Papers

Investigating the export marketing

activity of SMEs operating in
international healthcare markets
Received (in revised form): 5th June, 2006

Bradley R. Barnes
is a Senior Lecturer in Marketing at Leeds University Business School, United Kingdom. His main research interests are in the
fields of international marketing, and international buyer–seller relationships.

Ronika Chakrabarti
is a graduate from Leeds University Business School, specialising in International Marketing Management. She is a PhD
candidate at the School, and her research focuses on motivating internatinal distribution channels.

Dayananda Palihawadana
is a lecturer in Marketing at Leeds University Business School. He researches and teaches in the areas of international marketing
and marketing research.

Keywords export, internationalisation, SME

Abstract The paper reports on an investigation of the characteristics associated with

small and medium-sized enterprise (SME) exporters that operate in international
healthcare markets. A framework is initially developed to analyse (a) the factors that
stimulate such firms to venture overseas, (b) the key barriers to export, (c) the
international market coverage where the firms do business, and (d) their success factors
associated with trading internationally. Based on a sample of 112 SMEs, our findings
reveal that although business growth, profits and a large market size were seen to
motivate firms to venture overseas, finding an appropriate partner was a key barrier.
Cultural issues were not found to prevent the sample of firms from doing business
internationally, but having high-quality products and competitive prices were considered
important ingredients of success. Several managerial implications are also extracted
from the study that business support providers and governmental sources can use to
assist firms operating within the sector.
Journal of Medical Marketing (2006) 6, 209–221. doi:10.1057/palgrave.jmm.5050033

INTRODUCTION opportunity to become less dependent

Bradley R. Barnes
Leeds University Business
School,
Maurice Keyworth Building,
Leeds LS2 9JT, UK
Tel: + 44 113 343 7017
Fax: + 44 113 343 1807
e-mail: brb@lubs.leeds.ac.uk
Multinational and small and medium-
sized enterprises (SMEs) are realising the
benefits of operating beyond the domestic
market, as increasingly more firms engage
in international activities.1 International
markets represent a significant area of interest
among both practitioners and academics
alike, and provide companies with the
upon the domestic situation, and stimulate
growth through increasing turnover and
enhancing profitability. International activity
among firms is also of public and political
interest as it can positively contribute towards
society and the wealth of a nation, by
fostering greater employment and fiscal
contributions.

