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i Pergamon PIh S0969-5931 (97)00003-6

Internatiomd Business Review Vol. 6, No. 3, pp. 245-270, 1997 1997 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0969-5931/97 $17.00+0.00

Use of Export Marketing Research by Industrial Firms: an Application and Extension of Deshpande and Zaltman' s Model
Adamantios Diamantopoulos* and Stephen Horncastle?
*Professor of Marketing and Business Research, The Business School, Loughborough University, Loughborough LEl l 3TU, England tPast Research Student and Graduate of European Business Management School, University of Wales - - Swansea, Singleton Park Swansea SA2 8PP, Wales

Use of Export Marketing Research by Industrial Firms

Abstract - - The issue of information utilisation within an export setting has been neglected in the literature as most studies focus on the acquisition of export marketing research information rather than its actual use. In this paper, an expanded version of Deshpande and Zaltman's wellknown model of information use is developed by incorporating export-specific variables, and subsequently applied to a sample of UK exporters. The analysis reveals that information use depends on the firm's internal structure, the degree of surprise in the research results, and the nature of the export market in question. The findings are placed in the context of previous evidence on marketing research information use and direclions for future studies identified. ~ 1997 Elsevier Science Ltd

There is widespread consensus in the marketing literature that effective use of information is a source of competitive advantage (Parsons, 1983; Porter and Millar, 1985; Turner, 1991; Glazer, 1991, 1992) and a prerequisite for market orientation (Kohli and Jaworski, 1990; Jaworski and Kohli, 1993; Kohli et al., 1993; Dalgic, 1994; Cadogan and Diamantopoulos, 1995). The critical role of information was highlighted by the AMA Commission for the Effectiveness of Research and Development for Marketing Management, which urged researchers to study the process of knowledge creation and diffusion and develop ways in which information can be used more effectively in marketing management practice (Myers et al., 1979). Moreover, the issue of marketing knowledge utilisation provided the remit for the AMA's Task Force on the Development of Marketing Thought (AMA Task Force, 1988) and also featured as a key topic in the Marketing Science Institute's List of Research Priorities 1990-1992 (Marketing Science Institute, 1990). Thus T o o k e y ' s (Tookey, 1964: p. 59) early observation that "a marketing policy is only as good as the information on which it is based" has stood the test of time and, if anything, is more relevant in today's information age than it was 30 years ago.

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In the international arena, the importance of effective information use cannot be overemphasised if costly mistakes are to be avoided and opportunities not bypassed (Ricks, 1983; Douglas and Craig, 1983). Indeed, "the single most important cause for failure in the international market place is insufficient preparation and information... Failures continue to occur because firms either do not believe that international market research is worthwhile or face manpower and resource bottlenecks that impede research" (Czinkota and Ronkainen, 1990: p. 322). This is particularly true in the case of exporting, since "myths loom large in suppliers' perceptions of foreign markets and the only antidote is a strong dose of factual information" (West, 19"80: p. 11). In spite of the critical role of information both for export initiation (Johanson and Vahlne, 1977) and export expansion (Denis and Depelteau, 1985), hardly any research has been conducted into how information is actually used by exporters (Souchon and Diamantopoulos, 1994). Instead, past empirical studies have been primarily concerned with the sources of information consulted by exporters (e.g. export marketing research vs export assistance), the organisation of research activities (e.g. in-house unit vs external consultants), the types of information collected (e.g. market potential vs distribution options) and the data collection methods employed (e.g. market surveys vs product tests). Thus the focus has been very much on the how and what of gathering export information rather than on using such information (once it has been acquired). However, "in organizations, there is a difference between information acquisition and utilization" (Sinkula and Hampton, 1988: p. 339), since many firms "gather more information and don't use it, ask for more and ignore it, make decisions first and look for the relevant information afterwards" (March and Shapira, 1982: p. 98). The purpose of the present study is to provide insights into the factors which facilitate or impede export marketing research usage in an industrial context. The study draws from the extensive literature on domestic marketing research utilisation to assess the extent to which previous findings on the determinants of industrial market researching information usage are also applicable in an export setting. It also examines the potential impact of additional (i.e. exportspecific) factors on information use. More specifically, the objectives of the present study are two-fold: To apply Deshpande and Zaltman's, 1987, well-known model of market information use to a sample of UK exporters of industrial products, and to explore the potential influence of export-specific variables on information usage by incorporating them in the above model. By identifying the relative importance of alternative influences on export information use, improvements can be made in the way information is managed, thus enhancing the value of the latter in the export decision-making process. This is of particular importance for UK firms, which "have indeed been slower to make use of international research than many of their


