The Internet and Internationalization of Smaller Manufacturing Enterprises

Abstract

One of the most frequently discussed topics in the current international business literature is the impact of the Internet on the internationalization of smaller manufacturing enterprises (SMEs). The study was carried out through a mail survey of the top executives of 125 Wisconsin firms. It examined 10 research hypotheses on internal and external factors which had been identified by previous research to influence the internationalization of SMEs through the Internet. Research findings conclude that the scope of internationalization of SMEs through the Internet is affected by internal factors, such as managements' perceptions of the effectiveness of their web sites as a marketing tool, lack of experience, and SMEs' potential usage of the Internet.     

When do firms invest in offensive and/or defensive marketing?

Market conditions may lead firms to increase offensive marketing activities aimed at attracting new customers, and/or to enhance defensive relationship building intended to retain current customers. Characteristics of the marketing environment are examined, including firms' interest in technology adoption and perceived need to apply it to provide structure for the supply chain, product development, quality control, and social impact. Such indicators relate to the firm's perception of “competitive intensity” in the marketplace. Survey results from 196 manufacturing companies show that technology adoption propensity and competitive intensity are associated with greater investments in offensive marketing activities as well as customer and employee engagement.     

Marketing: Who's really minding the store globally?

In today's highly competitive global marketplace, firms have increasingly turned to outsourcing. In fact, it is not just “blue collar” jobs being outsourced, but “white collar” jobs, as well. Even marketing, “the window to the company's worldwide customer base,” is feeling outsourcing pressures. This article takes a look at the corporate implications of outsourcing global marketing functions and reports the findings of a telephone survey conducted among U.S. and Canadian marketing executives. U.S. firms were found to outsource marketing activities more frequently than Canadian firms, often at the expense of control and customer satisfaction.     

Coordinating manufacturing and marketing in international firms

In this article, the authors argue that manufacturing experiences much of the turbulence and conflict imposed by the dynamic global marketplace through its relationship with marketing, because marketing is usually responsible for introducing changing competitive priorities and demand patterns to the organization. Through a survey of manufacturing and marketing managers within international firms, the authors develop a profile of manufacturing-marketing conflicts experienced in each of four international strategy environments: export, multidomestic, global, and transnational. As international strategies became more complex, firms made use of more techniques for coordinating between marketing and manufacturing, with more use of decentralized and informal approaches. Coordinating techniques included individual MBO-reward systems, joint task forces for problem-solving, and direct involvement of manufacturing and marketing in establishing the competitive priorities of the firm.     

Promoting Awareness of Government Export Assistance Programs in the International Marketing Course

ABSTRACT

One of the features of international marketing which distinguishes it from purely domestic marketing is the role of government-sponsored programs in helping firms start and indeed succeed in overseas markets. There is evidence that American firms make much less use of these programs than their foreign competitors. One possible contributing factor to this situation is limited classroom coverage which American instructors of international marketing devote to this area.

Two hundred and six U.S.-based members of the Academy of International Business (A.I.B.) were surveyed. Results indicated that while instructors of international marketing feel that government export assistance programs are important for export sucess, they are not very familiar with most of these programs and do not have positive perceptives about the quality of services currently offered. Little class time is devoted to most of the programs and lecture remains the dominant pedagogical tool. The connection between instructor familiarity with these programs and perceived importance and quality is also addressed.     

Developing trends in the marketing of life insurance

The personal financial services industry is being changed drastically by a number of legislative and other measures. As a result, life assurance companies are having to reappraise their use of marketing methods in a highly competitive environment. This paper investigates the major industry marketing trends which are occurring particularly in the areas of advertising, distribution, new product development and price. The role of IT is highlighted.

The trends are set against a backcloth of an analysis of market penetration by a range of personal financial services products. The paper ends by outlining likely future trends in the use of marketing methods by assurance companies as part of their competitive strategies.

Data are presented from published sources and from a series of personal interviews with marketing executives in the industry.     