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www.palgrave-journals.com/jmm
 Barnes, Chakrabarti and Palihawadana
Despite considerable interest in the area
of internationalisation among academics,
see for example Buckley et al.,2 Cavusgil,3
Dunning,4 Johannson and Vahlne,5 very
little has been concluded in terms of
investigating the characteristics associated
with exporting firms that operate in
international healthcare markets. To help
bridge this gap, the primary aim of this
investigation from an exploratory context
is to undertake research on a sample of
manufacturing SMEs to determine the
level and extent of export involvement
associated with such firms in this sector. It
is our belief that the findings will help to
shed valuable insights for business support
organisations and governmental commerce
departments that provide export and
international assistance to firms supplying
to this industry. To achieve this, several
objectives were derived, which help to
explain the rationale and purpose behind
the research investigation, and these are
presented as follows:
• To discover which factors motivate
healthcare firms to venture internationally.
It will be interesting to see which
variables influence and stimulate firms
from within the sector to seek export
markets. It will also prove beneficial for
governmental and business support
providers to discover which factors appear
to be the most influential. Such stimuli
could be used to influence non-exporting
firms to consider diversifying into
international markets.
• To identify the problems and difficulties that
healthcare firms have experienced when
entering international markets.
Once motivated and encouraged to
venture into international territories, the
next objective, aims to explore areas where
firms from within the sector may have
experienced problems. As before, it will
also be of interest to identify which are
210 Journal of Medical Marketing Vol. 6, 3 209–221
the most problematic barriers for firms, as
business support providers can then look
to provide assistance aimed at minimising
such difficulties for existing exporters, and
to pre-warn potential and new exporters
of areas where problems may lie.
• To explore which international markets
healthcare firms tend to operate in.
By analysing international market
territories where firms have undertaken
business, it will be possible to discover
more characteristics about the sector and
the principal markets served. This may
prove beneficial for business support
organisations, as they prepare to offer
relevant export services in line with key
export territories. Secondly, it helps to
identify gaps where further research could
be undertaken to explore the potential of
less traditional, yet perhaps more
developing markets.
• To find which factors have contributed
towards the international success among
healthcare firms.
At a micro-level, it will be interesting to
discover the critical success factors
associated with international activity from
within the sector, and identify those that
appear to be most prevalent. Such
information may prove useful in helping
to identify domestic healthcare firms with
the appropriate characteristics and have
the potential to succeed internationally.
Overall, it is envisaged that the research
will prove useful in providing an outline
view of the characteristics associated with
SME manufacturers that supply to the
healthcare industry. As a result, in the short
to mid-term, the findings are likely to
benefit practitioners employed within
business support organisations, such as
Chambers of Commerce, industry specific
trade associations and public or quasi-
governmental commerce bodies. Whereas
in the mid to long-term, it is hoped that
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Export Stimulation
International Involvement
International Markets
Figure 1: Focus of the research.
firms within the sector will be the key
beneficiaries, as based on their experience
and characteristics, business support
providers can potentially develop further
initiatives to encourage and enhance
international activity and export
performance.
BACKGROUND
Based on several strands of the export
marketing literature, and the four research
objectives, namely identifying the factors
that motivate and stimulate healthcare
firms into export, distinguishing elements
that for SMEs operating in international
healthcare markets act as barriers to trade,
discovering which international territories
are served by the firms, and identifying
firm-specific factors that have influenced
exporting success, the following schematic
framework presented in Figure 1 was
developed in order to focus the research
and the literature.
Export motivation and stimuli
Stimuli, motives, incentives or triggering
cues as they are commonly referred to in
academic discourse contribute towards a
firm’s decision to initiate or develop their
international operations.6 In a study of
mid-Western exporters of scientific and
industrial instruments, Pavord and Bogart7
found that the primary motive for
exporting was to avoid a saturated home
market and declining domestic sales.
Majkgard8 suggests that exogenous and
endogenous factors can stimulate firms to
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Export marketing activity of SMEs
Export Barriers
go international. Exogenous factors occur
mainly due to network effects and changes
in the environment. They are externally
rooted and can occur for instance when a
firm follows a customer into other
countries. An important client, for
example, could request the local firm to
Success Factors open facilities in new foreign markets
where they have established operations.
Endogenous factors include a firm’s
specific competitive advantage, for
example, product, technology and its
ability to exploit knowledge. Excess
production capacity can also influence
the need to generate increased demand.
Moreover, there can often be an
internal drive to venture international,
particularly when seeking new resources,
materials, knowledge and technology,9 and
this may be instigated by senior
managers.10
