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Global Journal of Management and Business Research: E
Marketing
Volume 18 Issue 2 Version 1.0 Year 2018
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals
Online ISSN: 2249-4588 & Print ISSN: 0975-5853
The Mediating Role of Marketing Strategy in the Effect of
Antecedents on Export Performance of Leather and Textile
Exporting Companies in Ethiopia
By Dr. Getie Andualem Imiru
Addis Ababa University-School of Commerce
Abstract- This study examined the impact of specific firm characteristics, environmental characteristics
and marketing mix strategy on export marketing performance. Data were gathered using a structured
questionnaire from firms engaged in leather and leather related products, textile and garment exporting
companies operating in Ethiopia. Although a total of 278 questionnaires were distributed to a sample of
exporter from leather and textile sectors 253 questionnaires were returned at the end of the data collection
process, which gave the response rate of 91 per cent. Correlation, regression and path analysis were
used to analyse the data. Firm characteristics, Industry characteristics, Export market characteristics, and
Product adaptation influence Export performance significantly at 95% confidence interval with a sig. level
of 0.000, 0.000, 0.029, and 0.001 respectively. The variable firm characteristics significantly affect export
performance and partially mediated by product adaption. When the mediator variable removed from the
model its direct value dropped from 0.31 to 0.18 and the direct effect is still significant after mediator
enters the model. Product characteristics, export market characteristics and industry characteristics
significantly affect export market performance.
Keywords: export, marketing, performance, marketing mix, strategy, leather, textiles ethiopia.
GJMBR-E Classification: JEL Code: M31
TheMediatingRoleofMarketingStrategyintheEffectofAntecedentsonExportPerformanceofLeatherandTextileExportingCompaniesinEthiopia
Strictly as per the compliance and regulations of:
The Mediating Role of Marketing Strategy in the
Effect of Antecedents on Export Performance
of Leather and Textile Exporting Companies
in Ethiopia
Dr. Getie Andualem Imiru
Abstract-
This study examined the impact of specific firm
characteristics, environmental characteristics and marketing
mix strategy on export marketing performance. Data were
gathered using a structured questionnaire from firms engaged
in leather and leather related products, textile and garment
exporting companies operating in Ethiopia. Although a total of
278 questionnaires were distributed to a sample of exporter
from leather and textile sectors 253 questionnaires were
returned at the end of the data collection process, which gave
the response rate of 91 per cent. Correlation, regression and
path analysis were used to analyse the data. Firm
characteristics, Industry characteristics, Export market
characteristics, and Product adaptation influence Export
performance significantly at 95% confidence interval with a sig.
level of 0.000, 0.000, 0.029, and 0.001 respectively. The
variable firm characteristics significantly affect export
performance and partially mediated by product adaption.
When the mediator variable removed from the model its direct
value dropped from 0.31 to 0.18 and the direct effect is still
significant after mediator enters the model. Product
characteristics, export market characteristics and industry
characteristics significantly affect export market performance.
Among these variables product characteristics and industry
characteristics are found to be partially mediated by export
market strategy.
Keywords: export, marketing, performance, marketing
mix, strategy, leather, textiles ethiopia.
I. Introduction
Author: Addis Ababa University-School of Commerce.
e-mail: get_aiwo@yahoo.com
II. Statement of the Problem
In the international marketing context, a handful
of studies (e.g., Bilkey 1982; Christensen, da Rocha,
and Gertner 1987; Cooper and Kleinschmidt 1985;
McGuinness and Little 1981; Rosson and Ford 1982)
have suggested that export performance is influenced
by export marketing strategy. Because of conceptual
and methodological problems associated with these
studies, however, their results are fragmented and the
relationship between export marketing strategy and
export performance remains an unresolved issue (Aaby
and Slater 1989; Madsen 1987).
Trade is positively associated with growth
performance. Therefore, exporting could be considered
as a strategic activity at firm, industry and country levels
(Kaimakoudi, 2014). Companies have to seek new
opportunities in the market. Firms can be proactive by
anticipating future demands and opportunities in the
market, participating in emerging markets, shaping the
environment, and introducing new products and brands
before their rivals (Venkatraman, 1989). Therefore,
proactiveness can provide companies to be a financial
leader (Zou et al, 1998). The multiplicity of measures
used and the fragmented nature of the findings bring
additional need for a fresh look into the construct of
export performance from both scholars’ and
practitioners’ perspectives. In their qualitative study,
Carneiro and colleagues (2016) found that, there are
similarities on practitioners’ and scholars’ views of
export performance, ranging from multi-dimensional
conceptualization, preference for economic measures
and market measures to infrequent use of learning and
behavioural measures. Ethiopia is the 91st largest
export economy in the world and the 80th most
complex economy according to the Economic
Complexity Index (ECI). In 2016, Ethiopia exported
$1.71B and imported $19.1B, resulting in a negative
trade balance of $17.3B. In 2016 the GDP of Ethiopia
was $72.4B and its GDP per capita was $1.73k atlas
(2017). Until 2013, the major agricultural export crop
was coffee, providing about 26.4% of Ethiopia's foreign
exchange earnings. In the beginning of 2014, oilseeds
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he study report is organized into seven sections.
