Full Bibliographic Reference
Authors
:
Laura Salciuviene (Lancaster University Management School,
Lancaster,UK): James Reardon (Monfort College of Business, University of NorthernColorado,
Greeley, Colorado, USA),
and: Vilte Auruskeviciene (ISM University of Management and Economics,Vilnius, Lithuania)
Title
: Antecedents of performance of Multi-Level Channels in TransitionalEconomics
Journal Name:
Emerald, Basic Journal of Management
Volume
: 6 No. 1
Page number
: 89-104
Year
: 2011
Key words
: Multilevel marketing, distribution channels and markets, relationshipmarketing, Lithuania.
Paper type
: Research paper
1.
Abstract
All of the necessary information required for a review was presented.In our opinion, it couldhave
been better if some more key words had been used.
2. Introduction
This
article, “
Antecedents of performance of multi-
level channels in transitional economies”
written by Laura Salciuviene (Lancaster University Management School, Lancaster, UK),James
Reardon (Monfort College of Business, University of Northern Colorado, Greeley,
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2
Colorado, USA), and Vilte Auruskeviciene (ISM University of Management and
Economics,Vilnius, Lithuania); appraises the antecedents of channel performance in a multi-
levelmarketing (MLM) channel.The title of the research,
“
Antecedents of performance of multi-level channels in transitional
economies”
, matches with the content of the research. For instance, when we see the theoreticalbackground
part, it covers about
Introduction
It is our belief that the authors’ claims of “ “ were
supported.
However, the authors’ use of citations was incorrect in the first paragraph. Towards the end of
the first citation, “Chen
et al.,
1998”
(Chen
et al.,
2000a, b) should have listed all of the authors “…
Chen, Y.F., Drezner, A.,Ryan, J.K. and Simchi-
Levi, D. 1998 or 2000a, b ….)
the various marketing strategic composites, based upon the linkage of domestic and
exportmarketing strategies of small, medium sized manufacturing firms. This study has
contributed tothe literature on export marketing strategy in several ways. First, it has
demonstrated thatcommon strategic composites are used by firms operating out of different
domestic markets.Second, it illustrates the nature of the linkages between domestic and export
marketingstrategies. Third, the study is focused on the strategic behavior of small and
medium sizedexporting firms, rather than the larger organizations often found in empirical work
uponexporters. Finally, the study has illustrated the important role played by certain
environmentalfactors in determining the selected strategy.The authors are keen to point out the
contention that a common taxonomy of strategiccomposites exists for SMEs involved in
manufacturing.In this paper it is argued that the congruence between two domains - domestic
marketing strategyand export marketing strategy - plays a role in determining the performance of
an export venture.
3
The paper seeks to determine whether a variety of strategic types exist, and if so, whether
exportperformance differs across these types and also to see the impact if any that the
congruencebetween domestic and export strategies has upon export performance. The research is
conductedwithin the context of small, medium sized enterprises since resource issues are more
critical forsuch organizations.
2. Statement of the Problem
The basic question of interest in this research concerns the impact, if any, that the fit
betweenthese two strategies (domestic and export) has upon export performance. It is argued that
thecongruence of the domestic marketing strategy utilized by the firm and the adopted
exportmarketing strategy plays a crucial role in determining the performance of an export
venture.The article focuses to fill the gap that was not answered through literatures by trying to
answer tothe following question:
What is the impact of the relationship between domestic and export strategies on
exportperformance?
What actual marketing strategic combinations could be used by firms for the smoothperformance
of domestic and export activities?
Are there particular composites of domestic and export marketing strategies used by firmsthat
operate in their home market and also export? If there are, what is the nature of thesecomposite
strategies?
Are there common strategic composites used by exporters from different countries?
What role, if any, does the type of industry, and the type of export market play in determiningthe
choice of strategy for an exporting firm?
Does export performance differ across the strategic composites, for each of the nationalgroups of
exporters?