Katsikeas et al.11 refer to such stimuli as
being proactive or reactive. Proactive
stimuli is triggered primarily by the
opportunity to enhance profit and growth,
the ability to easily modify products for
export markets, governmental or public
policy initiatives for promoting export,
favourable foreign country regulations,
the possession of unique products, and
economies-of-scale resulting from
obtaining additional orders. Meanwhile,
reactive stimuli includes adverse domestic
market conditions, the availability of
surplus production capacity, the
opportunity to increase the number of
export markets and reduce market-related
risk, and unsolicited export orders.
Thus, if decision makers within firms
perceive and interpret various stimuli as
being sufficiently strong, they maybe
motivated to venture into international
markets.12,13 As the intended research is
based on a sample of companies that
operate in the healthcare sector, it
will be interesting to see which
motives have influenced this sector the
most.
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 Barnes, Chakrabarti and Palihawadana
Barriers to export
Export barriers represent the range of
possible constraints that can hinder a
firm’s export expansion.14 With respect
to specific problems and difficulties, the
most frequently cited obstacles from
empirical studies include insufficient
finance, inadequate international
distribution, foreign government
restrictions, insufficient knowledge, tariffs
and a lack of foreign market
connections.15,16
Findings presented by Katsikeas and
Morgan17 revealed that external issues
represented the most significant problems
associated with entering international
markets. These are couched in the external
environment, mainly as financial concerns
with issues such as currency devaluation,
seeking trustworthy distributors, the high
relative cost associated with financing
exports, regulatory and bureaucracy within
public agencies, lack of governmental
support in overcoming export difficulties
and ineffective national export
promotional programmes. Such macro-
level factors can cause serious problems
for international firms trying to compete
with local companies in the host market.
Operational problems exist at the
micro-level in terms of the export
documentation process, payment delays
from distributors, logistical constraints such
as transporting products overseas, which
can be compounded by the high cost of
physical distribution.
Internal problems relate directly to
controllable issues within the firm. For
example, product considerations include
export packaging, meeting quality
standards and establishing suitable design
and images for the export market. Other
internal problems could be poor
organisation, not having a formal export
department, the inability to finance export
and the fact that key decision makers
often possess insufficient information
about overseas markets.
212 Journal of Medical Marketing Vol. 6, 3 209–221
A lack of exposure to export market
intelligence can lead to a breakdown of
communication and unfamiliarity, which
can cause a number of information
problems. The effective use of relevant,
accurate and timely information is
therefore critical. Export market research
is important for formulating export
market strategy, and a shortfall of this
resource can cause major difficulties for
decision-makers. Firms often claim that
they have problems in identifying and
gathering appropriate information required
for distributors in overseas markets.
Effectively communicating with overseas
customers may also impose problems in
export markets.
Overall, by reviewing the extant
literature in this area, Leonidou18 was
able to identify no fewer than 39 types
of export barriers. As a result, he was
able to classify these beyond the internal
and external factors into seven related
sub-groups comprising of informational,
functional, marketing (internal), procedural,
governmental, task and environmental
(external). It will be interesting to
discover from our research, which barriers
seem to most impede healthcare
firms when operating in international
markets.
Characteristics of export markets
Terms such as cultural distance,
psychological and psychic-distance have
been used interchangeably in international
marketing to explain how firms develop
their international operations.16 In the
mid-1970s researchers from the University
of Uppsala5 began to explore the concept
of ‘psychological’ distance in greater depth,
using the philosophy to develop theory in
the area of internationalisation.19 Psychic
distance is said to lend itself to guiding
country selection decisions, as the
internationalisation framework suggests
that relatively less developed firms in
terms of export are more likely to select
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international markets with increased
cultural commonalities.20
As such, because companies often lack
sufficient resource and experience, it is
likely that risk factors will limit their
export initiatives to fewer markets.
Nevertheless, it is assumed that as firms
progress in international markets, they are
likely to be in a better position to expand
into more territories, and overcome
cultural barriers by investing in more
resources. In brief, the expectation is that
relatively in-experienced firms commence
undertaking international business in those
countries regarded as being ‘close’, and
then expand to more distant markets.21
Interestingly, Chetty and Campbell-
Hunt22 discovered that this phenomenon
was also apparent for ‘born global’ firms.
However, the pace of learning appears to
be more rapid among such firms, which
then enables rapid expansion into more
culturally distant territories. It will be
interesting to observe the markets where
firms in the healthcare sector operate, to
discover to what extent international
culture and geographic distance may have
an impact.
Exporting success factors
It was judged important to identify which
factors were associated with obtaining
success in international markets. Testing
for this may provide useful insights
regarding the key characteristics needed in