Firstly, statement of the problem is briefly
highlighted. Secondly; Research questions are
articulated; thirdly, literature review related to key areas
in which the present study extends to the previous
literature on the export marketing strategy-performance
relationship are highlighted; fourthly, a broad conceptual
framework of export marketing strategy and
performance is proposed; fifthly, the design of the study
and the methodological procedures are described;
sixthly, the findings of the study are presented and
discussed; finally, a statement of conclusion,
recommendation and further area of investigation
are proposed.
T
exports have been more important. Coffee is critical to
the Ethiopian economy. More than 15 million people
(25% of the population) derive their livelihood from the
coffee sector.
Other exports include live animals, leather and
leather products, chemicals, gold, pulses, oilseeds,
flowers, fruits and vegetables and khat (or qat). Cross-
border trade by pastoralists is often informal and
beyond state control and regulation. In East Africa, over
95% of cross-border trade is through unofficial channels
and the unofficial trade of live cattle, camels, sheep and
goats from Ethiopia sold to Somalia, Kenya and
Djibouti generates an estimated total value of between
US$250 and US$300 million annually (100 times more
than the official figure). Recent initiatives have sought to
document and regulate this trade. Dependent on a
few vulnerable crops for its foreign exchange earnings
and reliant on imported oil, Ethiopia lacks sufficient
foreign exchange.
According to the World Bank news report, the
newly completed Addis Ababa-Djibouti railway line
significantly eases trade logistics related constraints.
The Group’s report also lauded Addis Ababa in the area
of developing industrial parks and power generation
efforts which they say is expected to improve export
performance and stimulate growth in the short to
medium-term world bank (2017). Over the longer term,
countries highly dependent on one or a few commodity
products should work to diversify their export bases.
The major export products of Ethiopia include
coffee, livestock products (leather, live animals and
meat), oil seeds and pulses, fruits, vegetables and
flowers, textiles, natural gum, spices and mineral
products. In addition to the efforts underway to increase
the export supply of these products and to improve their
quality, investments in other currently unexploited,
higher value-added, export sectors is highly
encouraged. Recognizing that large capital investments
are needed to exploit these resources; various
incentives are currently provided to encourage foreign
investments (including joint ventures and marketing
arrangements) so that the sector provides meaningful
contribution to the Country’s development. In Ethiopia
there are around 914 exporters engaged in the following
product categories: leather and leather products, textile
and garments, in oil seeds, coffee/roasted coffee
General export, pulses or cereals, spices, live animals,
flower, textiles etc.; Most of the exporting companies are
established for the last 26 years since the government
liberalized the economy after the command economy of
the military government steeped down. The exporters of
Ethiopia can be classified into 34 product categories.
III. Research Questions
With globalization of markets and competition,
foreign markets have become increasingly viable and
natural opportunities for growth -oriented domestic firms
the following questions were raised in this study.
Can the marketing strategy-performance
relationship be empirically verified by internal forces
such as firm and product characteristics and
external forces such as industry and export market
characteristics?
IV. Scope of the Study
This study is delimited to three major Ethiopian
exporting companies engaged leather and leather
products, textile and Garment products. The study units
are all employees participating in formulating,
implementing and monitoring, evaluating and control
export marketing strategies. The major cities included
Addis Ababa, Bahir Dar, Gondar, Hawassa, Nathreth
and Dire Dawa. The variables under this study are
delimited to firm characteristics, product characteristics,
industry characteristics, export market characteristics,
Elements of Marketing Strategy (product adaptation,
price competitiveness, support to foreign distributer and
promotion adaptation) and export marketing
performance. Methodologically, it is delimited to three
major chain retail stores.
V. Literature Review
In this study three distinctive features should be
noted at the outset.
Firstly, the unit of analysis is an individual exporting
company which is defined as marketing of a specific
product in a specific export market.
Secondly, export performance is determined by
export marketing strategy and marketing strategy is
influenced by internal and external environments of
the firm. Furthermore, export performance is
conceived as the accomplishment of strategic as
well as economic objectives.
Thirdly, data have been collected through structured
research questions with marketing managers
directly involved in the export ventures studied.
Firms at different stages (initial foreign market
entry, expansion of national markets, and global
rationalization) differ in their international experience,
extent of international involvement, strategic thrust,
international levers, and strategic decisions (Douglas
and Craig 1989).
a)
Internal forces
Internal forces contain firm and product
characteristics.
i.
Firm Characteristics
Firm’s capabilities and constraints profoundly
influence their choice of marketing strategy and ability to
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To what extent is export performance mediated by
export marketing strategy?
execute the chosen strategy (Aaker 1988, porter 1980).
Key assets and skills of a firm constitute its sources of
sustainable competitive advantage (day and Wensley
1988; porter 1985). Possession of assets such as
international experience, extent of international business
involvement, and resources available for export
development affect export marketing strategy and
performance.
ii.
Product Characteristics
The specific marketing strategy in an export
venture is influenced by product characteristics
(Cavusgil, Zou, and Naidu 1993; Cooper and
Kleinschmidt 1985; McGuinness and Little 1981).
Product attributes can affect the positional competitive
advantage (Day and Wensley 1988), which influences
the choice of an offensive or defensive strategy (Cook
1983). Relevant product characteristics that influence
export marketing strategy include culture specificity,
strength of patent, unit value, uniqueness, age, and
service/maintenance requirements of product.
b)
Industry forces
Industry forces includes industry characteristics
and export market characteristics.
i.
