International marketing – the issues 627
Operationalization
Experiential research
Experiential research on exporters has identi-
fied several phases. From work initially con-
ducted in Sweden by Weidersheim-Paul and
replicated later in the USA by Bilkey and Tesar
and by Cavusgil, we know of the following
behavioural phases of exporters:
1 The company is totally uninterested.
2 The company will fulfil unsolicited orders but
no more.
3 The company will undertake market research
of that market.
4 The company begins to export to a
psychologically close country.
5 The company is now experienced and ready to
export to any market.
Of these stages, the most important was the
finding relating to psychological closeness.
Psychological closeness or as it will be referred
to later, psychological distance or socio-cultural
distance, is a key to understanding exporter
behaviour.
Psychic or psychological distance
(also socio-cultural distance)
This affects both supplier and buyer. For a
supplier, knowledge of a market takes away the
fear and lessens risks, both actual and per-
ceived. For marketers, unlike sociologists or
social anthropologists, the aim is to identify
that which unites people as a common charac-
teristic or feature, which is to be found with the
same degree of frequency across national
boundaries. The more we know of a target
market and the degree that it approximates to
our own, the better placed we are to design an
acceptable offering.
In numerous studies, newcomers to
exporting have been found to export first to
those markets, which were more like extended
domestic markets because of similarities of
language, customs and institutions. British
exporters for long periods were able to find the
psychological distance between themselves and
Australian, Canadian, Nigerian or Ghanaian
buyers much less than that existing with France
or another very closely neighbouring European
country. Language, history, institutions, cur-
rency and familiar standards of size, weight or
volume influence greatly the perceived degree
of foreignness. The European Union is proceed-
ing apace with harmonization and common
measures including a common currency.Selection of foreign market entry
mode
There is a wide selection of entry methods to
choose from and no easy solutions. An inter-
esting approach, however, was that taken by
Davis et al. (2000), taking the host country
institutional environment and the internal insti-
tutional environment as two sources of isomor-
phic pressure. Davis et al. hypothesized that
SBUs would adopt similar organizational
forms, structures, policies and practices to
conform to behavioural norms within those
two environments. They found that SBUs using
wholly owned entry modes demonstrated high
levels of internal (parent) isomorphism: those
using exporting, joint ventures or licensing
agreements demonstrated external isomorph-
ism and those using multiple or mixed entry
mode demonstrated low levels of isomorphic
pressure. There is no single ‘best’ strategy. Adopt a
contingency approach.
Have you considered the needs and desires of
the local market?
Has anyone asked the local natives about their
expectations?
Can you reconcile their expectations with
your demands of a new market?
As socio-cultural distance increases, firms are
more likely to choose contractual rather than
investment modes.