Internationalisation strategies for SMEs for enhancing the typical supply system in the age of...

122 Int. J. Globalisation and Small Business, Vol. 2, No. 2, 2007

Copyright © 2007 Inderscience Enterprises Ltd.

Internationalisation strategies for SMEs for enhancing the typical supply system in the age of globalisation: the Vietri Ceramics network

Vittoria Marino*, Carmen Gallucci and Giada Mainolfi Department of Business Studies and Researches University of Salerno Via Ponte don Melillo – 84084 Fisciano (SA), Italy E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] *Corresponding author

Abstract: At present, in our globalised economy it would appear that consumers are more and more interested in buying artisan products, considering them synonymous to quality, tradition, culture and respect for the environment. From this perspective, after illustrating the strengths and weaknesses of this particular sully system, we intend to stretch the conceptual scheme of typical products to the point of including in the concept of supply the relative experience connected to such specificity, which can be found only in their places of origin. Our approach in declining the globalisation-localisation dichotomy attempts to identify opportune strategies of internationalisation for particular categories of Small and Medium-sized Enterprises (SMEs), such as the ceramic district at Vietri sul Mare, with its heritage of culture, resources, relations, relationships, experiences, competence, knowledge and information – and to firmly link the strategy to the territory of origin.

Keywords: internationalisation; Small and Medium-sized Enterprises; SMEs; typical supply system.

Reference to this paper should be made as follows: Marino, V., Gallucci, C. and Mainolfi, G. (2007) ‘Internationalisation strategies for SMEs for enhancing the typical supply system in the age of globalisation: the Vietri Ceramics network’, Int. J. Globalisation and Small Business, Vol. 2, No. 2, pp.122–136.

Biographical notes: Vittoria Marino is an Associate Professor of Global Marketing at the Faculty of Business Management, Salerno University. She holds a PhD in Economics and Public Management and her main studies are on SMEs and international management.

Carmen Gallucci is an Associate Professor of Global Marketing at Salerno University. After graduating in Economics, she was awarded a PhD in Business Administration. She has published studies on family business and territorial marketing.

Giada Mainolfi holds a PhD studentship in Marketing and Communication at Salerno University. Her research areas of interest include international marketing with a special focus on global branding strategies and enhancing intellectual property.

Internationalisation strategies for SMEs 123

1 Introduction

Globalisation, as a vector of development blending the relations between culture, institutions and economics, has the potential, both in horizontal and vertical terms, to facilitate integration processes. This process offers an opportunity, to actors and operators alike, for widening the competitive scenario. While in the first instance, globalisation from a business viewpoint was closely connected to uniformity of consumption, i.e., identifying global segments of demand and supply to achieve large-scale economies, at the present time, it is considered more a driver for enhancing specific individual competence in a much wider scenario. The aim of this paper is to identify opportune strategies of internationalisation for specific categories of small and medium-sized businesses, with their heritage of culture, resources, relations, relationships, experiences, competence, knowledge and information, and firmly link them to the territory of origin. Our research question is: Is it possible to identify useful internationalisation strategies suitable to Small and Medium-sized Enterprises (SMEs) producing typical products?

Our analysis will be based on an original definition of the typical product supply concept. In this perspective, subsequent to pinpointing the strengths and weaknesses of this particular system of supply, a conceptual scheme of typical local products will be drawn up in order to trace, in the concept of supply, the experience linked to the products’ specificity or nature/character that derives from their respective places of origin; typical products are nowadays a potential means of enhancing a composite and multidimensional supply strengthened by interaction between businesses, territories of origin and consumption in terms of ‘values’.

We decided to deepen our theoretical analysis framework with empirical research targeted at Vietri Ceramics Board. Our aim was to identify the international strategies for enhancing the typical ceramics supply system. The paper has been structured as follows: Section 2 identifies the theoretical model as depicted in the academic literature on SMEs’ international strategies. The third section focuses on typical product peculiarities. The fourth section identifies opportune strategies of internationalisation for specific categories of SMEs, highlighting their connection with the territory. The Section 5 applies the conceptual framework to Vietri ceramics network. The Section 6 shows our final remarks and further research development.