Industry Characteristics
The intensity of exporting activity and the nature
of export marketing strategy vary considerably across
industries. This is largely a result of the varying nature of
industries (Porter 1980). Industry structure has been
considered a key determinant of firms’ strategy in
domestic market context (Kerin, Mahajan, and
Varadarajan 1990; Porter 1980). In export marketing,
analysis of the relationship between industry structure
and marketing strategy must incorporate the significant
variations in the market systems, government
interventions, and presence of foreign competitors
across markets. In addition, technology intensiveness
and intensity of price competition in the industry also
must be considered as the relevant correlates of
adaptation of marketing strategy (Jain 1989).
ii.
Export Market Characteristics
Conditions in foreign markets pose both
opportunities and threats for exporters. Export marketing
strategy must be formulated in such a way to match a
firm’s strengths with market opportunities and neutralize
the firm’s strategic weaknesses, or to overcome market
threats (Aaker 1988; Terostra 1987). Consequently,
export marketing strategy tends to be conditioned by
export market characteristics (Cavusgil, Zou, and Naidu
1993; Cooper and Kleinschmidt 1985; Rosson and Ford
1982). The key characteristics of the export market that
can affect the choice of export marketing strategy
include demand potential, cultural similarity to home
market, familiarity with the product, brand familiarity of
export customers, and similarity of legal and regulatory
frameworks.
iii.
Export Marketing Performance
Export performance is defined as the extent to
which a firm’s objectives, both economic and strategic,
with respect to exporting a product into a foreign
market, are achieved through planning and execution of
export marketing strategy. A firm usually initiates an
export venture with a number of objectives, which can
be economic (i.e. profits, sales, or costs) and/or
strategic (i.e. market expansion, competitive response,
gaining a foothold in foreign market, or increasing the
awareness of the product/firm). Subsequent to
formulation and implementation of export marketing
strategy, some objectives can be achieved fully, others
only marginally. The extent to which a venture’s strategic
and economic objectives are achieved is therefore a
gauge of the performance in the export venture.
Table 1:
Dimensions of export performance reviewed in the previous literature
Authors
Year Performance Dimensions or Indicators
Gracia et al
2015 Export activity and export performance Resource commitment, experience, Firm size, export
barriers, export performance
Spyropoulou et al
2015 Brand advantages on export ventures Resources, competitive intensity, market distance and
export entrepreneurship
Kaimakoudi
2014 Investigating export performance and
competitiveness Strategies, competitiveness and export marketing
Adu-Gyamfi, Komeliussen
2013 Antecedents of export performance in
emerging markets Resource commitment, experience, Firm size, export
barriers, export performance
Papadopoulos and Martin
2010 The influence of internationalization on
export performance Institutional commitment, international experience and
export performance
Lages et al
2009 Annual performance of an export venture Overall performance, product quality, importers
satisfaction, relationship performance with importers
and suppliers.
Leonidou et al
2002 Marketing strategy determinants of export
performance Export performance, managerial, organization and
environmental factors
O’class and weerawardena
2001 The influences of firm and environment
characteristics on marketing performance Uniqueness, performance, experience, marketing
capabilities, environment and competitive intensity
Zou et al.
1998 Financial export performance Financial, strategic and satisfaction with export venture
Kats keas et al
1997 The influence of firm characteristics and
export commitment on export performance Experience, firm size, competitive advantages and
export commitment
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c)
Export Marketing Strategy
Export marketing strategy is the means by
which a firm respond to the interplay of internal and
external forces to meet the objectives of the export
venture. It involves all aspects of the conventional
marketing plan, including product, promotion, pricing,
and distribution. In international marketing, the key
consideration is whether the marketing strategy should
be standardized or adapted to the conditions of the
foreign market (Douglas and Craig 1989). The degree of
marketing adaptation versus standardization is a
function of product, industry, market, organization, and
environmental characteristics (Buzzell 1968; Cavusgil,
Zou, and Naidu 1993; Jain 1989; Wakters 1986).
Therefore, we evaluate export marketing strategy along
the standardization adaptation continuum.
d)
Relationship between Export Marketing Strategy and
Export Performance
The relationship between export marketing
strategy and performance has been investigated as part
of a stream of exporting literature involved with
explaining the success or failure of a firm’s exporting
activities. These studies typically attempt to identify key
factors that contribute to successful export marketing.
Among the key success factors highlighted are export
marketing strategy; management attitudes; and other
firm, industry, product and export market factors (Aaby
and Slater 1989; Bilkey 1982; Cavusgil 1983; Christense,
da Rocha, and Gertner 1987; Cooper and Kleinschmidt
1985; McGuinness and Little 1981; Rosson and Ford
1982). In their review article, Aaby and Slater (1989)
suggest that export performance is direct influenced by
a firm’s business strategy.
With few exceptions, previous studies have
been conducted at the overall firm level. As a result,
export marketing strategy and performance were
conceptualized as firm specific characteristics. An
underlying theoretical justification for firm level studies is
the theory of internalization (Buckley and Casson 1985;
Rugman 1981), which states that, in an imperfect
market, firms should internalize the firm specific
advantages, both tangible and intangible, to extract
maximum economic rent. Because firm specific
advantages are derived not only from the development
and marketing of a particular product but also from the
total learning process of the firm, export performance
could be investigated at the firm level.
