EXPORT-MARKETING PROBLEMS OF SMES

: THE CASE OF LUDHIANA APPARELS AND

TEXTILE INDUSTRY

KARAN VOHRA

MA MARKETING

 
 EXPORT-MARKETING PROBLEMS OF SMES
:THE CASE OF LUDHIANA APPARELS AND
TEXTILE INDUSTRY

BY

KARAN VOHRA

2008

A Dissertation presented in part consideration for the degree of

“MA Marketing”

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ABSTRACT
Although, the benefits derived from exporting in an increasingly globalizes marketplace are

enormous, but for many small-sized manufacturing firms, the internationalization path is beset

by numerous challenges. This research seeks to investigate the perceived level of importance of

export-marketing problems and its importance depending on the exporting experience of the

firm. In light of certain gaps involving the dearth of major research in the context of Indian

Apparel and Textile Industry, attempt was made examine the existence of potential differences in

the perception of export marketing problems between the groups of two distinct exporter

categories in terms of export market experience.

The study reveals that many exporting problems are perceived to be important. The study also

reveals that certain obstacles caused by certain problems such as exchange rate fluctuations,

government related problems, export financing difficulties, etc. tends to decrease with a rise in

the experience of the firm and, vice-a-versa. The benefit of the study is that the methodology

provides in-depth understanding of exporting problems faced by SME Exporters but only in the

relation of exporters of industrial town of Ludhiana, India. At the end, necessary conclusion is

given with the summary of major findings. Effort has also been made to provide implications for

managers and public policymakers so as to bring prosperity in the industrial sector of India.

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ACKNOWLEDGEMENT

First and foremost, I would like to thank my supervisor, Dr. Mona Moufahim, who played a

significant role by helping me decide the framework of this dissertation and providing

continuous support and guidance without which this research would not have been possible.

Due to the nature of this investigation, requiring information from industry, I would like to

express my gratitude to all those who participated in the survey, with special thanks to Cross

Country Apparels and K.A. Exports Pvt. Ltd. for giving their valuable time and necessary

information when required.

I would like to specially thank to my parents, Mr. Rajeev Vohra & Mrs. Sonia Vohra and my

grandparents for their never ending love and support. Their superior guidance helped to facilitate

me put this piece of work together. It is their encouragement and cares that drive me go ahead

and give me the courage to overcome all the difficulties in this study.

Also I would like to specially thank Sonal Mehta (Friend) for taking time out of her busy

schedules and helping me with this project. I would also like to thank all other friends of mine in

Nottingham and India for their assistance and encouragement.

Last but not least, I would like to thank God – The Almighty for rendering all his blessings on

me, which has helped me to achieve success in whatever I have pursued in life and wish to

continue doing so in future.

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TABLE OF CONTENTS

Chapter 1 - Introduction .............................................................. 9

1.1 Indian Economy ............................................................................................9
1.2 Indian Apparel and Textile Industry ...............................................................10
1.2.1 SWOT Analysis ......................................................................................................................................... 12

1.3 Rationale of Research .....................................................................................13

1.4 Research Questions .........................................................................................14
1.5 Structure of Dissertation .................................................................................15

Chapter 2 - Literature Review................................................... 17

2.1 Introduction .....................................................................................................17
2.2 Small and Medium Enterprises SMEs ............................................................17
2.3 Market Orientation ..........................................................................................20
2.3.1 Market Orientation and SME ..................................................................................................................... 21

2.3.2 Market Orientation and Indian Firms ......................................................................................................... 24

2.3.3 Market Orientation and Innovation ............................................................................................................ 25

2.3.4 Export Market Orientation ......................................................................................................................... 27

2.4 Categorization of Export Problems ................................................................28

2.4.1 External Problems ...................................................................................................................................... 30

2.4.2 Operational Problems................................................................................................................................. 31

2.4.3 Internal Problems ....................................................................................................................................... 32

2.4.4 Informational Problems ............................................................................................................................. 33

Chapter 3 – Research Methodology .......................................... 35

3.1 Introduction .....................................................................................................35
3.2 Role of Methodology ......................................................................................35
3.3 Research Design .............................................................................................35

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 3.3.1 Difference between Quantitative and Qualitative Research Methods ........................................................36

3.3.2 Mixed-Methods Research .......................................................................................................................... 38

3.4 Data Collection ...............................................................................................39

3.4.1 Sample ....................................................................................................................................................... 41

3.5 Questionnaire ..................................................................................................42

3.6 Interviews ........................................................................................................43
3.6.1 Interview questions .................................................................................................................................... 44

3.7 Data Analysis ..................................................................................................45

3.8 Ethics and Legal Considerations ....................................................................46

Chapter 4 - Findings and Analysis ............................................ 47

Chapter 5 - Discussion .............................................................. 56
5.1 External Problems ...........................................................................................56
5.2 Operational Problems .....................................................................................63
5.3 Informational Problems ..................................................................................64
5.4 Internal Problems ............................................................................................67
5.5 Market Orientation and Innovation ................................................................67

Chapter 6 - Conclusion ............................................................. 70

6.1 Conclusion ......................................................................................................70
6.2 Implications.....................................................................................................72
6.3 Limitations of Research ..................................................................................73
6.4 Recommendations for further research ...........................................................74
6.5 Summary .........................................................................................................74

References ................................................................................. 76
Appendix ................................................................................... 83

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 Appendix-1 EU Apparel Imports before and after Quota Elimination ................83
Appendix-2 US Apparel Imports before and after Quota Elimination.................85
Appendix-3 Different Definitions of SMEs .........................................................87
Appendix-4 Questionnaire ....................................................................................89
Appendix-5 Profiles of Interviewed Companies ..................................................97
Appendix-6 Response to the Importance of Exporting Problems ........................99
Appendix-7 Full Result of Independent sample t- test .......................................101

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List of Figures
Figure 1: SWOT Analysis on Indian Apparel and Textile Industry ....... 13
Figure 2: The Definitions of MSM Enterprises...................................... 19
Figure 3: Difference between Quantitative and Qualitative Methods .... 37

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List of Tables
Table 1: Response to the Importance of Exporting Problems ................ 48
Table 2: Exporters' Perception depending on Exporting Experience ..... 51

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CHAPTER 1 - INTRODUCTION

1.1 I NDIAN E CONOMY

In the developing world, India has emerged as one of the most affluent economies with constant

growth and a few setbacks. In terms of Gross Domestic Product (GDP), India ranks fourth in the

world with an estimated GDP (PPP) of $2.989 trillion and a growth rate of 9.2%. The rapid

growth and positive report of the Indian economy, makes it an attractive place for the foreign

investment. Since liberalization in 1991, Indian economy has roofed an extended ground. In spite

of the surfeit apparel and textile sourcing opportunities around the world, the foreign buyers and

retailers are attracted towards India as a favoured destination only after China.

In India, the industrial sector is divided into two main sub-sector i.e. Large Scale Industries and

Small and Medium Scale Industries. Both the sectors have been a priority sectors for

Government of India since Independence in 1947 with special emphasis to the development of

Small and medium Scale Industries (SSI). Small and Medium Enterprises (SMEs) also known as

Small and medium Scale Industries (SSI) in India constitute an important segment of the Indian

economy in terms of their contribution to the country’s industrial production, exports,

employment and creation of an entrepreneurial base. In 2003-04, SSI sector contributed about

40% of total industrial output and over 34% to country’s exports. It also provided employment to

nearly 25 million people around the country. Keeping in view the pivotal importance of this

sector, the government has formed a new ministry called The Ministry of Micro, Small and

Medium Enterprises in 2007, with the merger of Ministry of Small Scale Industries and Ministry

of Agro and Rural Industries.

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During the Liberalization of 1991, the New Industrial Policy was framed under which special

emphasis was given to the growth and development of Micro, Small and Medium Enterprises

and all the industries except a few were open for small and medium enterprises. This meant that

young entrepreneurs and SME sector could start any business of their choice with any amount of

capital and scale without acquiring any license or permission. Thus, Trade was made free and

any restriction which hindered the growth of SMEs was removed.

The New Economic Policy led to exemplary development of SSI sector, with growth rate of SSI

sector exceeding overall growth of industrial sector. In 2005-06 the industrial growth rate was

constant at 8.10 as compared to 8.40% in 2004-05, whereas SSI showed a growth rate of 12.32%

in 2005-06 as compared to 10.88% in 2004-05. SSI sector has also been contributing

substantially to India’s GDP where it contributed 5.82% in 2003-04 at 1999-2000 prices (SSI

Annual Report, 2006-07). Further, SSIs’ have performed tremendously in exports since 1991-92

with a rise in exports from INR1 138830 million in 1991-92 to INR 1244170 million in 2004-05

showing a humongous increase of 800% within 14 years (SSI Annual Report, 2006-07). Thus,

SSI or SMEs (for this research) sector is playing potential role in improving the Indian economy

by increasing exports, generating employment, raising standard of living, poverty eradication,

promoting education, etc.

1.2 I NDIAN A PPAREL AND T EXTILE I NDUSTRY

Indian Apparel and Textile Industry has engraved a niche for itself in the world apparel and

textile market. It is an important contributor to the Indian economy and one of the few industries

which is vertically integrated from raw materials to finished goods. Indian textile firms in the

                                                                 
1
 INR= Indian National Rupee 

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early days of liberalization in 1991 could not resist the temptation to explore the global textile

markets. As a result, a brisk growth in marketing and merchandising activities, design

management, fashion communications management, garment manufacturing technology, etc.

was observed. As a result, many large companies like Gap, Nike, Reebok, Tesco, Next, Asda,

Wal-Mart, etc started sourcing apparels, textiles and other commodities from India

(Subbulakshmi, 2004). The next crucial phase for the textile sector had begun in January 2005;

after which the textile quota system namely, Multi-fibre Arrangement (MFA) which governed

the global trade of textiles and apparels for more than 4 decades, started getting dismantled. As a

result, the post-2005 Indian firms have gained in a big way and several huge new investments

have begun pouring in with a view to exploit the opportunities emerging in the global textile and

apparel market.

From January 2005, the world apparel and textile sector is fully integrated into the

regulatory framework of the General Agreement on Tariffs and Trade (GATT) of the World

Trade Organization (WTO). In this quota-free regime, buyers are now free to source apparels and

textile in any amount from any country; suppliers are similarly free to export as much product as

they are able, subject only to a system of national tariffs. As such, Indian apparel and textile has

become increasingly integrated with the global market. On the other hand, as global competition

intensifies under the new quota-free trading regime, countries are bracing for major changes in

the structure of sourcing and apparel supply worldwide. As a result, it has exposed the Indian

textiles industry to the threat of import penetration.

Indian Apparel and Textile Industry is 2nd largest industry in India by employment providing

livelihood to 35.0 million people (2005), generating 1/5th of the total export earnings and

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contributes 4 per cent to the GDP thereby making it one of the largest industrial sector of the

country. The world apparel and textile industry is worth US $450 billion with apparel accounting

for 60% of the market and textiles amounting to remaining 40%. India’s share in this global

market is only about 4.30 per cent with exports world US $19.2 billion recording a growth of

about 7% over the previous year (Ernst and Young, 2007). China, India and Pakistan are the

biggest beneficiaries of abolition of quota regime for exports into US and EU. India’s post-quota

share in US’s apparel imports have increased 4-fold from 4% pre-quota to 15% post-quota,

whereas the post-quota share of most countries have decreased from pre-quota period (see

Appendix-1). Likewise, EU’s apparel imports have increased from 6% pre-quota to 9% post-

quota (see Appendix-2). Thus, keeping in view the increasing trend of global trade, the Indian

Apparel and textile sector aspires to grow its revenue to US $95 billion, its export value to US

$55 billion with additional employment to 12 million by the year 2012 (Annual Report, Textile

Ministry, 2007-08; 2005-06).

1.2.1 SWOT A NALYSIS

Looking at the importance of the Indian Apparel and Textile Industry, a SWOT Analysis of the

Industry is done in the context of world apparel and textile industry. As such keeping in view this

analysis, managers and public policymakers should thrive on building upon these strengths;

removing the weaknesses by converting them into strengths; should take the advantage of the

available opportunities and finally, should make necessary efforts to reduce or overcome these

threats. The following figure shows the SWOT Analysis of the industry.

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 Figure 1: SWOT Analysis on Indian Apparel and Textile Industry

STRENGTHS
2nd Largest Industry of India
Vertically Intergrated Industry
Largest Exporter to EU and 2nd largest to
US
Quota-free Trade Regime
Strong Raw Material Base
Cheap Labour
Cost Competitiveness
SWOT
OPPORTUNITIES
Can become Leader in World Apparel
Exports
Capable of reducing the level of
Unemployment
Need to focus on New Product Development
WEAKNESSESS
Immature Industry
Lack of Professionalism
Lack of sufficient Skilled Labour
Obsolete Technology of Production
Insufficient Support provided by
Government
Lack of Market Information
THREATS
Strong International Competition, especially
--Chinese Aggression
Risk of Selling Abroad
Recession in Foreign Markets
Unpredictable Currency Exchange Risks
Improvement in Quality

1.3 R ATIONALE OF R ESEARCH

Apparel and Textile Industry is one of the largest manufacturing industries of India. It has great

opportunities for growth and expansion both domestically and internationally. India’s Apparel

industry is mostly characterized with exports to many retailers around the world executed mostly

through Export Houses and procurement/commissioning offices of large global apparel retailers.

Woollen Apparels contribute a small but very substantial part of the apparel industry with its

rapid growth and export opportunities. This industry is characterized with large number of small

and medium sized (SME) firms but only a few large scale firms (Chandra, 2005).

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Many empirical studies argue that there exist a positive relation between firm size and exporting

experience on one hand and behaviour on the other. This means that large firms should fare

better than small firms in exports because of importance of economies of scale in production,

R&D expenditure, lack of investments, lack of intuitional supports, risk taking abilities and

possible price discriminatory behaviour of large firms (Patibandla, 1995). All this has given rise

to numerous export marketing problems for relatively small firms, where these are finding it

difficult to locate substantial buyer and making the product saleable in the export market.