order to help firms achieve in
international markets. A company’s specific
differential advantage23 derived from the
quality of its products, its technological
orientation and resources may contribute
towards exporting success. Similarly,
Gencturk and Kotabe24 suggest that the
utilisation of governmental export
assistance can also have a bearing on
success.
Internal change agents such as top
management who have an interest in
export development represent a key
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Export marketing activity of SMEs
determinant as to whether or not a firm
will take the initiative to export.25 Indeed,
a distinct entrepreneurial capability
appeared to be associated with the success
of many ‘born global’ firms,22 which may
relate to the manager’s confidence in the
firm’s competitive advantage, their
international exposure and the culture of
the organisation.26
Finally, based on the extant literature,
Katsikeas et al.,11 conclude that exporting
success can be attributed to any of the
following three principal areas relating to
marketing policy, firm-specific factors,
and external factors. As a response, the
research envisages to shed some light upon
which factors, as perceived among
respondent firms are associated with
obtaining success in international
healthcare markets.
RESEARCH APPROACH
The research design adopted for this study
is exploratory in nature with the aim of
obtaining preliminary insights into the
exporting behaviour among healthcare
SMEs. A mail survey was adopted as the
principle method for data collection,
which suited the financial and time
constraints of the research project. The
approach also provided the opportunity
for a large number of firms to
participate.27
The target population for this study
consisted of UK firms that supplied to
medical and healthcare markets. A
questionnaire was derived based on the
research objectives, and the instrument was
tested with four industrial experts who
were employed within two medical trade
associations that worked closely with
companies from within the sector. Their
insights into the nature of the sector
proved useful, and several adjustments
relating to the sequence and structure of
certain questions were made. Secondly, a
pre-test survey was undertaken with ten
representative companies, who formed part
Journal of Medical Marketing 213
 Barnes, Chakrabarti and Palihawadana
of a healthcare exporting initiative. A
consultant working on the initiative
helped to administer the process, which
again proved useful, as the sequence of
questions was modified to help improve
the overall structure and flow of the
research instrument.
The British Healthcare Directory of
Healthcare Equipment and Services was
used as the sampling frame for the study,
and in total 548 SME manufacturing firms
were listed. The most recent European
Union (EU) definition was used for the
study, incorporating any enterprise
employing no more than 250 staff.28 A
covering letter, which provided an outline
regarding the purpose of the research, was
mailed out with the questionnaire to the
Export Director in each of the companies.
Total confidentiality was guaranteed for all
respondents, and this was clearly
highlighted in the covering letter. In a bid
to motivate response, a pre-paid reply
envelope was also included. In total, 124
forms were returned, and 112
questionnaires were eventually used for the
data analysis, this represented a 20 per cent
response rate, which was perceived to be
adequate for the exploratory nature of the
research investigation.29
FINDINGS AND RESULTS
In light of the initial aim of the research,
that is, to determine the level and extent
of export involvement associated with the
respondents, cluster analysis was
undertaken based on the ratio of export
turnover to total sales, and the number of
territories that each firm exported to.
Cluster analysis is a tried and tested
method for classifying objects or cases into
relatively homogenous sub-groups.30,31
Three clusters were identified, and as a
result 52 companies were classified as
‘infrequent exporters’, 24 respondents
emerged as being ‘moderate exporters’,
and 36 were labelled ‘frequent exporters’.
214 Journal of Medical Marketing Vol. 6, 3 209–221
Infrequent exporting companies
predominantly exported to a limited
number of markets, namely just two or
three territories and perhaps due to lack
of resources, international market risks, and
the costs associated with trading overseas,
their export sales did not normally exceed
20 per cent of total turnover. Moderate
exporting companies tended to operate in
more countries than infrequent exporting
firms, and in general obtained orders from
approximately seven to nine territories.
The majority of their marketing effort
tended to be domestically focused, with
export sales ranging from 5 to 44 per cent
of turnover. Frequent exporters
meanwhile, are more likely to have a long
history of marketing internationally. Such
companies have demonstrated a
commitment to entering international
markets, operate in excess of 11 market
territories, and export sales represent in
excess of 20 per cent of the firm’s total
turnover.
In summary, a fairly even balance from
within the sector emerged between firms
that export at a relatively low level and
those that moderately and more
significantly export. As the majority of the
SMEs from the clusters would probably
benefit from support to help develop their
export operations further, the findings in
response to each of the research objectives
are now presented, based on the three
group formations.
Export motivation
Several factors were identified from the
literature that appeared to motivate firms
into export and respondent companies
were asked to rate their importance. As a
result, it was possible to discover which
variables most significantly influenced the
respondents (Table 1).
Business growth and the opportunity
for greater profit were the prime
motivators for infrequent exporting firms.
Such companies also appeared to be
© 2006 Palgrave Macmillan Ltd 1745-7904 $30.00
 Export marketing activity of SMEs