Though these studies have contributed to our
knowledge of export behaviour, there are notable
limitations associated with firm level investigations of
export marketing strategy and performance.
Considerable variations in export marketing strategy
and performance often exist across various product
market export ventures of the same firm. It is unrealistic
to expect that the same marketing strategy can lead
to the same results in all export market ventures
(Douglas and Wind 1987). Consequently, if the export
marketing strategy performance relationship is
investigated at the overall firm level, aggregating all
product market export ventures, confounded findings
are likely to result (Madsen 1987). Therefore, the
position taken in this research is that the individual
product market export venture must be taken as the unit
of study to obtain a more precise measurement of the
export marketing strategy performance relationship.
Previous studies have viewed exporting simply
as a means of realizing the economic goals of the firm.
Performance has been measured in terms of sales or
profits, with no deliberate attempt to relate it to a firm’s
strategic and competitive goals, such as gaining a
foothold in foreign markets or neutralizing competitive
pressure the firm faces in the domestic market.
Furthermore, these studies have posited that firm,
product, industry, and export market factors determine
export performance directly. The central role of proactive
marketing strategy in determining export performance
has not been emphasized. As a result, research on
exporting is becoming increasingly isolated, with
inquiries consisting of a “mosaic” of autonomous
endeavours (Aaby and Slater 1989).
The need for strategic considerations in
marketing theory has been emphasized by Day and
Wensley (1983), Lambkin and Day (1989), and Wind and
Robertson (1983). Increasingly, firms have treated
export markets as strategic as well as economic
opportunities. Given intense international competition, it
is believed that export marketing research can be
enriched if exporting inquiries incorporate strategic
considerations. This implies that exporting should be
viewed as a firm’s strategic response to the interplay of
internal and external forces, export marketing strategy
should be emphasized as a key determinant of export
performance, and the strategic dimensions of export
performance must be tapped.
The other issue is related to the diversity of
conceptualization and measurement of export marketing
strategy and performance and the simplistic nature of
research approaches employed in some previous
studies. Both Madsen (1987) and Aaby and Slater
(1989) observe that export marketing strategy and
performance were conceptualized and operationalized
in many different ways by different researchers. They
point out that researchers previously have made little
effort to identify measurement difficulties, sampling,
validity, or particular technical problems. Data collection
methods have ranged from unstructured personal
discussions to structured mail surveys to in depth
interviews, and analytical approaches have ranged from
simple frequencies to sophisticated multivariate
techniques. As a result, confusing and even
contradictory findings have surfaced in the literature
(e.g., the effect of firm size on export performance).
These discrepant findings hinder not only practice, but
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also theory development in export marketing. Hence,
there is an urgent need for an integrated approach to
export marketing inquiry. Such an approach must
explicitly deal with the measurement as well as
conceptualization of export marketing strategy, export
performance, and factors internal and external to the
firm using a structured questionnaire.
VI. Conceptual Framework and
Hypothesis of the Study
In this research; Internal forces
(Firm characteristics and product characteristics) &
Industry forces (industry characteristics and export
market characteristics) are proposed to be related to
marketing mix strategy and export performance.
a)
Conceptual Framework of the study
Exporting can be conceptualized as a strategic
response by management to the interplay of internal and
external forces. The particular theoretical perspective
adopted here is the principle of strategy environment
coalignment (Aldrich 1979; Porter 1980; Venkatraman
and Prescott 1990), which states that the “fit” between
strategy and its context whether it is the external
environment (Anderson and Zeithaml 1984; Hofer 1975)
or organizational characteristics (Chandler 1962; Gupta
and Govindarajan 1984) has significant positive
implications for firm performance framework of industrial
organization (cf. Scherer and Ross 1990) and rests on
two premises: (1) Organizations are dependent on their
environments for resources (Pfeffer and Salancik 1978)
and (2) Organizations can manage this dependence by
developing and maintaining strategies (Hofer and
Schendel 1978).
The framework postulates that marketing
strategy in an exporting company is determined by
internal forces such as firm and product characteristics
and external forces such as industry and export market
characteristics. The performance of the export venture,
in turn, is determined by export marketing strategy and
firm Characteristics (e.g., a firm’s capability.)
Figure 1:
Conceptual Framework of Export Marketing Strategy and Performance
b)
Hypothesis of the Study
In line with the objectives of the study the
following hypothesis were set and tested.
H1:
Firm characteristics have a positive influence on the
export marketing strategy,
H2:
Product characteristics have a positive influence on
the export marketing strategy,
H3:
Industry characteristics have a positive influence on
the export marketing strategy,
H4:
Export market characteristics have a positive
influence on the export marketing strategy,
H5:
Product adaptation has a positive and significant
effect on export performance,
H7:
Promotion adaptation has a positive and significant
effect on export performance,
H8:
Support to Foreign Distributer/ Subsidiary
has a
positive effect on export performance,
H9:
Product adaptation mediates the effect of Firm
Characteristic on export performance,
H10:
Export marketing strategies mediates the effect of
product characteristic on export performance,
H11:
Export marketing strategies mediates the
effect of
industry characteristic on export performance,
H12:
Export marketing strategies mediates the effect of
export market characteristic on export performance.