247 international competitors... [and] are relatively light spenders in this area in Use of Export comparison with the budgets they reserve for the domestic market" (Gofton, Marketing 1994: p. 26); in fact, international research accounts for only 25.8% of total R e s e a r c h by marketing research expenditure by UK firms (AMSO, 1993). Thus the findings Industrial Firms of the present study should be beneficial not only to export managers and inhouse researchers seeking to promote effective use of information within their organisations, but also to information suppliers serving industrial exporters. Both marketing research agencies and export assistance bodies would benefit from an understanding of the factors which facilitate or hinder information use by their potential clients, resulting in better targeting of their services (Diamantopoulos et al., 1993).
Literature Review In a domestic setting, there is a well-established body of literature on the use of information in general and marketing research information in particular (for relevant reviews see Weiss, 1977; Deshpande, 1979; Larsen, 1980; Havelock, 1986; Menon and Varadarajan, 1992). Among the topics that have attracted detailed study, are managerial perceptions of the contribution of marketing research information (e.g. Holbert, 1974; Bellenger, 1979; Luck and Krum, 1981; Barabba and Zaltman, 1991), the environmental, organisational, and project-specific characteristics affecting information usage (e.g. Deshpande and Jeffries, 1981; Deshpande, 1982; Deshpande and Zaltman, 1982, 1987; Goldstein and Zack, 1989; Perkins and Rao, 1990; Sinkula, 1990; Raphael and Parket, 1991; Glazer and Weiss, 1993), the differences in information usage by public and private organisations (e.g. Deshpande, 1981; Deshpande and Zaltman, 1981), differences in perceptions between research providers and research users (e.g. Krum, 1978; Deshpande and Zaltman, 1984), the evaluation of research results by managers (e.g. Lee et al., 1987; Jobber and Elliott, 1992), the manager-researcher dialectic (e.g. Zaltman and Moorman, 1988; Moorman et al., 1992, 1993), the role of marketing research information in organisational politics (e.g. Piercy, 1979, 1989: Goodman, 1993), the link between market information processing and organisational learning (e.g. Sinkula, 1994; Day and Glazer, 1994), and cross-country differences in the implementation of marketing research (e.g. Schlegelmilch et al., 1986; Schlegelmilch and Therivel, 1988). In contrast to domestic marketing research where a substantial amount of conceptual and empirical knowledge has accumulated over the past fifteen years or so, surprisingly little is known about the factors affecting the use of export marketing research information. Most studies have investigated such issues as the information needs and preferences of exporters (e.g. Pointon, 1978; Wood and Goolsby, 1987), the sources of information used (e.g. Wakers, 1983; Cavusgil, 1985; Koh et al., 1993; McAuley, 1993), the types of research studies undertaken (e.g. Bodur and Cavusgil, 1985; Seringhaus, 1988), the organisation and execution of research activities (e.g. Cavusgil, 1984a; Koh, 1991; Diamantopoulos et al., 1991; Crick et al., 1994), the differences in export characteristics between users and non-users of export

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marketing research (e.g. Diamantopoulos et al., 1990; Schlegelmilch et al., 1993), and cross-country comparisons of the export profiles of research users (e.g. Diamantopoulos and Winklhofer, 1996). In addition, there is a substantial literature relating to the awareness of, attitudes towards, and participation in governmental export assistance programmes by firms (for relevant reviews, see Seringhaus, 1985, 1986, 1987; Diamantopoulos et al., 1993). To the authors' best knowledge, only two empirical studies have attempted to investigate issues related to the actual use of information in international operations. Hart et al., 1994, while primarily concerned with the acquisition of export marketing research information by industrial small and medium-sized firms, also asked their respondents to indicate how useful the information collected was to their export operations. While there was (moderate) agreement that export decisions are modified in the light of research and that key decision makers tend to use such research, there was also agreement that research is used to back management hunches (particularly amongst smaller firms) and that decisions would be taken without market research (particularly by firms serving only a few geographic regions). According to the authors, these contradictory findings "highlight the need for a focused study of the use of market research information by exporters" (Hart et al., 1994: p. 18). The second study, by Garrett and Hart, 1993, is not specific to exporting, focusing instead on the marketing research activities of multinational SBUs. Based on in-depth interviews with the marketing managers/directors in eleven multinational organisations, it was found that use of the information depends largely on the element of surprise, since "the respondents tend to discard market research results which are not in accordance with prior beliefs" (Garrett and Hart, 1993: p. 527); this is consistent with previous research on the impact of surprise on the use of market research information (Deshpande and Jeffries, 1981; Deshpande and Zaltman, 1982, 1987). Importantly, however, there was much greater tolerance to surprising findings if the information had been collected in-house than when external researchers were involved. Moreover, the quality of work undertaken by the latter was often perceived not to justify the costs involved and there were doubts about the ability of external agencies to understand a particular market. These findings, however, relate largely to the use of secondary data, since desk research was solely relied upon by all but one of the companies. From the above, there appears to be need for empirical research specifically designed to address the question of export information use. The two previously-mentioned studies, while insightful, were not solely concerned with the question of use and, thus, their treatment of the latter was (understandably) limited in both conceptual and methodological terms. Hart et al.'s (1994) study was exploratory in nature and did not investigate export information use within a conceptual framework delineating the determinants of use and their expected impact; moreover, no theoretical or psychometric support was offered for the measure of information use employed. As far as the Garrett and Hart, 1993, study is concerned, its qualitative nature, small sample size, and the fact that respondents were marketing personnel in multinational

SBUs rather than export managers, all combine to place constraints on the extent to which the patterns observed are generalisable to exporting. The sections that follow describe a study designed specifically to examine the factors affecting the use of export marketing research information by industrial firms. First, a brief conceptual background is given to information use and the likely determinants of the latter; particular reference is made to Deshpande and Zaltman's (Deshpande and Zaltman, 1987) model of information use by industrial firms in a domestic (US) setting, which is used as the starting point for the current investigation. Next, the methodology of the study is described, providing details of data collection and measure development procedures. This is followed by the presentation of the study's findings and a discussion of their implications in the context of previous efforts. The paper is concluded by considering the study's limitations and drawing up an agenda for future research.

Use of Export Marketing Research by Industrial Firms

Information Use: Conceptual Background

The current interest lies with the factors affecting the use of export information by industrial firms, with particular emphasis on marketing research information. The present focus is on instrumental use, namely the "situation in which knowledge.., is used to guide behaviour and make decisions" (John and Martin, 1984: p. 173); thus, instrumental use is the direct application of knowledge to solve specific problems (Moorman, 1995).* In this context, marketing research is generally conducted to fill a knowledge gap relating to a particular project ad, therefore, more likely to be used, instrumentally than in any other way (Deshpande and Zaltman, 1982).t This is certainly the case with export marketing research which is typically designed to answer very specific questions, such as the assessment of sales potentials, the identification of suitable foreign distributors, and the evaluation of competitive producers and prices (Cavusgil, 1984a, 1985; Seringhaus, 1988; Diamantopoulos et al., 1991 ; Hart et al., 1994). In conceptualising (instrumental) information use, Deshpande and Zaltman's (Deshpande and Zaltman, 1982) dimensions of decision relevance. information surplus, recommendations implemented, and general qualio,, although originally developed in a domestic setting, were deemed to be sufficiently general as to also be applicable in an exporting context. Decision relevance refers to the relevance of the information provided by the research project on the decision being made; information surplus indicates the amount *Information use can be defined in numerous ways and can take a variety of meanings depending upon the context involved. For relevant discussions, see Caplan et al., 1975; Knorr, 1977; Rich, 1977, 1979; Weiss, 1977, 1980, 1981; Zaltman, 1979, 1982; Havelock, 1986; Dunn, 1986. For a review with particular emphasis on marketing information, see Menon and Varadarajan, 1992. tIndeed, "instrumental research (in contrast to exclusively exploratory and theoretically oriented research) is a common and in fact probably the most common type of research done in marketing" (Deshpande and Zaltman, 1982: p. 17).