The High Growth in New Metal-Based Manufacturing and Business Service Firms in Finland

This study examined the effects of the factors involved in the start-up situation and the first seven years' development on the subsequent high growth of firms. The criterion of success used in this study was high growth in business during the first seven years. The subjects were Finnish metal products manufacturing firms and business service firms established in 1990. The results indicated, firstly, that it is the internal networks of firms that bring about competitive advantage, innovations and efficiency. In these entrepreneurial team-driven firms a group of people participate in the strategic management of the firm. It was also found that co-operation between firms and changes in external personal networks contributed to a high rate of growth. The empirical results showed that new firms had equal chances for growth irrespective of their locality. On the other hand, growth was affected by changes in a new firm's competitive situation and by changes in strategic factors. The results also clearly indicated that high growth firms were characterised by rising productivity of labour at the same time as they were generating new jobs.     

Competitive Strategies of Tiawanese PC Firms in Their Internationalization Process

Small Taiwanese firms have been successful in developing market niches internationally for their products in the fast-growing and highly competitive global information industry. To identify the competitive strategies used by these firms, a study was udnertaken which classified various stages of their internationalization processes. Results indicate that these firms established their momentum in the global marketplace either by using a regional focus combined with innovation synergy or by emphasizing a combination of marketing techniques as their strategy components.     

The Globalization of Furniture Industries/Markets

The globalization of industries and markets represents a key trend of the last decade. This evolutionary process, anticipated to become more prevalent in the future, requires long-term strategies whereby firms, industries and nations utilize competitive advantage to expand beyond domestic borders. In order to remain competitive, manufacturers of industrial and consumer goods must address the threats of both domestic and foreign origin and, increasingly utilize a global context for strategic planning, operations and marketing. Global communications and transportation technologies for electronic data interchange, materials resource planning, international finance, management and marketing have enhanced the ability of firms to operate internationally and offer true world brands. Furniture is an example of a product that naturally lends itself to internationalization in that if performs the same basic function across geographic areas and cultures such as seating, bedding, dining, storage and display. Moreover, the use of international furniture and woodworking machinery shows rapidly diffuses new technologies and designs through the global marketplace. Wood furniture represents a prime example of a U.S. industry that has felt the competitive pressures of market globalization. In 1978, imports claimed only 6.6% of the U.S. consumption of wood household furniture. By 1990, they had reached nearly 25% of consumption. The secondary wood manufacturing industries in the United States, including wooden furniture, have been largely insulated from foreign competition due to their established position within the domestic market, abundant and high quality materials with high consumer acceptance and appeal and certain transportation barriers as associated with relatively high volume to value items. However, as the international competitive arena changes, manufacturers, industries and nations must reevaluate their future strategies in terms of the forces shaping competition. This paper presents a framework based upon a multitude of factors affecting competitive advantage in the global context using a furniture industry example. These considerations may be categorized into six domains: (1)raw material supply; (2) production/technology; (3) design and marketing; (4) related/supplying industries; (5) home country demand; and (6) government influence on trade. Global strategic options are then briefly addressed as they pertain to the wood furniture industry. The synthesis of key strategic inputs combined with a global involvement strategy may provide insight not only to wood furniture, but to many other industries attempting to cope with similar changes as evolutionary momentum builds toward global markets, consumers and competition.     

Sales Training in a Dynamic Market

Abstract

The Singaporean hotel industry is examined, with particular emphasis on me differences between global and local sales force training. Empirical evidence indicates that there is a wide divergence between global and local practices. It appears that global firms perceive that sales training leads to greater sales force performance and view sales training as being part of their strategic marketing plan. Global firms also employ a more formal training curriculum, focus on “soft” competencies, and have an established training culture. Conversely, local firms rely upon “on-the-job training (OJT)” and appear not to understand that sales training programs can be a source of competitive advantage. Managerial implications and suggestions for future research are presented.     

How professional service firms compete in the market: an exploratory study

Abstract

This study investigates how professional service firms (PSFs) compete in the market. Drawing on strategic marketing literature, a managerial rather than customer perspective is adopted. The study investigates the competitive positions sought by professional service providers and the specific marketing activities actually undertaken to achieve these positions. Thirty-seven depth interviews with senior management from a range of PSFs indicate that firms seek to differentiate themselves by developing long-term relationships, providing better service quality and greater value, and developing brands with strong reputations. Organisations typically seek such interrelated competitive positions simultaneously. A list of marketing activities used by the PSFs to achieve these competitive positions offers practical insights into the specific activities needed to achieve the various competitive positions sought.     