Export Marketing
Strate
gies
Export Market
Characteristics
Industry
Characteristic
Export
Performance
Product
characteristics
Firm
Characteristic
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H6:
Price competitiveness has a positive and significant
effect on export performance,
VII. Research Design
a)
Sampling Design
A survey was designed to obtain the effects of
antecedent variables and marketing mix strategy on
export performance of leather and textile companies.
The population of the study was all exporters operating
in Ethiopia. The data for the analysis was developed and
applied to a sample of members of major two exporters
product categories (leather and leather products and
textile and garment products which has been operating
since 1986.
b)
Research Instrument
The questionnaire was prepared following an
exhaustive literature review and all constructs were
measured with existing scales. The questionnaire
consisted of questions related to the constructs and
measures needed in the study. The final, refined
instrument contained six groups of variables intended to
measure firm, product, industry, and export market
characteristics, as well as export marketing strategy and
performance. The five groups of explanatory variables
were measured primarily by five-point Likert scales. All
items were measured on a five-point Likert-type scale
where 1=strongly disagree to 5=strongly agree. 278
Questionnaires were distributed to exporters. All of the
participants were either the corporate strategist or
marketing strategists of the case companies. In order to
test the proposed hypotheses, 253 responses were
obtained from exporters.
VIII. Measures and Model
All measures were adopted from different
existing literature in the field. Firm Characteristics were
measured using eleven items. Product Characteristics
were measured using seven items; industry
characteristic was measured from two items; export
market characteristic was measured from seven items.
In addition, export marketing strategy were considered
as a mediating role such as product adaptation were
measured using six items, price competitiveness three
items, promotion adaptation six items and support to
foreign distributors three items.
IX. Result and Discussion
a)
Demographic Profile
Although a total of 278 questionnaires were
distributed to a sample of exporter from total exporter of
914 in the country. Only 253 questionnaires were
returned at the end of the data collection process, which
gave the response rate of 91 per cent. The demographic
profile of the respondents is shown in Table 1.
Table 2:
Profile of Respondents
Item Description Frequency %
Firm Size
less than 50 82 32.4
50-499 106 41.9
500-4,999 65 25.7
Annual Sales
less than 1000 7 2.8
1000-9,999 38 15.0
10,000-99,000 22 8.7
100,000-1,999,000 82 32.4
2,000,000 or more 104 41.1
Year of experience in international market
less than 5 years 17 6.7
5-10 76 30.0
11-20 99 39.1
21-30 50 19.8
31 or more 11 4.3
Number of market the firm operates
1-5 43 17.0
6-10 86 34.0
11-20 79 31.2
21 or more 31 12.3
Type of Products Consumer Products 198 78.3
Industrial Products 55 21.7
b)
Reliability Analysis
Reliability analysis were conducted prior to the
regression analysis in order to identify the appropriate
items for the analysis. The consistency reliability and the
value of Cronbach’s alpha will determine the variables’
reliability and measure the consistency of a multiple item
scale (Sekaran, 2003). Table 2 shows the summary of
the reliability analysis and factor loadings for all the
measurement items used in multiple regression
analysis. Therefore, Cronbach alpha coefficients (0.915)
which are by far above0.70 which demonstrates an
excellent internal consistency.
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Model
Y1 =
a + b1X1 + b 2X2 + b3X3 + b4X4
+ e
Y2 =
a + b5X5
+
b6X6 + b7X7 + b8X8+
+ e
Where,
Y1 is Export Marketing Strategy
Y2 is Export Performance
X1 is Firm Characteristics
X2 is Product Characteristics
X3 is Industry Characteristics
X4 is Export Market Characteristics
X5 is Product Adaptation
X6 is Price Competitiveness
X7 is Promotion Adaptation
X8 is Support to Foreign Distributors
c)
Over all Mean Score of the Effect of Marketing
Strategy and Export Performance
To perform correlation and linear regression
analysis on the data, the researcher has created an
index for each of the constructs or variables that
represent the value of the construct by averaging the
subject responses to items.
Table 3:
Mean and standard deviation for Effect of Marketing Strategy on Export Performance
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Consumer buying decision 253 1.64 4.82 3.5305 .80449
Packaging color 253 1.71 4.83 3.4546 .79158
Background image 253 1.00 5.00 3.5692 .87636
Packaging Material 253 2.29 4.43 3.6863 .47175
Font Size 253 2.67 5.00 3.6319 .62828
Printed Information 253 2.00 5.00 3.9381 .77672
Innovation 253 2.00 5.00 3.5823 .73352
d)
Correlation Analysis
A correlation is a measure of how strongly two
variables relate to each other. Correlation coefficients
are frequently used to describe data because they are
relatively easy to use and provide a great deal of
information in just a single value (Mooi &Sarstedt, 2011).
Karl Pearson’s coefficient of correlation or
simple correlation is the most widely used Method of
measuring the degree of relationship between two
variables (Kotari, 2004).
The calculated value of the correlation
coefficient ranges from -1 to 1, where -1 indicates
a perfect negative relation (the relationship is
perfectly linear) and 1 indicates a perfectly positive
relationship. A correlation coefficient of 0 indicates that
there is no correlation (Mooi & Sarstedt, 2011).
The below table shows the Pearson correlation
result with its significant level. When we see the
correlation of Firm characteristics with Export
performance it has a significant positive Pearson
correlation of 0.334 at 0.01 confidence interval. With
regard to Industry characteristics it has a significant
negative Pearson correlation of -0.177 at 0.01
confidence interval. But, when we see the correlation of
product characteristics and export market
characteristics the correlation is not significant.