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of extraneous (redundant) information generated; recommendations implemented reflect the proportion of the recommendations generated by the research that were actually followed by the user(s); and general quality describes the overall success of the research project as perceived by management. A further two dimensions identified from the literature were also deemed to be relevant to the present study. The first is uncertainty reduction and reflects the extent to which the research information reduced the uncertainty surrounding the particular decision to be made; this dimension was drawn directly from the definition of international marketing research as "the research activities of firms carried out either in the home market or in foreign markets, for the purpose of reducing uncertainty surrounding international marketing decisions" (Cavusgil, 1984a: p. 262). The second dimension, decision confidence, also relates to the decision maker's emotional state, reflecting the "change in confidence after receiving marketing research results" (Lee et al., 1987: p. 190). Collectively, the six dimensions described above seem to provide a comprehensive conceptualisation of export marketing research information use, capturing a variety of aspects associated with the application of the latter to the decision making process. Shifting attention to potential determinants of information use in an industrial context, the most comprehensive analysis of the latter is Deshpande and Zaltman's (Deshpande and Zaltman, 1987) investigation. Based upon previous similar work in the consumer goods sector (Deshpande and Zaltman, 1982) and a literature review on industrial marketing research (Deshpande and Zaltman, 1985), they identified six potential determinants of information use, reflecting organisational factors (namely,formalisation and centralisation), the product's life-cycle stage, the research purpose (i.e. exploratory vs confirmatory) and the degree of surprise in the findings. Using path analysis, they found significant influences for three of these variables. Formalisation and exploratory research purpose were---contrary to initial expectations--positively related to information use, while surprise had a negative effect (as hypothesised). In comparing these findings with those obtained in their consumer goods study (Deshpande and Zaltman, 1982), the authors concluded that "there appears to be considerable difference in the nature of market information use in consumer and industrial contexts" (Deshpande and Zaltman, 1987: p. 116). While not specifically concerned with export information, Deshpande and Zaltman's (Deshpande and Zaltman, 1987) model provides a useful starting point for identifying potential influences affecting the use of export marketing research by industrial firms. In this context, it seemed theoretically prudent to retain for initial investigation all six variables in Deshpande and Zaltman's (Deshpande and Zaltman, 1987) original model, despite the fact that not all proved to be significant. A compelling reason for this was that, to date, there has been no independent replication of Deshpande and Zaltman's (Deshpande and Zaltman, 1987) model and, thus, it could be that some of the nonsignificant findings were due to sample idiosyncrasies; given that their model

251 was based on an extensive literature review coupled with careful theoretical Use of Export reasoning, "one may well question the sensibility of making important Marketing decisions on a theoretical formulation on the basis of a single test" (Henkel, Research by 1976: p. 22). A related point is that the utility of variables such as I n d u s t r i a l F i r m s centralisation and formalisation has been demonstrated in other similar studies (e.g. Deshpande, 1982; John and Martin, 1984) but has never been empirically investigated in the context of export information use; however, the question of how to best organise the international marketing research function has long been an issue of concern in the normative literature (e.g. Karstens, 1960; Alder, 1975; Douglas and Craig, 1983; Van Hamersveld, 1989). In addition to the six determinants of information use drawn from Deshpande and Zaltman, 1987, three additional influences were identified from the export literature as likely to have a direct or indirect impact on use. The first is export experience and reflects the familiarity of the company with the particular export market that is being researched, Export experience has been shown to affect both whether research will be conducted in the first place (Diamantopoulos et al., 1990; Schlegelmilch et al., 1993) and the information sources utilised (McAuley, 1993; Cavusgil, 1984b). In the present study, it is hypothesised that export experience will indirectly affect information use through (a) a negative link with exploratory research purpose, (b) a posilive link with confirmatory research purpose, and (c) a negative link with surprise. Clearly, the more familiar the firm is with a certain export market the less the need for exploratory-type research and the greater emphasis on confirmatory research; this view is consistent with Sood and Adams' (Sood and Adams, 1984) results who found that, as firms become more experienced, they acquire more specific market information. Regarding the expected impact on surprise, given that the latter reflects "the extent to which a particular result is unanticipated, counterintuitive, or unforeseen by managers" (Deshpande and Zaltman, 1982: p. 19), the longer the firm has been operating in the market concerned, the less likely it is to be "surprised" by information relating to this market. A second variable expected to have a direct and positive impact on information use is the dependence of the firm an the export market under consideration for generating business. If the export market concerned is relatively unimportant in sales and/or profitability terms, then "managers prefer to make decisions on the basis of limited research aided by judgment calls" (Cavusgil, 1985: p. 28). In contrast, research results are likely to be taken more seriously and relied upon for decision-making purposes when there is a lot at stake; thus, all other things being equal, it would be expected that the greater the proportion of total export sales accounted for by a particular market, the greater the use of export marketing research information relating to that market. The final variable expected to directly affect information use is the relative profitability of the export market under consideration vis-a-vis the domestic market. The more attractive export opportunities are perceived in profitability terms, the higher the potential payback of research in terms of its impact on the decision-making process. Given that "the payoff period for evaluating the costs

