Do Distributors Really Know the Product? Approaching Emerging Markets Through Exports

21 Pages Posted: 19 Oct 2014

See all articles by Francesca Checchinato

Francesca Checchinato

Ca Foscari University of Venice

Hu Lala

Ca Foscari University of Venice - Department of Management

Tiziano Vescovi

Ca Foscari University of Venice - Department of Management

Date Written: October 1, 2014

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

JEL Classification: F23, F63, M16, M31, D22

Suggested Citation

Checchinato, Francesca and Lala, Hu and Vescovi, Tiziano, Do Distributors Really Know the Product? Approaching Emerging Markets Through Exports (October 1, 2014). Department of Management, Università Ca' Foscari Venezia Working Paper No. 2014/19, Available at SSRN: https://ssrn.com/abstract=2511311 or http://dx.doi.org/10.2139/ssrn.2511311

Francesca Checchinato

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Hu Lala (Contact Author)

Ca Foscari University of Venice - Department of Management ( email )

San Giobbe, Cannaregio 873
Venice, 30121
Italy

Tiziano Vescovi

Ca Foscari University of Venice - Department of Management ( email )

San Giobbe, Cannaregio 873
Venice, 30121
Italy

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