Table 4:
Correlations of independent and dependent variables
Correlations of Independent and Dependent Variables
Export
performance Firm
characteristics Product
characteristics Industry
characteristics Export market
characteristics
Export
performance
Pearson
Correlation 1
Sig. (2-tailed)
Firm
characteristics
Pearson
Correlation .334** 1
Sig. (2-tailed) .000
Product
characteristics
Pearson
Correlation .082 .708** 1
Sig. (2-tailed) .192 .000
Industry
characteristics
Pearson
Correlation -.177** .519** .669** 1
Sig. (2-tailed) .005 .000 .000
Export market
characteristics
Pearson
Correlation .110 .136* .162* .349** 1
Sig. (2-tailed) .080 .030 .010 .000
N 253 253 253 253
** Correlation is significant at the 0.01 level (2-tailed), * Correlation is significant at the 0.05 level (2-ta iled)
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The table below shows the correlation of
independent variables with the mediator variables. As it
is shown in the table 5 the correlation of export
performance, production adaptation, and price
competitiveness with export performance they have a
significant Person correlation of 0.263, 0.274, and 0.194
respectively at 0.01 confidence interval.
Table 5:
Correlations of Independent and Mediator Variables
Export
performance
Production
adaptation
Price
competitiveness
Promotion
Adaptation
Support to foreign
distributors
Export
performance
Pearson
Correlation
1
Sig. (2-tailed)
Production
adaptation
Pearson
Correlation
.263**
1
Sig. (2-tailed)
.000
Price
competitiveness
Pearson
Correlation
.274**
.304**
1
Sig. (2-tailed)
.000
.000
Promotion
Adaptation
Pearson
Correlation
.194**
.544**
.338**
1
Sig. (2-tailed)
.002
.000
.000
Support to foreign
distributors
Pearson
Correlation
.085
.284**
.081
.397**
1
Sig. (2-tailed)
.180
.000
.197
.000
N
253
253
253
253
253
** Correlation is significant at the 0.01 level (2-tailed)
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Table 6 below shows the correlation of independent, dependent, and mediator variables together.
The Mediating Role of Marketing Strategy in the Effect of Antecedents on Export Performance of Leather
and Textile Exporting Companies in Ethiopia
Table 6:
Correlation of independent, dependent, and mediator variables
Correlations
Export
performance
Firm
characteristics
Product
characteristics
Industry
characteristics
Export market
characteristics
Production
adaptation
Price
competitiveness
Promotion
Adaptation
Support to
foreign
distributors
Export
performance
Pearson 1
Sig. (2)
Firm
characteristics
Pearson .334** 1
Sig. (2) .000
Product
characteristics
Pearson .082 .708** 1
Sig. (2) .192 .000
Industry
characteristics
Pearson -.177** .519** .669** 1
Sig. (2) .005 .000 .000
Export market
characteristics
Pearson .110 .136* .162* .349** 1
Sig. (2) .080 .030 .010 .000
Production
adaptation
Pearson .263** .309** .352** .308** .582** 1
Sig. (2) .000 .000 .000 .000 .000
Price
competitiveness
Pearson .274** .403** .230** .159* .182** .304** 1
Sig. (2) .000 .000 .000 .011 .004 .000
Promotion
Adaptation
Pearson .194** .206** .024 .120 .540** .544** .338** 1
Sig. (2) .002 .001 .700 .056 .000 .000 .000
Support to
foreign
distributors
Pearson .085 .020 -.243** -.092 .359** .284** .081 .397** 1
Sig. (2) .180 .752 .000 .144 .000 .000 .197 .000
N253 253 253 253 253 253 253 253 253
**. Correlation is significant at the 0.01 level (2
-tailed), *. Correlation is significant at the 0.05 level (2
-tailed)
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e)
Regression Analysis
In its simplest form, regression analysis allows
market researchers to analyze relationships between
one independent and one dependent variable. In
marketing applications, the dependent variable is
usually the outcome we care about, while the
independent variables are the instruments we have to
achieve those outcomes with. It can also help make
predictions (Mooi and Sarstedt, 2011).
i.
Antecedent Forces on Export Market Strategy
The following tables are extracted from SPSS in
order to perform a regression analysis between
independent variables and dependent variable.
Table 7:
Model Summary
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .697a .486 .477 .382
a. Predictors: (Constant), Expmachx, Firmchx, Indtychx, Prodtchx
The model for this regression was:
Y1 =
a + b1X1 + b 2X2 + b3X3 + b 4X4
+ e. From the model
summary result we can see that independent variables
explain the dependent variable with a percentage
of 48.6. In cross-sectional designs, values of around
0.30 are common while for exploratory research, using
cross-sectional data; values of 0.10 are typical
(Mooi & Sarstedt, 2011).