International Business Review 6,3 associated with the conduct of international marketing research will need to be considerably longer than that in relation to comparable domestic research" (Douglas and Craig, 1983: p. 20), the greater the profit potential of the market concerned, the greater the use of information generated by export marketing research. Fig. 1 summarises the above discussion by providing a schematic representation of the direct (solid lines) and indirect (dashed lines) linkages between export marketing research information use (EMR USE) and the variables expected to impact upon it. The rationale for the signs of the paths linking formalisation (FORMAL), centralisation (CENTRAL), PLC stage (LIFECYCL), exploratory research purpose (EXPLOR), confirmatory research purpose (CONFIRM) and surprise (SURPRISE) to one another, has been discussed extensively in Deshpande and Zaltman, 1982 and need not be repeated here. As far as the signs of the paths linking these variables to EMR USE are concerned, these are partly based on Deshpande and Zaltman, 1987 following the estimation of their model (see the earlier discussion on formalisation, exploratory research purpose, and surprise) and partly on Deshpande, 1982 and Deshpande and Zaltman, 1982. Lastly, the expected effects of export experience (EXPERIENCE), export dependence (DEPEND) and export profitability (PROFITAB) have been just described above and no further comment is necessary.

Research Method Variables In operationalising the conceptual framework of the study (see Fig. 1), an effort was made to use, wherever possible, established measures of the constructs involved. By using previously verified measures, it was hoped that the substantive relationships among the variables of interest would not be masked by measurement problems. A brief description of the individual measures is given below, while the sample details on which reliability estimates, etc are based are given in the next section. Export Marketing Research Information Use (EMR USE). A composite scale consisting of seven equally-weighted items in additive form, was used to operationalise use. The items comprise all those used by Deshpande and Zaltman, 1982, 1987 to reflect the dimensions of decision relevance, information surplus, recommendations implemented and general quality, plus two items capturing uncertainty reduction (Cavusgil, 1984a) and decision confidence (Lee et al., 1987). The internal consistency of the measure was very satisfactory (Cronbach's alpha=0.80) and, indeed, exceeded that of Deshpande and Zaltman's original measure (alpha=0.63).*
*However,it shouldbe born in mind that coefficientalpha is partly dependentupon the length of the scale (see, for example, DeVellis, 1991; Spector, 1992; Traub, 1994) and, therefore, comparisons shouldbe interpretedwith caution.


LIFECYCL lli..... '*,,,

~+vE) , "

Use of Export Marketing Research by Industrial Firms

t ...............


RM " """t CONFI Ii+vE)/ ." CENTRAL ' .

(+VE),'"'" -VE .' +VE -VE



il EMR

(+VE) -VE





Figure 1. A Model of Export Marketing Research Information Use Among Industrial Firms. (Figures in parentheses 0 indicate expected effects not confirmed by Deshpande and Zaltman, 1987)



Surprise (SURPRISE). The three-item additive scale developed by Deshpande

and Zaltman, 1982, 1987 was employed to indicate the extent to which the research findings were unforeseen, counter-intuitive or unanticipated; however, this produced a disappointing reliability coefficient (alpha=0.45), which could not be improved.

Exploratory Research Purpose (EXPLOR). Initially, Deshpande and Zaltman's

(Deshpande and Zaltman, 1982, 1987) seven-item composite index was used

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to determine the extent to which the purpose of the research was "intended to identify new or previously unconsidered courses of action" (Deshpande and Zaltman, 1982: p. 18); however, two of the original items had to be dropped in an effort to improve extremely poor initial reliability. Despite this, the scale's internal consistency remained low (alpha=0.40).


Confirmatory Research Purpose (CONFIRM). The eight-item composite index used by Deshpande and Zaltman, 1982, 1987 was initially employed to gauge the extent to which the research was "intended to affirm a predetermined direction or course of action" (Deshpande and Zaltman, 1982: p. 18); however, three items in the original scale had to be excluded to improve poor initial reliability. Unfortunately, as was the case with EXPLOR, the scale's reliability remained poor despite all purification efforts (alpha=0.39). Product Life Cycle (LIFECYCL). Consistent with Deshpande and Zaltman,
1982, 1987, respondents were asked to place the product for which the specific research project was conducted in one of the following categories: Introduction (1), Growth (2), Maturity (3), and Decline (4).

Formalisation (FORMAL). This dimension of organisational structure reflects

"the degree to which rules define roles, authority relations, communications, norms and sanctions, and procedures" (Deshpande and Zaltman, 1982: p. 18). It was initially operationalised via Deshpande's (1982) scale which consists of 15 items "tapping the extent to which jobs are codified (Job Codification), the degree to which rules are observed (Rule Observation), and the extent to which the specific tasks are stated (Job Specificity)" (Deshpande, 1982: p. 94). The scale was subsequently reduced to 13 items, following a reliability check (alpha=0.63).

Centralisation (CENTRAL). This dimension of organisational structure describes "the delegation of decision making authority throughout an organisation and the participation by managers in decision making" (Deshpande and Zaltman, 1982: p. 18). Initially, a centralisation measure was formed by combining Deshpande's (Deshpande, 1982) five items indicating whether decision-making authority is confined to the upper levels in the organisation) with a single-item scale asking respondents to indicate how often they participate in decisions concerning the export market under consideration (4=always, l=never). However, the internal consistency of the combined measure indicated that the participation item be dropped. Thus, the final measure of centralisation is identical to Deshpande's (Deshpande, 1982) Hierarchy of Authority index (alpha=0.80). Export Experience, (EXPERIENCE). This was operationalised as the number of years the finn has been exporting to the specific export market for which the
research project concerned was undertaken. This measure of experience is thus quite distinct from the "overall" export experience of the firm, the latter

reflecting the total number of years a finn has been involved in exporting (note that the two measures are positively but only moderately correlated with one another; r = 0.49, P<0.001).