2 Theoretical structure

The theoretical model refers to current literature about SMEs’ international strategies (Ruzzier et al., 2006). In particular, the resource-based view of internationalisation appears to be very interesting. Past research offers few examples of resource-based or capabilities-based studies of small firms’ internationalisation. Some authors (Ahokangas, 1998), who under that perspective have tried to show the link between the SMEs’ internationalisation processes and the skills owned, outline the importance of their connection with the environment.

This model concerns resource development and the strategic internationalisation behaviour of small firms, combining the strategic and network perspectives of resources. Ahokangas assumes that SMEs are dependent on the development potential of key

124 V. Marino, C. Gallucci and G. Mainolfi

internal and external resources, which can be developed within the firm and between firms and their environments. From this point of view, internationalisation is a ‘process of mobilising, accumulating, and developing resource stocks for international activities’.

The tight relation between SMEs and their environment appears clearly. The environment can activate resources and skills that have a positive impact on the creation of new firm networks for the projection to international markets. Under the globalisation perspective, Porter (1998; 1990; 2000) too detected networks, clusters and industrial districts as opportunities for SMEs to compete worldwide.

Whereas competition has become global (Agmon and Drobnick, 1994), competitiveness remains highly anchored within the territory (Genosko, 1997; Budd, 1998). In fact, the proximal territory in which small companies are established may constitute a basis for a strong local integration, and even a stepping stone, facilitating the access of small companies to an international opening (Torres, 2002). Several researchers’ studies (Keeble et al., 1998) developed the concept of ‘glocalisation’, a neologism resulting from the contraction of the terms ‘global’ and ‘local’. This idea is based on the principle that proximity plays an active role in the global insertion of SMEs. Their performance would depend also on the availability and quality of local resources. Most SME international processes are embedded in their local position, which gives to territory an important role that has to be assessed and integrated in the SME internationalisation theory. The paper takes into account a particular kind of SME that is characterised by typical local supplies that are specific and strongly linked to the territory of those firms. In general, because of their deep integration with the territory, these supplies are competitive as they can get value from the firms’ aggregations and networks from each given territory. This is the strength that supports their international projection.

3 The typical products supply system

Models of consumption in postindustrial societies are characterised by the search for satisfaction of ever more sophisticated needs. This explains current trends that concentrate on the search for and enhancement of goods that not only are ecologically and environmentally friendly but also respect the ethics, nature, traditions and beliefs that are at the basis of man’s way of life.

Changes that have registered in the lifestyles of consumers are reflected, in actual fact, in their consumption and buying habits. In the context of secondary needs (esteem, self-fulfilment, etc.), the product’s symbolic dimension is privileged in the sense of a more detached perspective compared to its material quality (Maslow, 1973). The greater weight of expression of a product is commensurate to its greater capacity to satisfy needs; consequently, the more the product embodies symbolic values, the greater its value capacity in terms of exchange. The search and desire for and consumption of typical products can be collocated in this area; however, in terms of the quest for definition, a perspective of analysis in a purely productive sense ought not to be privileged. In specific technico-productive terms, typical products, either of an alimentary or a permanent kind, can be included both in the category convenience goods as regards tangible features and in the category shopping goods as regards function. Interest shown in products of this kind, which are not necessarily branded products, can be explained in terms of the eclectics of consumer behaviour (Codeluppi, 1992). In actual fact, the search for basic values motivates the desire for products whose brand is not well-known in that they are


an expression of craftsmanship and quality. In terms of the more strictly technically productive elements, their character derives from the qualitative nature of raw materials used, their origin and form, and from the ability of those who transform them from the environmental and morphological conditions of the territory and, consequently, from their bond with that territory. This relationship can best be illustrated by means of a three-dimensional approach which highlights the geographical link, or in other words, particular climatic conditions which, through natural raw materials, can transfer to the products the character they embody; the historical dimension, i.e., the result of a process of communication of knowledge, culture and know-how, which, being inscribed in the collective memory of the local people, concurs in creating both the history of the place and the emerging of a specific productive vocation; the third dimension, finally, refers to the cultural component, in other words to the complex of symbols produced by a particular society and transmitted from generation to generation, which determines and regulates human behaviour.