3. Objectives
3.1 General Objective
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The general objective of this Article is to examine the strategic behavior of SMEs that export,and
whether that behavior impacts upon the performance of an export venture. The article is
alsofocuses on the relationship between competitive strategy and performance, whether this
interfaceis affected by the national origin of the firm, and investigates the strategy-performance
interfacefor SMEs.
3.2 Specific Objectives
The specific objectives of this study are:
To investigate if there are particular composites of domestic and export marketingstrategies used
by firms that operate in their home market and also export. If there are, toknow what the nature
of these composite strategies is.
To look into common strategic composites used by exporters from different countries.
To explore the role, if any, that the type of industry, and the type of export market play
indetermining the choice of strategy for an exporting firm.
To examine whether export performance differ across the strategic composites, for eachof the
national groups of exporters.
To investigate the strategy-performance interface for SMEs.Setting the above specific objectives
helps the researcher to fulfill the gap that was not coveredby literatures.
4. Hypothesis
The following hypotheses were addressed by the study:
The congruence of the domestic marketing strategy utilized by the firm and the adoptedexport
marketing strategy might play a crucial role in determining the performance of anexport venture.
Some of the results obtained in the standardization/adaptation literature are applicable tosmall
and medium sized enterprises but it might also be applicable for exporting firmsthat are the
major form of foreign market entry.
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5. Methodology/Research Design
5.1 Sampling Techniques and Population Size
In this article, the authors have relied on the data collected from the UK and Canada firms
andfrom the related studies done by different scholars. The study classifies its population in to
twostrata:1. Export contacts in SMEs manufacturing firms in Canada.2. Export contacts in SMEs
manufacturing firms in UK.The authors used WIN database (Export database compiled by
Industry Canada), and FAMEdatabase (a financial database containing information on major
public and private Britishcompanies) with regard to the huge volume of data about exporting
firms that are used to selectsample firms.In the Canadian survey out of 30,000 exporters list
found from WIN EXPORTS database, 517firms were randomly selected as sample, and in the
UK survey out of 270,000 firms found inFAME database 600 firms were randomly selected as
sample. In this article firms were sampledaccording to the following criteria:Canadian survey:
total annual sales less than $10 million;
number of employees less than 100;
export sales of between 5-75 per cent of total sales.UK survey:
Total annual sales less than 5 million BGP;
Number of employees less than 100;
Export sales between 5-75 per cent of total sales.The researcher believes that the last criterion
was imposed because it was necessary to samplefirms that were neither exclusively domestic nor
totally internationally oriented, to enable theinvestigation of potential relationships between
domestic and export strategies.
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Table 1: Samples Firms taken from Each Country
Population No. of Exporters Sample %
Canadian 30,000 517 1.7%UK 270,000 600 0.22%
Total 300,000 1,117 1.92%
5.2 Data Collection
The data for the study were collected through mail survey with questionnaires being sent
toexport contacts in random samples of small and medium sized manufacturers. Hence out of
thetotal of the Canadian sample 227 responses were obtained, of which 207 were usable, giving
atotal response rate of 40%, and out of the total UK samples 173 responses were received
of which 160 (26.6 %) were usable. Even though the study uses different measures to reduce
theeffects of non-response in both surveys like promising to send a summary of the findings
torespondents, waiting for late respondents to complete and return the questionnaire, etc, it
couldn’t reduce the non
-respondability of the questionnaires.Two groups of strategic variables were included in
the study. The first reflected aspects of domestic marketing strategy whereas the second
measured the firms export marketing strategy.Both variables were assessed in terms of scope and
competitive positioning.
5.3 Data Analysis & Interpretation
In the article, a total of 29 variables (17 for domestic and 12 for export) were used to assess
thedomestic and export marketing strategies of SMEs to avoid the likely problems in
interpretingthe results for 29 variables the researchers decides to use factor analysis to achieve
someparsimony. The 29 strategy variables were standardized and submitted to a factor analysis.
