Industrial Marketing Management 40 (2011) 5–7

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Industrial Marketing Management

Business marketing in BRIC countries

Sergio Biggemann a,⁎, Kim-Shyan Fam b,1

a Marketing Department, School of Business, University of Otago, New Zealandb School of Marketing and International Business, Victoria University of Wellington, New Zealand

⁎ Corresponding author. Tel.: +64 3 479 8467; fax: +E-mail addresses: sergio.biggemann@otago.ac.nz (S.

kim.fam@vuw.ac.nz (K.-S. Fam).1 Tel.: +64 4 463 6459, 027 563 6459(Mobile); fax: +

0019-8501/$ – see front matter © 2010 Elsevier Inc. Aldoi:10.1016/j.indmarman.2010.09.004

a b s t r a c t

a r t i c l e i n f o

Available online 13 October 2010

Keywords:BRIC countriesBrazilRussiaIndiaChinaBusiness marketing

This paper highlights the increased importance of the BRIC countries (i.e., Brazil, Russia, India, and China) inthe world economy. The BRICs are not only among the best economic performers but are responsible of aconsiderable part of the goods and services consumed globally and intensely trade one another. This meanssignificant business interaction that existing research fails to explain. Hence, this special issue was prepared toencourage publication of empirical research of business marketing that involves one or more BRIC countries.This paper briefly introduces to the eleven research papers included in this special issue.

64 3 479 8172.Biggemann),

64 4 463 5231.

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© 2010 Elsevier Inc. All rights reserved.

1. Brazil, Russia, India, and China, the new development engine

The BRIC countries as Brazil, Russia, India and China are frequentlyreferred to have attracted a great deal of media and academicattention in the recent years. These countries are different from oneanother in their culture, background, language, and the structure oftheir economies. However, they have a common denominator:economic growth development in the BRICs has greatly exceededgrowth compared to the world's leading industrialized nations. Evenafter the economic crisis that started in 2007, they continuedoutperforming the rest of the world. While in 2009 large economiesshrunk as much as 6%, (e.g., Japan and Germany), Brazil stayed steady,India grew 5.9%, and China 8.1%; only Russia was the group's badperformer shrinking 7%. This and the forecast for 2010, which gives allthese countries an expected economic growth above the average ofdeveloped economies, further increase the interest on these countries.

Looking at the 2009 Real GDP (figures in 2005 US dollars providedby the World Bank), it is interesting to mention that Brazil is theworld's 10th largest economy, Russia the 13th, India the 11th andChina the 3rd. The combined economies of the BRIC nations areequivalent to 50% of the United States economy, the world's largesteconomy, and far exceed that of Japan, the world's second largesteconomy. However, the figures were rather different 10 years ago. In1999, Brazil was still the 10th world largest economy while Russiawas 15th, India 16th and China 7th. The sum of their economiesrepresented only 30% of America's economy. While United States’economy grew 20% in the last ten years, Brazil grew 36%, Russia grew

69%, India 92% and China is currently more than two and a half timeswealthier than 10 years ago. If the trend continues, the BRICs are likelyto occupy spots in the largest 10 world economies in the next fewyears, possibly at the expense of Canada and Spain. It is estimated thatin 2009 the BRICs were responsible for 60% of the world's economicgrowth. In the second quarter of 2010 China had overtaken Japan asthe second world economy, India keeps showing robust economicgrowth and Brazil as well as Russia have registered positive growth onthis period. Thus, these countries are of significant relevance to theworld's economy.

2. Trading within the BRICs

Although China is significantly larger than the other threecountries it does not disqualify them to be a member of BRIC group.The increased trading dynamics within the BRICs has been calledto the attention of pundits and practitioners. China is the main supplypartner to Russia and India and only second to Brazil. China is also animportant customer representing the third largest market for Brazil,fourth for India and sixth for Russia. Individually neither Brazil, Russia,nor India is significant from a Chinese perspective. However, as agroup, they supply more than 18% of China imports, which makesthem, as a group, China's largest trading partner ahead of Japan.

In addition to the increased trading between these countries, theirheads of state have initiated talks to create an influence block tochange the balance of power with the US and Europe. The leaders ofthese countries are arguing that the economic importance of the BRICsis underrepresented in institutions such as IMF and World Bank.Whether they manage to change this is yet to be known; however,within the BRICs interaction keeps increasing and the BRICs keepgrowing in importance to other developed countries. The BRICsappear to have progressed from an acronym only to an active block ofnations.