Consequently, a product can be defined as typical or characteristic if, taking into account the component value of a specific territory (climate, soil, breed of animals, variety of vegetation, etc.), it supplies a market, continuing a tradition represented by the symbolism created and built up over time by small communities, to ‘advertise’ themselves, their culinary traditions (enogastronomy) and their territory – in other words, cultural goods rather than economic resources; a complex supply of benefits that derive from the evoking of flavours, traditions and places embodied in the actual product. It is in the ratio of these variables that the typical product can, quite rightly, be considered a ‘special category’, i.e., readily recognisable by virtue of the distinctive features specified above, compared to similar products of the same ‘goods category’. The attribute speciality of typical production enables their rating in the category of niche business (Mattiacci, 2000). Naturally, this requires a redefining of the margin/boundaries of the business of reference, calling into account the concept of market interstices, typically neglected by large firms as they consider them less profitable. In substance, the niche variety constitutes a special supply, i.e., the maximum degree of emphasis on the differentiation of similar goods, by providing a distinctive character to meet the needs of the niche itself. The niche value shifts entry barriers: from supply to demand, discouraging or even impeding the purchase of products on the part of demand quotas that do not strictly adhere to the requisites of targeting, and at the same time, impeding the diffusion of large quantities in essential terms (and not only) by price. The bond identified with the niche business inspires ulterior considerations in terms of the territory of origin of production. The need to delimit territory boundaries derives from the consideration that, as the distance from the zone of origin gradually increases, product character seems to shift to the extent, at times, of overlapping into the product category ‘made in’ (Roth and Romeo, 1992; Jaffe and Nebenzahl, 2006); such products, even though identifying supply in some ways connected to a well-defined territorial area, are far from the archetype of typical products in that they embody the idea of a country of origin in its entirety and productive processes that can be replicated outside that country. Such characteristics contrast with uniqueness, the distinctive element, the sum and consequence of path dependence. Its effect materialises in its potential for rendering irreversible the uniqueness of a place, of a local system: no production could ever ‘encounter’ the path of evolution of another without having the same history in common.


4 Internationalisation strategies for enhancing the typical supply system

As noted above, supply in terms of traditional products is characterised by its variety and strong symbolic connotation by virtue of the conceptual extension of the product, which, over time, produces a paradigmatic stratification encapsulating significance and values.

The product itself therefore, represents the nucleus around which a spiral of symbolic values is created and established in terms of popular traditions and workmanship, the territory, the environment and morphology. Character in this respect is therefore a synonym for differentiation achieved by virtue of the customer’s recognising a differential, in terms of value, to which a price is justly attributed. The heterogeneity that characterises traditional products, not to mention the range of categories of production, often varying one from the other, does not simply qualify the intensity of the bond existing with the territory in question or with other distinctive marks of recognition, but also invests other profiles no less relevant, such as productive potential and degree and extent of distribution of the same on the market. The extent of production, in particular, refers to the possibility of generating a more or less limited supply compared to potential demand; from this point of view, the supply of typical products is conditioned by various elements, such as the geographical space of the territory of origin or the rarity of raw materials used. The vastness of the outlet market, on the other hand, is determined by the visibility of the product, which in some cases does not go beyond the area of production, while in others reaching national and/or international levels.

In this respect, it is fundamental to reflect on assessing problematic issues – in the sense of a threshold scale starting from which market penetration would be significant – on which the capacity for survival of individual productions, either in an exclusively locally centred context or in terms of branching out into national or international areas, would depend. Greater visibility, presence and current market feedback, in other words, success and vitality (sales levels, identification and product convenience in terms of market prices), are all significant factors of survival in domestic markets and, eventually, in international markets. This is the recipe for traditional products (recognised, acknowledged and regulated on a community scale) that are not as yet in a position to claim sufficient degrees of visibility or profits in marketplace terms, to ensure the necessary resources for penetrating national and foreign markets.

In this sense, a rethinking policy in terms of traditional products would be necessary in order to highlight their diversity in terms of critical potential, so as to identify different enhancement strategies for individual categories. Potential categories of classification could distinguish between ‘basic’ and ‘luxury’. The former, traditional products of the basic type, i.e., relying on a wide geographical area providing raw materials and/or areas of cultivation/transformation, generate high volumes of production. At the same time, these products enjoy wide visibility and appreciation even outside their place of origin. On the other hand, for elite production, i.e., great exchange value, traditional luxury products (Dubois et al., 2005), connoted as such by virtue of the fact that even though production is generated on a much more limited scale, enjoy wide visibility, outreaching by far close-knit local environments.