Use of Export Marketing Research by Industrial Firms

Export Dependence (DEPEND). This was defined as the proportion of total export sales attributable to the export market concerned and indicates the "importance" of the latter to the firm's export operations. The proportion of total export profits accounted for the particular export market was also recorded as an alternative indicator of market importance. However, as the two measures were strongly intercorrelated (r=0.83, P<0.001) and given that the profitability dimension is also captured by the PROFITAB variable (see below), the sales measure was retained for use in further analysis. Export Profitability (PROFITAB). Drawing from Diamantopoulos et al., 1990 and Schlegelmilch et al., 1993, a five-point comparative rating scale (5=much more profitable, l=much less profitable) was used to indicate the degree to which the profitability of the particular export market under consideration was higher or lower than that of the domestic market.
The internal consistency of the central variable of interest (information use) is well-above recommended thresholds (e.g. Nunnally, 1978; DeVellis, 1991); the two organisation structure dimensions, also exhibit acceptable reliabilities (although less so for the formalisation variable). Particularly problematic appear to be the scales capturing the purpose of the research project (exploratory/confirmatory) and the nature of its findings (as reflected in the degree of surprise); despite the fact that measures for these variables were based on past studies and despite purification efforts, no improvement in reliability was forthcoming. This posed a dilemma: either eliminate these variables from the model in Fig. 1 altogether (and thus incur substantial specification error) or retain them on conceptual grounds. After much deliberation, it was decided to include these variables in the subsequent analysis on substantive considerations (i.e. in the light of their theoretical importance and repeated use in previous studies).

Sample Description A total of 700 finns randomly selected from SELL'S BRITISH EXPORTERS business directory were targeted by means of a mail questionnaire.* The latter
*Consistent with Deshpande and Zaltman (1987) the sample was not stratified by industry, as the main concern was with the examination of the influences on export information use in
general and not in making inter-industry comparisons (this is also clearly reflected in the broad nature of the variables included in the model). While it would have been desirable to exclude very small firms from the initial sample (since previous studies have shown that smaller exporters are unlikely to conduct any form of export marketing research - - see Cavusgil, 1984a; Diamantopoulos et al., 1990; Schlegelmilch et al., 1993), size information was, unfortunately, only sporadically given in the SELL'S directory.

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was sent out with a covering letter addressed to the export director/manager, asking the recipient to complete the questionnaire or, if (s)he was unable, to pass it on to a colleague who was better qualified to answer. In an attempt to ensure that respondents would all consider the same concept when answering the questionnaire, Cavusgil's (Cavusgil, 1984a) definition of export marketing research (cited earlier in the conceptualisation of the study) headed the first page. The questionnaire then asked respondents to (a) consider one particular export market, and (b) to relate their answers to the most recently conducted research project for this market with which they have been involved and for which a written report had already been prepared. While the above approach follows closely that used in previous similar studies (Deshpande and Jeffries, 1981; Deshpande, 1982; Deshpande and Zaltman, 1982, 1984, 1987), a major concern at this stage was reaching a sufficient number of eligible respondents. Specifically, of all firms targeted, only those which (1) were currently exporters, (2) were users of export marketing research (either done in-house or commissioned to external research suppliers), and (3) had recently carried out a formal research study (to warrant a written report), could be reasonably expected to complete the questionnaire. Any recipient of the data collection instrument not fulfilling all three criteria would not be an eligible respondent. Bearing in mind that, according to a previous UK study, the incidence of export marketing research use is no more than 50% (Schlegelmilch et al., 1993) and given that the response rate for this same study was 33% (including non-users of export marketing research), it was feared that a substantial proportion of the targeted firms would not respond to the questionnaire. As it was not possible to determine in advance (i.e. prior to the mailing) how many firms would satisfy the three eligibility criteria, 100 firms from the initial sample were also contacted by telephone in order to identify key reasons for non-response and, thus, enable an assessment of likely non-response error.* In this context, it needs to be emphasised that "a low response rate does not automatically mean that there has been nonresponse error. Non-response error is a problem only when a difference between the respondents and the non-respondents leads the researcher to an incorrect conclusion or decision" (Tull and Hawkins, 1993: p. 184). In the present study, non-response error would only be a cause for concern if the main reasons for non-response were not related to the satisfaction of eligibility criteria but to respondent characteristics which directly and differentially affect responses to the substantive issues examined in the survey (Lesley, 1972). Of the 700 questionnaires sent out, a total of 157 were returned, of which 51 came from non-eligible respondents (e.g. non-exporters, non-users of export marketing research). A further 11 firms returned the questionnaire incomplete, citing time constraints or company policy against filling in any questionnaire as reasons for non-response. Finally, 24 firms returned the questionnaire

*The firms for the telephone interviews were randomly selected from the 700 companies forming the initial sample.

incomplete or only partly completed without any explanation. This left a total Use of Export of 71 fully usable questionnaires for further analysis. Marketing While the above pattem of responses suggested that, in line with R e s e a r c h by expectations, non-eligibility was the main reason for non-response, it was I n d u s t r i a l F i r m s nevertheless based on those firms that did respond to the mailing; thus, inevitably, the response pattern reflects a self-selection effect. However, the telephone survey of randomly selected firms from the initial sample, painted an identical picture. Of the 100 firms contacted, no fewer than 60 (60%) tumed out to be ineligible because they had ceased trading, were no longer exporting, or did not conduct any form of export marketing research. Only 6 firms (6%) indicated lack of time or company policy for reasons for non-participation, while the rest indicated that they had already returned the questionnaire or were about to do so. From the above it can be safely concluded that the response rate achieved largely reflects a low incidence of eligible respondents rather than specific shortcomings in the study's design or implementation (on this point, see also Wiseman and McDonald, 1980). Indeed, if the results of the telephone survey are projected to the initial sample size, only about 280 out of the 700 firms originally targeted could be expected to participate in the study in the first place. Following CARSA's (CARSA, 1982) standard definition of response rate as the total number of fully-completed questionnaires (71) over the number of eligible responding units in the sample (280), the study's effective response rate comes to 25% which is in line with the response rates of previous UK studies of export marketing research practices (e.g. the 30% achieved by Hart et al., 1994). An analysis of the job titles of respondents revealed that 24% were chief executives/directors, another 35% were heads of export/international operations, and the remainder 41% consisted of marketing/sales managers. Since the current focus lies in industrial exporters, in the interests of maintaining comparability with the Deshpande and Zaltman, 1987 study, 21 firms were excluded from subsequent analysis as they were solely or mainly involved in exporting consumer goods. Among the remaining (industrial) companies, there was considerable variation in size, the smallest firm having total annual sales of 900,000, while the largest a sales turnover of 4.5 billion and 65,000 employees. However, the majority of the sample consisted of small and medium-sized firms, with median annual sales of 5 million and median employment levels of 100 full-time personnel. On average, the respondent firms had been exporting for some 40 years and derived just under 50% of their total sales from export markets. The mean number of employees specifically dealing with export operations was six, and two-thirds of the firms sampled had a separate export department. In terms of export destinations (i.e. countries served), these ranged from 1 to 102. European countries were served by more than 80% of the firms and some two-thirds exported to Asia and/or Africa. North America and Oceania were less popular destinations (52 and 44% of firms respectively), while South America was a target only for a minority of exporters in the sample (30%).

