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Caspian Journal of Applied Sciences Research, 1(12), pp.

91-104, 2012
Available online at http://www.cjasr.com
ISSN: 2251-9114, 2012 CJASR

Full Length Research Paper


Using Component Model and Numerical Taxonomy Analysis in Order to
Ranking Export Target Markets of Industrial Goods in Iran
Hamid Gharzi1, Younos Vakil Alroaia2*
1

Faculty Member, Department of Management, Sabzevar Branch, Islamic Azad University, Sabzevar, Iran
Assistant Prof. and Chairman, Department of Management, Semnan Branch, Islamic Azad University, Semnan, Iran,
P.O.B: 35145-175,
*Corresponding Author: Phone: +98912231 6247; E-mail: y.vakil@semnaniau.ac.ir

Received 6 September 2012; Accepted 14 October 2012

This study considers the nature and appropriation of export target markets for Iranian industries. Foreign
markets increasingly have become more viable economically in the past two decades. Therefore, it's important to
identify the key factors influencing the export marketing performance of Export Target Markets (ETMs). The
paper builds on the contributions of previous research in the areas of industrial park organization and export
success and industries in the export development process. The integrated assessment are influenced by such
shaping as; Geographical distance, Population, Real growth rate (GDP), Population growth rate, Gini index,
Imports and Investment of GDP. The target markets are selected as the case of this study according to the
industrial products from other countries to Khorasan province for the five years period. The numerical
taxonomy analysis of this paper could be used for ranking and analysis of the target markets. The empirical data
comprises the longitudinal survey of the industries of the Khorasan province. Also, the paper provides four
critical groups to select the best alternatives of importing countries for industries as models for the province in
Iran.
Key words: Export, Target Market, Industry, Priority, Iran

to explain the selection of export target market.


Similarly, constitutions of the internal factors are
firm-specific and decision-maker characteristics
have been found to be correlated to the firms
ability to identify and the appropriate export
opportunities and to participate successfully in
exporting. The commonly studied firm-specific
variables are firm size, years in business,
competitiveness
of
products,
international
experience, and foreign market coverage and
ownership structure of the firm. Managerial
characteristics that have been studied include
educational level and age of the manager, foreign
language skills, international orientation and
number of international traveling. Amongst the
external factors are stimuli, (e.g. customers,
economic integration, market opportunities,
government
assistance
programmers,
and
geographical distance and population).
In summary, there are economical and noneconomical approaches to measure target markets.
Economical approach is mostly used in target
market studies and is concerned with such factors
as export intensity (export to sales), profitability,
and return on investment (ROI), export growth and

1. INTRODUCTION
What factors determine an industrial export
success? Scholarly research on this question has
tended to focus primarily on two factors. Past
efforts have examined the influence of decisionmaker characteristics on the export behavior of the
firm and its performance (Axinn, 1988; Reid,
1983; Simpson and Kujawa, 1974; Mayer and
Flynn, 1973). Studies have also examined firmspecific characteristics that influence a firm's
international behavior (Julian, 2003; Cavusgil and
Zou, 1994; aaby and Statev, 1989). Some studies
concentrate on categorization and assessment of
variable factors effects on export performance and
proposed models are defined as dependent
variables without considering export performance
criteria (Madsen, 1984; Chelty and Hamilton,
1993; Zou and Stam (1998). A number of
empirical studies, however, have been carried out
on the subject of export or the internationalization
of target markets1. These studies have revealed that
both external and internal factors have influenced

