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The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Master MSc Thesis Presentation
The impact of a strategic alliance through outsourced Marketing (OM) in the competitive advantage of the
Small and Medium Enterprise (SME’s) in Portugal
Friday, 19th November 2010cristinanazaremartins@gmail.com
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Introduction
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
The Strategic Alliances
• Lin and Lin (2010): … through complementarity can enhance synergies between them.
• Hynes e Mollenkopf (2008): … can reach the point of creating competitive advantages.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Theory, Domain and focus
5
MarketingMarketing
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Problem and Research Questions
• Central question
“The strategic alliances through Outsourced Marketing has impact in the SMEs’ competitive advantage?”
• Research questions
The resources’ management through Outsourcing is correlated with the factors of businesses’ competitiveness?The resources’ management through "periphery" Outsourcing has an impact on company’s performance?The resources’ management through Outsourcing has an impact on the efficient cost management?The Marketing’ significance in a company has an impact on the decision to engage Outsourced Marketing services?
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
State of the Art
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Marketing Management
Adapted from Lambin (2000)
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Outsourcing: Strategic Alliances
Stra
tegi
c A
llia
nce
s
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Marketing Outsourcing
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Theories
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Performance management
Font: Kotler, 2008; Murray, Kotabe and Wildt (1995); IAPMEI (2010)
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
An
alyt
ical
Mod
el
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Methodology
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Adopted Methodology
Positivist Paradigm:The reality and the results are rigorous, external and objectives.
Interpretativist Paradigm:Through preliminary support techniques to the questionnaire survey and final interviews to validation/results interpretation.
Quantitative methodology based in the hypothetical-deductive method.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Techniques of data collection
Non-documentary research techniques and non-participant observation, in the form of surveys and interviews
Instrument for data collection:1st phase: survey by questionnaire, the population of 297 000 SMEs in Portugal (IAPMEI 2007), having been obtained a sample of 103 SMEs.
2nd phase: Final interviews , for a better interpretation and validation of the obtained results, to five Marketing consultancy companies (“Designarte”, “Love2Brand”, “QSP Marketing”, “MPG Media Global Agency”, and “Jotoliveira”.
Universe 297.000 SMEs
Sample 103 SMEs
Activity sectors (7): retail (31,7%), construction (13,9%), energy (0,1%), manufacturing industry (14,3%), extractive industry (0,3%), services (30,1%) and tourism (9,5%).
Portugal (Continent and islands): North (30%); Center (20%); Lisbon (30%); Alentejo (5%); Algarve (5%); Madeira and Açores (10%).
Random sampling method (probabilistic)
Sample and sampling procedures
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Field research and results’ analysis
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Statistical Analysis
• The questionnaire was seen until the date of April 29, 2010, by 940 addressees;
• 523 started to fill it
• Just 181 completed it
• The remaining 342 dropped out completing, after starting to answer the questions (cancelled questionnaires).
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Descriptive analysis
Marketing significance (%)
Attitude towards Marketing Management (%)
Companies that do not consider Marketing significant choose to Outsource (Azhar 2008)
The marketing manager’s skills are crucial to consider Marketing relevant to the organization
No significance
Minor significance
Average significance
Signifi-cant
Very significant
Insourcing
Marketing Management
function outsourced
The qualification of the marketing
manager provides levels of efficiency and
effectiveness
Efficiency and effectiveness of outsourced
Marketing
Totally disagree
Disagree
Neither agree nor disagreeAgree
Totally agree
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
SMEs choose to relegate more operational marketing activities to third parties, opting to maintain inside the business strategy.