Table 1: Group similarities and differences for export motivation stimuli

Exporting motives and Infrequent Moderate Frequent One-way Anova and

stimuli exporters (I) exporters (II) exporters (III) Scheffe’s test

Mean SD Mean SD Mean SD F p-value Scheffe’s

test

Large market size 2.94 1.00 3.33 0.70 3.06 0.79 1.64 0.20
Stability by entering more 2.84 0.89 3.17 0.70 2.97 0.74 1.35 0.26
markets
Greater profit 3.08 0.83 3.08 0.83 2.94 0.83 0.33 0.72
Unsolicited orders 2.36 0.83 2.25 1.03 2.36 0.76 0.16 0.86
Closeness of markets 1.94 0.84 1.79 0.72 2.08 0.77 0.99 0.38
Excess capacity 1.76 0.80 2.04 0.86 2.33 0.86 4.99 0.00* III>I
Foreign distributor requests 2.40 0.93 2.58 1.18 3.16 0.70 7.46 0.00* III>II, III>I
Growth rate 3.12 0.72 3.38 0.77 3.42 0.65 2.16 0.12
Smooth out business cycles 2.44 1.01 2.42 1.06 2.75 0.65 1.44 0.24

*p < 0.01.
Mean scores calculated based on data collected on a 4 point scale ranging from 1 — unimportant, to 4 — very important.

motivated by the stability of export simply respond to requests from in-market

markets. It may be that these companies
want to reduce the risk, as they are testing
the international market place. A large
market was also seen to be influential for
encouraging such firms. In contrast, it
appears that the close proximity of
international markets, and the ability to
use export markets for reducing excess
capacity were perceived to be less
important stimuli.
For moderate exporting firms, a large
market size, the possibility for increasing
business growth, and the stability
associated with export markets were the
three most influential factors for these
companies. The potential for greater profit
was also perceived to be an important
factor for moderate exporting firms. As
with infrequent exporters, the close
proximity of export markets, and being
able to utilise export markets to minimise
excess capacity appeared to represent
relatively unimportant criteria.
The potential to increase the growth
rate of the business, and requests from
foreign distributors were the two most
important factors that motivated frequent
exporters to seek international
opportunities. This is probably because
such companies will incur fewer costs in
terms of time and effort by being able to
distributors, and it may be easier to find
similar marketing channels and
international representation from
distributors that have business contacts in a
number of markets. A large market size
and the stability of export markets were
also key factors that tended to be of
influence, as frequent exporters look to
reduce financial cost and risk associated
with export. As with infrequent and
moderate exporters, the results also suggest
that the close proximity of overseas
markets, and the opportunity for using
export to reduce excess capacity were
among the least important motivational
stimuli for frequent exporters.
When analysing the companies
collectively, it can be seen that increasing
the growth rate of the business was overall
the most important export motivational
factor. This was closely followed by a large
market size, greater profitability and the
stability of export markets, which were all
considered to be major influential factors
for stimulating international activity. The
closeness of foreign markets and the
potential to use up excess capacity
appeared to be the least important
stimuli for motivating export among the
SMEs operating within the healthcare
sector. The findings suggest that

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 Barnes, Chakrabarti and Palihawadana
irrespective of the three clusters, it appears
that in general, similar stimuli were
perceived to be highly important
motivators, and others were of relatively
less importance.
It can be concluded that the desire for
business growth, profits and a large market
represented major motivational factors
among the firms surveyed per se. Moreover,
it is also noteworthy that a further key
motivator, that is the stability associated
with international markets, is also of
concern for business. As pointed out by a
particular respondent, the rapidly changing
environmental factors fuelled by wars and
SARS suggests that companies need to be
reassured that they will receive a return on
their export investment. Results from the
one-way Anova help to confirm such
similarity between the three groups in
terms of the factors that motivated them
to venture international.
No significant differences were found
between the groups for seven of the nine
measures. The two motivational stimuli
that tested significant were the ability of
export markets to help use excess
production capacity (where frequent
exporters had a significantly greater
tendency to be motivated by this factor
than infrequent exporters), and requests
from foreign distributors (where frequent
exporters were significantly more
motivated by such requests, than moderate
and infrequent exporters).
Barriers to export
Finding an appropriate distributor or agent
was perceived to be the main barrier to
export for infrequent exporting companies.
To minimise risk and investment, many
companies opt for appointing distributors
in overseas markets. However, access to
reliable trustworthy distributors and agents
was a difficulty being faced by many
companies at this level. Other major
obstacles for these firms included the costs
associated with marketing overseas,
216 Journal of Medical Marketing Vol. 6, 3 209–221
competing with overseas producers,
currency exchange fluctuations, and a lack
of market knowledge (see Table 2).
The direct costs associated with
marketing overseas were perceived to be a
high trade barrier, as many firms may have
to incur start up costs associated with
export, including product and service
adaptations, financing market research,
market visits and exhibition expenses.
These additional costs could imply that
price adjustments and increases may be
needed in order to achieve a return,
which makes competing with local
suppliers even more difficult. Such
companies at this level are also likely to
lack market awareness and knowledge of
overseas competition and distribution
networks.
Similar to infrequent exporting
companies, moderate exporters experience
difficulties when competing with local
competition, and in identifying appropriate
distributors or agents — these represented
the main exporting barriers. Constraining
the costs associated with marketing
overseas was also perceived to be a major
obstacle. Unlike infrequent exporting
firms, moderate exporters consider the
lack of export incentives to be a relatively
greater problem than currency exchange
fluctuations. Competing with overseas
producers and finding the right
distribution partner represented the highest
barriers for moderate exporters, as firms at
this level may still lack market knowledge,
and the finance to effectively compete
with host market firms.
Finding the right distributor, competing
with local suppliers and the cost of
marketing overseas remain as the key
factors that also inhibit frequently
exporting companies. Overall, it appears
that a trend has been identified, where in
principal the most significant trade barriers
among the three groups were almost
identical. Finding the right distributor/
agent appeared to be the most pertinent
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 Export marketing activity of SMEs