Forboth data sets, nine factors were isolated. For the Canadian exporters, four of the nine factors
areconcerned with aspects of export marketing strategy and the remaining five explains aspects
of domestic marketing strategy. For UK data sets, three of the nine factors are concerned with
7
aspects of export marketing strategy and the remaining six describes aspects of
domesticmarketing strategy. Also Cluster analysis was applied to factors isolated in each data set
to try toisolate strategic composites.The domestic marketing strategy was measured using the
instrument developed by Dess andDavis (19984; Robinson and Pearce (1988) and
McDougall and Robinson, 1990). Whereasexport marketing strategy was measured using the
instrument developed by (Cavusgil and Zou,1994).A smaller sample of both countries exporting
firms would have aided in the data analysis,particularly when looking for possible correlation
between domestic and export strategies of SMEs. The results reported in this article referred to
this population of firms, and not to allsmall, medium sized manufacturers involved in
exporting. This shows that it is not possible toinfer the findings to the whole SMEs.The
following analyses were done using different statistical tools throughout the study:
Factor analysis was done to assess the domestic and export marketing strategies of SMEs.Also
Cluster analysis was applied to factors isolated in each data set to try to isolatestrategic
composites.
Two statistical techniques were used to try to determine strategic types that were similarbetween
the national groups. First, a proximity matrix based on Euclidean distances wascalculated.
Second, several post hoc tests (least significant difference (LSD) andScheffe's) were conducted
to see which strategic dimensions did not differ significantly.
Single factor analyses of variance were used to investigate whether there was exportperformance
difference among the four strategic types for both the Canadian and UKexporters.
The study again underscores the importance of conducting a detailed environmentalanalysis
when selecting a strategy. In particular, two environmental characteristics
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appear to be associated with strategic choice - the sophistication of the marketinginfrastructure of
the export market and the degree of technological sophistication in theindustry.
In order to explore the nature of any relationships between the environment and selectedstrategic
alternatives, Crosstabs and Chi-squared tests were run for each of the sevenenvironmental
variables against the four composites for both groups of exporters.
Crosstab analyses were done for the five export market variables indicated that onecharacteristic
was significantly related to the choice of strategy for both samplesIn order to investigate whether
similar strategic composites were used by Canadian and UKexporters, comparisons were made
between individual strategic types across the Canadian andUK groups. One objective of this
research is to investigate how domestic marketing strategy isadapted for an export venture.
Consequently, the domestic strategies used by firms in the twonational groupings were compared
first. The following process was used to compare strategictypes within the national
groupings.The four Canadian strategic composites are:
The competitor (
Cluster 1):
This group consisted of 56 firms (27% of the sample). Itwas characterized mainly by a relative
lack of concern for developing brand identity andfor keeping promotional expenditures low in
the domestic market. The emphasis is uponmaintaining current products rather than on product
innovation. These firms provide abroad product mix that is competitively priced. These firms
have moderate market scopeand provide minimal support to the foreign channel.
The top-end nicher (
Cluster 2)
:
This group consisted of 40 firms (10% of the sample).This group was characterized as hiving
products that had been on the market for aconsiderable amount of time (on average 29
years). They believe in providing primeproduct at a premium price. The highlights of
their exporting strategies are: their narrowscope, the moderate degree of product adaptation that
they employ, and the relatively lowlevel of support that they provide to the foreign channel.
9
The innovative nicher
(Cluster 3)
:
This group consists of 44 firms (21% of the sample).These firms employ a niche strategy in the
domestic markets, with an emphasis upon newproduct development, and brand recognition. They
have the least amount of experienceof international markets.