Moreover, marketing the SME’s products and services is completely different from that of large

firms (Stokes, 2000). Therefore, studying the marketing phenomenon in SME’s context is

important as contributes a lot to the exports of the country.

Thus, the aim of the study is to analyze the various export marketing problems of apparel

manufacturing and exporting firms and to evaluate opportunities that can be availed from these

problems so that this sector can grow to its fullest strength and compete with counterparts like

China and Thailand.

1.4 R ESEARCH Q UESTIONS

Though Indian Apparel and Textile industry is growing at a very fast rate, it has many

opportunities that can be managed and utilized when various problems relating to marketing and

other areas are solved and taken care of. Thus, this study focuses on export marketing problems

of Indian SMEs and their relative perception of these problems depending on the export market

experience of these firms. Moreover, an in-depth study into the export-marketing problems of

SMEs of Indian Apparel and textile industry has not been taken up in the recent past. Thus, the

objective of this research is to examine the following aspects: firstly, to evaluate the performance

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of Indian SMEs and identify issues relating to market orientation; secondly, to identify and

analyze various Export Marketing Problems in context of SMEs of Woollen Apparel Industry;

thirdly, to examine whether the perception of these problems vary with exporting experience of

the firm and finally, to find and suggest possible solutions to these problems. The following

statement represents the research question:

“What are India’s Woollen Apparel and Textile SME Exporters perception about various export

marketing problems, depending upon the exporting experience of the firm and how these firms

adjust themselves and solve these problems?”

To achieve these objectives and answer the research question, some exporting SMEs of industrial

city of Ludhiana, India will be investigated in order to assess the intensity of various exporting

problems.

1.5 S TRUCTURE OF D ISSERTATION

This research is divided into six chapters. The first chapter, Introduction provides an overview of

the Indian Apparel and Garment Industry, with brief discussion of its strengths and problems in

export market and finally, overall research objectives. The second chapter, Literature Review

discusses the past studies into the market orientation in relation to Indian Small and Medium

Enterprises (SMEs), export market oriented activities; and finally, on various exporting

marketing problems. The three chapter, i.e. Methodology defines provides the information

relating to collection of data and various methods used for analyzing the data. The forth chapter

describes the empirical results and findings of the research by evaluating the data collected.

Chapter five, i.e. Discussion talks about the findings and analysis in relation to the literature

reviewed earlier and the relevance of export market orientation to Indian firms. The last chapter

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concludes the research, provides managerial and public policymaker implications and outlines

the research limitations and recommendations for further research.

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CHAPTER 2 - LITERATURE REVIEW

2.1 I NTRODUCTION
Increasing globalization, changing economies, deregulations and liberalizations is forcing the

companies to respond and grow differently and efficiently from past. Companies are trying hard

to get out of the shackles of old transactional marketing orientation and adopt new relationship

marketing orientation, thus adjusting in the present scenario. In this chapter of the research,

present scenario of Indian exports will be discussed. Then, time will be spent on discussing the

marketing orientation for SMEs with special emphasis to Indian exporting firms. In the later

part, relevant literature will be reviewed in relation to various export barriers faced by the

exporting firms. At the end limitations will be discussed and conclusion will be given.

2.2 S MALL AND M EDIUM E NTERPRISES SME S

Small and Medium Enterprises or SMEs are the enterprises which are run as an independent

business with personal capital involved (McAuley, 2001). Though this definition is incomplete in

the context of the capital required or numbers of employees, but it provides a rough outline about

the nature of the enterprise. In fact, it is quite difficult to define a SME as there is no standard

world agreement on the size and the nature of the SME. Perhaps one of the most widely accepted

and pragmatic definition of small firm is based on the ideas of the Boston Committee Report

(1971) They identified three major characteristic of a firm which are likely to have strong effect

on the nature of decision making patterns and management of small firms (Hill, 2001). These

characteristic are:

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• they have relatively small share in the marketplace;

• they are managed by owners or part owner-managers in a personalized way, and may not

have any formal managerial structure;

• they are an independent firm, and not associated with any other large firm.

Source: Hill (2001) and McAuley (2001)

On the other hand, the Commission of the European Communities (1992) and the European

Network for SME Research (1994) group the different size and scale of industries as follows:

• Micro: Nought to nine employees.

• Small: Ten to ninety nine employees.

• Medium: One hundred to four hundred and ninety nine employees.

• Large; Five hundred or more employees.

Source: Eyre and Smallman (1998) cited in McCartan-Quinn and Carson (2003)

Some more definitions of SMEs given by different organizations and transition countries around

the world are compiled under one list compiled from UNECE (2002) and World Bank (See

Appendix- 3).

Conversely, the definition of SME provided by Indian Government is based on the capital

employed in the plant and machinery of the firm. The Micro, Small and Medium Enterprises

Development Act, 2006 (MSMED Act, 2006) carved out for the administration and policy

formation of SME sector provides the definition for Small and Medium Enterprises. Thus, the

summary of this act reveals that “The Micro, Small and Medium Enterprises Development Act,

2006, covers entities with an investment of up to Rs 10 crore in the manufacturing sector and of

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 up to Rs 5 crore in the services sector.” The detailed definitions of MSM Enterprises are as

following:

Figure 2: The Definitions of MSM Enterprises

Investment in plant and machinery/equipment (excluding land

and building)

Manufacturing Enterprises Service Enterprises

Micro Enterprises up to Rs2. 25 lakh3 Up to Rs. 10 lakh

Small Enterprises More than Rs. 25 lakh and up to More than Rs. 10 lakh
Rs. 5 crore4
up to Rs. 2 crore

Medium Enterprises More than Rs. 5 crore and More than Rs. 2 crore and up to
Rs. 5 crore
up to Rs. 10 crore

Source: Ministry of Small Scale Industries, Annual Report, 2006-07

Thus, there is no single definition on which there is consensus in the literature. Moreover, the

criteria for defining the small firm varies from number of employees, to the sale volume, to

capital employed in the plant and machinery (Ministry of Small Scale Industries, 2003), type of

customer and capital requirements (Ibrahim and Goodwin, 1986) and sheer organizational size or

industry market share (Chen and Hambrick, 1995). The definitions arrived by various authors,

departments, or committees are no longer particularly appropriate and have been constantly

affected by variations in national boundaries (Hill, 2001 and McAuley, 2001). For the present

research, the definition provided by MSMED Act, 2006 in the Indian context is suitable and thus,

would be used in distinguishing the firms during the selection of the data set.

                                                                 
2
 Rs.= INR= Indian National Rupee 
3
 1 Lakh= 0.1 million 
4
 1 Crore= 10 million 

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In next part of this chapter, market orientation will be discussed which is perceived to be most

important factor overcoming the barriers of exporting-marketing problems.

2.3 M ARKET O RIENTATION

Drucker, (1954) was the first one to advocate that general management of the firm has

responsibility towards the marketing and that should be guided by “marketing concept”. From

then, market orientation has been recognized as a key theme in recent times helping in great deal

by providing sustainable competitive advantage to the organizations by creating consistently

superior value for customers (Narver, Slater and Tietje, 1998; Slater and Narver, 1994). Being

market-oriented means that companies try to understand and respond to customers’ latent and

future needs (Slater and Narver 1999, 1994). In the past, there has been many efforts in

developing sustainable theories for market orientation but there applicability to the business

process was difficult, thus rendering them as philosophical business theory, rather than strategic

business tool (Venkatesan and Soutar, 2000). But recently, two models had emerged which

expanding the view of market orientation. These efforts were made by--- Kohli and Jaworski

(1990) and Narver and Slater (1990) which changed the entire view relating to market orientation

and made it more operationalized as a strategic tool (Venkatesan and Soutar, 2000). In Narver

and Slater’s, (1990: 210) view “Market orientation is the organizational culture that most

effectively and efficiently creates the necessary behaviours for the creation of superior value for

buyers and thus, continuous superior performance for the business”. This model viewed market

orientation as a set of organizational behaviour with focus on three main groups i.e. customers,

competitors and the organization itself with the aim of targeting them as one group and thus,

creating a bond between them.

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In contrast, Kohli and Jaworski (1990) defined market orientation as “The organization wide

generation of market intelligence pertaining to current and future customer needs, dissemination

of the intelligence across departments and organization wide responsiveness to it.” This model

thus suggested three core aspects, namely--- generation of marketing intelligence, dissimilation

of intelligence throughout the organization and finally, the response of the organization as whole.

In conceptualization, both the models are invariably the same in creating a strong customer base

and improving the profitability of the company, the main difference between them is the way

with which they are operationalized and implemented in company’s operations (Venkatesan and

Soutar, 2000).

2.3.1 M ARKET O RIENTATION AND SME

The process regarding the application and operationalization of market orientation to small

business firms has been dubious and different authors and researchers have different verdict

about its applicability. The problem arises when applicability of market orientation to a different

firm size, strategy, and other environmental characteristics is examined (Becherer et.al, 2001).

Large firms have been noted for their market responsiveness (see Day and Nedungadi, 1994, for

example), i.e. they have responded positively to different models of market orientation and have

been successful in launching new products and working in the close vicinity of the customers.

Horng and Chen (1998) affirm that market orientation is not only a concern of marketing

department but it is a organization-wide activity facilitating coordination and responsibility

sharing between the marketing department and others. A Taiwanese survey found that Taiwan’s

small manufacturing firms use marketing as strategic tool with more emphasis than the other

larger companies (Horng and Chen, 1998). In their analysis, Horng and Chen (1998) proved that

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top manager’s emphasis on marketing orientation had positively affected the process of

‘intelligence dissimilation and the responsiveness of the organization’. In contrast, it has also

been proved that lack of marketing training among the managers is the most important problem

of small firms. Thus, to increase the overall marketing orientation of the managers, they should

be sent to marketing training programs (Horng and Chen, 1998). Pelham (2000) also confirms a

strong influence of management’s marketing orientation on the dimensions of firm’s

performance. He also suggests that organization-wide marketing orientation culture provide

needed input and efforts for the preparation of marketing plans which, as a result will improve

firm’s overall performance (Pelham, 2000). Ennis (1998) in his study proves the importance of

preparing/developing marketing plans for small firms so as to gain the advantage of limited

resources at their disposal.

The review of previous researches into the theory of market orientation reveals a mixed response

towards its applicability to small and medium enterprises. According to Siu and Kirby (1999)

these models (Kohli and Jaworski, 1990 and Narver and Slater, 1990) have been developed in

isolation with the SMEs, as a result are not applicable to marketing problems of SMEs. Instead

he claims of developing a new model which is completely related to the marketing problems of

the SMEs. He proposes that in order to develop a balanced view, normative business models and

specific small business models to be clubbed together to form a framework which is applicable

to small and medium entrepreneurial firms. The model developed by Siu and Kirby (1999) is

based on the 19 most important marketing problems (Dunn et.al, 1986) and 8 dimensions of

measuring market performance (Carlson, 1990). The results show peculiar feature that Chinese

small firms are more product or production oriented, then being market or customer oriented.

But, depending on the nature of the business and conditions of the market in which a particular

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firm is present, the results are not surprising as most of the firms like these in China or India

“perform as production arms of the overseas buyers” (Siu and Kirby, 1999:267). Thus, rejecting

the present models of market orientation (Kohli and Jaworski, 1990 and Narver and Slater,

1990), he urges for the development of models which better suits the distinctive nature and needs

of Eastern countries small firms as the marketing needs of Eastern and Western small firms are

different.

Verhees and Meulenberg (2004) in their research assert that specific resources and capabilities of

small firms have consequences for market orientation as defined by Kohli and Jaworski (1990).

According to them, small firms have scarce resources for market intelligence generation and

thus, there is no room for marketing specialist. But they very much rely on secondary data (such

as business journals, newspapers, or even personal contacts, word-to-mouth, suppliers, bankers,

etc.) for generating sustainable market intelligence. Further, dissimilation of marketing

intelligence is not a major issue for small firms as most of the decision making is centralized and

there is no need to share or dissimilate the information to lower levels. However, intelligence

dissimilated to employers and lower-level managers may increase employee motivation

(Ruekert, 1992 as cited in Verhees and Meulenberg, 2004) and thus, making the firm more

market oriented. Finally, informed owners and managers can respond to market changes with

alacrity and flexibility as the decision-making is non-bureaucratic and is able to oversee the

company’s operations. In this way Verhees and Meulenberg (2004), advocates the applicability

of market orientation in the context of small and medium enterprises (SMEs).

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2.3.2 M ARKET O RIENTATION AND I NDIAN F IRMS
In a key research by Aggarwal and Singh (2004), emphasis was laid on measuring marketing

orientation, its components and various factors impinging on the market orientation of Indian

organizations. Kohli and Jaworski (1990) model was chosen to measure the market orientation

with items relating to information generation, information dissemination, and overall

responsiveness. In context of Indian firms, results show high priority to market information

generation with organization-wide focus on generating information from customers, retailers and

distributors and suppliers and secondary marketing research. Consecutively, information

dissimilation seemed to have equally high priority within the organization. Special focus was

given to cross-functional meetings, interdepartmental meetings, and interaction of marketing

personnel with other departments to discuss the market trends and developments, regulatory

environmental changes, etc. This has resulted into a perception that market information spreads

quickly through all levels in the company (Aggarwal and Singh, 2004). In contrast, results

showed comparative weakness in overall organizational responsiveness towards the competitor’s

actions and coordination among different departments (Aggarwal and Singh, 2004). This result is

constant with the result of Horng and Chen (1998) which they found that employee’s

commitment towards the firm is particularly affected by responsiveness of the organization.

Thus, it is suggested that “small firms should focus on designing responsive mechanism to

increase the employee’s satisfaction” Horng and Chen (1998).

In a different context, Venkatesan and Soutar (2000), rejects the applicability of Kohli and

Jowarski’s (1990) function based model to Australian SMEs and advocates Narver and Slater’s

(1990) behaviour based model more suitable for studying SMEs on the basis of results of sample

surveyed. They believe that marketing activity of an organization is not only limited to

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information gathering, dissimilating and responsiveness (as put forward by Kohli and Jowarski,

1990) but some other dimensions such as customer service and product quality which can be

studied in Narver and Slater’s (1990) model. Thus, in the context of Narver and Slater’s (1990)

model, being customer-oriented construct was found to be more appropriate than being

competitor-oriented construct. But, on the other hand, interfunctional coordination construct was

not consider appropriate as there was found a lack of separate functional departments in the SME

firms (Venkatesan and Soutar, 2000).