91

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of
Industrial Goods in Iran

market share. Non-economical approach is


concerned with number of exports international
markets, product characteristics, export of new
products, and share of export in product
development. In fact, target market studies use
either single indicator or multiple indicators.
Furthermore, it is concluded from the previous
studies that target market indicators are dependent
to one another (Wallets and Samiee, 1990; Thach
and Axinn, 1991; Shoham, 1998).
To identify the sources and root causes of
market and government failure, it is important
investigate the patterns of export development
assisting services of private and public sectors and
to analyzing the appropriate role of the public
sector in the provision of assistance for a variety of
reasons including competitiveness and economic
issues. On the whole, the economic success of a
nation now depends upon the ability of its
businesses to compete in the global economy as
economies among countries throughout the world
have become increasingly intertwined and
interdependent on each other. According to Iran
Statistical Center (2005), 96% of business potential
customers are outside Iran borders, and the big
emerging markets (The Chinese Economic Area,
India, ASEAN, South Africa, South Korea, and
Turkey) and they account for almost half of the
world's market by 2010. These markets account for
almost 67% of world import growth.
When one measures "exports as a percent GDP
or export per capita" the Khorasan province ranks
at or near the bottom of the industrialized area in
export activities (Iran Statistical Center 2007). The
attention that has been oriented towards promotion
of non-oil exports in recent years has further
encouraged entrepreneurs and producers for
fancying in this sector. The issue of a list of
exemplary exporters on October 20 each year is a
new move that has further accelerated the trend of
non-oil exports. Providing facilities, solving
problems of exporters in an effort to pave the way
for their active presence in international
exhibitions, marketing for manufactured, products
and supplying the market with products that could
compete with similar foreign goods are among
effective measures that have been taken for the
promotion of Iran's non-oil exports (Ministry of
Commerce, 1999). Although in regional
international markets Iran is faced with major
competitors such as Malaysia, China, Singapore,
South Korea and in recent years, India, which have
obtained many Iranian exporters in the light of
common bonds they enjoy with regional

businessmen, there is hope that they can secure an


effectively outstanding share of the target market
for their products.
In sum up, in this study we concentrate on a
new question of interest as the criteria industries
use in selecting export target markets. In particular,
we examine the countries in which firms must take
advantage of the benefits of exporting. As Yip,
Biscarri and Monti (2000), we defined systematic
as using objective criteria to select export markets
(such as systematic and formalized international
market research activities for selecting suitable
markets abroad, visiting of target markets on factfinding tours, monitoring of national and
international business written press for product,
and the use of published statistical sources for
differentiating target markets).
Therefore, the aim of this study is to find out
empirically the best target markets of export for
decision-making in Khorasan industries. In this
case, the next section explains the methodology
used for measuring target markets. The third
section finds out the decision-making processing
target markets in Khorasan province and finally,
the last section is the conclusion.
2. METHODOLOGY
The study deployed a quantitive survey of research
method. The population consisted of all countries
that Khorasan province was expanded through a
period of five years from 2006 to 2010. These
countries and the data matrix are shown in table 1.
Similarly, the design of target markets must
involve selection of those that have sufficient
potential for success. Hence, from several factors
of success, the following eight criteria factors have
been selected- Geographical distance, Population,
Real growth rate (GDP), Gini Index, Population
growth rate, and Population of age groups between
15 to 65.
2.1. Technique used in this paper
In this section, the author briefly reviews the
technique which is used in this study to identify the
best alternatives of target markets in Khorasan
province industries in Iran.
2.2. Principle Component Analysis
Principle Component Analysis (PCA) is widely
used in multivariate statistics such as factor
analysis. It is used to reduce the number of

92

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

variables under study and consequently ranking


and analysis of the decision-making units (DMUs),
such as industries, universities, hospitals, cities, etc
(Sharma, 1996; Zhu, 1998; Azadeh and Jala, 2001;
Azadeh and Abrahimpour, 2002). These DMUs
utilize a variety of sources as inputs to product
several outputs (Sharma, 1996). The objective of
PCA is to identify a new set of variables in which
each new variable is called a principal component,
and that it is a linear combination of the original
variables. Secondly, the first new variable y1
accounts for the maximum variance in the sample
data and so on. Third, the new variables (principal
components) are uncorrelated. PCA is performed
by identifying Eigen structure of the covariance or
singular value decomposition of the original data.

a7: Investment of GDP


Index

a 8: Gini

To obtain PCA model, there are 8 variables


(indicators) and K decision making units (DMUs)
is a k8
and suppose X=( . )k8
matrix composed

by

value of
therefore

's defined as the

indicator for

DMU and

(m=1,,8).