The branded broadliner
(Cluster 4)
:
This group consisting of 67 (33% of the sample).These firms have a very broad market scope
and strong concerns about developing abrand identity. They provide average product quality at a
competitive price. They arerelatively experienced in international markets.This research
generally supports the contention that a common taxonomy of strategic compositesexists for
SMEs involved in manufacturing. The taxonomy covers a range of export entrystrategies
encompassing both broadly based and niche targeting. Empirical evidence from twonational
groups of exporters suggests that five distinct strategic composites are being used. Theseare
Broadliner, Top-ender, Competitor, Innovator and Value strategies. Three strategies
werecommon to both groups, namely the Broadliner; Top-ender; Competitor strategies.In order
to investigate whether similar strategic composites were used by Canadian and UKexporters, the
study made comparisons between individual strategic types across the Canadianand UK groups.
In this study the first comparisons were based on whether the comparablestrategies were built
around commodity or specialty products. The second comparisons werebased on the dimensions
of domestic strategy, initially, to check for similar strategies acrossnational groups.In the article,
potential effects of a variety of environmental factors like characteristics of theindustry and the
potential effects of characteristics of the selected export market were examinedon the pattern
of deployment of the various composites. Consequently, the effects of fivecharacteristics of the
export market were examined. These were:
The degree of legal and regulatory barriers present;
the demand potential;
the sophistication of the marketing infrastructure;
the competitive intensity; and
the degree of product exposure in the market.
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As the Article was conducted by making use of the documentary analysis and mail-
outquestionnaire, its process are based on empirical evidences which provide detailed analyses.
Ittries to analyze the relationships between domestic and export market strategies. The
qualitativeand quantitative research design was applied for this research.
6. Major Findings
The following findings are based on the cumulative result of the analysis done on UK andCanada
sample firms:
56(27%) of the Canada sample respondents believe that emphasis is given uponmaintaining
current products rather than on product innovation. These firms also believein providing a broad
product mix that is competitively priced. Moreover, these firmsbelieve in having moderate
market scope and provide minimal support to the foreignchannel.
40(19%) of the Canada sample respondents believe in providing a prime product at
apremium price. Distributional intensity is selective rather than intensive. The highlightsof their
strategies are: their narrow scope; moderate degree of product adaptation thatthey employ, and
the relatively low level of support that they provide to the foreignchannel.
44(21%) of the Canada sample respondents employ a niche strategy in their domesticmarkets,
with an emphasis upon new product development, and brand recognition.
67(33%) of the Canada respondents employ a very broad scope and strong concernsabout
developing a brand identity. They provide average product quality at a competitiveprice. They
adapt their promotional approach to suit their target markets, and providemoderate support in the
foreign channel.In order to investigate whether similar strategic composites were used by
Canadian and UKexporters, comparisons were made between individual strategic types across
the Canadian andUK groups.
11
Domestic Strategies
The domestic strategies adopted by these two groups are similar.
The dimensions of domestic strategy were not significantly different on LSD tests
Three specified domestic strategies are common across the national groups
–
Broadliners,Top-enders, and Innovators.
Export Strategies
Both countries followed similar export strategies.
The major differences between the two national groups were with respect to targeting andpricing.
Both groups followed the same export strategy.
In the case of Innovator groups of both country: The major differences were with respectto
training for the distributor, adjustments to labeling and the number of exportcustomers. Canada
exporters had a smaller number of export customers, placed moreemphasis on training for the
foreign distributor, and did not adapt their promotionactivities as much as their UK
counterparts. UK exporters use a market spreadingapproach, entered more export markets than
their Canadian counterparts.
In the case of Top-ender of both groups the major differences were with respect to exportgoals
training and promotional support for the foreign distributor. But both groups hadsimilar degrees
of product adaptation and tended to standardize their promotionalactivities.
7. Conclusions
Based on the above findings and data analyzed, the article concluded as follows:
The findings should be viewed as restricted since the sample was drawn from a singleindustrial
sector, namely manufacturing. More research across industrial sectors andadditional national
economies is needed.
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There are three specific domestic strategies that are common across the national groupsof UK
and Canada
–
Broadliners, Top-enders, and Innovators.