2.3.3 M ARKET O RIENTATION AND I NNOVATION

Another conceptual work of Slater and Narver (1994) assumes innovation as an important

meditation link that drives market orientation-performance relationship. This means that

innovation and innovative thinking will make a firm market oriented, thus bringing profitability

to the firm. Han et.al (1998) considers innovation as a missing link between the market-

orientation and organizational performance. Innovation in small firms have been extensively

studied and practiced in relation to entrepreneurship (Han et.al, 1998; Geursen and Mulye,

2000). The term entrepreneur has been applied as “the person who creates new combinations,

investigate how to fulfil currently unsatisfied needs or perceives a more efficient means of doing

what is already being done” (Schumpeter 1934, quoted by Verhees and Meulenberg, 2004, pg.

138). This means an entrepreneur is always in search of problems with the aim of doing business

and earning profit by finding different solutions for such problems. Entrepreneurs have always

linked with small and medium sized firms as they start on a small scale with scarce resources

with the aim of developing niche in the market (Verhees and Meulenberg, 2004). But as

criticized by many authors, innovation, especially product innovation is difficult to introduce as

limited resources and capabilities prevent small firms in many industries from conducting in-

25 

 
house research and development activities (Verhees and Meulenberg, 2004 and Han et.al, 1998).

In Han et.al (1998) view, market orientation not only involves improvements in product-related

aspect but also facilitating organizational facets and new processes in the organization.

Deshpande, Farley, and Webster (1993) demonstrate a positive correlation between customer

orientation and innovative firms with performance linked to market orientation and innovation.

Verhees and Meulenberg’s (2004) study confirms the presence of positive relationship between

market orientation and firm’s performance, and consumer market intelligence is positively

related to firm’s performance. Geursen and Mulye (2000), confirms this result in their study by

asserting that a direct and two-way communication with the customers helps in achieving market

orientation. Han et.al (1998) findings are in line with the results provided by Verhees and

Meulenberg’s, (2004) and Geursen and Mulye (2000), where ‘customer orientation is highly

significant for organizational innovation’. Other authors, as cited by Han et.al (1998) (for

example Lawton and Parasuraman, 1980 and Peters, 1984) also claim that superior corporate

performance is derived from a commitment to total customer satisfaction, which can be brought

about by continuous innovation. On the other hand, they also assert that competitor orientation

and inter-functional coordination though important for market orientation, has no relevant

significance in bringing continuous innovation (Han et.al, 1998).

Thus, for the present study the theoretical model of market orientation provided by Kohli and

Jaworski (1990) will be used for further analysis of export-marketing problems of Indian

Apparel and Textile firms. Moreover, the discussion will be explained with special reference to

market orientation construct.

26 

 
2.3.4 E XPORT M ARKET O RIENTATION
Market orientation as defined by many authors and researchers, have been continuously been

applied to different business structures and environment. Though, the research into market

orientation still needs further investigation, “the research into firms’ market orientation in their

export operations is still in its early development stage” (Cadogan et.al, 2002). Several attempts

have been made to relate and integrate market orientation into international context (Cadogan

and Diamantopoulos, 1995; Cadogan et.al, 2002; Racela et.al, 2007), but major research have

been have been conducted in relation with domestic market (Racela et.al, 2007).

As discussed earlier, market orientation as proposed by Kohli and Jaworski (1990) is composed

by three organization-wide activities:

(1) market intelligence generation;

(2) inter-departmental intelligence dissemination; and

(3) firm’s responsiveness activities,

This model has been used to construct theoretical framework for export-market orientation in

many international business studies (Cadogan and Diamantopoulos, 1995; Racela et.al, 2007).

Racela et.al (2007) evidently proves that exporting firms, by being more market oriented can

enhance their relationship between overseas buyers and distributors, as it is perceived to be

important for achieving superior levels of performance. But Cadogan et.al (2002) on the other

hand, ignores the importance of relationship building on the basis of export-market oriented

activities. Instead, Cadogan et.al (2002) focuses on the importance of export-market oriented

activities on the firm’s exporting success and dependence of firm’s operation on exporting

activities. Racela et.al (2007) agrees with the view of Cadogan et.al (2002), suggesting that

27 

 
firms’ export market oriented behaviour is directly related to coordinating capabilities and level

of export market dependence. In traditional theories, such as (Aggarwal and Singh, 2004;

Verhees and Meulenberg, 2004; Han et.al, 1999) it is evident that there exists a direct

relationship between the firm’s experience in the market and the market orientation. But

Cadogan et.al, (2002) by giving an unexpected result provides a negative relationship between

the length of export experience and export-market oriented activities. They argue that such a

relation is a result of firm being old and bureaucratic, which fosters internal inflexibilities and

incapability to deal with rapid changing external environment and restraining innovation and

risk-taking (Cadogan et.al, 2002).

In conclusion, there has been mixed response towards the applicability and usefulness of various

market orientation models on small firms. Each of them focuses on delivering superior value to

its customers continuously (Narver and Slater, 1990, 1994; Kohli And Jawroski, 1990; Shapiro,

1988). Further, in this chapter, relevant literature relating to exporting problems of SMEs will be

analysed with relevance to export marketing activities as discussed above.

2.4 C ATEGORIZATION OF E XPORT P ROBLEMS

“Export problems or barriers are defined as those constraints that hinder the ability of firm to

initiate, develop or maintain export marketing activities of the firm” (Kaleka and Katsikeas,

1995). Though, these export marketing problems have been viewed differently by different

authors and researchers, but these are quite related to the degree of market orientation of the

firm. The more market oriented a firm is, less are the chances of firm being into the ocean of

major export-marketing problems. In Cadogan et.al (2002:616) words export-market oriented

(EMO) activity is defined as: “(a) generation of market intelligence pertinent to the firm's

28 

 
exporting operations, (b) dissemination of this information to appropriate decision makers, and

(c) design and implementation of responses directed towards export customers, export

competitors, and other extraneous export market factors which affect the firm and its ability to

provide superior value for export customers.” Thus, being market oriented helps the firm in

dealing with the export problems faced by time to time.

“Barriers to exporting are all those attitudinal, structural, operational and other constraints

that hinder the firm’s ability to initiate, develop and sustain international operations.”

(Leonidou, 1995:31)

There is diverse array of exporting problems that has been identified in various international

business literatures. The review of exporting problems literature reveals a diversified assortment

of conceptual frameworks and taxonomy of export problems and barriers. Leonidou (1995)

proposed that export barriers can be categorized as external or internal to the firm, and as

domestic or overseas. Whereas, Kaleka and Katsikeas (1995), combines these categories to

derive a new two-dimensional export barriers schema: internal-domestic; internal-foreign;

external-domestic and external-foreign. Cavusgil and Zou (1994), proposed a new

conceptualization framework of export marketing strategy stating that Export Marketing

Strategy, a driver of export performance, is run by two forces i.e. Internal Forces comprising of

firm characteristics and product characteristics, and External Forces comprising of industry

characteristics and export market characteristic. Further, in different context, Katsikeas and

Morgan, (1994) distinguished the exporting problems amongst external, operational, internal and

informational problems. The present study employs taxonomy of export problems as proposed

29 

 
by Katsikeas and Morgan (1994) as it captures the essence of the impending model of exporting

operations.

2.4.1 E XTERNAL P ROBLEMS

External problems or barriers are those barriers which are rooted in the external environment and

the firm itself has no control over the consequences of such problems. These problems are also

referred to as macro environment barriers or industrial barriers (Tesfom and Lutz, 2006). Many

researchers and academicians have recognized that the origins of a substantial number of export

problems facing the firms are couched in the external environment (Katsikeas and Morgan,

1994). In the words of Leonidou (1995) these problems stem from the home and the home

environment within which the firm operates. Some of these are the result of local government

policies and regulations, international trade barriers and quotas (WTO’s MFA), fierce

competition and exchange rate fluctuations. Stiglitz (2002) argues that prudent and carefully

crafted economic policies of government can minimize the international treats to any national

economy. Such inactive intervention by government has become the root cause for the crisis in

the country’s economy. The nature of these problems vary widely from issues like financial

constraints i.e. high cost of capital to finance exports (Katsikeas and Morgan, 1994; Kaleka and

Katsikeas, 1995; Tesfom and Lutz, 2006); to national export policies i.e. lack of government

assistance in overcoming export barriers (Leonidou, 1995; Kaleka and Katsikeas, 1995;

Baurschmidt et.al, 1985), ineffective national export promotion program (Kaleka and Katsikeas,

1995; Weaver and Pak, 1990); lack of export incentives provided by government (Cavusgil and

Zou, 1994; Neupert et.al, 2006) and finally, to the perceived procedural complexity in the nature

of red tape in the operation of public institutions (Katsikeas and Morgan, 1994; Kaleka and

Katsikeas, 1995) and presence of deep-rooted corruption in the public institution and

30 

 
departments (Stiglitz, 2002; Kaleka and Katsikeas, 1995; Tesfom and Lutz, 2006). The last and

the most important of all the problems emerging as a result of the changes in the external

environment is the volatile exchange rate fluctuations (Leonidou, 1995; Kaleka and Katsikeas,

1995; Baurschmidt et.al, 1985; Tesfom and Lutz, 2006 Katsikeas and Morgan, 1994) which

invariably effect the export performance of the SMEs in the developing countries. Finally, these

macro environment factors can exist in the backdrop of fierce international competition (Weaver

and Pak, 1990; Kaleka and Katsikeas, 1995; Tesfom and Lutz, 2006; Baurschmidt et.al, 1985)

which further weeds out the problems which are operational in nature.

2.4.2 O PERATIONAL P ROBLEMS

The problems emerging as a result of procedural difficulties in operating aspects of the

transaction with foreign customers, logistics and transportation problems, etc. are known as

operational or procedural problems of exporting. In Katsikeas and Morgan’s (1994) words, these

problem categories tend to be associated with the micro-level of export activity and includes

array of complex issues and procedural requirements in various exporting activities. Though the

lists of problems are not mutually exclusive and widely vary on different issues, some of them

are related to complex requirements in export documentation process (Leonidou, 1995; Tesfom

and Lutz, 2006; Katsikeas and Morgan, 1994), payment delays from overseas buyers and

distributors (Katsikeas and Morgan, 1994; Kaleka and Katsikeas, 1995; Tesfom and Lutz, 2006),

and risk of selling abroad including forgery and thefts (Kaleka and Katsikeas, 1995; Leonidou,

2004). Furthermore, other problems may arise from logistical constraints such as difficulties in

transporting the products exported (Katsikeas and Morgan, 1994; Kaleka and Katsikeas, 1995;

Baurschmidt et.al, 1985), further multiplied by high cost of transporting and physical distribution

process.

31 

 
2.4.3 I NTERNAL P ROBLEMS
Internal problems or barriers are the constraints associated with organizational resources/

capabilities and company approach to export business (Leonidou, 2004). In other words, these

problems are categorized as those which are directly related to the controllable issues within the

firm itself. Moreover, in Kaleka and Katsikeas’s (1995) words these problems are experienced

both in the domestic and as well as foreign context i.e. the problems which are internal in nature,

but are manifested in domestic country base whereas; internal-foreign problems are those which

are experienced in the country of the target-market. But in Wortzel and Wortzel (1981) view, the

volume of exports of the firms manufacturing and exporting from less developed or developing

countries have very limited overseas operations i.e. distribution and promotion activities in the

export markets. Thus, making large investments in the unknown overseas market to attract and

capture the market may be unwise and unnecessary for the firm, since the overseas consumer

base wouldn’t be enough to justify such actions. Thus, on the basis of such conclusion of

Wortzel and Wortzel (1981), it would be more practical and justifiable to not to divide internal

export barriers into domestic and foreign. Rather these problems should be considered as just

internal-firm export problems.

By and large, many export problems faced by SMEs exporting firm are directly related to the

controllable issues within the firm itself. These problems are intrinsic to the firm and are usually

associated with insufficient organizational resources for export marketing (Tesfom and Lutz,

2006). For instance, inability to self-finance exports (Weaver and Pak, 1990; Kaleka and

Katsikeas, 1995; Tesfom and Lutz, 2006; Katsikeas and Morgan, 1994); difficulty in meeting

importer’s product quality standards (Baurschmidt et.al, 1985; Tesfom and Lutz, 2006; Katsikeas

and Morgan, 1994) and poor product design and style for exporting goods (Neupert et.al, 2006;

32 

 
Baurschmidt et.al, 1985; Leonidou, 1995; Kaleka and Katsikeas, 1995). Further, some problems

can emerge as poor organization of firm's export department, lack of personnel qualified in

exporting marketing activities and lack of "experts" in export consulting (Katsikeas and Morgan,

1994; Kaleka and Katsikeas, 1995; Cavusgil and Zou, 1994; Tesfom and Lutz, 2006) to “draw

and develop initiatives for improved export marketing performance” (Tesfom and Lutz, 2006).

On the other hand, difficulty in making contacts with the foreign buyers i.e. identification of

appropriate overseas distributors and communication with overseas customers (Cavusgil and

Zou, 1994; Tesfom and Lutz, 2006; Leonidou, 2004).

Although quite fragmented, all these constitute to internal issues within the SME exporting firm

that influence export performance and ongoing export activities (Tesfom and Lutz, 2006;

Katsikeas and Morgan, 1994; Kaleka and Katsikeas, 1995).