Furthermore , suppose
.
is the standardized matrix of X=( x1..x8)
's defined as the value of
with
standardized indicator for ith DMU and
therefore
. PCA is
performed to identify new independent variables
or principal components (defined as
for

2.3. The PCA Model


To achieve the objectives of this study, a
comprehensive study was conducted to locate
export indicators, which influence export
performance of industrial units. Eight indicators
were identified as major target market factors in
industrial units of Semnan Province. The eight
selected target market indicators are listed as
follows:
a1: Population
a 2:
population growth rate
a3: population between 15-65
a4:
Geographical distance
a5: real growth rate
a 6:
Imports
+

j=1..8) , which
are respectively different
linear combination of
As mentioned, this is achieved by identifying
Eignestructure of the original data. The principal
components are defined by a k 8matrix
Y=(y1y8)k8 composed by
's are
shown by (Minhas & Jacobs , 1996 Nagai &
Cheng , 1997):

.
.
.

.
Where
for the

is the coefficient of

+
For obtaining the

variable

principal component. The

vectors (

's are

and PCA

scores the following steps are performed:


Setp1:
Calculate the sample mean vector
and covariance matrix S:

estimated such that the following conditions (1,2


and 3) are met:
1. Y1 accounts for the maximum variance in
the data ,
accounts for the maximum
variance that have not been accounted by
and so on.
2.
m= 1.8
.
3.

and consequently p

In which,
S= (

=
(X-

(X- ). For q=18

Step 2: Calculate the sample correlation matrix.

for all m n n=18

93

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of
Industrial Goods in Iran

R=

.S.

is a 88 diagonal matrix whose


element is 1/

Harbottle,2000). However, to facilitate the readers


with applications of the study in general and
Numerical Taxonomy in particular, it is assumed
there are k, DMUs for other studies as follows:
Step1: Suppose we have k DMUs with 8
indicators which can be shown by a k by 8

where
diagonal

for j=18.

Step3: Solve the following equation.


R-I8 =0 where I8 is a 88 identity matrix.
We obtain the ordered 8 characteristic roots
(Eigenvalues)
12..8
with
the
related
8

matrixes X=

indicator for the ith DMU (i=1.k and


j=18).
step 2: The k by 8 matrixes is standardized such
that all indicators have mean of 0 and variance
of 1. The new matrix is

characteristic
vectors
(eigenvectors)
(m=18).
(
Those characteristic vectors compose the principal
components Yi. the components in eigenvectors
are respectively the coefficients in each
corresponding Yi:
Ym=

DMUs

and

are mean and standard deviation

of
indicator respectively.
Step3: The distance of every two DMUs for
each indicator is computed.
This is done to homogenize the DMUs. For
example for DMUs a and

is given by

b,

/8

j=1.8
=

Therefore, the distance matrix

D==

and vector d==


where
is the
th
minimum of i row of matrix D are identified.
To identify homogenous DMUs, the upper (L1)
and lower (L2) limits of vector d is computed

i=1.k
2.4. Numerical Taxonomy

as L1= +2
and L2= -2
where and
are the mean and standard deviation of vector d
respectively. If all dis are within L1 and L2,
homogeneity is achieved and we go to next
step. Otherwise, cluster analysis is performed until
all DMUs are homogenous.