Both national groups export strategies, that small, medium sized manufacturing exportersuse
three distinct composite strategies, namely the Broadliner, Top-ender, Competitorstrategies.
This study has contributed to the literature on export marketing strategy in several ways.First, it
has demonstrated that common strategic composites are used by firms operatingout of different
domestic markets. Second, it illustrates the nature of the linkages betweendomestic and export
marketing strategies. Third, the study is focused on the strategicbehavior of small and medium
sized exporting firms, rather than the larger organizationsoften found in empirical work upon
exporters. Finally, the study has illustrated theimportant role played by certain environmental
factors in determining the selectedstrategy.
The article emphasizes that further testing is required of the reliability of the strategiccomposites
constructs established in this study since they are based on self reportingmeasures only.
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8. Summary of the Reviewers
From the student
reviewers’
point of view, this article possesses most of the entire criteria thatshould be included in a
scientific journal and all these elements are briefly discussed as follows;
A. Title
The authors clearly spelled out the title and so it is
“Congruence
of domestic and exportmarketing strategies - an empirical investigation of its performance
implications
”
.
B. Problem Statement
The researchers clearly formulated the research problems and so seek to determine whether
avariety of strategic types exists, and if so whether export performance differs across these types.
C. Objectives or Purpose of the Study
One of the main questions or problems to be answered in the research was to examine
theparticular composites of domestic and export marketing strategies used by firms that operate
intheir home market and also export. Throughout the research this idea was discussed
separatelyand together with other factors. The researchers able to show the magnitude of
the relationshipsthat exist between the above variables. As the result the conclusion arrived at the
end of theresearch is conclusive and based on the empirical data which enable the main question
of theresearch solved. The purpose of the article is described clearly.
D. Review of Relevant Literatures
The literatures included in the articles are relevant and supportive the justifications behind
thisare, the available literatures are reviewed comprehensively and they are important to depict
theview points of different authors on the title under discussion. Moreover almost all the
referencesare journals which help to get useful research findings and debates even though they
arepublished before ten years.
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E.
Researcher’s
Research Methodology
Since this section is the corner stone of the research, the authors of the article have
consultedprimary and secondary data. The authors have clearly sated study participants that are
small andmedium sized manufacturing enterprises in UK and Canada, who have the capacity to
export.The researchers clearly state the populations and also make the sample appropriately.
Theauthors conduct the study by using a
mail out questionnaires sent directly to the sample exportfirms in both countries. prior to
sending the final questionnaire to the respondents theresearchers tested the questionnaires upon a
convenience sample of ten exporters and
some itemswere eliminated on the grounds that they were not relevant to either the size of the
firm includedin the study, or the activities of exporters.The data analysis method is clearly
explained and the researcher utilized the appropriate dataanalysis methods such as factor analysis
and Chi-square methods
.
Empirical approach was used to conduct this research. The information collected was
wellanalyzed in reaching valid conclusion.
F. Insights to Further Studies
As we see from the article, the authors suggest fruitful areas for further research. First does
thetaxonomy of strategies isolated here, apply to services firms or do the distinct characteristics
of service generates different strategies? Second, do firms switch from broadly based
strategiestowards more focused strategies as they move further in to internationalization process?
15
G. Review of References
References are properly used and discussed in the main body of the article as well as cited
inHarvard system
.
Comprehensive reference lists are not given in the article. Based on conventionwriters are
recommended to incorporate forty and above texts in their work. Unfortunately in thisarticle only
thirty four references are cited. The other problems with respect to references are thatmost
references are old. Based on convention ten years back texts are considered as old andsixteen of
them were written before ten year.
9. Weakness of the Articles
The weakness of the article in the minds of the reviewer includes:
The numbers of references are not adequate and old.
The Authors did not mention the rationales behind the selection of research site, Canadaand
UK.Our overall assessment concludes that the authors have represented the strategies in a useful
wayby employing a well-structured, logical and understandable methodology.
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