Illustrated in Figure 1 are strategic challenges to be met in terms of management of the term ‘traditional product–territory’, in the light of the changes of perspective achieved by experience economics. From a strategic marketing perspective, the territory firm can be analysed both as an independent entity and within the constellation, creating value with the contribution of various partners.

Figure 1 Strategic challenges of the binomial product-territory

Territory image

Exploitation ofproduct image

(Coral of Torre del Greco)

Exploitationof territorial brand

(Amalfi Paper)

Exploitationof collective brand

(Pasta of Gragnano)

Synergies fordeveloping

product and territory(Positano Fashion)

low

basic

high

luxury

Typology ofcharacteristic

products

Source: Gallucci (2006)

The preferable condition is obviously the supply of superpremium typical products, having strong distinctive identity connected to similarly relevant territory perception. In this sense, an example could be Positano cloth supply (Positano Fashion) and the place of production (the Amalfi coast). The opposite is the condition where it is impossible to gain competitive advantage either from the production or from the territory. In this case the solution could be the use of collective brands to recover the geographic origin of typical basic supply. Pasta of Gragnano can get competitive advantage over competitors because the production process is an ‘art’ owned only by the people of Gragnano. In another case, the importance of typical luxury `supply can justify the use, inside the brand, of territory image that is partially right. Luxury supply is appreciated for its distinctive and intrinsic quality. For example, Torre del Greco cameo supplies are recognised worldwide but are unable to lead to better qualification of the territory. The last case occurs when the basic typical supply is associated with territories with international perceived image. Amalfi coast is the territory relevant to another typical supply, paper production. These firms have been successful in getting a strong competitive position, thanks to proper territory brand strategy of Amalfi Paper.

In other words, not only do strategies that reinforce local vocations, assets and traditional knowledge of the territory and surrounding areas need to be defined, but such strategies should also be extended in a ‘network’ approach perspective. Accordingly, territories have to develop strategies of integration of local economies into a wider circuit of international economies, thus becoming links of global networks of commercialisation, management, finance, competence and culture.

If we analyse the issue of traditional production in terms of an opportunity for development for specific areas, for small and medium-sized enterprises and for the reinforcement of competitive capacity for Italy within the new scenarios of globalisation (Kotabe and Helsen, 2000), it would be worthwhile to enquire which products should remain (and justly so) within the restricted markets where most consumption practices


take place and, on the other hand, which products, albeit respecting the requisites of typicality desired, can aspire (with or without community approval) to gain access to markets different from those of the restricted area of production (Magni and Santuccio, 1999). Utilising traditional production to sustain global competition (Porter, 1987; Elwood, 2003), however, has to be considered with due caution and care; in fact, as indicated above, often production is limited, and consequently unable to compete in international markets through widespread distribution and product recognition, which often constitutes a parameter of identification for global products (Albaum et al., 2002).

Consequently, we are unable to propose a uniform and univocal interpretation for internationalising traditional products, bearing in mind that every classification is restricted by its own specific issues and opportunities. If the starting point is the creation of a model in terms of the combination product-territory, then it would be possible to identify directions of development based on the typology of the traditional product, i.e., basic-luxury, and on the collective image rating that its territory of origin enjoys (high rate or low rate) (Roth and Romeo, 1992) (Figure 2). If the traditional products in question are luxury goods and the collective image of the territory is highly rated, an approach for creating a global niche can be considered in the sense that, plausibly, a virtuous spiral effect can be started for processes of enhancement both of typical products and of the territories of origin. The greater or lesser effects of such mechanisms are based on how their typology of traditional products interfaces with the typology of their territory. The more a traditional product can be classified as a ‘luxury’ product and the more its territory can claim a distinctive, recognised and acknowledged identity, the more feasible it is to start a virtuous process through which both entities in question can achieve better performance. For products that already enjoy their own well-defined visibility, it is far easier to identify a higher placing/positioning on the international client’s map of perception, by means of an extended prismatic effect.