Numerical Taxonomy Approach is capable of


identifying homogeneous from non-homogeneous
cases. Furthermore, by given indicators, a group of
division making units (DMUs) is divided to
homogeneous sub-groups (Agrawala, 1999;
Azadeh, et al, 2003). It also ranks the DMUs in
particular group (Thomas, 1987; Cohen and
Farach, 1997;; Gaibrith, and Haiues, 2000;
=

and

Step4: The distance of each DMU form the


ideal DMU for each indicator is computed as:

And
of

=
Where

where
and

Furthermore, the z vector (Z1..Zk) where


shows the score of
(Zhu,1998):
j /

is the value of

indicator. The growth level for each DMU is:


=

are mean and standard deviation

' s respectively.

' s are between 0 and 1 with 1 as the worst


and 0 as the best scores.

is the maximum of the


where

and

+2

94

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

No.

Indicator

A1

Table 1: Data Matrix of Target Market of the Khorasan Province


A2

A3

A4

A5

A6

A7

A8

0.846

70.3

532

3.7

7.035

17.3

36.5

Country

Azerbaijan

8372373

South Africa

49004031

-0.38

65.8

7285

77.04

19.9

65

3
4
5

Albania
Germany
Austria

2994667
81471834
8217280

0.267
-0.208
0.034

68.1
66.1
67.7

2816
3518
3187

3.1
3.6
2

4.59
1337
156

27.7
18
21

26.6
27
26

Ethiopia

90873739

3.194

51

3230

7.517

25.2

30

Jordan

6508271

0.984

59.9

1499

3.2

12.97

30.1

39.7

8
9

America
Uzbekistan

2967975
28128600

0.063
0.94

72.4
68.8

785
1658

4.7
8.2

2.988
9.44

33.3

37
36.8

10

Spain

46754784

0.574

67.7

4293

-0.2

324.6

22.9

32

11

Australia

21766711

1.148

67.7

12799

3.3

200.4

27.4

30.5

12

Afghanistan

29835392

2.375

55.3

1614

8.9

5.3

13

Algeria

34994937

1.173

70.6

4295

4.2

37.07

27.5

35.3

14
15

U. A. Emirates
Indonesia

5148664
2.46E+08

3.282
1.069

78.7
65.5

1223
7396

2.6
6

159
111.1

26.8
32.5

37

16

United King dom

62698362

557

66.2

4408

1.6

546.5

14.4

34

17
18
19

Ukraine
U.S
Italy

45134707
3.13E+08
61016804

-0.622
0.963
0.42

70.8
66.8
65.9

2101
9872
3415

4.3
2.7
1.1

53.54
1903
459.7

16.1
12.8
19.1

31
45
32

20

Bahrain

1214704

2.814

77

1062

3.9

12.14

26.6

21
22

Brazil
Belgium

2.03E+08
10431477

1.134
0.071

67
66.1

11862
4094

7.5
2.1

187.7
281.7

18.5
20.8

56.7
28

23

Bulgaria

7093635

-0.781

67.9

2538

0.3

22.78

22.8

33.5

24
25

Pakistan
Portugal

1.87E+08
10760305

1.573
0.212

60
65.8

1917
5287

2.7
1

32.71
68.22

15
19

30.6
38.5

26

Tajikistan

7627200

1.846

62.7

1571

5.5

3.301

20.9

32.6

27

Taiwan

23071779

0.193

73.4

6705

10.5

251.4

21.8

32.6

95

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of Industrial Goods in Iran
28
29