International Analysis A series of sequential regressions was performed to estimate the model of export marketing research use earlier described in Fig. 1. The results of the estimation procedure are shown in Fig. 2, while Table 1 provides summary statistics on the regression equations. Focusing initially on the ultimate criterion variable (EMR USE), out of the

Business Review 6,3

0.12 LIFECYCL 1 ' . . . . . , -0.22 EXPLOR


0.11 -0.07




"" '"1


." 0.04 -0.33** T

i 0.03 ~ SURPR1SE


]i? 0.32** ;XPERIENCE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




Figure2. ModelEstimation;
*P<0.10; **P<0.5.

* P< 0.10
** P < 0.05

Use of Export eight variables hypothesised to have a direct effect upon it, four were found to have a significant impact (CENTRAL, SURPRISE, DEPEND and PROFITMarketing AB). Centralisation has a negative influence upon use, which confirms Research by previous findings in a domestic context showing that "managers who see I n d u s t r i a l F i r m s themselves as operating in firms that are relatively decentralized.., are likely to make extensive use of market research information" (Deshpande, 1982: p. 98). Also in accordance with theoretical expectations, the greater the profitability of the export market concerned in comparison to the domestic market, the greater the use of research information. While this is in line with previous evidence showing that "dependence-on foreign markets as a source of profits...has a strong influence on the nature of international marketing research" (Cavusgil, 1984a: p. 273), the export dependence variable paints a rather different picture. Contrary to expectations, the latter is negatively related to information use, suggesting that more use is made of marketing research information relating to markets from which the firm draws a smaller proportion of its export sales. Although this counterintuitive finding seems to imply "irrational" behaviour by managers (since they apparently rely more on research when making decisions about their less important export markets), another intefipretation is that export marketing research is primarily used to identify/assess new markets (prior to entry) and/or investigate ways of improving export operations in markets in which the firm is currently not particularly strong/successful. In other words, the role of research is not so much intended to support the decision-making process in those markets in which the firm is already well-established but rather to generate new possibilities in heretofore unexplored (or underexplored) markets (particularly those with superior profit potential as the positive impact of the PROFITAB variable seems to suggest). This interpretation is consistent with the findings on the role of surprise (see below) as well as with previous evidence in the export literature concerning the nature of information used by exporters. Specifically, the type of information generated by marketing research (objective knowledge) tends to be used primarily at the early stages of export operations; as the firm becomes more established in an export market, it tends to rely more and more on experiential knowledge (Johanson and Vahlne, 1977; Sood, 1981). The results relating to the impact of surprise are also opposite to those expected. While significant, surprise is positively related to information use, indicating that the more unexpected or unanticipated the findings of the
Dependent Variable EMR USE SURPRISE EXPLOR CONFIRM NS=not significant. R2(adj.) 0.40 0.14 0.01 0.05 F-value 4.49 3.31 1.05 1.60 Significance 0.000 0.030 NS NS


0.51 0.20 0.09 0.14

Table 1. Regression Statistics

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research, the greater the use of information based upon this research. This runs contrary to previous studies in which a negative link with use was consistently observed (Deshpande and Jeffries, 1981; Deshpande and Zaltman, 1982, 1987). One possible explanation is that, in an export context, surprising research findings are tolerated to a greater extent than when research relates to the domestic market. Given that managerial knowledge pertaining to export markets is generally less than that relating to the home market (Douglas and Craig, 1982), it may well be the case that the very aim of conducting export marketing research is to provide insights concerning unexplored possibilities and generate new avenues and directions that may be profitably exploited by the firm. Research projects of this nature are likely to score high on surprise. Given the well-documented reluctance of firms to commit resources to export marketing research (Douglas and Craig, 1983; Cavusgil, 1984a, 1985; Diamantopoulos et al., 1991), any research that is actually undertaken could be expected to generate genuinely "new" knowledge to the firm and, thus, go beyond merely confirming prior beliefs. Note that the present findings mirror the views of research suppliers on the link between the degree of surprise and likely use of research information, where a positive relationship has also been uncovered (Deshpande and Zaltman, 1984). Regarding the four variables initially expected to directly influence use but did not reach significance, the findings concerning the PLC stage (LIFECYCL) and confirmatory research purpose (CONFIRM) reflect those by Deshpande and Zaltman (1987) who also failed to establish any relationship with use. In contrast, formalisation (FORMAL) and exploratory research purpose (EXPLOR), were both found to have (weak) positive effects by Deshpande and Zaltman but no direct (or, for that matter, indirect) effects were observed in the current investigation. If all non-significant variables are removed from the model and the regression equation on EMR USE re-estimated only with SURPRISE, CENTRAL, DEPEND and EXPERIENCE as predictors, the new R2 is reduced to 0.46 and the R 2 (adj.) becomes 0.41. Using the stepdown Fstatistic to compare the full and restricted models (Kleinbaum et al., 1988) a non-significant result is obtained, indicating that the four-variable model achieves practically the same predictive ability as the eight-variable model. Shifting attention to mediating linkages, consistent with Deshpande and Zaltman, 1987, confirmatory research purpose (CONFIRM) has a negative effect on surprise (SURPRISE). Also consistent with Deshpande and Zaltman, 1987, neither the PLC stage (LIFECYCL) nor the organisational structure variables (FORMAL and CENTRAL) appear to influence the research purpose as reflected in the EXPLOR and CONFIRM variables; this is in contrast to a consumer goods setting where such linkages have been identified (Deshpande and Zaltman, 1982). As far as the impact of export experience (EXPERIENCE) is concerned, as expected, the longer the firm has been operating in the export market under consideration, the less likely it is to find research results relating to this market as "surprising". However, the propositions linking EXPERIENCE with the research purpose variables are not substantiated by the results; neither the path from EXPERIENCE to EXPLOR nor that from