2.4.4 I NFORMATIONAL P ROBLEMS

The final set of problems i.e. informational problems, can become quite apparent with a lack of

exposure to silent export market intelligence. In Katsikeas and Morgan (1994) words,

informational barriers refer to problems in identifying, selecting, and contacting international

markets due to information inefficiencies. Tesfom and Lutz (2006) on the other hand, refer these

problems to as marketing knowledge and information problems “which revolves around lack of

knowledge of foreign marketing and business practices and competition and lack of management

to generate foreign sales” (Tesfom and Lutz, 2006:270). Lack of knowledge or insufficient

information about the overseas and difficulty in locating promising markets is perceived to be a

major problem deteriorating exporting performance of SMEs in developing countries (Tesfom

and Lutz, 2006; Katsikeas and Morgan, 1994; Leonidou, 2004; Weaver and Pak, 1990). The

33 

 
possession of sufficient information helps in reducing uncertainty and face sophisticated and

turbulent foreign business environment. Further, export market research is a “keystone to the

effective formulation of an export marketing strategy” (Katsikeas and Morgan, 1994) and lack of

such resource can hinder the decision making (Katsikeas and Morgan, 1994; Weaver and Pak,

1990; Tesfom and Lutz, 2006; Neupert et.al, 2006). In addition to these problems, difficulty in

making contact with the overseas customers is a serious problem for many present and aspiring

exporters (Leonidou, 2004; 1995; Cavusgil and Zou, 1994; Tesfom and Lutz, 2006; Kaleka and

Katsikeas, 1995). These problems in turn, have disastrous effect on the promotion in the export

markets (Katsikeas and Morgan, 1994; Weaver and Pak, 1990).

A reviewed above, there is enough of the literature available on the exporting problems of the

SMEs in the developing countries, but there is need to systematically analyze the literature on the

regional context. As talking on country like India, there is a dearth of research into the marketing

and exporting problems of SMEs. Thus, the objective of the literature review is to:

• classify the export problems of SMEs in the developing world;

• identify these problems in the context of Indian SME firms and;

• to analyse the effect of exporting experience of the firm on the perception of the exporting

problem.

Efforts will be made to fill this gap in the present literature by applying both qualitative and

quantitative methods to do in-depth research into the export-marketing problems.

34 

 
CHAPTER 3 - RESEARCH METHODOLOGY

3.1 I NTRODUCTION
In this chapter information is given regarding the type of methodology used to carry out the

research to achieve the set objectives of the research. Justification is also given regarding the use

of mixed-methods approach i.e. quantitative and qualitative method for data collection and

analysis. Attempt has also been made to highlight the strengths and weakness of the research

methodology and limitations of the research.

3.2 R OLE OF M ETHODOLOGY

Research Methodology is the plan, system or an overall scheme upon which the investigation is

based so as to provide with the answers to research questions (Brown, 2006). Saunder et al.

(2000) defines research methodology as an operational structure under which the data is

collected and analyzed to clear meaning. It helps in defining rule of the game and thus making

available the procedures for each and every activity to be undertaken in the research (Brown,

2006). Thus, research methodologies are tools that are designed to aid our understanding of the

world (Onwuegbuzie & Leech, 2005).

3.3 R ESEARCH D ESIGN

“Research design refers to the plan of action that links the philosophical assumptions to specific

methods.”(Creswell, 2003; Creswell and Clark, 2007; Crotty, 1998) Survey research,

experimental research, ethnography and mixed methods are some of the research designs. To

achieve the set-out objectives of this research, the multi-method approach i.e. employing both

quantitative and qualitative methods for data collection and analysis is used in the present

research. In other words, the whole research was conducted in 2 phases: -- in the first phase, the

35 

 
participating firms were asked to fill the questionnaire and in the second phase, interviews were

conducted with the managers of the exporting firms to seek answers to and discuss the various

exporting problems as perceived to be important in the first phase of the research.

3.3.1 D IFFERENCE BETWEEN Q UANTITATIVE AND Q UALITATIVE R ESEARCH M ETHODS

Broadly there are two ways of conducting research in field of social science --- Quantitative and

Qualitative Research methods. From a very long time they have both been used very extensively

in the social science researches. Quantitative research focuses on counts and measure of things. It

deals with hard and rigorous data with the purpose of finding answers to the problem questions

through the application of scientific procedures and statistical analysis (M.B. Davies, 2007,

p.10). Qualitative research methodology on the other hand, deals with the soft, rich and deep data

as a result of someone’s views, opinions, emotions, suggestions, documents, dairy, etc.

Qualitative research involves exploratory, interpretative and naturalistic approach to the world

with an attempt to rationalize phenomena in the terms of meanings people bring to them (M.B.

Davies, 2007, p.10 & Denzin and Lincoln, 2003, p. 4).

Some other points of difference between the two have been discussed below.

36 

 
 Figure 3: Difference between Quantitative and Qualitative Methods

Basis of Difference Quantitative Research Qualitative Research

1. Relationship Fairly distant or short-lived Quite close-knit relation.

between researcher
relation.
and subject.
2. Researcher’s Outsider looking stance. Acts as an insider.
stance in relation to
the subject.
3. Relationship Confirmation. Emergent.
between concepts
and research.
4. Research strategy. Structured and close-ended Unstructured and open-ended
research.
strategy.

5. Scope of findings. Nomothetic i.e. findings are Ideographic i.e. findings are
irrespective of time and place. located in specific time and place.

6. Image of social Very static and external to actor. Processual and socially constructed
reality. by actor.
7. Nature of Data. Hard, reliable and easy to handle. Rich, deep and difficult to handle.

8. Method of Analysis conducted through the use Analysis conducted through the use
Analysis. of conceptualization. of statistics and diagrams.

By: A.Brayman (1999, p.36)

37 

 
As far as this research is concerned, it is related with the validation of theory relating to various

export-marketing problems in the case of Ludhiana’s Woollen Cluster and as well as discovery

of theory relating to the export-marketing strategies in this constantly changing world economic

environment. Thus, for this reason a mixed methods approach to the research is adopted to have

the benefits of both the methods and having an edge over the other research conducted.

3.3.2 M IXED -M ETHODS R ESEARCH

“Mixed method research is a research design with a philosophical assumptions as well as

methods of enquiry.” (Creswell and Clark, 2007, p.5) Thus, it is a combination of both

quantitative and qualitative methods for collection, interpretation and analysis of data in a single

scientific or social study.

But regarding the mixed-methods approach there always have been criticisms regarding its

foundation, establishment and usability. Different schools of thought have represented diverse

opinions regarding the nature of mixed-methods approach. According, to purists such as Bryman

(1984); Collins (1984) and Tashakkori &Tedlie (1988), quantitative and qualitative research

methods emerge from different ontologic, epistemlogic and axiologic assumptions of the nature

of the research (Onwuegbuzie & Leech, 2005). Some researchers also argue that, use of mixed-

methods approach is a costly and time-consuming method, and the results of which is

incompatible regarding the world is viewed (Onwuegbuzie & Leech, 2005). Thus, the two

methods could not be and should not be mixed (Smith and Heshusius, 1986 as cited in

Onwuegbuzie & Leech, 2005). Situationlists, being neutral, believe in treating both the methods

as ‘complementary’ (Vidich & Shapiro, 1955, p.33 as cited in Onwuegbuzie & Leech, 2005)

thus, gauging the importance of both quantitative and qualitative depending on the nature of the

38 

 
research problem. Finally, the pragmatists unlikely the purists and situationalists, believe in

integrating both the methods to understand the research problem better and hence producing

excellent results (Creswell &Clark, 2007 and Onwuegbuzie & Leech, 2005). Moreover, the

strengths and weaknesses of both the methods should be gauged and should be used in order to

produce and understand better social phenomena (Onwuegbuzie & Leech, 2005).

In this way, the mixed-methods approach provides the advantages of both survey and interview.

The survey or the questionnaire provided the efficient way of collecting responses from a large

sample which enabled the researcher in analyzing the intensity and effect of each problem. On

the other hand, interview is helpful in knowing the actual meaning behind the data collected and

to gain insight about the various problems and possible solutions. According to M.B. Davies

(2007), two routes to research i.e. quantitative and qualitative methods are not mutually

exclusive. Thus, the mixed-methods approach in a research is a fairly good option. Moreover,

researchers and students are often tempted by the roundedness of this approach (M.B. Davies,

2007). The adoption of multi-method approach for the necessary as the adoption of just

quantitative methods was not sufficient to completely understand the problem, whereas the use

of qualitative method would not have allowed the research to be generalized among woollen

industry. Thus, this kind of approach to research methodology was necessary for research into

such discipline.

3.4 D ATA C OLLECTION

In the data collection process, every effort was made to secure the best data from the

respondents. For this purpose, interviews were conducted to achieve higher rate of response and

secure best data for the research. Therefore, Interview-administered surveys were conducted for

39 

 
getting the questionnaires filled. This method of data collection has been used keeping in mind

the attitude of the Indian managers and achieving high-response rate of the survey. Interview-

administered surveys have many other advantages and disadvantages to its account (Burns,

2000):

Advantages:

1. Provides more flexibility and control of the situation to the interviewer.

2. Has a higher response rate as compared to mail-survey method as people are more

comfortable to answer to the questions than to ideally writing responses to the question.

3. Face-to face interaction helps in establishing rapport and a higher rate of motivation

among respondents.

4. Is helpful when extensive data is required on small number of complex topics.

Disadvantages:

1. This method is more expensive and time consuming as compared to other methods of

conducting survey.

2. Survey gets concentrated only to a limited number of respondents due to time and financial

constraints.

3. Requires skilled and trained interviewers for best results.

4. The respondents may feel reluctant to share sensitive information.

Key informant technique was used extensively so as to secure the best results from the most

appropriate person of the participating firm. Thus, all the interviews were conducted directly

from the owners, directors or the partners of the participating firm who had substantial

40 

 
knowledge about the firm’s export performance and export- relating marketing activities. This

approach however, has been highly criticized by many authors or researchers as a reason of

general bias towards the response given, effort to make a good impression of the firm, position

bias and ignorance of actual facts (Katsikeas and Morgan, 1994).

3.4.1 S AMPLE
Stratified sampling was used to select the sample for the data collection. Stratifies sampling is

helpful where the population is heterogeneous with respect to variable or the characteristic under

study. Stratification divides the population into layers of strata, groups or sub-groups. With this,

there is an increased possibility that the members of each strata or group are included in the

sample (Burns, 2000). A list of woollen apparel and textile exporters in the Punjab, India was

derived from the exporter directory of Federation of Indian Exporting Organization (FIEO), from

which a further list was derived containing the names of exporters based in Ludhiana exporting

woollen textiles products from India. Thus, the target population was the exporters who deal in

woollen apparel and textiles in the industrial city of Ludhiana, Punjab. Finally, a sample of 65

exporters was chosen on the basis of their experience in the exports. Initially, the exporters were

contacted telephonically to arrange the interview with them regarding the university survey. At

the end, 40 exporters agreed for taking part in the survey which indicated a response rate of 61%.

Further, time for the survey-interview was fixed according to their convenience.

As in the case of semi-structured interview, the sample size was kept considerably small so as to

generate in-depth information and also keeping in mind the time and money constraints.

Moreover, according to Creswell and Clark, (2007), the size of qualitative sample can never be

41 

 
the same as the size to quantitative sample as qualitative sample plays a secondary role and is

supplement to the primary data.

3.5 Q UESTIONNAIRE
A questionnaire in essence is a list of questions which researcher prepares beforehand (Rugg &

Petre, 2007). As such, the questionnaire was developed to collect significant information relating

to various export problems of the apparel and textile exporting firms. While framing the

questionnaire, thorough review of relevant literature relating to the export problems was initially

made for identifying the various export problems. Information regarding the export problems

were also collected through secondary research into business world literature such public sector

export promotion councils. Finally, a battery of 25 questions was prepared on four different

categories of problems. Before conducting the actual survey, a pilot test was carried out with the

purpose to check whether the questions within the questionnaire were clear and easily

understandable in the way perceived by the author. After the pilot test, no major change was

made in the questionnaire and thus was considered apt.

Finally, the actually survey was conducted and the respondents were asked to gauge the

importance of the problem by rating each problem item being investigated by its importance. For

this, a five point scale was developed ranging from 1; “not at all important”, 3; “neither

important nor unimportant” and finally to 5; “most important” (See Appendix-3 for full

Questionnaire).

42 

 
3.6 I NTERVIEWS
Interviews have been recognized as the most appropriate method of collecting data in a

qualitative research. The most common ways of conducting interviews is individual or face to

face interaction or a group interview or a self-administrated questionnaire or just a questionnaire

filling. In the present research, personal interviews were conducted as a part of second phase of

the research. For this, two firms from the already surveyed 40 firms were selected on the basis of

their export market experience. One of them were more experienced, engaged in the exporting

business for more than 20 years and other less experienced, with 10 years of export-market

experience. (For full details of the companies, See Appendix-5)

The purpose of interview was to gain a comprehension of how the various exporters manage to

surpass the hurdles placed by such exporting barriers and find answers to various exporting

problems as discussed in the questionnaire. Moreover, efforts were also made to extract that how

much market oriented the firms are and how they manage all the export-marketing activities of

the firm. The interviews were recorded and notes were made where possible and regular contact

was maintained with the respondents in order to extract and clarify more details from them.

The format of interview was semi-structured with a pre-determined structure and where possible

additional questions were also asked relating to the question being discussed. Therefore, a list of

questions was prepared and discussed with the executive managers of the firms and thus, were

analyzed qualitatively.

43 

 
3.6.1 I NTERVIEW QUESTIONS

Q.1. Exhibitions, Trade Fairs, etc. provide a good platform for marketing goods and making

contacts with the foreign buyers. Do you think that these are helpful and to what extent? Do you

firm participate in these exhibitions?

Q.2. Is the presence of competition from China, Vietnam, Thailand, etc. is affecting the exports

of the Indian woollen Industry? How does your company manage to face such fierce

competition?

Q.3. Do you have a specialized Export Marketing Department in your organization? If yes, what

are its duties and how does it work?

Q.4. Do you think professionally managed companies are more effective and successful than the

traditionally managed ones?

Q.5. How do you bring about new product development or innovation in your organization?

Q.6. How do you cover the risk of selling abroad?

Q.7. Are Indian government policies, including incentives provided doing something for

promoting exports in woollen hosiery industry?

Q.8. How do you cover the risk of currency fluctuations?

Q.9. What do you think about the establishment of Special Economic Zones and recognition of

100% Export Oriented Units in Punjab? Is government ignoring such issues?

44 

 
3.7 D ATA A NALYSIS
The application of data collected is an important part of data analysis for producing quality

results. As explained by Saunders et.al (2004), it is very necessary to analysis and interpret the

data collected as correctly as possible. Moreover, many authors recognized the importance of

choosing the right statistical technique which is turn is crucial for analyzing the research

questions correctly (Morris, 1999).