Turkmenistan
Turkey

4997503
78785548

1.137
1.235

68.4
67.1

662
1700

11
7.3

4.888
166.3

12.4
18

40.8
41

30

Thailand

31
32
33

Ukraine
Tunisia
Syria

66720153

0.566

70.9

5445

7.6

156.9

24.9

43

45134707
10629186
22517750

-0.622
0.978
0.913

70.8
69.3
61

2169
3687
1413

4.3
3.4
4

53.54
20.02
13.57

16.1
26.1
16.6

31
40

34

Libya

6597690

2.064

62.7

3515

3.3

24.47

13.2

35

South Korea

48754657

0.23

72.9

6564

6.1

417.9

28.7

31.4

36
37

Tanzania
China

47746620
1.34E+09

2.002
0.493

55.1
73.6

4884
6380

6.4
10.3

6.33
1307

17.4
41.5

34.6
47.8

38
39
40

Denmark
Zimbabwe
Japan

5529888
12084304
1.26E+08

0.251
4.31
-0.278

65.3
54.3
64

3679
6308
7671

1
5.9
3

90.83
4.043
636.8

17.5
21
20.3

29
50.1
37.6

41
42

Ivory Coast
Singapore

21504162
4740737

2.078
0.817

57.2
77

6590

3.6
14.7

7.015
310.1

9.7
27.2

44.6
47.8

43

Senegal

12643799

2.557

53.9

7182

3.9

4.47

25.9

41.3

44
45

Swedish
Switzerland

9088728
7639961

0.163
0.21

64.8
67.8

3570
3754

4.1
2.7

158.6
226.3

18.1
19.9

23
33.7

46
47

Chile
Iraq

16888760
30399572

0.836
2.399

68.1
58.9

14791
712

5.3
5.5

54.23
42.56

23.5

52.4

48

Saudi Arabia

26131703

1.536

67.6

1693

3.8

99.17

24.5

49
50

Oman
Ghana

3027959
24791073

2.023
1.822

65.7
60

1512
6313

3.6
4.7

19.3
10.18

26.3
39.8

39.4

51
52

Russia
France

1.39E+08
65312249

-0.47
0.5

71.8
64.7

1461
4223

3.8
1.6

237.3
577.7

18.9
19.9

42.2
32.7

53

Filipina

5259250

0.075

66.1

3316

3.2

69.11

18.7

26.8

54
55

Finland
Cyprus

1.02E+08
1120489

1.903
1.617

61.1
73.4

7237
1643

7.3
0.6

59.9
7.962

16
19.7

45.8
29

56

Kyrgyzstan

5587443

1.427

65.4

2148

-3.5

3.075

26.4

30.3

57

Kazakhstan

15522373

0.4

71

2341

30.11

24.7

26.7

58

Qatar

848016

0.81

76.7

1164

19.4

23.38

33

59
60

Kenya
Canada

41070934
34030589

2.462
0.794

55.1
68.5

4374
9908

4
3

10.4
406.4

21.3
22.1

96

42.5
32.1

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

61

Croatia

4483804

-0.76

68.1

3170

-1.4

20.93

22.4

29

62
63
64

Congo
Kuwait
Georgia

71712867
2595628
4585874

2.614
1.986
-0.326

53
72.2
68.3

5821
784
882

6
3.2
5.5

5.3
20.36
8.828

41.5
13.8
14.5

40.8

65

Lebanon

4143101

0.244

68

1477

7.2

17.97

30.8

66

Luxembourg

503302

1.145

66.9

3952

3.2

23.67

16.8

26

67
68

Poland
Malta

38441588
408333

-0.062
0.375

77.6
68.5

3020
3322

3.8
3.7

167.4
5.159

19.5
8.8

34.9
26

69
70
71

Malaysia
Moroccan
Uganda

28728607
31968361
34612250

1.576
1.067
3.579

64.4
66.1
48.7

6290
5339
4385

7.2
4.2
5.8

174.3
34.19
4.474

20.1
30.2
20.9

44.1
40.9
45.7

72
73

Norway
Niger

4691849
1.56E+08

0.326
1.935

66
55.9

3962
5895

1.5
6.8

74.2
34.18

18.6
11.6

25
43.7

74
75

Nigeria
New zealand

4290374
16847007

0.822
0.371

66.4
67.4

15004
4076

2.1
1.7

30.24
408.4

19.6
18

36.2
30.9

76

Netherland

1.19E+09

1.344

64.9

2542

8.3

327

32

36.8

77
78

India
Hong Kong

7122508
