Research in International Marketing (RLE International Business)

Peter W Turnbull, Stanley Paliwoda, Peter W Turnbull, Stanley Paliwoda

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135124342
• Edition: 1
• Topic: Business
• Subtopic: International Business
• Index: Business

This book considers problems which can be serious obstacles in international marketing but which are much less difficult in domestic marketing, such as cultural differences; the establishing and maintaining of relationships with customers' and the special problems for firm strategy and organisation arising from the internationalisation process.

PART ONE:

ORGANISATIONAL BUYING BEHAVIOUR AND CULTURAL VARIABLES

This section looks at the application of industrial buying behaviour and behavioural theories, in the context of different cultures. It is appropriate then to begin with the paper by Wilson and Ghoneim, which reports on a complex, descriptive and general model of Egyptian organisational buying behaviour, evolved from an exploratory study of the buying process in the Egyptian industrial public sector. This paper examines the processes of adapting a theory as it moves from one culture to a very dissimilar culture. Thus, for example, the authors discuss the transfer of fundamental concepts such as the buying centre and the buygrid from a United States context to an Egyptian context. The specific modifications required of Western buying behaviour theory to accommodate the Egyptian situation are then highlighted, these being accommodations of cultural and organisational influences.

Reid continues the theme of cultural differences in his paper. He proposes that cultural distance is a cognitive property which is expressed in affective preferences for market exchanges originating from particular countries. Such preferences are developed through social learning and have their most significant impact on market behaviour among migrants. Migrants maintain information links with their country of origin, replicate communication networks, settlement patterns and social boundaries. These activities recreate consumption forms and patterns isomorphic with those found in a migrant's country of origin. Access to and knowledge of these markets provides decision makers with a comparative advantage which is exploited in international trade. Reid shows how and why this interpretation of cultural distance is useful to firms and public policy decision makers interested in international market expansion.

Bradley's contribution has much in common with both of the preceding papers. Bradley sets out to examine the relationship between buyers' attitudes to international suppliers and countries of origin. The focus of his paper is on developing communications strategies for foreign market entry using country-company associations. Attitudinal data for a sample of 60 industrial buyers in the electrical and electronics industries in Ireland are tested for this country-company relationship using multiattribute and scaling techniques. The findings suggest that the hypothesised relationships do exist, are strong and that buyers relate to the same latent evaluative structure when assessing countries and companies in their buying behaviour.

O'Driscoll places his emphasis on the organisational aspects. Here, he traces some of the changes that took place over a decade in a large Irish company moving from high-growth to maturity and stagnant markets. Alongside this, there is the transition from an entrepreneurial style of management to a more professional one. While organisational development continued over the decade and the company's personality gradually changed, two major structural changes took place. The strategic thinking underlining this organisational restructuring is discussed alongside the work of Porter on generic strategy.

Moller returns to the questions raised by Wilson and Ghoneim. His principal objective is to provide analytical in-depth descriptions of the buying processes of strategic components. Methodologically, this means an attempt to build descriptive buying process models through inductive analysis of case material. Inductive modelling of material component buying is approached by (i) presenting a comprehensive conceptual model of production material buying, ( ii) adopting a data collection method called decision system analysis for analysing six cases of component purchase processes, (iii) drawing inductive 'maps' or models of the empirical cases through conceptualisation, and finally, (iv) evaluating the usefulness of the conceptualisations suggested and discussing the implications of the results. While this lacks an international dimension, in terms of research data we feel that it has applications which are universal.

Overall, it may be said that Wilson and Ghonheim, and Reid concern themselves with the application of buyer behaviour models to cultural interfaces. Similarly too, with Bradley who, focusing on communication strategies, examines buyer attitudinal behaviour with regard to suppliers and their country of origin. On the organisational side, O'Driscoll examines behavioural patterns among management, identifying the actionist or entrepreneurial non-bureaucratic model, and the industrial engineering model adopted by the majority of professionals. Finally, Moller through inductive case analysis like 0 'Driscoll, presents an in-depth analysis of the buying process for strategic components, charting not only the stages but offering a conceptual model and some discussion of the implications of the results as well.

Transferring Organizational Buying Theory Across Cultural Boundaries

David T Wilson Ahmed Ghoneim:

The Pennsylvania State University U.S.A.

The Problem

The new open-door economic policy of the Egyptian government encourages foreign investment and provides a favourable and attractive investment climate for Western business firms. Unfortunately, there are few studies available to guide business people in serving this market. The primary problem addressed in this paper is the development of a model of the Egyptian organizational buying process that would be helpful to someone attempting to understand Egyptian public sector companies

A secondary objective was to explore the transferability of organizational theory from one culture to another. The transfer of theory across international boundaries is obviously related to many variables such as culture, economics, business organization and government policies. A review of the literature of cross cultural studies found that most studies were either intracountry or international studies of countries having a high correspondence on the critical variables of culture, economic and political environment (Bradley, 1977; Davig 1980; Hakansson and Wootz 1979; Woodside et al, 1978). Many of the studies were theory free and basically described the buying process. Several studies did have a simple buying stage process model underlying them.

The IMP Project Group study is a major attempt to develop a new theoretical approach to international marketing and purchasing of goods based upon four groups of variables that describe and influence the interaction between buying and selling companies. This model while intPresting an challenging did not have the specificity that would be useful in adapting a model to the Egyptian buying process.

The first step was to identify appropriate theories of organizational buying behaviour that may parallel the buying situation in the Egyptian public sector. A number of these models are discussed in the next section. Appendix A provides background on the Egyptian public sector, comparing operation and selected comments on cultural variables which provide useful background for model understanding.