Figure 2 Strategic options in internationalisation of the combination product-territory

low high Territory image

Collective brand

‘made in’ effectDistribution channels

LD/OD

Territorial brandIncoming effect

Development of tourismservices

Traditional and onlineDistribution channels

Product and territorial brand

Enlarged prisma effect Distribution channelsSpecialist catering

Product brand

Distribution channelslinked to fairs and

theme eventsTyp

e of

typi

cal p

rodu

ct

Luxu

ry B

asic

Source: Marino (2006)


This encourages more selective pricing policies in that the experience of the consumption practice connected to the products can be directed through alternative distribution channels. In effect, in most cases, access to countries that are more appealing from a commercial point of view is almost always controlled by intermediaries who often impose conditions of admission that are far from flexible. In this case, the obstacle can be overcome by identifying channels such as sales outlets of gastronomic specialities/ delicatessens or specialist catering channels as regards the agro-alimentary sector, to achieve the goal of exalting experiential consumption practice connected, for the most part, to abstract or nonmaterial components rather than to the product itself.

The consumer, by purchasing a traditional product, is bound in a certain sense to the culture the product reflects and to the history of the territory it comes from; a consumer, in effect, desires ‘to live’ the territory involved in the widest sense. If, on the other hand, reference to traditional products concerns collective brands that do not evoke products and territories with a well-defined collective image in the perception of the consumer, the effect ‘made in’ can certainly be exploited by using preexistent channels linked, above all, to large-scale and organised distribution.

The consumer will, however, tend to satisfy his/her consumption practice experience needs connected to the culture of a territory without identifying precisely its coordinates of belonging; in this case, the identity of a country or territory is discovered without any kind of in-depth enquiry. The model of consumption practice in question is perceived from a distance, imported by the collective imagination, and is not sustained by interaction; and there is no delving too deeply into the customs and traditions of the place. The strong point of luxury products characterised by a low-rated image of the territory is their capacity to be marketed easily through fairs and manifestations that link traditional products to their territories of origin by means of a wider showcase, i.e., the place of origin itself. The link between the image of a specific productive sector and the image of the territory in question is consolidated by these events.

Even in this case, the consumer is the expression of a changing purchasing and consumption practice scenario compared to that of a few years ago; in fact, by abandoning the logics of homologous and mass consumption practice, trends are moving towards productive categories of quality and craftsmanship. Obviously, compared to before, the consumer is interested above all in the category of the product as opposed to the territory of origin. However, a steady investment in productive excellence can readily be turned into an advantage, by means of opportune intervention in communication activities, initially as regards the country of origin and then focusing on and qualifying the territory of origin. In conclusion, to create a territorial brand the product has to be marketed through promotional tourism of the territories and for this reason basic products that are conjugated to a high collective image of the territory have greater appeal in local terms; in effect, thanks to tourist flows attracted to the area, product qualification mechanisms can be activated. In this case the consumer is principally the tourist who visits the territory, highly qualified for its tourism and culture vocation. And it is thanks to the qualification of the territory that the product can be accredited. The consumer’s goal is to fix as deeply as possible in his/her memory his/her stay in the territory and the purchase of a local traditional product contributes to achieving this aim. Hence, the more highly quoted the territorial system, the more the product represents its functional expression and a purchase to complete an experience of cultural tourism that in no way neglects local traditional production.


5 The Amalfi Coast brand ‘Vietri ceramics’

5.1 Empirical research design

Empirical research was aimed at an artistic ceramic sector, one of the most representative crafts of the made in Italy category. Included in this sector are both innovative artistic productions and more traditional artistic productions, e.g., ornaments, crockery, floors and decorations, the technical production of which often differs significantly. Approximately 13% of world production and 43.3% of European production comes from Italy – famous in the world’s competitive scenario for its unique mix of style, taste and quality. In particular, we have decided to analyse the district of Vietri, a municipality in the South of Italy, which has been successful in linking its brand to the Amalfi coast territory, becoming a winning national story.

Our survey was carried out on the entire group of firms associated with the Vietri Ceramics Board (Ente Ceramica Vietrese), i.e., on 68 firms representative of the Vietri district scenario. The aim was to highlight relationships on an international scale relative to the firms interviewed and the potential intervention for improving brand recognition and sales trends on international markets through the diffusion of the Vietri identity, through promotional activities, innovation and synergies on a territorial level presenting a united front. The methodology chosen for collecting preliminary data was face-to-face interviews. Information was obtained by means of a questionnaire articulated in three sections: firm profile, degree of internationalisation and relations of the firm with the system district.

