement scale and a new scale developed specifically to measure relationship marketing style. Competence was measured by seeking managing directors' assessment of the current capability of their firm in the areas of positioning, innovation, H.R.M., employee productivity, quality and information management. Applying ANOVA to the responses from 104 firms suggests that respondent firms can be classified into 4 different marketing styles and that an orientation towards an entrepreneurial-transactional marketing style will generate the highest overall sales growth rate. Discriminant function analysis indicates that relationship orientated firms exhibit higher competences in areas such as the management of quality and the utilisation of information to enhance decision-making. The implications of these findings in relation to the future provision of support services to smaller firms are discussed, as is the need for further research.     

Perceptions of Indian business organizations toward formal marketing research

The results reported in this article are based on a mail survey of 219 firms in India. The major purpose of the study is to examine the marketing research experiences of Indian business firms and their perceptions about conducting formal marketing research. Results indicate that 45 percent of Indian firms have had some experience with formal marketing research and have positive perceptions concerning marketing research as an important decision making tool. Size and type of firm were found to influence whether formal marketing research is conducted. Research methodologies used in India are presented along with problems encountered by these practitioners.     

Solving Export Marketing Problems of Small and Medium-Sized Firms from Developing Countries

Abstract

This study shows how networks can be used to solve the export marketing problems manufacturing firms in developing countries are facing. Major export barriers perceived by manufacturing firms in Eritrea are identified and, subsequently, differences in perceptions between footwear and textile manufacturers, and small and medium sized firms are examined. The findings suggest that some problems can be solved through individual action by the firms (market or hierarchy). However, small and medium-sized firms on their own can't solve the most important problems, like the lack of market information, the preparation of proper designs and the fulfillment of minimum quantity requirements. The major conclusion is that export market entry by SMEs in developing countries will not be successful if no horizontal and vertical business networks are established.     

Perceptions of Small Businesses Toward Professional Marketing Research Services

In spite of small businesses comprising about 97 per- cent of the business firms in the United States and perhaps being less qualified to carry out research projects themselves, professional marketing research organizations tend to concentrate their efforts on solicitin business from large firms. The present study surveyed 320 small usinesses in one SMSA to determme their level of confidence in various sup liers of marketing research services, their future re- search needs, the degree of confidence they have in their own research capability, and their preference for outside assistance. Results from the study provide information that should be useful to marketing re- search organizations wishing to penetrate this extensive small busi- ness market.     

The moderating effect of brand orientation on inter-firm market orientation and performance

Abstract

While prior research has shown that market and brand orientation are key contributors to successful business performance, research to date has not fully explored how inter firm collaboration for these two key orientations can enhance business performance. The purpose of the paper is to investigate the relationship between inter-firm market and performance; to test for the moderating role of brand orientation in that relationship. A total of 169 completed pairs of surveys were collected of small and medium enterprises operating internationally in a variety of industries in Switzerland. The results show that inter-firm market and brand orientation are two antecedents of marketing and financial performance. The impact of inter-firm market on marketing and financial performance is significant when the brand orientation is favorable. This study extends previous research by examining the moderating role of brand orientation on inter firm market orientation, which is important, especially for firms wanting to increase their brand reputation by entering into partnerships with other firms. Further research is indicated, to identify the key moderators of the driving force of inter-firm market in relation to business performance and the reason why maintaining a strong brand presence is important in the international marketplace.     

Weight Watchers: Social Event Centered Marketing

ABSTRACT

This article looks at an international weight loss service company known as Weight Watchers and evaluates the promotional effectiveness of their social event focused business. Secondary research highlights their approach to the marketing mix and the significance of perception within this particular market and the marketing mix per se. Research of their traditional social event based business is reported in terms of the effect of the promotional tools used by Weight Watchers, influences on consumer decision making, consumer behavior, and internal and external factors which influence marketing decisions. The conclusions drawn are that there are significant issues for Weight Watchers to consider in terms of their future approach to the weight loss market. Firstly, the need for Weight Watchers to differentiate themselves further from their competitors and, secondly, to ensure they have distinct differentiation strategies for their social event and online businesses.     