For this research, the importance of the exporting problems as perceived by responding exporters

will be gauged using the mean scores of the responses. Further, to check the effect of exporting

experience on the perception of importance of exporting problems, independent sample t-test

will be applied to obtain the difference in the mean scores of two groups, viz; less experienced

exporters and more experienced exporters. These groups were classified on the basis of median

value of the exporting experience which was 13 years (Katsikeas and Morgan, 1995). Hence,

those firms with exporting experience less than 13 years were referred to as “less experienced

firms” (n=20) and firms with exporting experience more than 13 years were referred to as “more

experienced firms” (n=20). Using median has been statically proven to be a better tool of

splitting the sample into two groups of equal sizes (Saunders et.al, 2004; Malhotra, 2005).

As mentioned before, to test the extent to which there is significant difference in the perceived

export problems based on exporting experience, independent sample t-test will be utilized. It is

statistically easy to analyze the difference in perception when the two mentioned groups of equal

size.

If the sig. level (2-tailed) is equal to or less then 0.05, then there is significant difference in the

mean score of test variable for each of the two groups. On the other hand, if the value is greater

45 

 
than 0.05, then there is no significant difference in the two groups (Hays, 1994). This means that

problem question for which the sig. level (2.tailed) is less than or equal to 0.05, that problem will

be effected by the exporting experience of the firm and for which the sig. level (2.tailed) is

greater than 0.05, exporting experience will not have effect on that occurrence of that problem.

The qualitative data collected in the form of interviews are in the form of non-standardized

information such as word expressions, comments, etc which requires data categorization. As

such, it is advisable that qualitative data should be analyzed while being collected (Saunders

et.al, 2004). Thus, standardized methods of analyzing data are applicable to portray the richness

and fullness of the data.

3.8 E THICS AND L EGAL C ONSIDERATIONS

While conducting the research, ethical and legal considerations were kept in mind and were

strictly followed. The participating members were made completely aware about the nature and

objectives of the research and informed consent was also obtained from them. Managers and

owners were made sure that the collected and interview conducted will not be used for any other

purpose other than this research without their permission. Written consent was also taken from

the respondents for recording the interviews conducted. Finally, all the data gathered was stored

in accordance with the Data Protection Act 1998 (DPA, 1998).

46 

 
CHAPTER 4 - FINDINGS AND ANALYSIS
Table 1 indicates the frequency of the responses to the problem elements on the five-point scale

for each of the question. It also shows the mean values of these responses, recalling that the

responses were valued at the scale from 1 to 5, with extreme taking the higher value. The basic

mean of responses of each problem statement were used to determine the extent to which a

certain problem is associated with the high, moderate, or low degree of importance. For

evaluating the mean values, the mid-point set as 3.5 which represented a moderate degree of

importance on the 5-point scale employed (Saunders et.al, 2000). Problems with mean score of

greater than 3.5 were considered most important in effecting the exporting activities of the firms,

whereas mean scores gauging between 2.5 and 3.5 were considered to be moderately important

and any problem mean score lower than 2.5 was associated with low degree of importance.

The findings of table 1 indicate that few of the respondents were prepared to award low level of

importance to the various export barriers, with few exceptions. As such, nine exporting problems

were perceived to be extremely important by Ludhiana’s Woollen apparel and textile

manufacturing exporters. For them, problem relating to exchange rate fluctuations was perceived

to be as extremely important barrier to 62.5% of the respondents. The mean response for this

problem had a value of 4.38 which was gauged as extremely on the scale defined. While other

problems, with a comparable response were risk on selling abroad (4.10) and strong international

competition face by exporter (4.08) with 22.5% and 27.5% of the respondents rating as most

important, respectively. Others considered as highly important were difficulty in making contacts

in foreign markets (3.93); lack of government assistance in overcoming export barriers (3.75);

lack of attractive export incentives provided by the government (3.85); ineffective national

export promotion program (3.85); insufficient information about overseas markets (3.83); and

47 

 
finally; high cost of capital to finance exports (3.63). On the basis of the distinction between the

internal and external barriers noted by Leonidou (2004), six out of nine obstacles faced by

apparel firms of Ludhiana would be classified as “external” i.e. relating to macro economic

factors such as domestic country’s rules and regulations, inactive interventions by the

government and financial inabilities.

Now, turning to the exporting problems perceived by the participating exporting firms to be of

low regard were relating to product designing and quality standards, complexities relating to the

transportation of goods and high cost of logistics. The lowest mean scores were registered by

inadequate promotion in export markets, difficulties in transporting the products exported and

These exporting manufacturers have declared various other problems as moderately important.

Inability to self finance the exports and corruption in public institutions, and payment delay from

overseas buyers have been perceived to be moderately important with mean responses of 3.23,

3.40 and 3.30 respectively on the scale of 5. The remaining moderately important problems

included: lack of competitive pricing (3.30); red tape in public institutions (3.10); poor

organization of firms’ export department (3.15); lack of personnel qualified in export marketing

activities (3.30); lack of export marketing research (3.13); ineffective communication with

overseas buyers—language and culture barriers (2.83); and lastly; lack of “experts” in export

consulting (2.63). The relative significance of majority of exporting problems suggests that

apparel export market of Ludhiana is not much experienced and they perceive most of the

problems to be important to their business conditions. This was evident from the mean exporting

experience of the surveyed firms which is just 13.35 years. This shows the relative inexperience

of the sample of companies selected.

48 

 
Now turning to the exporting problems perceived by the participating exporting firms to be of

low regard were relating to product designing and quality standards, complexities relating to the

transportation of goods and high cost of logistics. The lowest mean scores were registered by

inadequate promotion in export markets. Difficulties in transporting the products exported and

foreign government rules and regulations with the mean score of 2.28 each. Other problems

perceived with a low regard were poor product design and style for the export markets (2.43);

difficulty in meeting importers’ product quality standards (2.45) and complexity of export

documentation requirements (2.33).

49 

 
Table 1: Response to the Importance of Exporting Problems

Std.
Q.no. Export problems item Mean Deviation
q1 Insufficient information about overseas markets 3.83 0.747
q2 Inadequate promotion in export markets 2.28 1.012
q3 Lack of export marketing research 3.13 0.723
q4 Difficulty in making contacts in foreign markets 3.93 0.730
q5 Ineffective communication with overseas customers
—language and culture barrier 2.83 0.781
q6 Difficulty in meeting importers' product quality standards 2.45 0.959
q7 Poor product design and style for export markets 2.43 0.984
q8 High cost of capital to finance exports 3.63 0.807
q9 Inability to self-finance exports 3.23 1.074
q10 Lack of competitive price 3.30 0.853
q11 Strong international competition 4.08 0.694
q12 Poor organization of firm's export department 3.15 0.736
Lack of personnel qualified in exporting marketing
3.30 0.723
q13 activities
q14 Lack of "experts" in export consulting 2.63 0.979
q15 Risk of selling abroad 4.10 0.591
q16 Difficulties in transporting the product(s) exported 2.28 0.877
q17 Payment delays from overseas buyers and distributors 3.30 0.823
q18 Lack of Government assistance in
overcoming export barriers 3.75 0.981
q19 Ineffective national export promotion program 3.85 0.736
q20 Lack of attractive export incentives provided
by the government 3.85 0.770
q21 Complexity of export documentation requirements 2.33 0.997
q22 Red tape in public institutions 3.10 0.810
q23 Corruption in public institutions 3.40 0.841
q24 Foreign government rules and regulations 2.28 0.905
q25 Exchange rate fluctuations 4.38 0.925

*(for full table, see Appendix-6)

50 

 
Table-2 represents the results of independent sample t-test taking all the exporting problems as

test variables and number of years of exporting experience as grouping variable. As mentioned

before, the test value of exporting experience was taken as 13 years based on the median value,

thus dividing sample set into two-equal parts containing 20 firms each. The mean score of both

the groups i.e. less experienced (>= 13 years) and more experienced (< 13 years) is also given.

The table also provides sig. level (2-tailed) of different problems based on their exporting

experience in the global export market. As mentioned before, the sig. level (2-tailed) will be

tested against the set minimum level of 0.05 (Hays, 1994) i.e. problem questions with sig. level

(2-tailed) less than or equal to 0.05 are significant and are affected by the exporting experience,

whereas the problems with significance level greater than 0.05 are not affected by the exporting

experience. The table below displays the results.

Table 2: Exporters' Perception depending on Exporting Experience

Sig level
Exporting
Exporting Problems Years N Mean t (2- tailed)

q1 Insufficient information about >= 13 20 3.60 -1.974 0.056

overseas markets
< 13 20 4.05 -1.974 0.056

q2 Inadequate promotion in export >= 13 20 2.40 0.777 0.442

markets
< 13 20 2.15 0.777 0.442

q3 Lack of export marketing >= 13 20 2.95 -1.559 0.127

research
< 13 20 3.30 -1.559 0.127

51 

 
 q4 Difficulty in making contacts in >= 13 20 3.90 -0.214 0.832
foreign markets
< 13 20 3.95 -0.214 0.832

q5 Ineffective communication with >= 13 20 2.55 -2.354 0.024

overseas customers—language and
culture barrier < 13 20 3.10 -2.354 0.024

q6 Difficulty in meeting importers' >= 13 20 2.10 -2.451 0.019

product quality standards
< 13 20 2.80 -2.451 0.019

q7 Poor product design and style for >= 13 20 2.40 -0.159 0.875
export markets
< 13 20 2.45 -0.159 0.875

q8 High cost of capital to finance >= 13 20 3.30 -2.755 0.009

exports
< 13 20 3.95 -2.755 0.009

q9 Inability to self-finance exports >= 13 20 2.80 -2.697 0.010

< 13 20 3.65 -2.697 0.010

q10 Lack of competitive price >= 13 20 3.15 -1.115 0.272

< 13 20 3.45 -1.115 0.272

q11 Strong international competition >= 13 20 4.20 1.144 0.260

< 13 20 3.95 1.144 0.260

q12 Poor organization of firm's >= 13 20 3.10 -0.425 0.673

52 

 
 export department
< 13 20 3.20 -0.425 0.673

q13 Lack of personnel qualified in >= 13 20 3.40 0.872 0.389

exporting marketing activities
< 13 20 3.20 0.872 0.389

q14 Lack of "experts" in export >= 13 20 2.45 -1.135 0.264

consulting
< 13 20 2.80 -1.135 0.264

q15 Risk of selling abroad >= 13 20 3.90 -2.251 0.030

< 13 20 4.30 -2.251 0.030

q16 Difficulties in transporting the >= 13 20 2.35 0.536 0.595

product(s) exported
< 13 20 2.20 0.536 0.595

q17 Payment delays from overseas >= 13 20 3.35 0.380 0.706

buyers and distributors
< 13 20 3.25 0.380 0.706

q18 Lack of Government assistance >= 13 20 3.20 -4.255 0.000

in overcoming export barriers
< 13 20 4.30 -4.255 0.000

q19 Ineffective national export >= 13 20 3.50 -3.390 0.002

promotion program
< 13 20 4.20 -3.390 0.002

q20 Lack of attractive export >= 13 20 3.45 -3.816 0.000

incentives provided by the
government < 13 20 4.25 -3.816 0.001

53 

 
 q21 Complexity of export >= 13 20 2.10 -1.447 0.156
documentation requirements
< 13 20 2.55 -1.447 0.156

q22 Red tape in public institutions >= 13 20 3.30 1.592 0.120

< 13 20 2.90 1.592 0.120

q23 Corruption in public institutions >= 13 20 3.50 0.748 0.459

< 13 20 3.30 0.748 0.459

q24 Foreign government rules and >= 13 20 2.35 0.519 0.607

regulations
< 13 20 2.20 0.519 0.607

q25 Exchange rate fluctuations >= 13 20 3.90 -3.753 0.001

< 13 20 4.85 -3.753 0.001

*(For full results of the independent sample t-test, see Appendix-7)

When examining the data, nine out of twenty five exporting problems were found to have

significant difference between less experienced and more experienced exporting manufacturers.

More specifically, these were (1) exchange rate fluctuations (mean=4.38, sig. = 0.001); (2) Lack

of government assistance in overcoming export barriers (mean= 3.75, sig. = 0.000); Ineffective

national export promotion program (mean= 3.85, sig. =0.002); Lack of attractive export

incentives provided by the government (mean=3.85 sig. =0.000); Risk of selling abroad (mean=

4.10, sig. = 4.10); High cost of capital to finance exports (mean= 3.63, sig. = 0.009); Inability to

self-finance the exports (mean= 3.23, sig. = 0.010); Ineffective communication with overseas

54 

 
customers--- language and culture barriers (mean= 2.83, sig. = 0.024) and finally, Difficulty in

meeting importers’ quality standards (mean= 2.45, sig. = 0.019). The significance levels of these

variables are below the acceptable of 0.005 which shows that these problems tend to related to

the exporting experience of the firms. Out of these, two problems i.e. ineffective communication

with overseas customers--- language and culture barriers (mean= 2.83, sig. = 0.024) and

difficulty in meeting importers’ quality standards (mean= 2.45, sig. = 0.019) are not perceived to

be important problem as the mean was less than 3.5 but these were found to significant with the

exporting experience of the firm.

In next part of the research, these findings will be discussed thoroughly in the light of literature

reviewed in Chapter-2 and efforts would be made to provide conclusive evidence that finding are

in line with the previous researches.

55 

 
CHAPTER 5 - DISCUSSION
In this part of the dissertation, various problems which were found to be significant in the

findings and analysis are discussed in the presence of relevant literature. In the beginning of this

chapter, these problems will be discussed under their classifications in the form of External,

Operational, Internal and Informational problems. Along with this, the effect of exporting

experience on the perception of exporting problems will be interpreted. Moreover, these

problems responses were also discussed with relevance to various interviews conducted. In the

next half, innovation and market orientation construct is discussed in the presence of existing

responses. At the end, final conclusion regarding the discussion will be given.

