The local brand representative in reseller networks, Suraksha Gupta, Naresh K Malhotra, Michael Czinkota, Pantea Foroudi, Journal of Business Research

To gain competitive advantage, brands are increasingly becoming concerned with their relationships with resellers and are employing local representatives. Interactions between local individuals who represent the firm behind the brand and the reseller firm provide opportunities for highlighting commercial aspects of the brand, such as product pricing, product differentiation and brand experience, to the reseller (Gummesson, 1994). Local individuals representing brands use opportunities to promote the brand by building trust in the brand-reseller relationship (Liberman and Montgomery, 1988; Morgan and Hunt, 2002; Christine, 2005).

This practice has been regularly employed by brands in IT (Intel, HP, Microsoft), telecom (Samsung, Benq, Sony Ericsson) and pharma (Pfizer, Ranbaxy) that tend to push their products through large networks of resellers, retailers and pharmacists. Such local individuals representing firms have been termed brand ambassadors by Debling et al. (2002) and Gromark and Melin (2011) whereas they have been termed relationship promoters by authors such as Palmatier et al. (2007a) and Walter and Gemunden (2000). This study investigates the characteristics of local individuals who represent a brand to its resellers. It does this by first conceptualizing these characteristics by employing complexity theory and then testing the conceptualization. The result is a scale of characteristics that can be used as an employee profile.

In order to precisely identify the characteristics of local brand representatives who can drive reseller brand preference, a scale was developed and empirically tested by the researchers using structure equation modeling techniques and fuzzyset qualitative comparative analysis (fsQCA) (Ragin, 2006 and 2008). fsQCA helps the researchers to gain a rich perspective on the data when applied together with complexity theory (Leischnig and Kasper-Brauer, 2015; Leischnig & Kasper-Brauer, 2015; Mikalef et al., 2015; Ordanini et al., 2013; Pappas et al., 2015; Woodside, 2014; Wu et al., 2014).

Drawing on the theory of rational choice, this paper proposes that the characteristics that attract resellers are leadership qualities, entrepreneurial nature, advisory skills, compatible attitude and charming personality. Also, this paper will identify those characteristics of a local brand representative, which influence resellers’ brand preferences and ultimately build reseller brand loyalty. Additionally, the current study contributes to the existing literature on industrial branding which describes the management of reseller networks.

Professor Suraksha Gupta, University of Kent

Professor Naresh K Malhotra, Georgia Institute of Technology

Professor Michael Czinkota, Georgetown University

Professor Pantea Foroudi, Middlesex University

ISSN 0148-2963

Full article can be found at: http://dx.doi.org/10.1016/j.jbusres.2016.01.046

The Janus Face of International Marketing – Part 4 (Final)

It’s not personal. Distance makes the heart grow fonder, it is often said. But in international marketing, distance can also mean abdication of responsibility. Marketers sometimes clearly demonstrate their desire not to know—for example, by appointing a middleman about whose behavior one can later on be suitably astonished, surprised and mortified. As developing nations develop greater expectations of corporate social responsibility and create new legal requirements, irresponsible marketers may encounter a less tolerant face in host countries. Though the chairman of the multinational corporation may feel suitably removed from local issues, be assured that the locals take all of the firm’s actions very personally.

Whose idea is it anyway? As international marketers voraciously pursue opportunity, they will also encounter fierce local competition and instant copying of good ideas. Intellectual property rights violations, including counterfeiting, piracy and copyrights violations, are rampant in many parts of the developing world. These not only harm the international marketer but also the consumers who purchase defective products. Think of the consumer who needs treatment for a critical illness and receives a fake drug. Or consider the situation of Chinese passengers after the crash of high-speed trains, which were manufactured by Chinese companies with technology incompetently copied from Western companies. The government policy of “technology importation, digestive absorption, independent re-innovation and localization” rings hollow to the grieving families of crash victims.

We can use Janus as a god of contradictions and transitions, but we can not turn to him for guidance in morality, ethics or even law. International marketers will confront dilemmas and challenges. How well they pursue the conjunction of highly effective marketing and ethical practices will inevitably be reflected in the loyalty of customers and the judgment of host governments.

 

About the Authors

Michael Czinkota researches international marketing issues at Georgetown University and the University of Birmingham in the United Kingdom. He served in trade policy positions in the George H.W. Bush and Ronald Reagan administrations, and currently collaborates in a national export certification effort. Visit his blog at michaelczinkota.com . Charles Skuba teaches international business and marketing at Georgetown University. He served in the George W. Bush Administration in trade policy positions in the U.S. Department of Commerce. He may be reached at cjs29@georgetown.edu .

 

Private Label Products: Competition or a New Opportunity

Branded products are facing increasing competition worldwide from private label goods from intermediaries. Thanks to an increase in price sensitivity and a decrease in brand loyalty as consumers look to save money, private label products are enjoying significant penetration in many regions. A study of seven countries by the Private Label Manufacturers Association revealed that private label market share has exceeded 40 percent in the United Kingdom, Germany, Belgium, and Switzerland. Market share for retailer brands is at an all-time high in France and Spain, where one of every three products sold carries a private label.

While private brand success is known to be strongly affected by economic conditions and the self-interest of retailers who want to improve their bottom lines, other factors contributing to the growth include improved quality and the development of segmented private brand products. Some private label brands even have a premium category now. Emboldened by the success of private label brands, manufacturers have expanded this “privatization” to new product categories, hoping to expand the success.

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg. 187.