5.2 Preliminary results

Situated in the South of Italy in the Province of Salerno at Vietri sul Mare, where the Amalfi coast begins, is the world-famous ceramics district renowned for the originality and hues of its production. The ceramic tradition at Vietri sul Mare is art in evolution which succeeds in following new cultural and innovative paths while at the same time respecting the traditions and historical identity of the people, with a focus on quality.

The craftsmen and artists of Vietri have succeeded in effectively reproducing in their work not only a process of continuation and innovation that genuinely respects local identity, but also the close link between the interior world and the landscape which is entirely ‘Mediterranean’ (Caruso, 2006).

Milestones have been reached over the last few years by the ceramics district of Vietri sul Mare. Thanks to its artistic and craftsmanship heritage accumulated day by day over the years, a cultural identity has been shaped that has given origin to an effective ‘ceramic culture tradition’. In keeping with precise and explicit political policy guidelines, many of the ceramics businesses in Vietri have set up the Vietri Ceramics Board (Ente Ceramica Vietrese). The impact of this consortium, including both public and private sector participation, lies in its collective brand name, registered at the Italian Office of Patents and Brands. This significant form of protection, in private sector terms, guarantees the origin of the product, the nature of the raw materials used and, in general terms, the quality of the product. The board can concede the use of the brand to the businessmen who are part of the consortium and its aim is that of coordinating individual actions on the part of the participants. In this context, quality controls, sanctions etc., are decided against those who violate established regulations for the use of the brand. The


collective brand contributes to product image in the areas of production and consumption practice to guarantee greater added value to the finished product. The more trust a customer places in the brand itself and the more anonymous the identity of those who use it to enhance their production, the greater the success of the collective brand. Collective brands are of fundamental importance for small and medium-sized Italian firms, often unbranded and oriented towards sell-in, and almost always dominated by the influence of the large international distributors. In such a scenario, interbusiness alliances, for the creation of a collective brand to sustain initiatives of combined marketing, are nowadays the only way to compete in foreign markets. Using collective brands is a useful protection device for typical basic products that are easy to imitate, as often happens, for example, in the case of Vietri craftsmanship ceramics products. In actual fact, the basic product in question is collocated on our conceptual matrix in the top-right quadrant, in that it is characterised by a high image rating of the territory. Alongside this, there is another type of product, marked again by a high image rating of the territory of origin, but belonging to the category of traditional luxury products. These include artistic ceramics production, unique items (or items of limited production) created by craftsmen of ceramics who concentrate on the art, the traditions and innovative and experimental techniques linked to both the production and decorations in their work; in other words, proper works of art, exhibited either in galleries or during theme manifestations connected to particular events. This type of traditional luxury product undergoes, as a matter of course, specific strategies of penetration and commercialisation which are obviously completely different from those of basic production.

From data elaborated by the Vietri Ceramics Board, global yearly turnover of the businesses amounts to circa 10 million euros. The particular nature of the district of Vietri lies in the strict coexistence of the productive system with the distributive system. In fact, annexed to the laboratories/workshops, or at least collocated in the vicinity, are the retailers. Most of the distribution (circa 84%) is through the direct channels of their own outlets; indirect distribution involves 16% of the firms that supply the product to the shops that deal with sales. Twenty-three percent of the operators deal with the local market connected to seasonal trends in sales by virtue of the presence or otherwise of tourists; 32% supply local and national markets; 45% cover the local, national and foreign markets.

The mapping enabled us to elaborate a panorama of small and extremely small firms, typical of district realities, characterised by a very small number of staff and strongly connoted in terms of craftsmanship. The principal results, relative to the profile of the firms interviewed, are summed up in Tables 1, 2 and 3.