5.1 E XTERNAL P ROBLEMS

As discussed by many authors (Kaleka and Katsikeas, 1995; Leonidou, 2004; Leonidou, 1995;

Tesfom and Lutz, 2006), external problems have been classified as one of the most important

problems in the exporting industry. It is evident from the findings of the current research that

these problems are important as reported by Ludhiana’s apparel and textile exporting companies.

The mean responses of 40 representatives of Ludhiana woollen industry depict that a majority

these problems are most important. As reported by Neupart et.al (2005) with an increase in

firm’s experience, the tendency of occurrence of these problems decreases, as the managers

adjust their policies and procedures in the anticipation of such situations. One of the interviewed

manager reports that:

“With somewhat experience in the export market, we can somehow predict the exchange

rate and by adopting the policy of hedging, we are now able to minimize our losses due to

currency fluctuations.” (K.A. Exports Pvt. Ltd.)

56 

 
Currency Exchange Rate fluctuations have been reported as the most important barrier in the

export performance. More than 62 percent of the exporters have reported this problem as “very

important”. Moreover, it was found in the results that exporting experience has direct effect on

the perception of this problem. It was found significant that as the exporting experience increases

its lateral effect on the risk of currency exchange rate fluctuations decreases and vice-a-versa. It

was also found that with the experience the firms evaluate different ways of dealing with these

problems. But the results are completely different from the result of Katsikeas and Morgan

(1995) in which the mean score of more experienced group was more than the mean score of less

experienced group.

According to Leonidou (2004), foreign exchange risks can be classified into three groups: (1)

unstable exchange rates, leading to fluctuating export pricing abroad; (2) revaluation of

exporter’s currency, resulting in less favourable prices to the end user; and (3) unconvertible

foreign currencies, making the repatriation of sales/profits from abroad difficult. In the India’s

context, the first two problems are more important but the third problem i.e. “unconvertible

foreign currencies” is not applicable because Indian currency is fully convertible into almost all

the major foreign currencies.

As reported by the interviewed respondents, they have been applying various different ways to

minimizing the loss occurring due to currency fluctuations.

“Depending on the present situations of the FOREX market we try to cover our losses by

either entering into floating exchange rate contract or fixed exchange rate contract, so that we

could have some control over the currency fluctuations.”(K.A. Exports Pvt. Ltd.)

57 

 
In broader sense, there are two ways of dealing in the international business transactions. One is

the floating exchange rate contract in which both the parties agree that the payment will be made

at the future rate i.e. at the rate prevalent on the day of delivery of goods or the day of making

the payment. On the other hand, in fixed exchange rate contract both the parties agree that

payment will be made at the exchange rate prevalent at the time of signing the contract

irrespective of the rate on actual date of payment. In this way, managers try to cover the

exchange rate risk on basis of future predictions. The manager of other firm reports that:

“As we have gained a lot of experience in the export market, we are now adapting new

ways of covering the risks of currency fluctuations. One of them is hedging. With the help of our

bankers, we hedge our receivables, in the anticipation of the heavy currency fluctuations in the

near future. In this way, we are able to cover our losses and sometimes are able to earn some

extra out of it.” (Cross Country Apparels)

Hedging has been proved as an important tool of minimizing the losses especially when large

transactions are involved. Some other ways of coping with foreign currency exchange risks

include using “spot prices” on the day of receiving the order, buying forward foreign currency

and using a “currency basket” that is more stable with an agreement with the foreign buyer

(Czinkota and Ronkainen, 2001; Leonidou, 2004). Thus, it is evident from the responses of the

interviewed managers that as the experience in the overseas market increases the companies try

new ways of dealing with the problems emerging from time to time, thus making then more

market oriented.

Ludhiana’s Woollen Apparel exporters have attached high degree of importance to a set of

problems i.e. government related problems. These set of barriers are in relation to the actions or

58 

 
inactions of the home government for the promotion of the indigenous exporters (Leonidou,

2004). This set of problems include: lack of assistance provided by the government in

overcoming the various exporting barriers; lack of export incentives provided by the government

and finally, ineffective national export promotion program. These have been reported of high

importance with a group mean of 3.86 which is quite high than the standard limit for the scale of

5. These findings are constant with the previous empirical studies on the exporting problems of

different developing countries (Leonidou, 1995; Kaleka and Katsikeas, 1995; Baurschmidt et.al,

1985). These problems have been perceived by many exporters as an important barrier in

contrary to be as viewed by the government (Katsikeas and Morgan, 1994).

As far as experience in the exporting business is concerned, both the interviewed managers have

represented a direct positive effect of the experience on the government related problems

“Though, we are quite taking the advantages of the incentives provided by the

government, but the government is not making efforts on advertising the incentives i.e. the

government is not making the enough required efforts in making the exporters and

manufacturers informed about the benefits of the incentives and export promotion programs.”

(Cross Country Apparels)

The perceived problem is evident in the findings of Yang et.al (1992); Albaum (1983); Leonidou

(2004) and Katsikeas and Morgan (1994) which explains that there is often low degree

awareness about the existence and type of assistance and support available from the government.

It is apparent from the evaluation of information reported by interviewed managers that a more

experienced firm is having a greater knowledge about the existing promotional programs and the

incentives provided by the government as compared to less experienced one. As such, they are

59 

 
taking the advantages of the only basic incentives provided which are more popular in the

industry but are unaware about the others.

“Though there are some of the important incentives provided by the government, but we are

mainly taking the advantages of the “Export Duty Drawback Scheme” of the government. In this

fierce competition, such promotional service provided by the government sometimes, act as life

saving activity for us. The export duty drawback which we get from the government sometimes

become the, only profit margin which we earn, i.e. we are selling on the cost or even 1% less

than the cost, so as to earn the profit equal to duty drawback.” (K.A. Exports Pvt. Ltd.)

This shows that due to lack of experience in the export market, the companies tend to stick to the

popular incentives but do not focus on other factors and incentive which may be important to

them. Thus, the main beneficiary of the government assistance and promotion programme are the

more experiences exporting firms, then it is not unexpected that less experiences exporters

identify this as a problem area.

Strong Competition from the apparel manufacturers of foreign origin is also greatly affecting the

performance of Indian Apparel Industry. 40 surveyed managers and owners of Ludhiana’s

Woollen Industry have recognized strong international competition as an important factor with a

combined mean of 4.08 which is considered as highly important on the scale 5 (Saunders et. al,

2000). The firm may be competitive enough in the domestic market but when it crosses the

transcending national boundaries, the competitive advantage may wear out and may have to

encounter more complications and intense competitive situations. Moreover, this problem has

been perceived to be associated with the on-going export operations i.e. this problem is not

affected by the nature, size or the experience of the firm (Neupert et.al, 2006). Moreover, it is

60 

 
also apparent from the sig. level (2- tailed) that there is difference in the perceived level of the

problem as an effect of exporting experience. These problems occur on on-going basis and affect

the business on its each and every aspect.

“This is a very common problem among all the exporters. Nowadays, the importers

and foreign buyers are sourcing from different the parts of the world making the apparel market

very price competitive. As such, the profit margins have come down, the quality standards have

raised, the export processing period has come down, etc. In this way, this problem has affected

us in all the aspects of the business.” (Cross Country Apparels)

These results are in line with the other researches done in this field of study (Weaver and Pak,

1990; Kaleka and Katsikeas, 1995; Tesfom and Lutz, 2006; Baurschmidt et.al, 1985). Burgess

and Oldenboom (1997), asserts that small firms in the developing economies are more venerable

to such fierce competition as a result of their limited financial and human resources. These

constraints make them less price competitive in the market and thus, turn out to the less export

market oriented. Competition from other Asian countries like China, Vietnam, Thailand, etc is

also affecting the Apparel industry on a greater scale. Nadvi and Jhouburn (2004), discusses that

China has main competitive pressure on the various other textile manufacturing and exporting

countries like Vietnam, India, etc. On this note, the owner-manager of K.A. Exports Pvt. Ltd.

discusses that:

“The strong international competition from countries like China is affecting the

business specifically on the basis of price. For example, I was meeting a couple of buyers

(importers), and I quoted a certain price to them, and they are carrying pretty much the same

thing from China for half the price I quoted. So, sometimes, it becomes completely impossible to

61 

 
deal with the competition. One of the main reasons, is that one of the cheapest raw materials

used in the manufacturing are actually imported from China, and the Chinese are manufacturing

the same thing, so obviously the Chinese apparel manufacturers are getting the same raw

material for less than we are getting, so the profit margin decreases due to difference in the

manufacturing cost.” (K.A. Exports Pvt. Ltd.)

It is also evident from the research that exporting experience does not affect the level of pricing

competition it faces from the foreign exporters and manufacturers. As explained by Katsikeas

and Morgan (1994) and Leonidou (2004) that pricing policies are not dependent on the export

market experience of the firm. Moreover, the surveyed managers and owners have scored foreign

competition problem highly, illustrating that these problems are generic and enduring in nature

(Katsikeas and Morgan, 1994).

The present study has found that smaller firms have been facing some problems in financing the

exporting activities of the firm. The capital invested in the business has always remained low in

the Indian firms. This has lead to difficulty in various activities of the firm which are more

capital intensive for example information gathering activities (Leonidou, 2004), innovation and

new production technology (Tesfom and Lutz, 2006), shortage of working capital, hiring

professionals(Katsikeas and Morgan, 1994) and taking the services of “experts” in export

consultancy (Katsikeas and Morgan, 1994). In this category of problem, high cost of capital to

finance exports (3.63) has been considered as high important, whereas inability to self-finance

the exports (3.23) has been associated with moderate importance. The experience of the firm in

the exporting business has effect on the ability of the firm to arrange finance at reasonable rates,

as it is apparent from the sig. level (2-tailed) that difference does exist in the less experienced

62 

 
and more experienced firms. But it is also evident from one of the interviews that small firms

avoid to hire professionals due to financial constraints.

“For small firms like ours, it becomes impossible for us to hire professional and take

the advice of the experts. Moreover, hiring professionals in one of the departments may

sometimes bring managerial limitations and result in diseconomies. So, we think this problem is

more related to limited finance availability and less related to professional management of the

firm.” (K.A. Exports Pvt. Ltd.)

Thus, limited access to capital and finance may constrain the operations and may also leads to

weeding out of other export and marketing barrier which affect the export performance of the

firm.

5.2 O PERATIONAL P ROBLEMS

As discussed, operational problems are those which emerge within the organization as the result

of procedural, operational or functional constraints. These mostly emerge at micro-level of the

organizational environment and tend to vary with the experience of the particular firm (Katsikeas

and Morgan, 1994). Of these problems risk of selling goods abroad is perceived to most

important with mean score of 4.10. Moreover, it has been rated as the second most important

problem, after exchange rate fluctuations, by the woollen apparel manufacturers of Ludhiana.

This result is parallel with the results of many other authors (Kaleka and Katsikeas, 1995;

Bauerschmidt et.al, 1985; Loeonidou, 2004) showing that there are many risks involved in the

exporting business. Kaleka and Katsikeas (1995) assert that this problem is more common with

the regular exporter i.e. increased level of export involvement give rise to more risks of selling.

As such, the exporters are applying different and innovative ways of dealing with the risks and

63 

 
minimizing their losses. Most common of them is using Irrevocable Letter of Credit which

assures the exporter the payment for the goods supplied, in case the importer becomes fraudulent

or bankrupt. But still, most of the importers and foreign retailers try to avoid doing business

under Irrevocable Letter of Credit. This was evident from the interview of one Ludhiana’s

Apparel Exporters:

“For covering the risk of payment from the foreign buyers, Letter of Credit (L.C)

especially, irrevocable LCs’ are quite in use and help in assuring the payment from the

beneficiary bank, but still there are risks of delays, etc. Nowadays, there are certain insurance

companies who on the payment of certain premium, help in selecting the buyer on the basis of

their credit-worthiness and thus getting us insured for that particular buyer. So in case we don’t

get our payment from that particular buyer the insurance company compensate for the loss of

payment.” (Cross Country Apparels)

As explained by the manager of Cross Country Apparels, many insurance companies and

Government agencies such as CRISIL are working for providing credit rating to foreign

importers and buyers, so that exporters and manufacturers can do business with highly accredited

buyers safely.

5.3 I NFORMATIONAL P ROBLEMS

Another important problem perceived by Ludhiana’s Woollen exporters was relating to

information generation which was measured on mainly two factor problems i.e. insufficient

information about overseas market and difficult in making contacts in the foreign market. This

problem is more relating to market orientation as it is also associated with gathering information

about various exporters and market as a whole, for the decision-makers at higher level of firm’s

64 

 
hierarchy and finally, implementing and directing the decisions towards customers, competitors

and other factors affecting the firm (Cardogan et.al, 2002). Many authors have attached high

importance to these set of problems. Kaleka and Katsikeas (1995) asserts that firms with low

level of experience and those which are not regularly exporting are having a greater degree of

problem in making contacts with the foreign buyers as a result of lack of managerial

commitment towards the exports. As far as information generation and gathering activities are

concerned, one of the interviewed firm claims that:

“Though the importers’ information and appropriate market research is available

from various agencies but this information costs a lot and thus, is out of the reach of the reach of

small firms like ours.” (K.A. Exports Pvt. Ltd.)

Moreover due to financial, human resource, and managerial constraints, it is impractical for the

firms to get into informational generations activities. Thus, lack of ability of the firms in

information generation makes the firm less market oriented as the firms are not able to into the

basic export-market oriented activities (Cardogan et.al, 2002).

As such, some of the firms are trying some other ways of contacting the foreign buyers and

gathering relevant information about the market. As reported in the interviews, exhibitions, trade

fairs, etc. provide a good platform for marketing goods and making contacts with the foreign

buyers. Now days, these exhibitions, trade fairs, etc. are organized by various government and

not government organizations, trade unions and associations, etc. so as to bring buyers and

sellers from around the world together under the same roof. In India, many government

sponsored exhibitions such as Texstyles India, India International Garment Fair (IIGF),

International Apparel Fabrics & Accessories Trade Fair (Intex Expo) are organized and have

65 

 
been getting positive response. Moreover, many Indian firms are also participating in the foreign

exhibitions taking place at different world centers such as Paris, New York, London, Sydney,

Singapore, China, etc.