Current management resources of Marketing (%) Outsourced Marketing services (%)
Descriptive analysis
Strategical Marketing + Operational Marketing
Strategical Marketing
Operational Marketing
Strategic Marketing plan
Sales plan
Product distribution plan
Operational Marketing plan
Brand and Communication plan
No answer
Communication plan
Product and price management plan
Others
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
• Majority Increase of financial indicators (0,1% - 20%)
• Only 12% of respondents say they disagree and totally disagree the statements about the impact of OM on the results achieved by SMEs
Increase in financial indicators (%)
Relationship between OM and obtained results (%)Descriptive analysis
Turnover Profit Market share Intern rate of return
Cash flow Other
Drastically increase (>30%)
No increase (0%)
Very few increase (>0% < 5%)
Few increase (>5% <10%)
Average increase (>10% <20%)
Quite increase (>20% < 30%)
Total agreement
Total disagreement
Gaining a competitive advantage
Preference of outsourced Marketing over insourcing
Efficiency in managing sales
Deliver the desire results
Benefit
Good satisfaction in sales management
Increase demand of products and brands
Notoriety (awareness) increase
Market share increase
Return on investment (ROI)
Cost efficiency
Effectiveness inthe sales targets
Totally disagree Disagree Neither agree nor disagree Agree Totally agree
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
The variables intersection: H1
Independent variable Correlation (+ / -) Dependent variables
Resource to OM
+ Competitive advantage
+ Notoriety
+ More efficient sales management
In SMEs exists a positive
association between OM and
competitive advantage:
• 41% of the answers were positive
Intersection between OM and Competitive advantages ( in number of cases)
Significant correlations between Outsourced Marketing (OM) and Competitive advantages
Competitive advantage
NotorietyMore efficient sales
management
Totally disagree
Disagree
Neither agree nor disagreeAgree
Totally agree
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
In SMEs exists a positive
association between OM and:
• Profit (88%),
• Internal rate of return (90%),
• Cash-flow (90%),
•ROI (41%).
Independent
variableCorrelation (+ / -) Dependent variables
Resource to OM
+ Profit
+ Internal rate of return
+ Cash flow
+ Return on investment (ROI)
Correlations between Outsourced Marketing (OM) and the financial indicators’ performance
Intersection between OM and Performance concerning the achievement of the ROI (in
number of cases)
Intersection between OM and Performance concerning the increase in financial indicators (in number of cases)
The variables intersection: H2
Totally disagree
Disagree
Neither agree nor disagree
Agree
Totally agree
Profit
Cash flow Internal rate of return
No increase (0%)
Very few increase (>0% < 5%)
Few increase (>5% <10%)
Average increase (>10% <20%)Quite increase (>20% < 30%)
Drastically increase (>30%)
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Outsourcing has an impact on Marketing
management concerning the non
financial performance:
• More Efficient sales management (50%);
• Good satisfaction in sales
management(41%).
Independent
variableCorrelation (+ / -) Dependent variables
Resource to OM
+More efficient sales
management
+Good satisfaction in sales
management
Correlations between Outsourced Marketing (OM) and the non financial indicators’ performance
Intersection between OM and the Performance of the financial indicators (in number of cases)
The variables intersection: H2
Totally disagree
Disagree
Neither agree nor disagree
Agree
Totally agreeMore efficient sales management
Good satisfaction in sales management
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
When SMEs opt for Marketing Resource Management through Outsourcing occurs a
positive impact on cost efficiency:
• In 48% of the SMEs it was observed such
increase.
Independent variable Correlation (+ / -) Dependent variables
OM + Cost efficiency
Correlations between Outsourced Marketing (OM) and cost efficiency
Intersection between OM and cost efficiency (in number of cases)
The variables intersection: H3
Totally disagree
Disagree
Neither agree nor disagree
Agree
Totally agree
Cost efficiency through the resource to Outsourced Marketing
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
There is a positive association between
probability of resource to OM and the variables set.
As variables set increase or decrease, also increases or decreases the resource to
outsource Marketing.
