Technological Complexity and Country-of-Origin Effects on Binational Product Evaluation: Investigation in an Emerging Market

ABSTRACT

Research into the impact of the country of origin (COO) dimensions on product perceived quality in emerging markets is limited and does not distinguish between technologically complex/simple products. This paper investigates country-of-design (COD) and country-of-manufacture (COM) effects through their two subconstructs (global country image and the perceived capacity of the country to design/manufacture products), on the perceived quality of four products varying in their level of technological complexity. Findings indicate that consumers are more sensitive to COM than COD for complex and for simple products, and that COD only affects product quality for products carrying symbolic meaning. The findings have marketing implications for binational products entering emerging markets.     

我国对东盟六国信息通讯投资与合作的市场分析

新加坡、马来西亚、菲律宾、越南、缅甸、柬埔寨六国不同程度地向中国开放电信市场,这为中国信息通讯企业在东盟国家的发展提供了更广阔的区域性市场。现阶段,金融危机对欧美的电信企业有一定冲击,他们在融资方面面临困难,中国电信企业可以抓住机遇,更好地发挥自己的低成本优势,扩大在信息通讯领域对东盟的投资与合作。本文通过对新加坡等六国信息通信市场的分析,总结我国在上述市场中的所处地位和面临的问题,得出适合重点开拓的市场及非重点市场,并根据相应市场特点提出相关政策建议。     

Exchange Market for Complex Goods: Theory and Experiments

The modern economy includes a variety of markets, and the Internet has opened opportunities for efficient on-line trading. Researchers have developed algorithms for various auctions, which have become a popular means of on-line sales. They have also designed algorithms for exchange markets, which support fast-paced trading of standardized goods. On the other hand, they have done little work on exchanges for complex nonstandard goods, such as used cars. We propose a formal model for trading complex goods, and present an exchange system that allows traders to describe desirable purchases and sales by multiple attributes; for example, a car buyer can specify a model, options, color, and other properties of a desirable vehicle. Furthermore, a trader can enter complex constraints on the acceptable items; for instance, a buyer can specify a set of desirable vehicles and their features. The system supports markets with up to 260,000 orders, and generates hundreds of trades per second.     

Effects of Trade Barrier Perception on International Services Trade

Abstract

While the United States is the world's largest exporter of business services, barriers erected by foreign governments seem to have severely depressed the penetration of insurance services in some of the world's largest markets.

Previous studies of the effects of barriers have concentrated on exporters of goods rather than services. Some of these studies conclude that foreign government restrictions are a major concern for exporters while others find that exporters perceive these barriers as less important.

The present study focuses on the effect of executives perceptions of trade barriers on their actions. Those who chose not to enter particular markets did not perceive these markets as more difficult to enter than all respondents did. Managers planned and took the most actions in the market perceived to be the least difficult to enter but results for other countries did not correlate with the perception of entry difficulty.     

Price transmission and volatility spillovers in Asian rice markets: Evidence from MGARCH and panel GARCH models

ABSTRACT

This article examines world rice price transmission and volatility spillovers across six major Asian rice markets over the period 2005-13. In addition to the conventional GARCH models, we use a panel GARCH framework to estimate the spillover effects along with the consideration of heterogeneity and interdependence among countries. Empirical results suggest that changes in the world rice price affected not only the price levels of domestic rice markets but also their conditional variances. Moreover, interdependence across rice markets contributed to a strong spillover of a price shock in one country to another within the region.     

Business Relationship Learning and Commitment in the Internationalization Process

This paper is based on a case study of an international venture and on the observations reported by a number of researchers that the received models of the internationalization process of the firm do not capture some important phenomena in the modern international business world. As several researchers argue that networks play an important role in the early internationalization the paper outlines a network model of the internationalization process of the firm. It combines the experiential learning–commitment interplay as the driving mechanism from the old internationalization process model with a similar experiential learning–commitment mechanism focusing on business network relationships. In the resulting model we can see firms learning in relationships, which enables them to enter new country markets in which they can develop new relationships which give them a platform for entering other country markets.     