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3. Business-to-business marketing and the BRICs

The BRICs have built large manufacturing and service-providingcapacity to the extent that China is called the factory of the worldwhereas India has turned to be a major exporter of informationtechnology and software workers. Brazil has a large manufacturingand service capacity too and is the largest exporter in Latin America,while Russia is the world's largest exporter of oil and natural gas, andis also an important player in technology products and services. Thisimplies significant interaction between the BRICs and governmentsand companies around the world, which is relevant from a businessmarketing perspective.

Most of today's knowledge of business marketing, which arguablyincludes relationship marketing and the work of the IMP group, isgrounded on studies conducted in traditionalWestern countries. Onlyin the last few years, scholars have started to question the validity ofmeasures such as trust and commitment to explain business relation-ships in non-Western contexts. Likewise, the idea of companiesworking in large networks that create direct and indirect relationshipsneeds further analysis when suppliers of new countries enter theplaying field. This is even more important when the new partieshappen to be important business partners.

Of course business marketing is not only about relationships andnetworks, finding solutions to business problems that deliver value tocustomers and end consumers is also a fundamental issue. In thecurrent world business context when two or more companiesinteract, the likelihood of a BRIC being supplier or buyer is large.Thus, research in the area of business marketing that involves one ormore BRIC countries is becoming increasingly relevant. Increasingunderstanding on business marketing matters associated to the BRICis the reason why this special issue was prepared.

4. Contributions to this special issue

From the large number of submissions received 11 are included inthis special issue; four fromBrazil, two fromRussia, two from India andthree fromChina. However, this proportion does not strictly reflect thecomposition of the papers received. Articles were included in thisspecial issue based on its relevance and contribution to advanceknowledge in the topic. Even though each paper has a main focus inone country, the validity of their findings may be generalizable to alarger number of countries. The articles of this issue illustrate thevariety of research currently conducted in the area. They also supportthe idea of the BRICs being a matter of global relevance becauseresearchers are not limited to academicsworking in the BRICs. Authorsare affiliated to universities and industries in more than 10 differentcountries that have extensively collaborated to conduct research in thetopic. In one paper authors were from Russia, Germany, Iran, SouthAfrica, and Greece, which is rather consistent with the networkinteractionist view of business marketing. All but one paper weremulti-authored, the majority being five-author papers.

This special issue addresses questions regarding relationshipquality and their effects on customers’ loyalty and account managers’performance, the role of market orientation and development ofrelationship capabilities, as well as the role of salesperson's customerorientation and value creation through business relationships. Othertopics include procurement information searching strategies andstrategies to reduce prospecting costs, performance measurementstudies and multidimensional scale developments, among othertopics. While one researcher is interested in business customers’behavior in India, another researcher is studying the effects of conflictmanagement on relationships in China, and a third one is interested ininterfunctional collaboration in Russia; all of them conductingindependent research in, arguably, related topics.

In organizing the contents of the issue,we, the guest editors, decidedto present the articles by country. That is, starting from Brazil, following

with Russia, then India and finally China. For the articles about the samecountry no special reason explains the order of their publication withthe exception of the first article that addresses marketing metricsbecause measurement is critical to improve performance. A synopsis ofeach paper is presented in the following lines:

Hoffmann Sampaio, Simões, Gattermann Perin, and Almeida (2011)conducted research to examine how managers approach marketingmeasures in Brazil. Based on a large-scale empirical study, Hoffmannet al. identified the most relevant marketing metrics from theperspective of Brazilianmanagers encountering that indicators pertain-ing to customer vision are the most important, followed by financialindicators, indicators related to product vision, and finally market andinnovation. Compared to the findings of previous studies, UKmanagersprioritize profits over any other measure whereas China managers careabout customer behavior similar to Brazilian managers. The studyconcludes that marketing and other management metrics should bebetter integrated one another.

Brashear Alejandro, Kowalkowski, da Silva Freire Ritter, ZancanMarchetti, and Prado (2011) motivated by the increased complexityof products and services that companies deal with and thus thecomplexity of sourcing, conducted research to understand theinfluence of information search efforts of buying firms in key purchasedecisions. Brashear Alejandro et al. evaluated the influence oforganizational, personal, and situational information search onpurchase decisions of integrated business management systemsdrawing on data from large Brazilian firms. From an organizationalperspective centralization of information was found to negativelyaffect information search efforts whereas formalization was positivelyrelated to search efforts. From a personal perspective a degree ofinnovative initiative was found important for information searchefforts. Finally from a situational perspective novelty and bargainingpower were found to be key drivers of the information search effort.Among other managerial implications this research warns about thenegative effects of buying power on efforts to seek information.

