What Are the Factors Influencing International Channel Choice of Small Business Exported?

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Individual Assignment

Module Name: Research Methods

Module Code: BM040-3-2-RESM

Lecturer: Rohani Binti Mohamad Husain

Student Name: Sasi kumar a/l Kaliappen

Student ID: TP026141

Intake Code: UC2F1105IBM

What are the factors influencing international channel choice of small business exported?

A Proposal Submitted
by
Sasikumar a/l Kaliappen
 

In Partial Fulfilment of the Requirements for
the Bachelor of Arts (Hons)
in International Business Management
 
 

 Asia Pacific University College of Technology & Innovation   
16.01. 2012

Table of Contents

Contents
Chapter 1: Introduction5
1.1: Background of the Study5
1.2 Problem Statement6
1.3 Objectives of the research7
1.4 Significance of Research7
1.5 Scope of Study7
Chapter 2: Literature Review8
2.1 Channel Choice In International Business8
2.1.1 Country Knowledge9
2.1.2 Market Growth10
2.1.3 Cultural Distance11
2.1.4 International Experience12
2.1.5 Customer Knowledge13
Chapter 3: Research Methodology14
Questionnaire and measurement development14
Data collection14
Measurement14
Measurement analysis15
3.1. Theoretical framework16
3.2: List of Hypothesis17
Chapter 4: Conclusion18
Chapter 5: References20

Chapter 1: Introduction

The next step of any company after having set a firm stable ground is to go international to make the brand recognizable and make more profit. Having the company to be run in international level could be proven rather hard. Especially for the small business as the beginning are proven vital to any company to either blossom, or wilt. When a company makes a decision to go international, it is very important for it to decide on how it will be marketed internationally. There are few ways on how the products will be channelled in the country. Firms with high profiles can take the risks of having their products being distributed directly by them. As for the smaller firms it is advisable for them to distribute their products indirectly as this will be less risk for them since the outcome of their product could be good or bad internationally. (B. Ramaseshan and Mark A. Patton, 1994).

1.1: Background of the Study

Given the paucity of studies investigating international channel choice among small business exporters, examines the influence of selected variables on international channel choice decisions of small business exporters in one specific industry. Results of the analysis using the logistic multiple regression procedure show that three factors significantly distinguish small business exporters using independent channels from those using integrated channels. These factors are: first, company's exports as a percentage of the total sales volume, second, international family heritage of the major export decision makers in the company, and third, importance of service requirements. The results indicate that firms with higher exports (as a percentage of the total sales volume) and stronger international family heritage tend to use independent channels, while firms with products for which the importance of service requirements is considered to be high tend to use integrated channels. The journal discusses the implications for the management of small business exports.

1.2 Problem Statement

According to Bello and Williamson (1984) highlighted the importance of channel choice and the structure of that channel in developing a marketing strategy and showed that the magnitude of the success a firm enjoyed in exporting was significantly influenced by the (formal) structure between channel members. Channel selection and structure is also important in the formulation of international marketing strategy in view of the fact that, once a channel has been set up, it will be very difficult to change. Anderson and...
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