Complex Models of Organizational Buying

Over the years a number of models have been developed in an attempt to describe the organizational buying process. These models have combined both task and non-task variables in an attempt to address the complexities of the process. A listing of the models that have been identified as 'complex' are in Figure 1.

The basic concepts of the BUYGRID model have reasonable acceptance within the US academic community and have been incorporated into the MATBUY and Supplier Choice Models. These three models deal with a structured buying process, a buying phase concept and permit analysis of a buying center or buying committee process, all of which are relevant to the transfer of theory to the Egyptian situation. These models will be discussed in some detail.

The BUYGRID Model

Industrial buying is conceptualized as a process taking place over time rather than as a simple choice process. Many researchers (Webster, 1965; Ozanne and Churchill, 1971; Boand, 1972) have distinguished stages or phases through which the decision passes in a chronological order.

In an early attempt to model the industrial buying process, Webster (1965) identified four stages; problem recognition, buying responsibility, search and choice. Webster's model generated interest in the concept of phases in the buying process. Robinson, Faris and Wind (1967) expanded that four-stage model to an eight-stage model, and combined it with Faris' three types of purchase situations to develop the BUYGRID model.

Figure 1

Complex Models of Organizational Buying Behavior in Chronological Order

• 1. BUYGRID Model (Robinson, Faris and Wind, 1967)
• 2. COMPACT Model (Robinson and Stidsen, 1967).
• 3. Simulation Model (Wind and Robinson, 1968)
• 4. Information Processing Model (Howard and Morgenroth,l968)
• 5. Organizational Buying Behavior Model (Webster and Wind,l972)
• 6. Industrial Buyer Behavior Model (Sheth, 1973)
• 7. Dyadic Paradigm (Bonoma, Bagozzi and Zaltman, 1975)
• 8. Organizational Interaction Model (Hakanssen and Ostberg, 1975)
• 9. Industrial Buying Task Group Model (Spekman, 1977)
• 10.Industrial Market Response Model (Choffray and Lilien, 1978)
• 11.Cornrnunication Network Dyadic Systems Model (Johnston, 1979)
• 12.MATBUY Model (Moller, 1981)
• 13.Supplier Choice Model (Vyas and Woodside·, 1984)

The existence and duration of each of these eight phases depends upon the buying situation. In a new-task situation all phases supposedly exist and are extensive, whereas in a straight­ rebuy situation phases are supposedly quickly passed through and some of them may be skipped.

The BUYGRID model is 'virtually devoid of predictive ability and offers little insights into the nature of the complex interplay between task and non-task variables. It does not permit inferences about behavioral cause-and-effect relationships of the kind needed for designing efficient marketing strategies' (Webster and Wind, 1972).

Despite these flaws, the model is widely accepted. It has also motivated researchers to work on the concept of phases of the buying process.

The MATBUY Model

Moller (1981) developed a comprehensive conceptual model of production material buying (MATBUY) behavior in the following way:

• 1. Defining the general process (and the stages) of production material buying.
• 2. Assessing the different decision-making points in the process where policy decisions (implying potential organizational conflict situations) are taken.
• 3. Assessing the ways in which the vendor selection ( a key subprocess) can be carried out.
• 4. Defining the principal personal, organization­ al and situational or contextual variables having an effect on the production material buying process-especially policy decision points and vendor selection.

Moller divided the production material buying process into eight phases:

A - Purchase Initiation

B - Evaluation Criteria Formation

C - Information Search

D - Supplier Definition for RFQ's

E - Evaluation of Quotations

F - Negotiations

G - Supplier Choice

H - Choice Implementation

Within each of these phases he discussed decisions, individuals/departments, and problems/tasks involved.

Although the MATBUY model tried to be so comprehensive that it covers conceptually all the principal decision problems and conflict situations, it has the following flaws:

• 1. It is devoid of predictive validity and empirical reliability. Consequently, it has little benefit for marketing strategists.
• 2. Unlike the BUYGRID model, it did not combine its phases with the different buying situations.

Supplier Choice Model

While the BUYGRID and MATBUY models are basically conceptual, the Supplier Choice model (Vyas and Woodside, 1984) is based on an empirical study of purchasing in 6 US firms. The major objective of the study was to identify decision rules the buyer center members use during the supplier choice process. The Supplier Choice model is based on a decision process model consisting of a finite series of steps in the form of highly simplified rules. The result is a series of proces flow mcdels that describe in detail the rules that guide each step of the decision model.

Vyas and Woodside found that during the earlier stages in the choice process, the buyer employed noncompensatory, conjunctive rules to eliminate unworthy candidates. Later in the process the price became a predominant criterion, when additional candidates were eliminated by using disjunctive decision rule. This model was an important input into the development of the Egyptian model.

The Buyer Center Concept

In their case study, Cyert, Simon and Trow (1956) introduced the first citation recognizing that not only the purchasing agent and his staff, but also a number of other managers in the firm are involved in the buying decision.

The term 'buying center' was, for the first time, used by Robinson, Faris and Wind (1967). Aft.er reporting the findings of several studies, they concluded that the buying influence is widely diffused among several persons and departments in the buying firm.

One year later, Weigand (1968·) suggested that studying the purchasing agent only is not enough. He concluded that the industrial buying function is complex and involves many people (with vastly different views) at all levels in the firm. Brand (1972) used the term 'decision-making unit', Duncan (1972) used the term 'organizational decision unit', but they are still in the sam...