Table 8:
ANOVA
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 34.169 4 8.542 58.534 .000b
Residual 36.192 248 .146
Total 70.361 252
a. Dependent Variable: Expmarkstra, b. Predictors: (Constant), Expmachx, Firmchx, Indtychx, Prodtchx
In table 9 below the constant, beta, and
significance level of each variable is addressed. The
table indicates that the four variables which are Firm
characteristics, Product characteristics, Industry
characteristics, and Export market characteristics
influence Export market strategy significantly at 95%
confidence interval with a sig. level of 0.000, 0.037,
0.024, 0.000, and 0.000 respectively. As the constant
and B values are known the model will be:
Y1
= 0.746 + 0.279X1
- 0.104X2
-0.089X3
+ 0.719X4
+ 0.05
Table 9:
Regression Model
a. Dependent Variable: Export market strategy
Table 10:
Model Summary
Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.333a
.111
.097
.522
a. Predictors: (Constant), Supptdis, pricompt, Prodadtn,
PromAdtn
Coefficients a
Model
Unstandardized Coefficients
Standardized Coefficients
t
Sig.
B
Std. Error
Beta
(Constant)
.746
.209
3.565
.000
Firm characteristics
.279
.042
.425
6.567
.000
Product characteristics
-.104
.050
-.157
-2.096
.037
Industry characteristics
-.089
.039
-.148
-2.278
.024
Export market characteristics
.719
.055
.642
13.133
.000
R
0.697
R square
0.486
Adjusted R-Square
0.477
F-Value
58.534
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ii.
Antecedent Forces and Mediators on export performance
The following tables are extracted from SPSS in order to perform a regression analysis between
independent variables and dependent variable.
The model for this regression was:
Y2 =
a + b5X5+ b 6X6 + b7X7+ b 8X8
+ e. From the model
summary result we can see that independent variables
explain the dependent variable with a percentage of
11.1. In cross-sectional designs, values of around 0.30
are common while for exploratory research, using cross-
sectional data; values of 0.10 are typical (Mooi &
Sarstedt, 2011).
Table 11:
ANOVA
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 8.445 4 2.111 7.738 .000b
Residual 67.660 248 .273
Total 76.104 252
a. Dependent Variable: Exmarper, b. Predictors: (Constant), Supptdis, pricompt, Prodadtn, PromAdtn
The table below shows the constant, beta, and
significance level of each variable. It indicates that two
variables which are Product adaptation and Price
competitiveness influence Export market performance
significantly at 95% confidence interval with a sig. level
of 0.010, and 0.001 respectively. The other two variables
which are Promotion Adaptation and Support to foreign
distributors is not influence Export market performance
significantly. As the constant and B values are known
the model will be: Y1 =
1.198 + 0.522X1 – 0.168X2 +
0.243X3 + 0.056X4
+ 0.05
Table 12:
Regression Model
Coefficientsa
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1
(Constant) 2.656 .249 10.662 .000
Product adaptation .164 .063 .188 2.588 .010
Price competitiveness .149 .046 .210 3.255 .001
Promotion Adaptation .013 .058 .018 .230 .818
Support to foreign distributors .005 .045 .007 .109 .913
a. Dependent Variable: Exmarp
The above table shows the constant, beta, and
significance level of each variable. It indicates that four
variables which are; Firm characteristics, Industry
characteristics, Export market characteristics, and
Product adaptation influence Export performance
significantly at 95% confidence interval with a sig. level
of 0.000,0.000, 0.029, and 0.001respectively.Among
these variables the first three are antecedent forces and
the last one is mediator variable.
iii.
AMOS Analysis for Mediation
To identify the existence of mediation, a path
diagram is drawn as a model for depicting a causal
chain by using AMOS. The values associated with each
path are standardized regression coefficients. These
values represent the amount of change in Y given a
standard deviation unit change in X.
Table
13:
Regression Weight without Mediator
Estimate
S.E.
C.R.
P
Exmarper
<---
Firmchx
0.228
0.041
5.630
***
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Firmchx Exmarper
e1
.11
.33
.94
Figure 2:
Relationship between firm characteristics & export performance
Table 14:
Regression Weights with Mediator
Estimate S.E. C.R. P
Prodadtn <--- Firmchx 0.241 0.047 5.153 ***
Exmarper <--- Firmchx 0.191 0.042 4.553 ***
Exmarper <--- Prodadtn 0.155 0.054 2.881 0.004
Table 15:
Direct and Indirect Effect of Variables
Indirect Effect Direct Effect Result
Exmarper <--- Firmchx 0.0868 0.18 Significant
From a theoretical perspective, a significant
reduction on the path demonstrates that a given
mediator is indeed potent. Perfect mediation holds if the
independent variable has no effect when the mediator is
controlled (Reuben and David, 1986).
If indirect effect is lower than direct effect even
the mediator variables devouring significant path, the
mediator variable should be excluding first to gain the
result of direct effect. Subsequently, include the
mediator variable in a model to gain the outcome. Once
the direct effect is drop presented, one can be
concluded that the mediation effect is occurs.
(Afthanorhan W.M. etal, 2014).
If the result of direct effect is suddenly increase
once includes a mediator variable when all path
coefficient is significant, calculate the result of indirect
effect. If value of direct effect is higher than indirect
effect, the non-mediation effect is not occurring.
(Afthanorhan W.M. etal, 2014).
The variable firm characteristics significantly
affect export performance and partially mediated by
product adaption since when the mediator variable
removed from the model its direct value dropped from
0.31 to 0.18 and the direct effect is still significant after
mediator enters the model.
