Trust & commitment for a successful manufacturer-distributor relationship : - A qualitative study for small company's presumptive export marketing strategy

Abstract: Many companies that go global use the entry mode of having a foreign distributor instead of setting up an own intermediary in the country. This is beneficial because it is lower risk, requires lower capital investments and the manufacturer gains the distributor’s expertise in the new market. Voxit AB is one of those growing companies that are in the starting phase of exporting one of their products within the area of speech recognition. The preparation for entering a new market through a foreign distributor is something Voxit is particularly interested in at the moment. A part of that is to build and keep a sustainable relationship with the foreign distributor.   With the purpose to increase my understanding about the relationship between manufacturers and foreign distributors, and to contribute with propositions to Voxit’s future international marketing strategy, six interviews with manufacturers were made. The focus is to study the factors trust, cultural differences, information exchange, commitment and opportunism that are affecting the relationship between these manufacturers and their foreign distributors and to see closer how these factors can be approached for a small company such as Voxit. The above purpose developed the research question; how should a manufacturer company such as Voxit, a SME that is starting to export a new product, develop a relationship with a foreign distributor?   Findings reveal that all factors that were studied, such as information exchange and cultural distance, are affecting the relationship between a manufacturer and a foreign distributor. However, the factors trust and commitment are especially affecting the relationship, which should be recognised when building a relationship with a foreign distributor.