Table 2: Group similarities and differences for exporting barriers

Exporting barriers Infrequent Moderate Frequent One-way Anova and

exporters (I) exporters (II) exporters (III) Scheffe’s test
Mean SD Mean SD Mean SD F p-value Scheffe’s
test

Competing with overseas 3.62 0.99 4.00 0.72 3.81 0.98 1.45 0.24
producers
Finding the right distributor/agent 4.02 1.01 4.00 0.98 3.92 0.81 0.13 0.88
Slow payments/payment defaults 3.54 0.94 3.56 0.89 3.33 1.01 1.39 0.25
The cost of marketing overseas 3.69 0.98 3.63 0.82 3.53 0.77 0.37 0.69
Lack of market knowledge 3.60 1.05 3.33 1.09 2.89 1.12 4.56 0.01** I>III
Time in planning 3.27 1.04 2.67 0.82 2.61 0.69 7.14 0.00* I>II, I>III
Lack of experience 3.25 0.97 2.54 1.06 2.47 0.81 8.87 0.00* I>II, I>III
Cultural/language problems 3.17 0.90 2.92 1.02 2.75 0.87 2.33 0.11
Lack of export incentives 3.50 0.98 3.63 1.01 3.17 0.97 1.88 0.16
International standards 3.23 1.08 3.08 0.93 2.94 1.04 0.82 0.44
Import duties 3.32 1.12 3.46 0.93 3.31 1.21 0.15 0.86
Transportation difficulties 3.08 0.88 2.75 0.90 2.72 0.74 1.40 0.25
Currency exchange fluctuations 3.62 1.01 3.38 0.77 3.44 0.91 0.67 0.51
Lack of export assistance 3.38 0.97 3.29 1.08 2.86 0.87 3.28 0.04** I>III
Customs and clearance 3.17 0.98 3.25 0.90 3.25 0.91 0.09 0.91
Unfavourable conditions 3.31 0.90 3.04 0.82 3.14 0.93 0.84 0.43
overseas

*p < 0.01, **p < 0.05, ***p < 0.1.

Mean scores calculated based on data collected on a 5-point scale ranging from 1 — strongly disagree, to 5 — strongly agree.

barrier to export, as this factor was viewed
upon as a significant problem across the
spectrum of firms. As with the exporting
motivational stimuli, no significant
differences were found for the vast
majority of the variables when the three
groups were analysed.
Nevertheless, a lack of market
knowledge and export assistance was
perceived to represent significantly greater
trade barriers for infrequent exporters
compared with frequently exporting
companies. Similarly, lack of experience
and the time needed to plan for export
appeared to be a significantly greater trade
barrier for infrequent exporters in contrast
to both moderate and frequent exporters.
Characteristics of markets served
On analysis of the regions where
respondents export to (Table 3), it can be
seen that the vast majority of frequently
exporting firms do business in all the
territories listed. Specifically, firms that
operate at this level have an extensive
coverage of global markets, and over 90
per cent of this cluster have successfully
experienced business in between 11 and
16 geographic locations, which include the
Far East and Australasia, the Americas and
the Gulf and Europe. Frequent exporters
have achieved orders on average in just
short of 14 of the 16 market territories
listed.
Moderate exporting SMEs have tended
to have wide experience of business
within the EU (including Ireland). An
encouraging sign for British exporters can
be seen regarding the Middle East, as for
this cluster, over 70 per cent have
experienced business there. This is
particularly interesting when considering
the cultural differences; however, for many
countries in this area, English is widely
utilised as the commercial language, and
healthy business relationships have been
established between the UK government
and many of the major countries in the
Gulf. Companies in this cluster have
obtained orders from between five and 11
different territories, with the average SME
doing business in around eight territories.