24133492

0.448
2.647

74.8
54.4

6179
2621

6.7
5.2

431.4
8.35

21.4
19.4

53.3
37.7

79

Yemen

10760136

0.083

66.2

2479

-4.8

44.9

14.8

33

80
81

Hungary
Egypt

9979062
82079636

-0.17
1.96

68.2
62.8

2957
1992

0.8
5.3

87.44
46.52

19.4
18.4

24.7
34.4

82
_

Ireland
Total

4670976
5.71E+09

1.061
639.687

67.3
5411.5

4831
339951

-1.6
358.8

70.36
13580.165

16.5
1715.7

29.3
2542.9

Mean

69584919

7.80106

65.99390244

4196.926

4.37560976

165.611768

21.7177

36.32714

_
_

Variation
S.D

3.89E+16
1.97E+08

3724.809
61.03122

38.75618233
6.225446356

9289984
3047.947

12.1118441
3.48020749

94193.2615
306.909207

43.9875
6.6323

67.68626
8.227166

97

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of Industrial Goods in Iran

A2

1
2

-1.202424
1.0131651

-0.3104127
-0.104367

3
4

-0.453067
-0.222749

5
6
7

Table 2: Standardized Matrix of the Khorasan Target Markets


A4

A5

A6

A7

A8

0.691692983
-0.031146753

-0.113959068
-0.134047147

-0.19412916
-0.395266593

-0.516689511
-0.288592737

0.0210105
3.4851438

-0.666090942
-0.274070657

-0.3376834
0.0602793

0.338304668
0.017042563

-0.123446015
-0.131228917

-0.366532674
-0.222863079

-0.524656037
3.816725611

-1.18232
-1.1337006

0.901990198
-0.560547019

-0.331346
-0.317238
-0.885162

-0.3111992
0.10795695
-0.3198657

0.274052247
-2.408486329
-0.978869962

-0.127263733
-0.075486955
-0.11169793

-0.682605783
0.754090167
-0.337798755

-0.031317954
-0.515119014
-0.497351545

-1.2552491
-0.7690549
0.4099658

-0.108215921
0.525047616
1.263855076

8
9
10

-1.119418
-0.832995
0.0315209

-0.3378187
-0.2102276
-0.1157731

1.029018193
0.450746404
0.274052247

-0.126788567
-0.112418872
-0.118415803

0.09321003
1.098897195
-1.314752001

-0.529875821
-0.508853317
0.518030179

0.0817848
0.0574751
-0.5259579

1.746341581
-3.274533607
0.178260441

11
12
13

2.8222514
-0.847431
0.0321771

-0.2424891
-0.2015724
-0.175408

0.274052247
-1.717772803
0.739882299

-0.10901078
-0.088906316
-0.108601154

-0.309064836
1.300034628
-0.050459565

0.113350238
-0.522342649
-0.418826693

-0.7082807
-4.415511
-0.1248477

0.856757088
-3.274533607
0.871834791

14
15
16

-0.975714
1.0495831
0.0692512

-0.3267603
0.89264972
-0.0349222

2.040993823
-0.079336069
0.033105668

-0.07404507
-0.1103052
8.998655683

-0.510202269
0.466750977
-0.797541459

-0.021543076
-0.177615291
1.241045308

-4.415511
0.0817848
-0.2828608

0.766290868
1.625719955
-1.103344336

17
18
19

-0.687652
1.861933
-0.256542

-0.1239886
1.23554994
-0.0434495

0.772008509
0.1294843
-0.015083648

-0.138012331
-0.112042016
-0.120939102

-0.021725646
-0.48146835
-0.941211054

-0.365162614
5.660919224
0.95822551

-0.6475064
1.0541731
-0.5259579

-0.847023381
-1.344587589
-0.394692283

20
21
22

-1.028537
2.5148314
-0.033769

-0.3467097
0.6787357
-0.2999708

1.767921034
0.16161051
0.017042563

-0.081713276
-0.109240171
-0.126657486

-0.136661322
0.897759762
-0.653871864

-0.500055927
0.071969922
