TCI2012 Building Marketing Externalities to Improve Agribusiness Clusters Competitiveness

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Christian Felzensztein on Marketing Externalities to Improve Agribusiness Clusters Competitiveness - A perspective from proximity, presented at the 15th TCI Global Conference, Basque Country 2012.

Christian Felzensztein on Marketing Externalities to Improve Agribusiness Clusters Competitiveness - A perspective from proximity, presented at the 15th TCI Global Conference, Basque Country 2012.

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  • 1. BUILDING MARKETING EXTERNALITIESBUILDING MARKETING EXTERNALITIESTO IMPROVE AGRIBUSINESS CLUSTERSTO IMPROVE AGRIBUSINESS CLUSTERSCOMPETITIVENESS:COMPETITIVENESS:A perspective from proximityChristian Felzensztein PhDUniversidad Adolfo Ibañez, Chilec.felzensztein@uai.clCristian Geldes PhDUniversidad de La Serena, Chilecgeldes@userena.clwww.clusterinnovation.com
  • 2. Introduction• Cooperation between firms in marketing activities in industryclusters settings is an area that only started to receive attention thepast decade, despite its importance to increase firms competitiveness(Brow and Bell, 2001; Brown et al, 2010; Felzensztein et al, 2012).• “Inter-firm marketing cooperation” has been considered as “activeexternalities” in clusters and has been argued to include: jointactivities such as participation in trade fairs, market research, newproduct development, trade missions to new markets, branding andsales to local and foreign markets (Felzensztein et al, 2010).
  • 3. Types of cluster externalitiesDemand-side (market driven) externalities Supply-side (production driven)externalitiesPassive • Output multipliers• Localized demand• Increased market share• Chance of discovery• Credibility• Informational spill over• Specialized labor force• Technological spill over• Input multipliers• Informational spill overActive • Active joint marketing activityo Trade fair participationo Delegations to clientso Trade missionso Firm referralso Informationgathering/sharing• Infrastructural support• Joint research and development
  • 4. • Social networks & geographical proximity are determinants of activemarketing externalities (Felzensztein & Gimmon, 2007; Felzensztein y Gimmon, 2009; Felzensztein et al,2010a; Brown et al, 2010:).(Felzensztein et al, 2010b: Long Range Planning)1. What other factors affect marketing externalities?2. What other dimensions of proximity can determine marketing externalities?Research questions:
  • 5. • Proximity approach from economic geography (Boschma and Frenken, 2010)• Used to explain interrelations between actors, especially learning,innovation and cooperation (Boschma; 2005, Cantiu, 2010)• Key issue in industrial districs and clusters (Ozman; 2009)• Different types of proximity (Knoben y Oerlemans, 2006)• Studies analyze few types of proximities (Carbonara y Giannoccaro, 2010).We propose to study relations between marketing externalities(inter-firm marketing cooperation) in industry clusters andproximity dimensions proposed by Boschma (2005).
  • 6. Theoretical model and hypothesisGeographicalProximitySocialproximityMarketingexternalitiesCognitiveproximityOrganizationalproximityInstitutionalproximityProposed model
  • 7. HypothesisH1: Geographical proximity facilitates positive relationshipbetween marketing externalities and non-spatial dimensions ofproximityH2: Non-spatial proximities are positively related to marketingexternalitiesH2.1: Cognitive proximity is positively related to marketing externalitiesH2.2: Social proximity is positively related to marketing externalitiesH2.3: Organizational proximity is positively related to marketing externalitiesH2.4: Institutional proximity is positively related to marketing externalities
  • 8. Research contextChile is among the top 20 global exporters of agricultural andforestry products, while accounting for about 10% of the and10% of national employment.Agribusiness cluster of "Province of Limarí” is a semi-arid land.The main agricultural products are grapes, wine, avocados andmandarins.
  • 9. Method and data• First stage: We propose and improve scalesto represent the constructs for interfirmmarketing cooperation and each dimension ofproximity proposed by Boschma (2005).• Second stage: We validated scales withConfirmatory Factory Analysis (CFA) and testthe interrelations between proximity and interfirmmarketing cooperation with two StructuralEquations Models (SEM).On line survey to1544 agribusinessfirms of Chile (119answered)Field survey to 312firms of agribusinesscluster (100%answered)
  • 10. Results: On line survey• 1544 survey to agribusiness firms• 162 answered (10,49%)• 119 totally answered (7,71%)• 25 items identified• 4 constructs or latent variables• CFA resultsCONSTRUCTCRONBACH´SALPHAAVE CR MSV ASVINTERFIRM MARKETINGCOOPERATION0.89 0.70 0.87 0.10 0.04INSTITUTIONAL-COGNITIVEPROXIMITY0.83 0.46 0.87 0.34 0.26SOCIAL PROXIMITY 0.59 0.47 0.73 0.40 0.09ORGANIZATIONALPROXIMITY0.75 0.54 0.82 0.40 0.13
  • 11. Results: Field validation surveyUniverse: 9,344agribusiness firmsStratificated by“Comunas”Conveniencesample (there is no a publicand official list of firms)312 sampled (3,3%)95% of confidenceand 5% error4 latent variablesidentified and 12indicators or items
  • 12. Results: SEM1. Interrelations between proximitydimensions and marketing externalities or IMC
  • 13. Results: SEM2. Interrelations between proximityand marketing externalities or IMC (secondorder)
  • 14. Conclusions• Our specific scale is a good means to measure the phenomena of proximityand marketing externalities or interfirm marketing cooperation (high levels ofvalidity and reliability)• Geographical proximity facilitates the relationship between non-spatialdimensions of proximity and marketing externalities (H1), but:• Only institutional proximity is positively related to marketing externalities(H2.4). Organizational-cognitive proximity is negatively related to marketingexternalities (H2.1 y H2.3)• As second order factor (SEM2), there is no statistically significant relationstated between interfirm marketing cooperation and proximity.• Other factors promote and facilitate joint activities between firms: i) tradeand business associations or the government (Porter, 1998; Andersson et al 2004; Ketelset al, 2006), ii) external factors such as market opportunities or threats (Traill yMeulenberg, 2002; Johnson et al, 2009; Capitanio et al, 2010) and iii) information andcommunication technologies.
  • 15. Implications• Deeper analysis of the concept of marketing externalitiescooperation (joint activities that have more impact).• Expand the research focus to the role of trade and businessassociations and the government, the effects of communicationstechnologies and external factors such as market opportunitiesand threats.• For managers, develop activities to promote interfirm marketingcooperation in clusters