Medeiros Pereira, Sellitto, Borchardt and Geiger (2011) studied theprocess involved in organizing a buyer's fair, which is a fair where firstand second-tier suppliers of the automotive industry make known theirbuying requirements for non-critical items to small and medium-sizedenterprises. The fair itself is the outcome of action research conducted bythe authorswhomwere given the task tofind a faster and less expensiveway for large companies to find small and medium-size enterprises tooutsource non critical items. This paper not only contributes tomanagerial practice in procurement, but also opens a complete newavenue of research for academics interested in buying behavior.

In the last paper fromBrazil, Brashear Alejandro, Vilaca Souza, Boles,Puga Ribeiro, andMonteiro (2011) focused on relationship quality (RQ)in emergingmarkets. The study evaluates loyalty, relationship value andperformance as outcomes of relationship quality, conceptualized asrelationship contacts and relationship-specific investments. Data comefrom the Brazilian automotive industry. The study finds that both formsof relationship quality are important but through distinct paths.Relationship quality developed through the account managers hasdirect affects on loyalty and perceptions of relationship value. At thefirm level, however, relationship quality is indirectly related to loyaltythrough relationship-specific investments. Relationship-specific invest-ments are important to the buyers’ loyalty to the firm and theirperceived performance, but are not significantly related to perceptionsof overall value. The studyfinds that loyalty cannot bedirectly explainedby RQ with the company. Instead, it is related to the RQ with accountmanagers. The last helps managers in organizational markets byrevealing the importance of a firm's account managers in generatingcustomer loyalty and perceptions of value from the relationship.

Both articles from Russia are from the same research group, butwith slightly different authors. In the first paper Smirnova, Naudé,Henneberg, Mouzas, and Kouchtch (2011) investigate the role ofmarket orientation on business performance. Drawing on data from

7S. Biggemann, K.-S. Fam / Industrial Marketing Management 40 (2011) 5–7

industrial firms from multiple regions of Russia the authors foundthat customer orientation and interfunctional coordination affectrelational capabilities of the firm, and thus overall business perfor-mance. However, Smirnova, Naude, et al. claim that in Russia onlymarket orientation aspects, which are aimed at developing acompetitor orientation, have direct positive outcomes for the firm.Among the managerial implications, this article suggests that marketorientation and relational capabilities, aimed at the development ofinterfirm cooperation, and the integration of processes among thefirms in industrial markets, can be the language that will help thefirms to understand each other and find mutually beneficial solutions.

In the second paper Smirnova, Henneberg, Ashnai, Naudé, andMouzas (2011) investigate the role of interfunctional collaborationbetweenmarketing and purchasing functions in industrial companies.This research focuses on interactions between marketing andpurchasing within the same organization and how it facilitatesdemand chain integration between firms. Smirnova, Henneberg,et al. found that marketing-purchasing collaboration affects inter-functional interaction. The article stresses the importance of under-standing the business partner to improve business performance.Collaborating within and between organizations is only starting todevelop in the Russian environment where in the past its centralizedmodel did not require such capabilities to be developed. This researchalso contributes by arguing that Russian managerial practices are notsignificantly different to those in traditional Western economies. Theyare just less developed, the authors argue.

Two articles account for the India component of this special issue. Inthe first article Gupta, Navare, andMelewar (2011) identify factors thatinfluence the behavior of business customers of international firms inemerging markets such as India. Gupta et al., argue that businesssustainability influences local firms’ behavior towards internationalfirms in their business dealings stronger than business risk. In thesecond article Singh and Koshy (2011) explorewhether value is createdby salespeople and if so, how. Drawing on quantitative data gatheredfrom small andmedium Indian enterprises, Singh and Koshy found thatsalesperson's customer orientation directly leads to value creation andrelationship development with customers, whereas a sales orientationdestroys value. From a managerial perspective, the paper argues thatrelationship development and value creation are not only differentconstructs but that the first does not necessarily lead to the second.

In thefirst of three articles about China, Yang, Zhou, and Jiang (2011)study the effectiveness of formal control and trust as governancemechanisms to safeguard business transactions finding that the jointeffects of formal control and trust on governing transactions dependon the relational ties that the focal partners share. In situations ofstrong relational ties formal control reduces trust whereas in situationsof weak relational ties formal control increases trust. Yang et al. advicemanagers to first identify the relational ties and then decide whichgovernance mechanism is better to apply. Occasionally, the authorsargue, controlmechanisms contribute to increase trust between parties.

The second article related to China is about Guanxi. Yen, Barnes, andWang (2011) propose a measurement scale for measuring Guanxibased on three Chinese relational constructs – ganqing, renqing andxinren. Drawing on qualitative and survey data from Taiwanese tradingcompanies, Yen et al. identify 11 items to assess Guanxi, supported byempirical evidence as opposed to previous work that tended to beconceptual. From a managerial perspective the authors call for moresocial interaction between Western companies and Chinese counter-parts. They also suggest Western suppliers to familiarize with practicesof constant exchange of favors and gift giving, however, avoidingcrossing the line to the point that a gift becomes a bribe.