The Changing Business Environment in Tunisia

ABSTRACT

The present article investigates the business environment of a single Arab country, Tunisia, which is one of the least explored markets in international business literature. The study revealed that the market is witnessing considerable change subsequent to the liberalization policy in general and the move towards the trade agreement with the European Union in particular. By doing so, the article attempts to contribute to the actualization of business studies treating national markets in the Arab region given that the bulk of research dealing with this area are concerned either with business in the pre-liberalization era or mass marketing in the oil-rich Arab economies.     

Entering and Participating in the Turbulent Russian Market

Abstract

This paper discusses how foreign firms enter and operate in a turbulent Russian market. Following the internationalisation process model, this paper is based on the assumption that current business activities are a driving force of internationalisation. Since planning in highly turbulent and uncertain markets is difficult, the IP model with its emphasis on gradual learning provides a good starting point. When foreign markets are assumed to be rather static, experiential knowledge can be easily utilised in subsequent actions. However, the Russian market is highly turbulent, which questions the value of experiential knowledge and seems to challenge the validity of the IP-model. In an attempt to address this problem, the paper suggests to deconstruct the concept of current business activities, so that it becomes more powerful in explaining the behaviour of firms in the markets characterised by high turbulence. Drawing on the Austrian Economics, this paper suggests that current business activities in a foreign market can conveniently be seen as consisting of two fundamental processes-search and discovery. The search process occurs when a firm already has knowledge about what it is looking for, but has to search for it. The discovery process initiates as searching for something known, but the turbulence turns it into a discovery of something else. Since the market conditions change rapidly and the knowledge is imperfectly distributed, discovery is an essential part of the firm's business activities in the Russian market. In the end, the paper discusses the implications of search and discovery processes for firms both entering and participating in the Russian market. Finally, it advances relationship as a mechanism to handle the market turbulence.     

Institutional logics and social enterprises: Entry mode choices of foreign hospitals in China

When social enterprises, being defined by their social mission and profitability, internationalize, they need to respond to institutional logics in the host country. By juxtaposing institutional logic and entry mode choice literature, this paper shows how social enterprises accommodate different institutional logics when they enter foreign markets. We collected data on Chinese healthcare reform, governmental policies and their changes, and conducted 36 in-depth interviews and three expert group meetings. By analyzing five non-Chinese hospitals entering China, we show how social enterprises, as hybrid organizations, respond to governmental, commercial, and social institutional logics, when entering a foreign market.     

New Service Development Process

Abstract

To continue to grow, more and more U.S. service firms have looked overseas in recent years to find markets for their offerings. Thus, innovation in the global context has become a strategic imperative for many service firms. While the issue of how to foster service innovation has been an area of extensive research, the cross-national comparison of innovation practices particularly between developed and emerging countries has been only a nascent field of research. To address this gap in the literature we conducted a comparative study of new service development process and stages of the financial service firms in an emerging country, India, and a developed country, the United States. The results support the central argument of the article that significant cross-national differences do exist with regard to a firm's new service development process. The findings should be of value to managers faced with the tasks of selecting and managing service innovation in emerging markets, as well as those firms experiencing international competition.     

Social status and country‐of‐origin preferences

This paper explores consumers' attitudes towards products of foreign origin according to consumer social status, particularly when purchases come from countries that have a low‐cost/low quality image. The research question is: for an identical good (same manufacturer, same brand), do consumers belonging to lower social classes ask for a larger price discount than higher social status consumers when they are offered the opportunity to switch from a country of manufacture whose quality image is well established, to a country of manufacture, the image of which is more uncertain (e.g. South Korea)? A structural equations model is used to highlight the fact that social status has only an indirect influence on the discounts for shifting to lower‐image countries. The relatively weak image of Korean products (at least against Germany and Japan) tends to result in higher price rebates asked for the Korean manufacturing origin. But lower social status consumers evaluate Korea more positively as a country‐of‐origin. The normative recommendation for the advertising strategy of “cheap” origins' goods in highly developed markets would be to put emphasis on quality rather than price, especially when modest consumers and lower classes are explicitly targeted.     