0.378249427

-4.415511
2.476291
-1.012152

0.736135462
-0.485158503
-0.138371327

23

-0.544276

-0.3168972

0.306178457

-0.140617555

-1.171082406

-0.465387694

-0.3436351

0.163182738

24

-0.74802

0.59715724

-0.962806857

-0.102047131

-0.48146835

-0.433032849

-0.6961258

-1.012878117

25

0.357642

-0.2983033

-0.031146753

-0.124347193

-0.969944973

-0.317330878

0.2641076

-0.409769986

26

-0.861539

-0.3141915

-0.529103015

-0.097574011

0.323081382

-0.528855976

-0.4530288

-0.123293624

27
28

0.8228731
-1.159773

-0.2358711
-0.3275269

1.189649246
0.386493983

-0.124658509
-0.109191016

1.759777332
1.903446927

0.279523161
-0.523685065

-0.4530288
0.5436692

0.012405705
-1.404898402

29

-0.819216

0.04665697

0.177673615

-0.107585281

0.840291924

0.00224246

0.5679789

-0.560547019

Row

A1

A3

98
96

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

30

0.4094802

-0.0145274

0.788071615

-0.118546883

0.926493681

-0.02838549

0.811076

0.479814506

31

-0.665342

-0.1239886

0.772008509

-0.138012331

-0.021725646

-0.365162614

-0.6475064

-0.847023381

32

-0.167301

-0.2989682

0.531061931

-0.11179624

-0.280330917

-0.474380582

0.4464304

0.660746946

33
34

-0.913377
-0.223733

-0.2386806
-0.3194122

-0.802175804
-0.529103015

-0.112861269
-0.094002069

-0.107927403
-0.309064836

-0.495396569
-0.45988118

-4.415511
-4.415511

-0.771634865
-1.284276776

35

0.7766125

-0.1056316

1.109333719

-0.124052262

0.495484896

0.822028879

-0.598887

1.052767231

36
37

0.2254219
0.716244

-0.1107434
6.42571184

-1.749899014
1.221775456

-0.095017942
-0.119742992

0.581686653
1.702309494

-0.518986607
3.718976833

-0.2099317
1.394509

-0.651013238
2.982713249

38

-0.169926

-0.3248271

-0.111462279

-0.123708176

-0.969944973

-0.243660882

-0.8906035

-0.635935535

39

0.6926215

-0.2915892

-1.878403856

-0.057201232

0.438017058

-0.526438323

1.6740706

-0.108215921

40
41
42
43
44
45

1.1398077
-1.376968
0.7851428
0.9793719
-0.205688
-0.145319

0.28849656
-0.2438206
-0.3288289
-0.288752
-0.30678
-0.3141268

-0.320282647
-1.412573804
1.767921034
-1.942656277
-0.191777805
0.290115352

-0.132375871
-0.093772678
-0.114434234
-0.085924236
-0.125150061
-0.124379964

-0.395266593
-0.222863079
2.96660193
-0.136661322
-0.079193484
-0.48146835

1.53526913
-0.516754677
0.470784937
-0.525047032
-0.022846393
0.197740016

0.1547139
1.0055537
1.394509
0.6044435
-1.6198947
-0.3193254

-0.213759844
-1.81199639
0.826601682
0.630591539
-0.545469316
-0.274070657

46
47
48

3.475806
-1.143368
-0.821512

-0.2672255
-0.1987114
-0.220354

0.338304668
-1.139501015
0.257989142

-0.114122918
-0.088513075
-0.102653378

0.265613544
0.323081382
-0.165395241

-0.362914392
-0.400938666
-0.216486722

1.9536322
-4.415511
-4.415511

0.268726661
-3.274533607
0.419503693

49

-0.880896

-0.3375145

-0.047209858

-0.094673856

-0.222863079

-0.476726552

-4.415511

0.690902352

50

0.694262

-0.2271524

-0.962806857

