Export Promotion Enhances Firm’s Quality Reputation, Product and Service Quality Generating Sales and Profits: A Structural Equation Modelling Using AMOS

Abstract:

Export promotion, a factor of export marketing mix can be a differentiator for profits. Few studies have dwelled explicitly on developing concrete models and multi-dimensional scales leading to strengthening of the theoretical foundations for measuring export performance. The research framework formulated for this study is based on existing theories. This qualitative research is on export promotion in enhancing firm’s quality reputation, product and service quality that generate sales with profit. The respondents were the Johor State manufacturing exporters selected from the Federation of Malaysia Manufacturers based on Krejcie and Morgan sampling plan. Respondent answered a self-administered survey questionnaire. Hypotheses formulated were tested through SEM using AMOS.  Results show that the observable variable of export promotion comprises of management of sales promotion activities, selecting and participating in relevant trade fairs, preparation of product literature, and evaluating of channel performance. The latent variables that have loaded highly into enhancing of firm’s quality are improve products, providing better service quality and gaining in reputation. The latent variables of sales performance that loaded in the observable measure of export sales are export sales efficiency and export sales growth. Profits measure are found to comprise of export profitability and profit margin. Structural equation modelling of good fitting shows that export promotion enhances firm’s quality and will lead to higher sales with profits. Future research and export marketing implications are discussed.
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