The Determinants of Pricing Strategies for Industrial Products in International Markets

ABSTRACT

The global marketplace is becoming increasingly complex in which to conduct business. Firms marketing consumer goods have a somewhat easier time than those selling industrial products, since more has been written about them and the international consumer goods have been analyzed for a longer period of time. In addition, the international marketing literature, has looked more at the elements of product, promotion and place than price. This literature gap has created a void in the understanding of marketers as to how to effectively price industrial products in international markets.

The paper identifies the important industrial pricing strategies in international marketing and examines the underlying determinants that affect their outcome. In addition, the specific causal relationships between the determinants and pricing strategies are examined through a logistic regression analysis.     

Export Attitudes of Taiwanese Executives

SUMMARY

Taiwanese-based firms have long been actively involved in exporting and international trade. This article investigates their export attitudes and qualities for effective international conduct. Data from 182 companies in Taiwan provide mixed support for three hypotheses advanced in this study. International experience is found to significantly influence exporting attitude. In addition, two measurements of size (annual sales and number of employees) and international business experience are found to have some influence on export attitudes and on the needed qualities for effective international business conduct.     

Impact of directed‐to‐consumers marketing strategies on firm market value

The objective of this paper is to analyse the impact of different directed‐to‐consumers marketing strategies on firm market value. To that end, we follow a microeconometric approach that consists of formulating a model whose dependent variable is an indicator of market value, that is to say, Tobin's Q, whilst the independent variables take the form of a number of different marketing strategies. This model is estimated by using an unbiased survey carried out in the year 2000 to executives working in 405 North‐American firms. The empirical results indicate that the most effective marketing strategies are, in this order, the ability to rapidly develop new products and services, the importance of both providing customized products and goods of high quality and finally, customer loyalty.     

Marketing Cues and Perceptions of Service Quality in the Selection of Accounting Firms

Abstract

This study tests the survey responses of clients of accounting firms to determine what marketing cues influence their selection of firms and what relationship these cues have on the perceived service quality of the firms' products. The study argues that three marketing cue factors are influential in the clients' selection of accounting firms. Using Principle Components Analysis, three factors were identified: Factor 1, termed Internal Factors-Tangibles includes the following cues: fees, physical facilities, appearance/dress of employees, convenience of location, and available parking. Factor 2, termed Internal Factors-Intangibles includes reputation of the firm, professional quality of employees, and “my own personal experience with other accounting firms.” Factor 3, termed External Factors comprises the opinion of friends/relatives, manner of employees, and word-of-mouth reputation. The relationship betwecn the resultant cues and perceived service quality measures suggests that the intangible and external factors have more influence than tangible factors on the perceived service quality of accounting firms.     

A behavioral model of international channel relationships

Purpose: The main purpose of the study is to fill the existing gap in international relationship marketing (IRM) literature by developing and testing empirically a comprehensive conceptual model of firms’ relationship with their marketing channels in export markets. Whereas concepts such as power, conflicts, trust, commitment, and communication have been shown to be related to the economic success of interfirm cooperation in general and buyer–seller relations in particular, the need for a comprehensive model is often expressed in the literature.

Methodology/approach: The authors combine commitment-trust theory with resource-based and knowledge-based view perspectives to develop a new comprehensive conceptual model of firms’ relationship with their marketing channels in export markets. Data from 104 strategic business units in Israel was used to test the model empirically.

Findings: Notably, the model tested explained a higher percentage of the variance in performance. The findings suggest that noncoercive power enhances relationship quality (i.e., communication, trust, and commitment), which in turn improve cooperation and export performance. Conflict had a negative effect on relationship quality. In addition, cooperative conflict management strategies had a positive moderating effect on the conflict— relationship quality link, whereas competitive conflict management strategies had a negative moderating effect on the impact of conflict on relationship quality. Finally, the results suggest that there are strong positive relations between communication and trust and between trust and commitment.

Research implications: The research develops and tests empirically a conceptual comprehensive model of firms’ relationship with their marketing channels in export markets by including major performance drivers. The model incorporates conflict management strategies and combines commitment-trust theory with resource-based view (RBV) and knowledge-based view (KBV), an innovative combination with great explanatory potential. Based on the findings, there is sufficient support for using the suggested model as a new integrative behavioral model that explains channel relationships.

Practical implications: The results indicate that managers should use noncoercive power and cooperative conflict management strategies in order to positively affect relationship quality (i.e., communication, trust, and commitment), which in turn enhances cooperation and export performance.