Independent variableCorrelation (+
/ -)Dependent variables
Importance attributed to Marketing +
Probability to OM
Attitude on the existence of an internal
marketing department+
Attitudes towards the reliance on
outsourcing for the function of Marketing
Manager
+
Preference for Marketing Outsourcing +
Correlations between Marketing significance and the resource to OM
Intersection between OM and probability to outsource Marketing (in number of cases)
The variables intersection: H4
Not at all important
Minor
Averagely importantImportant
Very importantUnlikely
Less likely
Likely
Most likely
Certain
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
• 50% of SMEs claim to be likely the resource to OM.
• 20% of these SMEs claim be certain to recourse to OM.
• 46% of the SMEs agrees with the use of outsourcing for the Marketing manager function.
• Only 20% of the Marketing Managers have academic education in the area.
• 45% of SMEs surveyed prefer the OM vs. 36% that prefer Insourcing Marketing.
Intersection between the attitude towards marketing management and probability of resource to OM (in number of cases)
The variables intersection: H4
Totally disagree Disagree Neither agree nor disagree Agree Totally agree
Intern Marketing department
Outsourcing the Marketing manager function
Preference of OM over the Marketing insourcing
Un
like
ly r
esou
rce
to
OM
Less
like
ly r
esou
rce
to O
M
Like
ly r
esou
rce
to
OM
Mos
t li
kely
res
ourc
e to
OM
Cert
ain
res
ourc
e to
O
M
Un
like
ly r
esou
rce
to
OM
Less
like
ly r
esou
rce
to O
M
Like
ly r
esou
rce
to
OM
Mos
t li
kely
res
ourc
e to
OM
Cert
ain
res
ourc
e to
O
M
Un
like
ly r
esou
rce
to
OM
Less
like
ly r
esou
rce
to O
M
Like
ly r
esou
rce
to
OM
Mos
t li
kely
res
ourc
e to
OM
Cert
ain
res
ourc
e to
O
M
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Factorial analysis and Cronbach's Alpha reliability test
It was observed that all variables tested, after having carried out the factor analysis, and having found the components associated
to variables, present a satisfactory internal reliability consistency .
Variables ScaleCronbach's
Alpha
Marketing resource management Behaviour 0,844
Performance associated to MO Facts 0,984
Marketing and its management Attitude towards Marketing 0,755
Outsourced Marketing Facts and opinions towards MO 0,958
Reliability Test from obtained scales
Highlights :
• Facts associated to the OM’s performance;• Facts and opinions in favour of OM.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Conclusion
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Conclusions about the research hypotheses
The management of resources through outsourcing creates
competitive factors in SMEs, with an impact on performance.
Significance of Marketing in SMEs increases the use
of outsourcing leading to efficient cost management.
Management of non-core competencies in SMEs in
Outsourcing of Marketing are synonym of competitive advantage.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Contributions to management
Both the Operational Marketing and Strategic Marketing are susceptible to be Outsourced.
This research leads to a new frame about the make or buy decisions
regarding the practice of marketing.
Matrix of relationship between core competencies and strategic importance
Font: own elaboration
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Limitations
Limited availability of SMEs to provide information, in order to
ensure some barriers to entry to new competitors;
Legal limitations: Law for data confidentiality;
Portuguese business culture: resistance to outsourcing, issues
and sensitive topics.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Recommendations
1. The questions should be asked to executive directors or even to the SMEs’ shareholders.
2. Focus on only one sub-theme and simplification of the questionnaire for a higher concentration and adherence.
3. Outsourcing practices in human resources management or in research and development can be compared to this investigation.
4. Make a cultural and geographical comparison to understand whether the results are exclusive to Portuguese SMEs or are also the same results in other European countries.
5. Cluster analysis in terms of characterization of SMEs, as defined by IAPMEI.
The impact of a strategic alliance through Outsourced Marketing in the competitive advantage of the SMEs in Portugal | Author: Cristina Nazaré Martins
Master MSc Thesis Presentation
The impact of a strategic alliance through outsourced Marketing (OM) in the competitive advantage of the
Small and Medium Enterprise (SME’s) in Portugal
Friday, 19th November 2010cristinanazaremartins@gmail.com