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 Barnes, Chakrabarti and Palihawadana

Table 3: Market demographics

Territories covereda Infrequent Moderate Frequent

exporters exporters exporters

China (excl. Hong Kong) 5.8% 33.3% 63.9%

South America 5.8% 20.8% 69.4%
Africa (excl. RSA) 13.5% 33.3% 69.4%
Japan 21.2% 20.8% 72.2%
South East Asia (excl. Singapore & Malaysia) 5.8% 54.2% 88.9%
Central/E. Europe 5.8% 66.7% 77.8%
India/Sub-continent 3.8% 58.3% 86.1%
South Africa 3.8% 62.5% 86.1%
Singapore/Malaysia 9.6% 54.2% 91.7%
Hong Kong 5.8% 45.8% 97.2%
Australia/New Zealand 11.5% 45.8% 97.2%
N. America (incl. Mexico) 23.1% 54.2% 97.2%
Scandinavia 34.6% 50% 88.9%
Middle East 25% 70.8% 94.4%
Ireland 63.5% 70.8% 100%
EU (excl. Ireland) 57.7% 83.3% 97.2%
Mean number of territories served 2.96 8.21 13.81
Range of territories 1–6 5–11 11–16
a
These market territories were defined by the trade associations, in-line with governmental funding for international exhibitions and
trade mission programmes. Respondents were asked to express whether or not they conducted business in the territories covered. As
a result, the percentages were calculated based on the number of firms in each band (Infrequent, Moderate, Frequent) that exported
to these regions.

Infrequent exporting SMEs tend to highly committed to initiating and

operate at significant lower levels in
international markets. Although it can be
seen from Table 3 that they are
represented in all the territories listed, the
relative percentage compared with
moderate, and more so frequently
exporting respondents is significantly
lower. The majority of infrequent
exporters have experience of undertaking
business in Europe, they export on average
to approximately three different territories,
albeit, some do business in as many as six
international territories.
Success factors
Companies in each of the clusters felt that
the high quality of their products was the
most critical factor that helped them
become successful in international markets.
In Table 4, it can be seen that infrequent
exporting companies perceived that
innovative features of their products and a
competitive price were also judged to be
useful. Moderate exporters, however,
considered senior management that were
expanding export trade, and had expertise
and skills in export matters to be the
driving forces which fuelled international
market success.
The high quality and the price
competitiveness of products were among
the most important factors associated with
success among frequently exporting SMEs
in overseas markets. Senior management’s
high commitment for initiating and
expanding export sales, and their expertise
and skills in export matters also
represented major factors that were
perceived to contribute towards success. In
brief, there was a consensus among SMEs
operating in international healthcare and
medical markets that high-quality products
were perceived to be the key factor
associated with success. However,
interestingly, while moderate and
frequently exporting SMEs appreciated
senior management’s contributions, in
terms of their skills and commitment
being key criteria for success, such factors
were less relevant among infrequent

218 Journal of Medical Marketing Vol. 6, 3 209–221 © 2006 Palgrave Macmillan Ltd 1745-7904 $30.00
 Export marketing activity of SMEs

Table 4: Success factors in international markets

Success factorsa Infrequent Rank Moderate Rank Frequent Rank

exporters exporters exporters
(%) (%) (%)

High-quality of products 76.9 1 83.3 1 100 1

Price competitiveness of products 50 2 58.3 5 63.9 =2
Innovative features of products 44.2 3 62.5 4 55.6 5
Senior management with expertise and skills 28.8 5 66.7 =2 63.9 =2
in export matters
Senior management which is highly committed 32.7 4 66.7 =2 66.7 4
to initiating and expanding export sales
Access to good reliable suppliers 17.3 6 25 =6 33.3 6
Access to adequate financial resources 15.4 7 12.5 9 25 9
Access to information about potential overseas 9.6 8 25 =6 30.6 7
markets
Innovative marketing strategies 5.8 9 20.8 8 27.8 8
Firm’s labour relations 0 11 8.3 10 5.6 =10
Innovative production skills 3.8 10 4.2 11 5.6 =10
a
Respondents were asked to express whether or not these factors had a bearing on the export success of their organisation. As a
result, the percentages were calculated based on the number of firms in each band (Infrequent, Moderate, Frequent) that perceived
these items to be conducive to export success. The rankings have been assigned on the basis of the magnitude of the percentages.