Variable SURPRISE EXPLOR CONFIRM LIFECYCL FORMAL CENTRAL EXPERIENCE DEPEND PROFITAB Direct effect 0.35 NS NS NS NS -0.39 n/a -0.37 0.25 Indirect effect n/a NS 0.12 NS NS NS -0.11 n/a n/a Total effect 0.35 NS 0.12 NS NS -0.39 -0.11 -0.37 0.25

Use of Export

Research by Industrial Firms

n/a=not applicable; NS=not significant.

Table 2. Direct and Indirect Effects on Information Use

EXPERIENCE to CONFIRM is significant. It seems that reasons other than the length of time for which the firm has been operating in the market determine the type of research that will be carried out. As a means for summarising the results, Table 2 shows the decomposition of effects on use based upon the significant paths displayed in Fig. 2. Centralisation has the highest relative influence on export marketing research information use, followed closely by export dependence and surprise; export experience and confirmatory research purpose have both more moderate (and opposite) overall effects on use.

Discussion Contrasting the present findings with those of Deshpande and Zaltman, 1987, more similarities exist in terms of absence of relationships rather than in terms of consistent significant influences. Specifically, other than the negative link between confirmatory research purpose and surprise, all other significant links in the two studies either involve different variables (as is the case with the organisational structure scales) or different directional effects of the same variable (as is the case with the surprise scale). This divergence in results suggests that the determinants of information use are very much contextspecific, differing not only across consumer and industrial good settings (as Deshpande and Zaltman, 1982, 1987 clearly demonstrate), but also across domestic versus export operations. For example, with reference to the role of organisational structure, while formalisation and centralisation both have a negative effect on information use in a consumer setting (Deshpande and Zaltman, 1982), formalisation has a positive and centralisation has no effect on use in an industrial setting (Deshpande and Zaltman, 1987), and centralisation (but not formalisation) has a negative effect on information use in an export setting (this study). It goes without saying, that the differences highlighted above should be seen in the light of methodological differences between the current study and that by Deshpande and Zaltman, 1987. Some of these relate to the measurement of the various variables and were pointed out in the methodology section.

262 International Business Review 6,3

Another difference is that the present model includes variables additional to those examined by Deshpande and Zaltman, 1987--namely the three export characteristics--and their presence might have possibly affected responses to the other variables. A further important difference, relates to the nature of the dependent variable. Specifically, according to Deshpande and Zaltman, 1987: p. 116), "extant theory on the nature of industrial marketing decision making led to a focus on marketing information use rather than market research use"; thus their definition was much broader than in this study where emphasis was specifically placed on (export) marketing research information. The narrower approach was justified on the grounds of previous evidence showing that "producers of industrial products...attach greater importance to foreign marketing research than the producers of consumer goods...Foreign marketing research is also more formalized in such companies, and there is a greater likelihood that final reports summarizing foreign marketing research are submitted to the chief executive" (Cavusgil, 1984a: p. 271). Note that the opposite applies to domestic marketing research, with consumer goods firms making much greater use (Deshpande and Zaltman, 1985). Looking at the individual variables found to influence research information use, centralisation was the strongest predictor and highlights the importance of this aspect of organisational structure in decision-making. Given that centralisation has also been observed to influence the acquisition of marketing research information (Sinkula and Hampton, 1988) as well as the utilisation of marketing plan output (John and Martin, 1984), it seems that this organisational dimension affects the entire chain of marketing decisionmaking. From the research project characteristics, only the degree of surprise was found to influence use. However, the nature of the impact did not support the view that if market research leads to "unforeseen, unanticipated, and perhaps counterintuitive findings, managers were likely to be upset" (Deshpande and Zaltman, 1984: p. 37). On the contrary, respondent managers were positively disposed towards surprising findings and quite willing to use them in the decision-making process. This suggest open-mindedness and potential adaptability on the part of the respondents, which is a good thing since "managers who always use past experience as an arbiter of current research validity are likely to be caught unprepared in a situation when there are unexpected changes in the marketing environment" (Deshpande and Jeffries, 1981: p. 3). Such unexpected changes are particularly ,prevalent in international operations (e.g. Keegan, 1984; Czinkota and Ronkainen, 1990; Terpstra and Sarathy, 1994). Turning attention to export characteristics, export experience indirectly influences use through lowering the extent of surprise in marketing research findings, while sales dependence and the relative profitability of the export market concerned both have direct effects on use. Of particular interest is the negative link between export dependence and research use, suggesting that in markets in which the firms sells a substantial proportion of its output, other (i.e. non-research) information sources tend to be relied upon for decision-