Table 1 Classification of firms part of the Ente Ceramica Vietrese (the Vietri Ceramics Board) per number of personnel

Classification by no. of personnel No. firms %

Zero staff members 20 29

Up to 5 staff members 37 54

From 5 to 10 staff members 7 11

From 10 to 15 staff members 2 3

More than 15 staff members 2 3

Total 68 100


Table 2 Type of firms belonging to the Ente Ceramica Vietrese (the Vietri Ceramics Board)

Type of firms No. firms %

Industrial firms 14 3

Craftsmanship firms 54 97

Total no. firms producing ceramics 68 100

Table 3 Legal status of firms belonging to the Ente Ceramica Vietrese (the Vietri Ceramics Board)

Legal status of firms No. firms %

Individual firms 52 78

Limited companies 14 20

Partnerships S.n.c. 2 2

Total no. firms 68 100

Subsequent to identifying the salient characteristics of the firms under consideration, an analysis of their relations on an international scale was carried out. From the results in this case, we find that 72% of the firms interviewed deal with foreign markets and the USA is indicated as the principal target country, while 15% declare they deal constantly with Switzerland, with percentages lower than 1% for England and Spain.

Of the firms that deal with international markets, 76% achieve an annual turnover figure that goes from 0 to 20%. Twenty-three percent of the firms achieve from between 20% and 40% of annual turnover abroad, while a percentage lower than 1% achieves between 40% and 60% of its annual turnover abroad. The findings from the interviews indicate that owing to the introduction of the euro currency, there has been a drop in percentage of turnover abroad; in some cases, in effect, the drop was consistent – from 80% to 20%. In conclusion, for firms that deal on an international scale, the average annual turnover figure abroad is in the region of 18%. To corroborate this thesis, trends of sales made abroad from the 1980s up to the present time show definite signs of slowing down. Seventy-nine percent of firms define them as prevalently on the decrease, 20% prevalently on the increase, while a percentage lower than 1% indicates a mainly constant trend.

Subsequent to identifying the position of the firms belonging to the Vietri Ceramics Board, with respect to international markets, the ratio of territory product and, above all, the potential of increasing synergic effects for enhancing the brand on an international scale were analysed. For 56%, this relation is fundamental in that the symbolic significance linked to the territory enhances the product even on an international scale. Forty-four percent, on the other hand, define this relation as totally irrelevant in that the shape, the decorations and the craftsmanship quality of the product are the only critical factors of success. The latter percentage – quite high as it happens – that rejects territory-product synergies, finds justification on the basis of the scarce advantages the territory offers to the Vietri firms or, on the other hand, on the strong individualist mentality that tends to consider personal capacity as the only source of competitive advantage.


In addition, the firms were asked to define the identity of the product, Ceramica Vietrese (Vietri Ceramics) on the international markets. According to 44% of those interviewed, this identity is recognised but needs enhancement, while 29% consider it established and appreciated and a further 27% define it as frequently not well-known to international consumers/customers, who are often quite content with substitutes. To enhance the identity of Vietri on international markets, firms need to indicate potential solutions. According to 33%, greater promotional strategies for the product are necessary, 27% indicate it as relevant innovation in shapes, forms and decorations and the same percentage consider essential systemic business activities, supported by the institutions and by the university. Thirteen percent of the firms interviewed, on the other hand, considered the acculturation of international customers necessary in order to acquaint them fully with the specificity of the product and its experiential content. It is difficult for the public, in effect, to distinguish and appreciate the characteristics of Vietri production without a preliminary awareness campaign and direct knowledge of the objects and their relative artistic value. Vietri products have to be placed alongside those of designer objects in order to raise customer perception in terms of high added value.

Methods of communication on the part of firms towards international markets were also analysed. The findings were that 55% carry out public relations by means of exhibitions, fairs, websites and sponsorship of cultural events, while 45% do no communication activity whatsoever. This finding is representative of the category of craftsmen, who often consider that the best communication is direct contact with the clientele, perhaps even just by word of mouth on the part of long-term clients. Suggestions offered by firms who are not in favour of communication activities, owing to limited resources, few contacts and the small size of the firms in question, concern systemic initiatives such as the participation at fairs together, overcoming individualist and competitive logics and attempting, on the contrary, to implement synergies.