“We have been participating in these exhibitions from past eight or nine years and we are

getting very positive response from these. In the beginning we too had some problem in creating

position in the market but slowly and steadily we were able to create our special niche market

within the market.” (Cross Country Apparels)

As interviewed from K.A. Exports Pvt. Ltd., smaller firms are still struggling in participating.

Though, these small firms very well know the advantages of these trade fairs and exhibitions, but

still they are not participating because of varied managerial perspective and shortage of finance.

“For country like India, it is very important because, first of all we get to meet

people (importers and buyers, etc) in person; they get to see our goods and gathering other

necessary information. So, in all the direct communication increases and thus bridges the gap

between buyer and the seller. Over the internet the exporter has no idea the kind of person

(importer) we are meeting, the kind of goods the importers want. Therefore, keeping in view the

various advantages of exhibitions, we will be participating in the trade fairs and exhibition by

this year.” (K.A. Exports Pvt. Ltd.)

But, Bauerschmidt et.al (1985) did not found these set of problems as important and thus, were

not included in their study. Kaleka and Katsikeas (1995) only gave importance to problem

relating to making foreign contacts but ignored the fact relating to information gathering.

Moreover, not much of the authors have taken exhibitions as an alternative to the formal

66 

 
information generation activity, but its relevance has been verified from the views of managers

interviewed.

5.4 I NTERNAL P ROBLEMS

As discussed previously, this set of problems which include lack of personnel qualified in export

marketing activities, lack of experts in export consultancy, poor organization of firms export

marketing department, inability to self-finance the exports, difficulty in meeting importers’

product quality standards and ineffective communication with overseas buyers—language and

culture barriers have been perceived to be of moderate or low importance by the surveyed

managers and owners. This result is in line with various researches (Bauerschmidt et.al, 1985;

Kaleka and Katsikeas, 1995; Ketsikeas and Morgan, 1994; etc). The findings of the present

research regarding language and culture barriers; export financing barriers and difficulty in

meeting importer’s product quality standards are in correspondence with the results generated in

the research of Bauerschmidt et.al (1985); Leondiou (2004). It is evident that these problems

have very low impact of the performance of the firm and very rarely affect their operations of the

firm.

5.5 M ARKET O RIENTATION AND I NNOVATION

Though innovation as a discipline is a very recent concept and thus, has been associated with

market orientation (Slater and Narver, 1994), but it has long been used in the business world in

the shape of new product development and bringing new designing into the export markets. On

the same lines, Ludhiana’s Woollen apparel and textile exporters do not attach much importance

to the problem of poor product design and style for export markets. From this response, it can be

deduced that exporters are not having much problem with new product designing and

67 

 
development for export markets. Moreover, the responses of interviewed managers confirmed

this claim that they are not having much trouble with product designing and continuously been

bringing new and innovative designs in the market.

“In response to the demands of the buyers, new products and designs are introduced from

season to season, and as a result the perceived level of customer satisfaction increases. The

customers communicate more easily and effectively and we always get the chance of getting new

orders. Thus in all, continuous development and innovation in the products offered increases our

performance and thus our profitability.” (Cross Country Apparels)

As reported by Deuschman (1991) (from Slater and Narver, 1994), “putting the customers first—

listening, understanding and serving” has been considered as the most important characteristic

for the success of US’s fastest growing companies. Slater and Narver (1994) assert that

continuous innovation and new product development in response to customer’s ever increasing

demand results in increasing customer satisfaction. Han et.al (1998) confirms Slater and Narver

(1994) claim and adds that increased customer satisfaction leads to enhanced corporate

performance and profitability. All this leads the firms to become more market oriented.

As manifested by Leondiou (2004), small firms are in inferior position of designing and

developing innovative products due to lack of research and design facility, qualified and expert

designers, limited financial resources etc. This is only partially true in the case of Ludhiana’s

Apparel exporters as they form networks and other strategic alliances for expertise in developing

new products.

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 “We outsource some of our designing and new product development to small designing

boutique and individual designers. They design for us at very reasonable rate and thus help us

efficiently in cost cutting.” (K.A. Exports Pvt. Ltd.)

Thus, small firms are also doing innovation and new product development even with small

capital and finance availability. But there is a need to develop more strong links of networking

between various companies and designers so as to bring competitive advantage to exporting

firms.

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CHAPTER 6 - CONCLUSION

6.1 C ONCLUSION
Increasing exports is widely regarded as important factor for the development and growth in

these developing countries. Small and Medium Enterprises (SMEs) are the real contributors to

the exports of the developing nations and these exports are bringing development and raising the

standard of living of the people of these nations. However, these SMEs are presently confronting

with many export marketing problems and barriers when they attempt to market their products in

the developed nations. Moreover, the export marketing problems relating to SMEs of developing

countries are multi-dimensional. Therefore, using classification given by Kaleka and Katsikeas

(1995) all the discussed export marketing problems were classified into External, Operational,

Internal and Informational problems.

The present study has investigated the export marketing problems encountered by indigenous

apparel and textile exporting firms of India from a ethnocentric perspective, in the context of

major industrial town in India i.e. Ludhiana. This research extends the existing literature to the

export marketing problems of SMEs with special emphasis on the Woollen Apparel and Textile

Industry of Ludhiana. It also provides evidence that, though not formally, but the concept of

market orientation had been continuously applied to the operations through the various export

market-oriented activities. Moreover, it was also found that exporting experience was positively

and directly related to export market-oriented activities. The surface findings of the present

research may not suggest any mediating role played by market orientation on the performance of

the researched firms. But it is clear from the research that required organizational culture is

70 

 
present in these organizations which are committed to customer value based on market

intelligence.

Risk of selling abroad was found to an important factor affecting the operations of the exporting

firms and thus, making the firm less market oriented. Government and Public Policy makers

should make necessary adjustments in the policies and should introduce such measures that

reduce the level of problems created by these barriers. Thus, Government and Public Policy

makers were found to have a significant role in shaping the future of exporters. The present study

found a lack of support from the government in solving the exporting problems. Moreover, not

much of the incentive were provided to the exporting firms and those provided were not properly

advertised or communicated to the aspiring and present exporters.

Product development related problem was found not as important as the firms were continuously

replying to the ever-increasing demands of the buyers and were introducing newer products.

However, the process of product development and innovation was found to be directly related to

the exporting experience of the firms i.e. more experienced and relatively larger firms were

generally enjoying the benefits of in-house research and development whereas novice and

smaller firms were using networking as a better option of bringing innovation in the firm.

Thus, it can be concluded from the present research that complexities and rigours demanded in

the export process are actually manageable. Especially, for small and less experienced firms, the

need of the hour is to act and manage intelligently by evaluating such a mechanism which could

solve more problems with minimum resources.

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6.2 I MPLICATIONS
Small business managers and owners, in order to become more market oriented, should enhance

the market oriented behaviour and activities, relating to effective new product development

process, improved relative quality controls and customer retention. Moreover, firms should focus

on more market information gathering activities as these are most important in making SMEs

more market oriented (Venkatesan and Soutar, 2000). Further, managers should focus on

identifying and understanding the problems that may hinder the exporting performance;

prioritizing these problems on the basis of their importance or occurrence, which have most

impact on the achievement of export goals; diagnose the major cause of each priority problem

and take necessary steps to accommodate and resolve such problems; and finally, should

evaluate a mechanism for continuous monitoring of resolution process and feedbacks. Less

experienced exporters need to capitalize on the export incentives and inducements to finance

export expansions. Most of these problems are a result of ignorance of many sources of

information (Yang Et.al, 1992; Leonidou, 2004). Therefore, they need to be fully informed about

the available capital incentives and promotions provided by the government.

It also seems that top management too play crucial role in facilitating export-market oriented

activities within the firm. Managers should not only focus on normal day to day activities, rather

they should focus on investing and expanding the firm’s exporting operations and embrace

exporting as a way of competing in the marketplace. Moreover, managers should emphasis on

encouraging the lower level managers and employees to be more market oriented and to be

attentive to export customer requirements.

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As mentioned before, public policymakers have significant role to play in the development of

exports of the nation. As such, the government should assist firms in reducing the dwelling effect

of these problems, since exports help in increasing the foreign reserves, improving the standard

of living and employment generation in the country. All this can be achieved by (1) providing

support to the exporting firm in increasing the process of internationalization; (2) providing

adequate promotional incentives such export subsidies, tax rebates, introducing special economic

zones and textile parks, financial assistance and expert consultation; (3) by providing timely and

relevant information about the foreign markets, technical standards, commercial legislation and

simplifying the documentation for exports. All these programs should be designed keeping in

mind the peculiar nature of managerial, economic, organizational and environmental aspects of

the small firms, as well as their level of export involvement (Kakiskeas and Morgan, 1995).

6.3 L IMITATIONS OF R ESEARCH

Our research findings should be interpreted in the light of certain limitations and consequently,

some caution is advised when generalizing the findings of the research. Firstly, the research was

concentrated on a small but an important sector of Indian export i.e. Woollen apparel and textile

industry. As such, the findings are more specific to this industrial sector, thus attempt should not

be made to generalize the findings to other sectors. Though Ludhiana’s woollen industry is

contributing majorly in the country’s woollen apparel exports, but the perspective of exporters

manufacturers of other major cities like Amritsar, New Delhi, Surat, Tirupur, etc. would have

helped in more generalizing the research. But due to shortage of time and financial constraints,

these were not taken into consideration in the present research. Secondly, the exporting firms are

too reluctant to participate in any kind of research; as such the sample size was too small with

60% of response rate to the previously selected sample. Again, due to time constraints and

73 

 
limited response from the firms, only 2 semi-structured interviews were conducted with the firms

of different exporting experience. Thirdly, no attempt was made in the present research to

consider differences in the perceived export problems based in the firm size (i.e. number of full-

time employees). Both theoretical and practical evidence explains that perceived level of export

problems does change with the size of the firm (Katsikeas and Morgan, 1995; Leonidou, 2004).

But in India’s context, information relating to this variable could not be collected accurately

because the firms are not will to disclose the true number of full time employees due to legal and

legislative implications.

6.4 R ECOMMENDATIONS FOR FURTHER RESEARCH

A further research into this issue is clearly warranted. It would be recommendable for the future

researchers conducting study in this area of research that an in-depth enquiry of the current and

future problems should be done and efforts should be made to generalize the research by

covering exporters from other parts of the country. Moreover, government should encourage by

funding the researchers to conduct such study on a nation-wide scale and on different sectors of

economy so that problems could be eradicated, thus bringing prosperity. Finally, it would be

beneficial to test the nature of these problems in the context of size of the firm, exporting

experience and relative involvement in the exports.

6.5 S UMMARY
To conclude, India has a rich economic history and liberalizations have helped in enhancing the

economic development of the country and financing its growth from foreign trade and capital.

The exports of the country have a large scope for development and further liberalizations and

incentives can help in enhancing its performance. The industry as a whole has a glowing future

74 

 
and more and more foreign retailers and buyers are interested in doing business with Indian

apparel manufacturers. Export-marketing problems and risks are part and parcel of Indian

Apparel and Textile Industry and further necessary steps should be taken to solve these problems

by weighing their benefits and thus, taking steps towards further development.

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APPENDIX

A PPENDIX -1 EU A PPAREL I MPORTS BEFORE AND AFTER Q UOTA

E LIMINATION

83 

 
 84 

 
A PPENDIX -2 US A PPAREL I MPORTS BEFORE AND AFTER Q UOTA
E LIMINATION

85 

 
 86 

 
A PPENDIX -3 D IFFERENT D EFINITIONS OF SME S

World Bank
Micro-enterprise: up to 10 employees, total assets of up to $100,000 and total annual sales of up
to $100,000;
small enterprise-up to 50 employees, total assets of up to $3 million and total sales of up to $3
million;
medium enterprise-up to 300 employees, total assets of up to $15 million, and total annual sales
of up to $15 million.
Albania
Micro-enterprises: < 10 employees;
Small enterprises: 10-40 employees.
Medium-sized enterprises: 50-250 employees.
Azerbaijan
Small enterprises: < 50 employees in industry; < 15 employees in transport; < 25 employees in
construction; and < 10 employees in retail trade and servicing.
Medium-sized enterprises: 51-250 employees in industry; 16-75 employees in transport; 26-150
employees in construction; and 11-50 employees in retail trade and servicing.
Bulgaria
Small enterprises: < 50 employees and max. assets in balance sheet BGL 20 million.
Belarus
Small enterprises: < 200 employees in industry with maximum annual turnover < Rbl 20 million;
< 100 employees in innovation
with maximum turnover < Rbl 5 million; < 50 employees in construction and other production
spheres with max. turnover < Rbl
5 million; < 50 employees in catering and public services with max. turnover < Rbl 2 million; <
25 employees in retail trade; and
< 25 employees in other non-production spheres with max. turnover < Rbl 1.5 million.
Medium-sized enterprises: No definition exists.
Hungary
Small enterprises: 11-50 employees; maximum turnover < HUF 500 million and maximum
balance sheet total < HUF 200 million.
Medium-enterprises: 51-250 employees; maximum turnover < HUF 2 billion and maximum
balance sheet total < HUF 1.25 billion.
Uzbekistan
Small enterprises: < 300 employees.
Medium-sized enterprises: 300-1,000 employees.
Malaysia
Annual sales turnover no exceeding RM25 million and fulltime employees not exceeding 150.
EU
Micro-enterprises: < 10 employees;
Small enterprises: 10-49 employees with maximum turnover up to 7 million Euros.
Medium-sized enterprises: 50-250 employees with maximum turnover up to 40 million Euros.
Maximum balance sheet total is 5 million for small Euros and 27 million for medium size
enterprises.

