Do distributors really know the product? Approaching emerging markets through exports

Francesca Checchinato, Lala Hu and Tiziano Vescovi ()
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Tiziano Vescovi: Dept. of Management, Università Ca' Foscari Venice

No 19, Working Papers from Venice School of Management - Department of Management, Università Ca' Foscari Venezia

Abstract: Exports represent an entry mode into international markets that is less risky than more direct strategies, therefore it particularly fits SMEs (small-medium enterprises) that generally have a few resources to invest. In the case of emerging markets because of the high psychic distance, SMEs tend to rely on their distributors for the business operations in the new market. However, although this type of intermediary allows the access to the foreign distribution channel that is particularly complex in countries such as China, it can limit the market control and in some cases, the product expansion. Based on a qualitative research consisting of interviews and secondary data, we present two original case studies of Italian firms operating in the Chinese market. It is shown that in emerging markets, since distributors do not really analyze and know consumer expectations and behaviors, they may represent a barrier in the knowledge accumulation of foreign products in the new market. Managerial implications are discussed on the extent to which SMEs are not able to replicate marketing strategies used in other countries, but they should define a clear strategy that involves their distributors in the process of knowledge accumulation and brand value creation in the foreign market.

Keywords: internationalization; export; SME; distributor; emerging markets. (search for similar items in EconPapers)
JEL-codes: D22 F23 F63 M16 M31 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2014-10
New Economics Papers: this item is included in nep-cse, nep-ent, nep-int, nep-sbm and nep-tra
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