Table 16:
Regression Weights without Mediator
Estimate S.E. C.R. P
Exmarper <--- Prodtchx 0.273 0.055 4.997 ***
Exmarper <--- Expmachx 0.265 0.073 3.657 ***
Exmarper <--- Indtychx -0.325 0.052 -6.275 ***
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Firmchx
Prodadtn
E
xmarper
e1
e2
.31
.10
.28
.18
.93 .14
.95
Prodtchx
Indtychx
Expmachx
Exmarper
e1
Figure 3:
Firm characteristics and product adaptation on Export performance
Figure 4:
Antecedent variables on export performance
Table 17:
Regression Weights with Mediator
Estimate S.E. C.R. P
Expmarkstra <--- Expmachx 0.720 0.059 12.237 ***
Expmarkstra <--- Indtychx -0.068 0.042 -1.629 0.103
Expmarkstra <--- Prodtchx 0.081 0.044 1.826 0.068
Exmarper <--- Prodtchx 0.246 0.053 4.652 ***
Exmarper <--- Expmachx 0.032 0.088 0.362 0.717
Exmarper <--- Indtychx -0.303 0.050 -6.028 ***
Exmarper <--- Expmarkstra 0.324 0.075 4.324 ***
Table 18:
Direct and Indirect Effect of Variables
Indirect Effect Direct Effect Result
Exmarper <--- Prodtchx 0.042 0.31 Significant
Exmarper <--- Expmachx 0.0528 0.31 Significant
Exmarper <--- Indtychx 0.0192 0.31 Significant
All the three variables which are product
characteristics, export market characteristics and
industry characteristics significantly affect export market
performance. Among these variables product
characteristics and industry characteristics partially
mediated by export market strategy. Regarding to
product characteristics; when the mediator variable
removed from the model its direct value dropped from
Table 19:
Hypothesis Test Results
Hypothesis Test Results
1. H1: Firm characteristics have a positive influence on the export marketing strategy, Accepted
2.
H2: Product characteristics have a positive influence on the export marketing strategy.
- Product characteristics have a significant effect on export marketing strategy but the
effect is negative.
Rejected
3.
H3: Industry characteristics have a positive influence on the export marketing strategy.
- Industry characteristics have a significant effect on export marketing strategy but the
effect is negative.
Rejected
4. H4: Export market characteristics have a positive influence on the export marketing strategy Accepted
5. H5: Product adaptation has a positive and significant effect on export performance, Accepted
6. H6: Price competitiveness has a positive and significant effect on export performance, Accepted
7. H7: Promotion adaptation has a positive and significant effect on export performance. Rejected
8. H8: Support to Foreign Distributer/ Subsidiary has a positive effect on export performance. Rejected
9. H9: Product adaptation mediates the effect of Firm Characteristic on export performance, Accepted
10. H10: Export marketing strategies mediates the effect of product characteristic on export
performance, Accepted
11. H11: Export marketing strategies mediates the effect of industry characteristic on export
performance, Accepted
12. H12: Export marketing strategies mediates the effect of export market characteristic on export
performance. Rejected
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0.39 to 0.31 and the direct effect is still significant after
mediator enters the model. When we see industry
characteristics the result of direct effect is suddenly
increase once includes a mediator variable when all
path coefficients are significant, and the value of direct
effect is higher than indirect effect, in this case
mediation effect is occurring.
Prodtchx
Indtychx
Expmachx
Exmarper
Figure 5:
Effect of antecedents on export market performance mediated by marketing strategy
X. Conclusion
The correlation of Firm characteristics with
Export performance has a significant positive Pearson
correlation of 0.334 at 0.01 confidence interval.
With regard to Industry characteristics it has a significant
negative Pearson correlation of -0.177 at 0.01
confidence interval. But, when we see the correlation
of product characteristics and export market
characteristics the correlation is not significant. The
correlation of export performance, production
adaptation, and price competitiveness with export
performance have a significant Person correlation
of 0.263, 0.274, and 0.194 respectively at 0.01
confidence interval.
The four variables which are Firm
characteristics, Product characteristics, Industry
characteristics, and Export market characteristics
influence Export market strategy significantly at 95%
confidence interval with a sig. Level of 0.000, 0.037,
0.024, 0.000, and 0.000 respectively. Firm
characteristics, Industry characteristics, Export market
characteristics, and Product adaptation influence Export
performance significantly at 95% confidence interval with
a sig. level of 0.000, 0.000, 0.029, and 0.001respectively.
The variable firm characteristics significantly
affect export performance and partially mediated by
product adaption since when the mediator variable
removed from the model its direct value dropped from
0.31 to 0.18 and the direct effect is still significant after
mediator enters the model. product characteristics,
export market characteristics and industry
characteristics significantly affect export market
performance. Among these variables product
characteristics and industry characteristics partially
mediated by export market strategy.
XI. Limitation and Direction for
Future Research
This study has some shortcomings and
limitations. The survey was conducted on leather and
textile products -sectors given higher priority by the
Ethiopian Government. The calibre possessed by some
companies on the selected sectors for the study
strategists have a low level of strategy formulation,
implementation and controlling cultures. The findings
can be generalized for other product categories in
addition to reflecting sector specific results. For future
research, another set of antecedents of export
performance can be included in the research model.
Moreover, Future researchers can use a minimum cut of
point of income to be generated by exporting
companies in order to show the role of the mediating
variable on export performance across a wider range of
exporting sector. Research in different sectors may still
produce contribution to the field.
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The Mediating Role of Marketing Strategy in the Effect of Antecedents on Export Performance of Leather
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