In reference to the relation dynamics of the firms in terms of innovation, 88% consider that it is necessary to improve identity recognition as regards Vietri, also by cultivating younger consumers, while the remaining 12% consider that innovation is a betrayal in terms of traditional forms of craftsmanship. Findings show that almost all the firms consider innovation essential, even if in actual fact, few firms are prepared to experiment with shapes and forms and decorations in their production, or to use new forms of communication, or even new methods of distribution. The same percentage results emerge again in connection with considerations made by the firms on operating individually or in groups. Eighty-eight percent, in fact, agree with the importance of operating from a systemic perspective, defining the same as a way of obtaining access to the support of institutions (cities, provinces, etc.) and to know-how and expertise provided by the university, while for 12%, individual firms are able to operate independently basing their expertise on tested traditions.

In reference to the firms that consider the systemic approach essential, 39% consider this fundamental in terms of safeguarding their production, in particular, as regards fakes that undermine the identity of the Vietri product and determine a near-radical reduction of its competitiveness. Mass-produced, low-cost products, especially those from China, are unfortunately often accepted by consumers who, in a phase of economic crisis and at times not distinguishing the genuine article from product imitations, are content with the latter basically for reasons of price. From an analysis of the replies in this respect, 22% consider it essential that the system operate at the same time in the field of product


security and promotion, two complementary areas for achieving enhancement of the Vietri identity. Sixteen percent demand that the system promote innovation through financing and new knowledge, provided by workshops for young artists who respect traditions in terms of shapes and decorations but, at the same time, succeed in integrating current scenarios with Vietri production to satisfy customer needs in full. Finally, 12% consider it essential that the system help businesses to promote the product in a collective fashion by putting Vietri on the map. A further 11% consider it essential that financing be obtained from the institutions.

In conclusion, if the observations made by the Vietri firms are analysed, common issues that affect the sector can be identified in order to safeguard and identify eventual enhancement strategies for putting Vietri on the map in terms of international markets. The territorial resource that influences traditional production is, in fact, the territory itself founded on cognitive skills, stratified and assimilated knowledge that accumulate in places different from each other and are difficult to imitate. The value of a territory is not obtained simply by appraising the resource as it is, but rather, by planning the development of relational and cognitive skills connected to the territory and which reflect its identity (Rullani, 1999). In this respect, the model for classifying basic and luxury traditional products in terms of territory can be utilised. Both basic craftsmanship ceramic products and artistic productions can be interpreted in the light of this scheme and for each, enhancement strategies follow those of the brand that nourishes ties with the territory. In other words, collective and territorial brands should be preferred to sustain basic production, and product and/or territorial brands for artistic ceramic production (Figure 3).

Figure 3 Strategic options of internationalising the combination product ceramics-territory

Collective territorial brand

Experiential effect connected to incomingParticipation in tourist/gastronomic itineraries

Distributive channelsTraditional and online

Production and territorial brand

Fairs/Manifestations connected to designSpecialised distribution channels

International exhibitions and eventsTyp

olog

y of

trad

ition

al p

rodu

ct

Luxu

ry B

asic

Image of territory

highly rated

Craftsmanship ceramicproduction

Artistic ceramicproduction

6 Conclusion

The evidence emerging from our analysis seems to strengthen the presence of internationalisation strategies that, prizing the SMEs’ networking skill, support the manufacturing of a development course pointing to value creation and diffusion over national borders. With this background, the link with territory is not only the original geographic space, but a territorial resource taking an active part in the creation of a typical supply system.


The image of the territory can favour the international development of traditional products in two ways:

1 by associating the brand of the product with the name of the territory (e.g., the brand Vietri Ceramics Board)

2 by promoting events and initiatives in places of production of traditional products to attract tourists and people interested in learning about characteristics of the territory and traditional products.

In each case, the aim is to create a virtuous spiral network for enhancing both production and territory, taking into account two crucial factors: the strict coordination between private sector actors and private firms, and the care in management of communication and of the coordinated image of the initiative. The efficacy of branding strategies, both of a collective nature and that of the product, is subordinated therefore to an efficacious interconnection between the different economic-territorial agents to give the utmost expression to the different logics of territory reference. Policymakers have to coordinate common efforts to keep the equity value tied to the context of the territory high. The combined action of local actors is to create attraction factors such as resources critical to the aim of global competition; cultural heritage, productive know-how, centres of research and training are fundamental for constructing and improving life experiences. The increase in levels of territory appeal aims to improve standards of living and to support existing firms in attracting new investments connected above all to tourist presence.

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