Marketing Factors in Small Country Manufactured Exports: Are market Share and Market Growth Rate Really Important?
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INTRODUCTION
*Dr. Igal Ayal is with the Faculty of Management, Tel AvivUniversity.He has written extensively on international marketing strategy and on product policy. Dr. Ayal has also served as consultant on both strategic and marketingplanning to several multinational firms. **Dr.Seev Hirschis the Meland Sheila Jaffee Professor of InternationalTradeat the Faculty of Management, The Leon Recanati Graduate School of Business Administration,Tel Aviv University, Israel. He has written extensively on trade, investment, and industrialization. This study was supported by the Israel Institute of Business Research-The Project on Export Marketingand InternationalActivities, Tel Aviv University. Journal of International Business Studies, Fall 1982
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most industries the third largest firm would certainly be included. An important question, then, is whether relationships similar to those described in these studies exist at the real low end of market share scale-that is, businesses with possibly one-tenth or less of the industry leader's share. Further, both PIMSand BCG were based mainly on national United States marketing data, while more and more firms are moving into international marketing. A second important question, therefore, is whether the conclusions are applicable to export market situations. At the industrylevel, the economic literatureis rich in analyses of interindustryperformance in international trade. These include post-Ricardian, factor-endowment explanations of trade direction and composition [See Haberler1961 for a survey of early literature; Kilpatrick and Miller 1978; and the comprehensive study by Pugel 1978 for recent examples]; demand-similarity based explanations [Linder 1961];technology transfer effects [Vernon1970];and international product life cycle explanations [Vernon 1966 and 1979]. A more recent focus of attention has been on multinational firms and their direct investment decisions, both in developed and less developed countries [forexample, see: Caves 1971 and 1974; Horst 1972; Lall 1979 and 1980; White 1978]. Least attention, however, has been directed to the effects of marketing factors-and particularly market share and market growth rate-that are so pervasive in the interfirm-orientedmarketing literature. The current study was designed to address these questions. The study was based on Israeli exports of manufactured products (excluding diamonds) in 1971-1975. On the one hand, total Israeli exports, in the 71 industrial branches examined, amounted, in 1975, to just under1 billiondollars-a sales volume that would make "Corporation Israel" the equivalent of a large American corporation. Approximately 15 percent of these exports were made to the United States. On the other hand, the totality of industry in a country (even the export directed portion of output) is necessarily much more diversified than the most diversified corpora
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