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Latvia
Small enterprises: < 25 employees; max. turnover < Lats 200,000; and max. balance sheet total <
Lats 70,000.
Lithuania
Small enterprises: < 50 employees and max. turnover < litas 500,000.
Moldova
Micro-enterprises: with employees < 20;
Small enterprises: with employees between 20 and 75 persons. Medium-sized enterprises: No
definition exists.
Romania
Small enterprises: 1-20 employees and turnover between LEI 10 million and 2 billion.
Medium-sized enterprises: 21-200 employees and turnover between LEI 10 million and 2 billion.
Russian Federation
Small enterprises: < 100 employees in industry and construction: < 60 employees in agriculture;
< 60 employees in science; < 50 employees in wholesale trade; < 30 employees in retail trade
and household services; and < 50 employees in other production and non-production spheres.
Medium-sized enterprises: No definition exists.
Estonia
Small enterprises: < 80 employees and max. turnover < EEK 15 million.
Tajikistan
Small enterprises: < 50 employees in industry and construction; < 15 employees in other
economic spheres.
Medium-sized enterprises: No definition exists.
Ukraine:
Small enterprises: < 200 employees in industry and construction; < 50 employees in other
production spheres; < 100 employees in science; < 25 employees in non-production spheres; <
15 employees in retail trade.
Medium-sized enterprises: No definition exists.

Source: Compiled from UNECE (2002), “Definition of SMEs in Countries in Transition”,

World Bank.

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A PPENDIX -4 Q UESTIONNAIRE

EXPORT-MARKETING PROBLEMS OF SMES

:THE CASE OF LUDHIANA APPARELS AND TEXTILE INDUSTRY

This questionnaire is the part of M.A. Marketing research in the University of Nottingham, UK.

I am doing a dissertation on the various export- marketing problems faced by Indian Apparel and

Garment industry. The results of this questionnaire will be used to gauge these problems and

every effort would be made to find a possible solution to these problems. I would be grateful if

an appropriate person from your firm would fill this questionnaire. This questionnaire is purely

for research purpose and will not be used for any other purpose.

Thank you very much for your time contributed for my research and I promise

that this research would help Indian apparel and textile industry to sustain these problems more

easily.

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 GENERAL INFORMATION

Name of the Organization

Name of Interviewee

Designation ______________________________________________________________

Address __________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Contact No. __________________________________________________________

Areas of Operation _________________________________________________________

________________________________________________________

Exporting Experience (in Years) _____________________________________________

No. of Full-time Employees __________________________________________________

Date: _________________ Signature

90 

 
 QUESTIONNAIRE

Insufficient information about overseas markets

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Inadequate promotion in export markets

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Lack of export marketing research

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Difficulty in making contacts in foreign markets

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

91 

 
Ineffective communication with overseas customers—language and culture
barrier

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Difficulty in meeting importers' product quality standards

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Poor product design and style for export markets

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

High cost of capital to finance exports

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important
Inability to self-finance exports

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

92 

 
Lack of competitive price

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Strong international competition

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Poor organization of firm's export department

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Lack of personnel qualified in exporting marketing activities

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important
Lack of "experts" in export consulting

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

93 

 
Risk of selling abroad

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Difficulties in transporting the product(s) exported

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Payment delays from overseas buyers and distributors

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Lack of Government assistance in overcoming export barriers

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

94 

 
Ineffective national export promotion program

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Lack of attractive export incentives provided by the government

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Complexity of export documentation requirements

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Red tape in public institutions

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

95 

 
Corruption in public institutions

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Foreign government rules and regulations

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

Exchange rate fluctuations

Not at all Somewhat Neither Important Somewhat Very

Important unimportant nor unimportant Important Important

96 

 
A PPENDIX -5 P ROFILES OF I NTERVIEWED C OMPANIES
Company No.1

Name of the Organization: Cross Country Apparels

Name of Interviewee: Mr. Tushar Goyal

Designation: Director-Partner

Address: B-36, Phase – V,

Focal Point,

Ludhiana, India

Contact No.: +91-98789-00080

Areas of Operation: Manufacturing of Hosiery Knitted Woollen and Cotton Garments

Exporting Experience (in Years): 21 years

No. of Full-time Employees: 400

97 

 
Company No.2

Name of the Organization: K.A. Exports Pvt. Ltd

Name of Interviewee: Mr. Karan Marwaha

Designation: Director

Address: 197,

Industrial Area- A,

Ludhiana, India

Contact No.: +91-98142-50779

Areas of Operation: All kinds of Woollen and Cotton Apparel Manufacturing

Exporting Experience (in Years): 10 years

No. of Full-time Employees: 70

98 

 
 A PPENDIX -6 R ESPONSE TO THE I MPORTANCE OF E XPORTING P ROBLEMS
Frequency Table

Not at all Very

important important Std.
Export problems item 1 2 3 4 5 Mean Deviation
q1 Insufficient information about overseas markets 0 2.5 30 50 17.5 3.83 0.747
q2 Inadequate promotion in export markets 30 22.5 37.5 10 0 2.28 1.012
q3 Lack of export marketing research 0 17.5 55 25 2.5 3.13 0.723
q4 Difficulty in making contacts in foreign markets 0 2.5 22.5 55 20 3.93 0.730
q5 Ineffective communication with overseas customers
—language and culture barrier 2.5 32.5 45 20 0 2.83 0.781
q6 Difficulty in meeting importers' product quality standards 15 42.5 25 17.5 0 2.45 0.959
q7 Poor product design and style for export markets 20 32.5 32.5 15 0 2.43 0.984
q8 High cost of capital to finance exports 0 7.5 35 45 12.5 3.63 0.807
q9 Inability to self-finance exports 2.5 30 20 37.5 10 3.23 1.074
q10 Lack of competitive price 0 17.5 42.5 32.5 7.5 3.30 0.853
q11 Strong international competition 0 0 20 52.2 27.5 4.08 0.694
q12 Poor organization of firm's export department 0 17.5 52.5 27.5 2.5 3.15 0.736
Lack of personnel qualified in exporting marketing
0 3.30 0.723
q13 activities 0 15 40 45
q14 Lack of "experts" in export consulting 15 27.5 37.5 20 0 2.63 0.979
q15 Risk of selling abroad 0 0 12.5 65 22.5 4.10 0.591
q16 Difficulties in transporting the product(s) exported 20 40 32.5 7.5 0 2.28 0.877
q17 Payment delays from overseas buyers and distributors 0 20 32.5 45 2.5 3.30 0.823
q18 Lack of Government assistance in
overcoming export barriers 0 12.5 25 37.5 25 3.75 0.981
q19 Ineffective national export promotion program 0 0 35 45 20 3.85 0.736

99 

 
q20 Lack of attractive export incentives provided
by the government 0 2.5 30 47.5 20 3.85 0.770
q21 Complexity of export documentation requirements 20 45 17.5 17.5 0 2.33 0.997
q22 Red tape in public institutions 0 22.5 50 22.5 5 3.10 0.810
q23 Corruption in public institutions 0 15 37.5 40 7.5 3.40 0.841
q24 Foreign government rules and regulations 22.5 35 35 7.5 0 2.28 0.905
q25 Exchange rate fluctuations 0 5 15 17.5 62.5 4.38 0.925

100 

 
A PPENDIX -7 F ULL R ESULT OF I NDEPENDENT SAMPLE t- TEST

Group Statistics

Std. Error
Exporting_Years N Mean Std. Deviation Mean
q1 >= 13 20 3.60 .821 .184
< 13 20 4.05 .605 .135
q2 >= 13 20 2.40 1.095 .245
< 13 20 2.15 .933 .209
q3 >= 13 20 2.95 .686 .153
< 13 20 3.30 .733 .164
q4 >= 13 20 3.90 .788 .176
< 13 20 3.95 .686 .153
q5 >= 13 20 2.55 .759 .170
< 13 20 3.10 .718 .161
q6 >= 13 20 2.10 .968 .216
< 13 20 2.80 .834 .186
q7 >= 13 20 2.40 1.046 .234
< 13 20 2.45 .945 .211
q8 >= 13 20 3.30 .733 .164
< 13 20 3.95 .759 .170
q9 >= 13 20 2.80 1.005 .225
< 13 20 3.65 .988 .221
q10 >= 13 20 3.15 .875 .196
< 13 20 3.45 .826 .185
q11 >= 13 20 4.20 .616 .138
< 13 20 3.95 .759 .170
q12 >= 13 20 3.10 .553 .124
< 13 20 3.20 .894 .200
q13 >= 13 20 3.40 .754 .169
< 13 20 3.20 .696 .156
q14 >= 13 20 2.45 1.050 .235
< 13 20 2.80 .894 .200
q15 >= 13 20 3.90 .553 .124
< 13 20 4.30 .571 .128
q16 >= 13 20 2.35 .875 .196
< 13 20 2.20 .894 .200
q17 >= 13 20 3.35 .813 .182
< 13 20 3.25 .851 .190
q18 >= 13 20 3.20 .894 .200
< 13 20 4.30 .733 .164
q19 >= 13 20 3.50 .607 .136
< 13 20 4.20 .696 .156
q20 >= 13 20 3.45 .759 .170
< 13 20 4.25 .550 .123

101 

 
 q21 >= 13 20 2.10 1.021 .228
< 13 20 2.55 .945 .211
q22 >= 13 20 3.30 .801 .179
< 13 20 2.90 .788 .176
q23 >= 13 20 3.50 .827 .185
< 13 20 3.30 .865 .193
q24 >= 13 20 2.35 1.040 .233
< 13 20 2.20 .768 .172
q25 >= 13 20 3.90 1.071 .240
< 13 20 4.85 .366 .082

102 

 
 Independent Samples Test

Levene's Test for Equality

of Variances t-test for Equality of Means
95% Confidence Interval
of the Difference
Mean Std. Error
F Sig. t df Sig. (2-tailed) Difference Difference Lower Upper
q1 Equal variances
assumed 5.510 .024 -1.974 38 .056 -.450 .228 -.912 .012
Equal variances not
assumed -1.974 34.935 .056 -.450 .228 -.913 .013
q2 Equal variances
1.407 .243 .777 38 .442 .250 .322 -.401 .901
assumed
Equal variances not
assumed .777 37.065 .442 .250 .322 -.402 .902
q3 Equal variances
assumed .655 .423 -1.559 38 .127 -.350 .224 -.804 .104
Equal variances not
assumed -1.559 37.839 .127 -.350 .224 -.805 .105
q4 Equal variances
assumed 2.316 .136 -.214 38 .832 -.050 .234 -.523 .423
Equal variances not
assumed -.214 37.296 .832 -.050 .234 -.523 .423
q5 Equal variances
assumed .711 .404 -2.354 38 .024 -.550 .234 -1.023 -.077
Equal variances not
assumed -2.354 37.884 .024 -.550 .234 -1.023 -.077
q6 Equal variances
assumed .016 .901 -2.451 38 .019 -.700 .286 -1.278 -.122
Equal variances not
assumed -2.451 37.181 .019 -.700 .286 -1.279 -.121
q7 Equal variances
assumed .470 .497 -.159 38 .875 -.050 .315 -.688 .588
Equal variances not
assumed -.159 37.609 .875 -.050 .315 -.688 .588

103 

 
 q8 Equal variances
assumed .204 .654 -2.755 38 .009 -.650 .236 -1.128 -.172
Equal variances not
assumed -2.755 37.952 .009 -.650 .236 -1.128 -.172
q9 Equal variances
assumed .029 .866 -2.697 38 .010 -.850 .315 -1.488 -.212
Equal variances not
assumed -2.697 37.989 .010 -.850 .315 -1.488 -.212
q10 Equal variances
assumed .000 1.000 -1.115 38 .272 -.300 .269 -.845 .245
Equal variances not
assumed -1.115 37.872 .272 -.300 .269 -.845 .245
q11 Equal variances
assumed .437 .513 1.144 38 .260 .250 .219 -.192 .692
Equal variances not
assumed 1.144 36.444 .260 .250 .219 -.193 .693
q12 Equal variances
assumed 7.359 .010 -.425 38 .673 -.100 .235 -.576 .376
Equal variances not
assumed -.425 31.657 .673 -.100 .235 -.579 .379
q13 Equal variances
assumed .758 .390 .872 38 .389 .200 .229 -.264 .664
Equal variances not
assumed .872 37.758 .389 .200 .229 -.265 .665
q14 Equal variances
assumed 1.614 .212 -1.135 38 .264 -.350 .308 -.974 .274
Equal variances not
assumed -1.135 37.062 .264 -.350 .308 -.975 .275
q15 Equal variances
assumed 1.394 .245 -2.251 38 .030 -.400 .178 -.760 -.040
Equal variances not
assumed -2.251 37.958 .030 -.400 .178 -.760 -.040
q16 Equal variances
assumed .018 .894 .536 38 .595 .150 .280 -.416 .716
Equal variances not
assumed .536 37.982 .595 .150 .280 -.416 .716

104 

 
 q17 Equal variances
assumed .283 .598 .380 38 .706 .100 .263 -.433 .633
Equal variances not
assumed .380 37.921 .706 .100 .263 -.433 .633
q18 Equal variances
assumed .706 .406 -4.255 38 .000 -1.100 .259 -1.623 -.577
Equal variances not
assumed -4.255 36.582 .000 -1.100 .259 -1.624 -.576
q19 Equal variances
assumed .010 .922 -3.390 38 .002 -.700 .206 -1.118 -.282
Equal variances not
assumed -3.390 37.312 .002 -.700 .206 -1.118 -.282
q20 Equal variances
assumed 3.077 .087 -3.816 38 .000 -.800 .210 -1.224 -.376
Equal variances not
assumed -3.816 34.641 .001 -.800 .210 -1.226 -.374
q21 Equal variances
assumed .092 .764 -1.447 38 .156 -.450 .311 -1.080 .180
Equal variances not
assumed -1.447 37.773 .156 -.450 .311 -1.080 .180
q22 Equal variances
assumed .005 .947 1.592 38 .120 .400 .251 -.109 .909
Equal variances not
assumed 1.592 37.989 .120 .400 .251 -.109 .909
q23 Equal variances
assumed .051 .823 .748 38 .459 .200 .268 -.342 .742
Equal variances not
assumed .748 37.926 .459 .200 .268 -.342 .742
q24 Equal variances
assumed 2.890 .097 .519 38 .607 .150 .289 -.435 .735
Equal variances not
assumed .519 34.968 .607 .150 .289 -.437 .737
q25 Equal variances
assumed 27.452 .000 -3.753 38 .001 -.950 .253 -1.462 -.438
Equal variances not
assumed -3.753 23.385 .001 -.950 .253 -1.473 -.427

105 

 
 106