The Contribution of Networking to Small Firm Marketing

It is generally accepted that networking is one means through which owner–managers of small firms market their goods and services. However, though there has been considerable attention directed toward the concept of small business networking, previous studies have failed to present a comprehensive investigation of the contents of network links, an analysis of the benefits contained within these links, and an expatiation of how these benefits contribute to the small firm, specifically its marketing activities. To that end, this paper reports on an in‐depth qualitative study to present an analysis of the contribution that networking makes to small firm marketing.     

Foreign expansion of small firms: The impact of domestic alternatives and prior foreign business involvement

This research analyzes foreign expansions of small firms. In particular, we look at how a small firm's foreign expansion is affected by the join effects of prior foreign business involvement and other factors. We found that when encountering performance downturn and market size decline, small firms with prior foreign business involvement are more likely to use foreign expansion to deal with the problems. This suggests that organizational characteristics mediate the relationship between competitive threats and foreign expansion activities. We also found that small firms' foreign diversification is affected by their product and domestic expansions, suggesting foreign activities of small firms are closely related to their non-foreign strategies.     

International Catalog Mix Adaptation

Abstract

Striking the right balance of adaptation of the international catalog mix may be the key to profitability. U.S. catalog firms, new to international markets, have less experience in adapting than firms in more globalized industries. The literature on international marketing strategy adaptation reveals that this decision depends on the environment, industry, market, product, and characteristics of the firm. This paper examines the influence of market similarity, type of business and the firm's international experience on international catalog adaptation, and explores the effects of catalog adaptation on a firm's performance. We hypothesize that the greater the market similarity, the less likely it is that firms will adjust their catalog. We also argue than adaptation is greater for consumer catalogs than for business-to-business catalogs. A third hypothesis is that more internationally experienced firms will adapt more and a final hypothesis is that a greater degree of adaptation will increase the international catalog performance. The results did not support the association of international catalog adjustment and market similarity, experience, and type of catalog. Findings are mixed both on catalog adaptations and firm performance. We found that some but not all adaptations in the catalog lead to improved performance. We speculate that U.S. catalog firms are making adaptations to reduce the costs of international marketing operations. This cost reduction strategy may not necessarily lead to profitability, thereby discouraging other firms from entering international markets.     

Network view of MNCs' socio-political behavior

While business networks and relationships in international and industrial marketing studies are explored extensively, relationships between firms and socio-political actors are rarely been studied. This paper addresses this gap and examines how MNCs manage their relationship with socio-political organizations. The study builds from the proposition that business firms, besides their actions in business market, have to manage their socio-political market. The study aims to develop a theoretical view that is based in business networks and contains the three concepts of legitimacy, commitment and trust. The proposition is that business firms behave proactively towards the actors in the socio-political environment which is related to their business goals. The three conceptual elements will enable us to understand more deeply the varieties in the firms' managerial behavior. Two cases test the concept in the model — those of Daewoo Motor Company (a South Korean MNC) and the Swedish MNC, Vattenfall. The study will contribute towards deeper understanding of socio-political market and how firms manage their socio-political relationships. The conclusions describe the theoretical and managerial implications.     

International opportunity recognition as a critical component for leveraging Internet capabilities and international market performance

Recent research in the field of international entrepreneurship has emphasized the need for a better conceptualization of international opportunity recognition. Further, with advancements in information and communication technologies, such as the Internet, there has been a profound impact on the way in which international business is conducted, for example, enabling entrepreneurial firms to capitalize on the economic opportunities of an Internet environment. In this study, we propose a model, highlighting the importance of international opportunity recognition, as a critical component for leveraging Internet capabilities and international market performance. Through the lens of a resource capabilities approach, a quantitative, online survey was used to collect data from Australian, international entrepreneurial firms. Structural equation modelling results indicate that international opportunity recognition plays a central role in explaining how resources and Internet capabilities combine for the firm’s realization of international opportunities, and subsequent international performance. The findings enrich current understanding of how international entrepreneurial firms realize opportunities in Internet-based environments.     

Cultural differences in Germany and Australia

This article discusses examples of cultural differences between the German and Australian cultures, their implications in the marketing and business decision making function, and provides recommendations for successful business conduct between Germans and Australians. © 1995 John Wiley & Sons, Inc.