Use of Export making. Although the present study cannot offer any direct evidence on this, one such source is likely to be export intelligence which "is gathered in the Marketing course of business transactions abroad through intermediaries, such as, Research by international banking services, freight forwarders and other export middlemen, I n d u s t r i a l F i r m s or by participating in events such as international fairs and business missions whose focus is not so much on information gathering as facilitating exchange or promotion" (Denis and Depelteau, 1985: p. 79). The type of knowledge generated by export intelligence is largely experiential, unlike market research information which generates objective market knowledge (Sood, 1981); in this context, "objective information is that which can be learned from others. This represents the approach to gaining knowledge through communication, research and instruction. On the other hand, experiential knowledge is that which can only be learned through experiencing the actual situation, and cannot be transferred from one individual to another" (Sood and Adams, 1984: p. 170, emphasis added). From a managerial perspective, the findings have several implications. Firstly, it seems that a centralised organisational structure can inhibit information use. Thus, the recommendation that "to the extent that an organisation does or could make frequent use of research, an alternative design (i.e. decentralized responsibility) which enhances research use might be considered" (Deshpande and Zaltman, 1982: p. 26) also seems to apply in an industrial export setting. Delegation of decision-making authority on export matters is one way of improving export information use within an organisation. Secondly, an atmosphere that encourages open-mindedness rather than a "status quo" interpretation of research results is also likely to facilitate information use. The latter finding should be good news for researchers offering their services to industrial exporters, as their search for creative directions and new avenues for the client firm are unlikely to be met with the same degree of scepticism as when similar research relates to the domestic market. Of course, in-house research staff should also be encouraged by the fact that surprising results will not simply be tolerated but actively taken into account by export managers. This should reduce any fears among in-house researchers that the quality of their efforts will be mainly judged according to "political" considerations (i.e. whether they "rock the boat" or not) and encourage inclusion of more creative research avenues within their research briefs. Thirdly, in offering export market research services, both internal and external research suppliers would do well to emphasise markets in which the firm does not currently derive a major proportion of its export sales but which are, nevertheless, attractive in terms of profit potential. In other words, instead of only highlighting the importance of research for those markets in which the firm is well-established, a more future-oriented outlook on the need for export marketing research is also recommended. In particular, the longer-term benefits of researching potentially attractive markets for further development and/or expansion should be stressed, as these are the kinds of markets for which export marketing research information is most likely to be relied upon

264 International Business Review 6,3

by managers. Of course, this does not imply that no research should be conducted for the major export markets of the firm but rather that, in such markets, research information is likely to play a smaller overall role in decision-making than alternative information sources (e.g. internalised general "intelligence" gathered in the course of day-to-day operations). Fourthly, albeit indirectly, the study highlights a major problem facing independent research specialists (i.e. marketing research firms) trying to target exporters as a client segment: many (if not most)exporters simply do not conduct any form of export marketing research (see sample description earlier). While the present study is not in a position to offer any specific reason of why this is the case (as it is based on a sample of firms that do employ export marketing research), previous evidence indicates that "the conduct of marketing research is a cost-incurring activity and thus bigger companies are more likely to be in a position to commit the required resources" (Hart and Diamantopoulos, 1993: p. 61). Thus, smaller exporters may not offer much potential as targets for marketing research companies. In addition, quite apart from the issue of company size, "it may still be problematic actually to convince companies to make the necessary resource commitment to export marketing research if the latter cannot be shown to result in practical marketing mix improvements" (Schlegelmilch et al., 1993: p. 134). This suggests that external information suppliers must demonstrate clear benefits to potential clients (e.g. cost savings and better targeting of export customers), if the latter are to be convinced of the value of export marketing research in their operations. With regard to the study's limitations, the small sample size coupled with the unsatisfactory measurement properties of some of the variables examined (namely the EXPLOR, CONFIRM and SURPRISE scales), clearly suggest that caution needs to be exercised in generalising the findings. Specifically, there is a need for replication since the low statistical power associated with the limited sample size may have failed to detect the true influence of some variables which failed to reach significance; moreover, this may have been compounded by poor reliabilities which tend to attenuate the "true" relationships between variables (Carmines and Zeller, 1979). Note, however, that a relatively small sample size can also be seen as a strength, since "if small samples do lead to significant findings, these findings are more likely to be repeated with larger samples than overturned... For researchers with small samples, this implies that regression is worth doing, since if you do find something, it is far more likely to be true than not" (Speed, 1994: p. 96).
Conclusions Lack of information concerning foreign markets "can be compared to firing a rifle blind. If a duck falls out of the sky it will be by luck, rather than judgment" (Fletcher and Wheeler, 1989: p. 30). However, simply acquiring potentially relevant information is only half the story; using is the other half and, probably, the most important one. The present study attempted to examine the relative impact of a number of factors potentially impinging upon the use

of export marketing research information by industrial firms by including export-specific variables to a well-known model of information use and applying it to UK data. In doing so, the investigation sailed through rather uncharted waters due to the absence of previous similar studies in an export setting. To draw a navigation chart, several issues need addressing in future research. Firstly, given that the present findings apply to industrial exporters only, it would be to conduct a similar investigation on a sample of consumer goods exporters. While, in a domestic setting, important differences exist between consumer and industrial goods companies with respect to the factors affecting information use (Deshpande and Zaltman, 1982, 1987), it remains to be seen whether this is also the case in exporting. Secondly, closer attention needs to be paid to the characteristics of the research project itself in terms of its purpose and the degree of surprise in the findings; the measurement problems mentioned in the methodology section, imply that the results on these variables are by no means conclusive and, thus, in need of further analysis (ideally with a larger sample). Thirdly, and perhaps most importantly, export marketing research has to be placed in the context of the entire export marketing information system of the firm; this means that its use needs to be looked at relatively to the use of other information provision mechanisms (such as export intelligence and export assistance services). Marketing research, marketing intelligence and export marketing assistance have largely been looked at independently in previous studies and a more integrative look would be worthwhile (Souchon and Diamantopoulos, 1994). For example, are particular types of export decisions associated with the use of export research, intelligence and assistance respectively? Under what circumstances does the firm rely upon each mechanism and how are they combined? What organisational and/or environmental factors facilitate/hinder employment of these mechanisms? Answers to such questions would go along way towards explaining actual information usage and generate empirically-based guidelines for more effective and efficient use of information among exporting firms. References
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Received April 1996 Revised September 1996