Destination Distributor Selection and Relationship Management by SMEs involved in Non-Traditional Exporting: A Case Study of Three SMEs in Ghana

Abstract

A survey was conducted to ascertain approaches adopted by small and medium enterprises (SMEs) to assess selection criteria and challenges of managing foreign distributor relationship in marketing of non-traditional exports (NTEs) from Ghana. Praise Export Services Ltd (PESL), Nature’s Best Fruits and Juices Ltd (NBFJL) and A₁ Secko Farms (A₁SF), a subsidiary of Secko Foods Ltd were proportionately selected as case studies. Questionnaires and one-on-one interviews were administered to these selected SMEs. The study revealed that, SMEs in the non-traditional export sector of Ghana’s export industry employ multiple approaches and strategies in selection of foreign destination distributors. Personal visits, trade exhibitions and ‘distributor own initiative’ were the most prominently adopted approaches, whereas strategic approach is the least used method for foreign distributor selection. SMEs’ relationships with foreign distributors can be classified as porous. Onuses, agreements, goals and objectives of foreign distributors were not defined and formally documented. Trade promotion organisations and business associates were important in selecting foreign distributors and verifying authenticity of distributors’ qualities and attributes. Performance records, financial strength, market knowledge, infrastructure, market orientation, product knowledge, non-conflicting portfolio, good reputation and image, commitment and trustworthiness were the major selection criteria for recruiting foreign distributors. Regular communication, competitive pricing, consistent supply of quality and unique products, attractive margins, invitation to SME’s  home base and extended credit were the key motivators of foreign distributors and agents. Trust, honesty, integrity, consistent supply of quality and unique products, communication, commitment, security in relationship, openness, respect and understanding between SMEs and foreign distributors were key to lasting successful business relationships.

Key Words: Export marketing; foreign distributors; SMEs, relationship management; non-traditional exports