Information Asymmetries as Antecedents of Opportunism in Buyer-Supplier Relationships: Testing Principal-Agent Theory

ABSTRACT

Purpose: A severe problem in supplier selection refers to moral hazard: suppliers not behaving in the expected way once contracted. Principal-agent theory could provide insights on how to reduce this problem. Because buyer–supplier relationships can be interpreted as principal-agent situations, the application of agency theory should facilitate improved supplier selection. Although theoretically compelling, empirical tests verifying this assumption are not prevalent. Regarding the advancement of theory, this paper tests whether both ex ante and ex post information asymmetries influence moral hazard. In particular, in the context of a globalizing economy with a subsequent increase in information asymmetries as a problem in supplier selection, this conceptual approach may be contributive.

Design/methodology/approach: The authors use a set of 87 buyer–supplier relationships to conduct a test, applying a partial least squares model with latent variables. A particularity of the data set is that it contains information on ongoing as well as on discontinued relationships.

Findings: The analysis indicated that both ex ante information asymmetries (operationalized by a reputation variable) and ex post asymmetries (operationalized by a monitoring variable) have shown to be significant and strong antecedents explaining the occurrence of moral hazard. Interestingly, and opposed to the common assumption, the length of a relationship and the amount of direct meetings have not revealed any explanatory significance. Buyer dependency hardly showed influence on supplier opportunism.

Research limitations/implications: Data were collected from a multitude of buyer–supplier relationships from a single firm in the chemical-pharmaceutical industry. Generalizations to other industries still need to be tested. Socially desirable answering behavior cannot fully be excluded because relationship discontinuation is not a desirable situation. In terms of theory implications, this research adds to the notion that both hidden action and hidden intention can lead to moral hazard.

Practical implications: An agency-based analysis can be operationalized with the help of an agency-based supplier classification portfolio. It might be of particular value to firms to discuss those suppliers that scored high in risk of opportunism but did not (yet) reveal any signs of moral hazard. Finally, the strong explanatory power

of reputation alerts buyers to pay more attention to behavioral information on the (potential) supplier available in the market.

Originality/value: Analyzing the occurrence of moral hazard and including terminated relationships adds to the emerging stream of literature on relationship discontinuation in B2B markets. Further, the strong empirical results may encourage researchers to elaborate on principal-agent theory-based assumptions, adding another layer of explanation to buyer–supplier relationships. Findings show that reputation is unduly neglected as supplier selection criterion in current theory and practice.     

JBBM at 21: Variety of Theories,Methods, and Countries While Giving Further Voice to Emerging Markets Within Africa

ABSTRACT

Purpose: The articles published in the Journal of Business-to-Business Marketing (JBBM) are reviewed for three themes: the varieties of theories used and tested, the methodologies of choice, and most pertinent to this article, the countries from which the data were obtained in the empirical studies.

Methodology/approach: Literature review of the JBBM issues, all inclusive.

Findings: The JBBM has had papers involving surveys 74%; case studies 11%; interviews 6%, experiments 4%, and networks 3%. There is a tremendous breadth of country representation, more than most other marketing journals.

Research implications: The authors encourage more frequent investigations into emerging markets, using African countries as exemplars.

Practical implications: To begin to understand marketing phenomena in the variety of African countries, the authors encourage researchers to establish partnerships, with African scholars and global multinationals whose marketing managers may have interest in understanding these markets and who may have data to share.

Contribution of the paper: Although a seemingly infinite number of marketing questions still exist even in well-developed markets, and scholars have begun to recognize opportunities in developing markets, future research will prove useful into emerging and nascent markets.     

New product planning: Lessons from Japanese experience

Japan has derived a reputation as a market that is extremely difficult to enter. However, this belief tends to promote neglect of the study of other factors—important among which is that of the competitive styles of Japanese companies. An issue that is particularly germane is that of product strategy. This article reports on research that was performed among a sample of foreign consumer products' companies in Japan. The article explores the theme that effectiveprodud strategy in Japan requires cultural sensitivity, as well as an ability to cope with the aggressive, technical led approaches of Japanese companies that comprise the competitive set.     