The last article of this special issue focuses on integrating,accommodating and compromising as strategies for conflict handlingthat affect trust and commitment. Based on data from Chinese andIndian human resources outsourcing service providers, Ndubisi(2011) studies the effects of these conflict handling strategies

on trust and commitment. Ndubisi finds conflict handling stylessignificantly associated with trust and commitment. He also studiesthe moderating effect of culture finding that it has a direct impact oncommitment but not on trust. Culture moderates the impact of com-promising conflict handling on trust and commitment. In addition,this article reports that the effects of culture are significantly higherfor the Chinese service providers compared to the Indians.

5. Conclusions

All the papers included in this special issue and many others thatwe regrettably could not be included demonstrate that businessmarketing research is an important stream of research in the BRICs.The topics that have been addressed do not differ significantly fromthose studied in traditional Western countries. However, theirfindings, not always consistent with existing knowledge, contributeto its advancement. The main differences between BRICs andWesterncountries were found in the effects of culture on relationshipdevelopment and, in the case of Russia, the effects of many years ofcommunism that still affect business practices. However, a significantpart of existing knowledge in business marketing is suitable tostudying the BRICs.

The articles published in this special issue open new avenues forresearch. As the trading levels within the BRICs and between themand the rest of the world continue to increase, gaining knowledgefrom the BRICs becomes even more important.

References

Brashear Alejandro, T., Kowalkowski, C., da Silva Freire Ritter, J. G., Zancan Marchetti, R.,& Prado, P. H. (2011). Information search in complex industrial buying: Empiricalevidence from Brazil. Industrial Marketing Management, 40(1).

Brashear Alejandro, T., Vilaca Souza, D., Boles, J. S., Puga Ribeiro, Á. H., & Monteiro, P. R. R.(2011). The outcome of company and account manager relationship qualityon loyalty, relationship value and performance. Industrial Marketing Management,40(1).

Gupta, S., Navare, J., & Melewar, T. (2011). Investigating the implications of businessand culture on the behaviour of customers of international firms. IndustrialMarketing Management, 40(1).

Hoffmann Sampaio, C., Simões, C., Gattermann Perin, M., & Almeida, A. (2011).Marketing metrics: Insights from Brazilian managers. Industrial MarketingManagement, 40(1).

Medeiros Pereira, G., Sellitto, M. A., Borchardt, M., & Geiger, A. (2011). Procurement costreduction for customized non-critical items in an automotive supply chain: anaction research project. Industrial Marketing Management, 40(1).

Ndubisi, N. O. (2011). Conflict handling, trust and commitment in outsourcingrelationship: A Chinese and Indian study. Industrial Marketing Management, 40(1).

Singh, R., & Koshy, A. (2011). Does salesperon's customer orientation create value inb2b relationships? Empirical evidence from India. Industrial MarketingManagement,40(1).

Smirnova, M., Henneberg, S. C., Ashnai, B., Naudé, P., & Mouzas, S. (2011).Understanding the role of marketing - purchasing collaboration in industrialmarkets: The case of Russia. Industrial Marketing Management, 40(1).

Smirnova, M., Naudé, P., Henneberg, S. C., Mouzas, S., & Kouchtch, S. P. (2011).Relational capabilities and performance outcomes: The case of Russian industrialfirms. Industrial Marketing Management, 40(1).

Yang, Z., Zhou, C., & Jiang, L. (2011). When do formal control and trust matter? Acontext-based analysis of the effects on marketing channel relationships in China.Industrial Marketing Management, 40(1).

Yen, D. A., Barnes, B. R., & Wang, C. L. (2011). The measurement of Guanxi: Introducingthe GRX scale. Industrial Marketing Management, 40(1).

Sergio Biggemann is Senior Lecturer in Marketing at the Marketing Department at theUniversity of Otago in Dunedin, New Zealand. His current areas of research are in thedynamics of business interaction, risk management in extended networks andsustainability and value chain integrity. He has special interest in the BRIC countriesas a new block or countries relevant to the world economic development and thebusiness environment.

Kim-Shyan Fam is a Professor of Marketing and Head of School of Marketing andInternational Business at Victoria University of Wellington, New Zealand. His researchinterests include faith and value based advertising and promotion, marketing ofeducation, and CSR of SMEs in Asia. He has published in, among others, Journal ofAdvertising Research, Journal of Business Research, Psychology and Marketing,European Journal of Marketing, and Journal of Business Ethics.