exporters, who perhaps do not possess support organisations, and quasi-

designated staff.
Relative to other factors within each of
the three clusters, the innovative features
of products appeared to rank highly
among infrequent and moderate exporters,
but were of less relative importance
compared with other variables for frequent
exporters. Despite this, the majority of
frequent exporters did perceive this to
contribute towards their firm’s success. In
a similar scenario, being competitive on
price was perceived to rank significantly
high in relation to other factors among
infrequent and frequent exporters, but was
of less relative significance for moderate
exporting SMEs. However, as before, well
over the majority of moderate exporters
perceived price competitiveness to be an
influential factor.
DISCUSSION
The analysis and results have identified
many factors that appear useful for
providing assistance to firms for
developing their international operations.
Several suggestions have therefore been
derived with the intention of providing
insights to managers from within business
governmental commerce departments to
help firms within the sector. Distributor
recruitment programmes in key markets
need to be developed. These will help
companies find efficient and trustworthy
overseas international partners. Access to
information and marketing research is
required for markets that are near to the
UK. Despite European markets being
geographically close, huge cultural gaps
exist, and these need to be overcome to
encourage exporters to venture further
into international markets. Governmental
support and assistance could be focused on
helping firms to bridge language and
cultural barriers.
The government should consider
providing more finance for such firms to
visit and participate in trade fairs and visit
international markets. Providing guidance
for the development and evaluation of
marketing strategies is important for the
government, and links could be formed
with universities and consultants to
enlighten firms regarding the prospects of
exporting. Financial funding is important
and is needed in a systematic way. In-
market competitor research should be

© 2006 Palgrave Macmillan Ltd 1745-7904 $30.00 Vol. 6, 3 209–221 Journal of Medical Marketing 219
 Barnes, Chakrabarti and Palihawadana
initially undertaken for companies, to help
understand the nature and level of
competition in specific markets.
As currency fluctuation represented a
barrier for infrequent exporters, this
problem can be resolved to a certain
extent by encouraging firms to undertake
vocational training in international trade.
Such programmes have previously helped
managers to obtain knowledge needed in
international markets. Legal advice
regarding the protection against
opportunistic behaviour from distributors
and agents may also prove fruitful,
particularly at the initial stage when firms
are considering developing relations with
new partners. Items to be included could
be related to terms and conditions of the
contract, that is, length, payment schedules
and delivery, etc.
The maintenance and enhancement of
relationships are very important for
moderate and frequent exporters who
supply to a number of customers in
diverse markets. The ability to develop
international relationships are likely to be
beneficial for companies whose export
turnover tends to represent a significant
volume of their total sales revenue. Such
relationships need to be nurtured
particularly in times of economic change,
where globalisation and de-regulation are
forcing more firms to compete
internationally. Companies would therefore
benefit from learning more about the
nuances of customer relationship
management to help better understand the
importance and significance of managing
key accounts. Flexible payment systems
also need to be encouraged to reduce
slow and non-payment risk. A public
and private sector joint initiative, part-
financed by international banks, export
credit organisations, and the government
could be developed to encourage firms to
adopt alternative forms of payment, such
as credit finance options for export
business.
220 Journal of Medical Marketing Vol. 6, 3 209–221
Although the research has attempted to
provide some preliminary insights into
firms that operate internationally within
the sector, the findings are limited to UK
based SMEs that predominantly
manufacture devices for hospitals. As a
consequence, the authors suggest that
further and subsequent research should
be encouraged in different countries.
A transatlantic comparison involving
US medical suppliers may prove fruitful,
as would a European survey in France
and Germany, as (with the UK) each of
these nations tend to compete at similar
levels within international healthcare
markets. Other research could focus on
medical service providers, to see if they
share similar characteristics as
manufacturing firms. Relatively larger
firms, that is, multinational healthcare
organisations could also be targeted to
examine further aspects of international
business in contrast to this exporter
investigation.
It is envisaged that the findings and
recommendations will be useful for
business support organisations and
governmental commerce departments in
their quest for providing assistance for
helping such firms that operate in the
industry. Overall, it is hoped that the
results have contributed towards helping to
increase our knowledge of exporting firms
that operate within this industry, and will
help to stimulate further research
associated with this highly dynamic and
growing industrial sector.
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