Originality/value/contribution: The suggested research model presents a novel combination of existing relationship marketing (RM) knowledge with the limited IRM knowledge into a comprehensive IRM model. It includes new relationships beyond those studied before. Integrating and synthesizing results from a large body of conceptual and empirical literature led to the final model. Accordingly, it contributes elements of newness. First, the model includes major antecedents of performance. To the best of our knowledge, this is the most comprehensive model of firms’ relationship with their international marketing channels in export markets. Second, there are almost no studies investigating conflict management strategies neither in RM nor in IRM models. Accordingly, a contribution of this research is incorporating conflict management strategies within the model and analyzing their effects.     

Taking marketing strategy risks with seemingly no expected gains

This paper investigates the competitive rationale for firms to invest in marketing activities aiming to enhance valuation and achieve differentiation and competitive advantage, while carrying the strategic risks of causing unintended negative consequences. We build a stylized theoretical model where firms offering similar (homogenous) products are competing by determining their marketing strategy and pricing. Each firm must choose between several marketing activities that have different potentials of enhancing consumers’ product valuations while carrying some risk of lowering consumer valuation if unintended negative outcomes occur. The stochastic nature of marketing implies that (1) even when both firms invest the same amount of money aiming to enhance product valuations by the same level, there will be a variety of (posterior) vertical differentiation scenarios where the consumers could value either firm’s product as better as or worse than the rival’s. (2) The firms may employ marketing activities that do not even lead to gains in consumer product valuation in expectation. The duopoly model analysis indicates that associated with strategic pricing, even such stochastic marketing activities may constitute desirable strategies for two a priori symmetric firms in order to avoid a Bertrand type competition as the benefit from differentiation is found to be significant enough to offset the unintended negative outcomes. The oligopoly model analysis indicates that there is an increased incentive to take marketing risk when there is a greater level of competitive intensity in the marketplace. Preliminary experimental evidence is presented to support the main findings from theoretical model analyses. The paper thus provides important managerial implications for firms contemplating investment in seemingly risky marketing activities.

     

Trade Shows and Fairs

Abstract

This article describes importance and value of trade shows/fairs to firms as they engage in the process of internationalization. Primary discussion examines the unique impact of trade fairs as a promotional medium for organizations to consider as they determine their marketing strategy. Careful planning along with an understanding of the role of trade fairs within the promotion mix can mean the difference between success or failure in the global marketplace.     

Evolving "New Marketing" Philosophies By Merging Existing Concepts: Application Of Process Within Small High-Technology Firms

The important role of small high-technology firms in both job creation and new innovations capable of sustaining a country's competitive advantage has understandably caused many Governments to be interested in factors influencing the market performance of these types of firm. A potential hazard with alternative emerging theories about appropriate marketing philosophies is that polarisation of opinions may cause theorists to reject alternative perspectives despite the fact that observations of "real world" marketing practice may suggest that a hybrid managerial approach is the most appropriate response to prevailing market circumstances. If one accepts this perspective, it permits merger of the transactional, relationship and entrepreneurial schools of marketing thought; thereby generating alternative approaches to marketing practice based upon (i) conservative-transactional, (ii) conservative-relationship, (iii) entrepreneurial-transactional and (iv) entrepreneurial-relationship orientations.

Research questions which arise about a hybrid concept are whether orientation might influence overall performance and the level of internal organisational competencies required of the firm in the key areas of innovation, HRM, employee productivity and decision-making. The results of a mail survey measuring revenue growth suggest that an entrepreneurial-relationship orientation will enhance overall performance of small high-technology firms. The survey also suggests that as entrepreneurial high-technology firms move closer to customers they exhibit higher competencies in areas such as HRM, employee productivity, management of quality and utilisation of information in decision-making.

It is concluded that the research has some interesting implications concerning the appropriate marketing styles available to small, high-technology firms. As entrepreneurial and relationship marketing can enhance performance, then possibly an owner/manager seeking to increase sales may be able to select a style which seem appropriate both to the degree to which customers seek closer relationships with suppliers and the vision of the firm concerning the importance of innovation as a strategy for delivering customer satisfaction. Further research is needed in order to gain additional understanding of (a) the influence of organisational competencies on overall performance and (b) whether marketing style might influence how small high-technology firms acquire the knowledge they require to improve internal operational processes.