Systemic small-player market exclusion in an east African context

ABSTRACT

Producer–consumers in Kenya and Uganda face challenges in meeting their subsistence goals. They face a paradoxical inclusion and exclusion from the contemporary market system that the solutions proposed in the agriculture development, subsistence markets and BOP perspectives cannot address because of faults in the pervasive marketing ecosystem perspective. In this article, we go beyond the traditional discussion of producer–consumers’ market access, to include upstream as well as downstream challenges. We introduce the concept of integration gaps to markets as a counterpoint to typical measures of market access. We show the integration gap is a systematic neocolonialist exclusion of producer–consumers that international aid agencies exhorting greater market engagement may worsen. We offer suggestions for improvement from a marketing ecosystem perspective.     

Factors influencing foreign direct investment of South African financial services firms in Sub-Saharan Africa

This research investigates the key elements that South African financial services firms consider before making foreign direct investments in Sub-Saharan African (SSA) markets. The results show that South African financial services firms are most strongly influenced by the political and economic stability of the country in question as well as the profitability and long-term sustainability of its specific markets. The degree of available infrastructure in terms of Information and Communication Technology as well as the existence of credible financial systems was also viewed as highly important considerations before investing in SSA. Given the uncertainty and ambiguity of most SSA markets many South African financial services firms prefer to enter existing markets via a majority stakeholder joint venture with a local partner or via a new investment if the market does not currently exist. The nature of the financial services firm also seems to influence the entry method and once in a new country most firms seem to prefer a full service presence. Additionally, the key motives cited for expansion northward were to broaden revenue bases and improve profit margins as well as to stay close to local customers.     

Internationalization of the organizational field: Swedish grocery retailers in the European integration process

Abstract

This article describes how import of ideas and practices influence an industry that is in an early stage of internationalization, as well as part of European integration. By using institutional theory, such a situation is depicted as an expansion of the organizational field, in which international isomorphism between organizations has commenced. Studying Swedish grocery retailing, a new set of ideas was found regarding what constitutes an efficient organization. This included centralization, vertical integration and brand management, and it was strongly influenced by foreign actors and markets. We conclude that isomorphism occurs in a decreasingly national field, although not entirely pan-European in character, and that international diffusion of ideas and practices reshape markets, partly independent of goods and capital flows.     

Barriers to the Formalization of Economic Activity and Marketing Solutions for Developing Economies

ABSTRACT

This research investigated barriers to the formalization of economic activity that was generally untaxed and unmeasured, referred to as informal economic activity, in an emerging economy. Nepal was selected as the country for study because it presents a case of a market undergoing economic and political liberalization. The paper presents background information on the economy of Nepal, the conduct of the fieldwork in Nepal, perspectives on informal economic activity, and the necessity of harnessing this activity. This is followed by research dealing with the informal economy and perceptions of the barriers to integration based on fieldwork in Nepal. Suggestions to harness this activity are offered. The results of this study may provide insights into the formulation of public policy and social marketing initiatives for addressing informal sector development in emerging markets.     

To Drop or Add: Market Timing and Supermarket Decisions on Irradiated Ground Beef

ABSTRACT

This article investigates the sequential nature of supermarkets' decisions regarding irradiated ground beef using data collected from two separate supermarket surveys. We identify four mutually exclusive groups of supermarkets: those that adopted irradiated ground beef early and subsequently either continued or ceased offering the product–Early Adopters or Droppers, and those that at first chose not to adopt and subsequently either added or continued not offering the product–Adders or Never Adopters. We find that one set of store-level factors plays an important role in separating Early Adopters from Droppers, while a separate set of factors is important in separating Adders from Never Adopters.     

Applying Diffusion Theory to Chain Restaurants

Abstract

The Diffusion of Innovations (diffusion) field is a well-established area for academic research across a range of social science disciplines. One of diffusion's key applications is to help predict the adoption rates of new products and technologies in new markets. To date, however, the application of the diffusion field, generally to hospitality and tourism, including the prediction of adoption rates, has been limited. This paper presents a conceptual framework for predicting the success of chain restaurants entering international markets, using diffusion's key principles. Following an overview of diffusion, including theoretical issues affecting the application of diffusion in a service sector environment, the paper presents a case study of an application of diffusion theory to the international expansion of a U.S. chain restaurant to Australia.