-0.097967252

0.09321003

-0.506442181

0.3735013

2.726392293

51

-0.897629

0.35068923

0.932639562

-0.135521802

-0.165395241

0.233581235

0.7138372

-0.424847689

52

0.0085546

-0.021667

-0.207840911

-0.119628297

-0.797541459

1.342704037

-0.4408739

-0.274070657

53
54

-0.289023
0.9974168

-0.3261995
0.16353681

0.017042563
-0.786112699

-0.126591946
-0.096640063

-0.337798755
0.840291924

-0.314430998
-0.344439873

-1.1580103
1.1514119

-0.455003096
-0.862101084

55

-0.837917

-0.3471874

1.189649246

-0.101326189

-1.084880649

-0.513669074

-0.8906035

-0.304226063

-0.672231
-0.60891
-0.995072
0.0580962
1.8737443
-0.336924
0.5328419

-0.3245352
-0.2741546
-0.3485692
-0.1445962
-0.1802982
-0.3301319
0.01079096

-0.095399174
0.80413472
1.719731719
-1.749899014
0.402557089
0.338304668
-2.087224224

-0.10443935
-0.121266803
-0.11454893
-0.087480816
-0.11481109
-0.140273468
-0.084990288

-2.262971328
0.754090167
4.317096124
-0.107927403
-0.395266593
-1.659559029
0.466750977

-0.52959235
-0.441504409
-0.463432719
-0.505725357
0.784558514
-0.471415535
-0.522342649

-0.7325904
-1.1701651
-4.415511
0.7503017
-0.513803
-0.8906035
-4.415511

0.705980055
0.4496591
1.701108471
-0.062982811
0.057638815
0.102871925
2.982713249

56
57
58
59
60
61
62

99
97

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of Industrial Goods in Iran
63
64
65
66
67
68
69

-1.119746
-1.087593
-0.89238
-0.080358
-0.386137
-0.287054
0.6867159

-0.3397069
-0.3296143
-0.3318596
-0.3503172
-0.1579298
-0.3507988
-0.2071849

0.996891983
0.370430878
0.322241562
0.145547405
1.864299666
0.402557089
-0.256030226

-0.095280103
-0.133162354
-0.123822872
-0.109059936
-0.128836699
-0.121676429
-0.101997976

-0.337798755
0.323081382
0.811558005
-0.337798755
-0.165395241
-0.19412916
0.811558005

-0.473272762
-0.510847393
-0.481060082
-0.462487814
0.005826582
-0.522802068
0.028308801

-4.415511
0.5436692
-4.415511
-1.2552491
-0.1734671
-1.2552491
0.9447794

-1.193810556
-1.088266633
1.369398999
-0.741479458
-0.33438147
-1.947695719
-0.24391525

70
71
72

0.3747027
0.0617052
-0.077077

-0.1907559
-0.1773486
-0.3290769

0.017042563
-2.777937749
0.000979458

-0.11033797
-0.069178708
-0.122479297

-0.050459565
0.409283139
-0.826275378

-0.428210576
-0.525033999
-0.297846288

0.5558241
1.1392571
-1.3767976

1.27893278
-0.123293624
-0.470080799

73
74
75

0.5571205
3.5456891
-0.039675

0.43574455
-0.3311128
-0.2674373

-1.621394172
0.065231879
0.225862931

-0.096115741
-0.114352309
-0.121741969

0.696622329
-0.653871864
-0.76880754

-0.428243158
-0.441080831
0.791075099

0.89616
-0.015454
-0.6596613

-1.525520028
-0.319303767
-0.560547019

76
77

-0.542964
0.650298

5.67719703
-0.3167508

-0.1757147
1.414532719

-0.105799309
-0.12048032

1.127631114
0.66788841

0.525850082
0.866015829

0.0574751
2.0630259

1.550331438
-0.047905108

78
79

-0.517045
-0.563634

-0.2304871
-0.2983042

-1.862340751
0.033105668

-0.084449581
-0.126460866

0.236879625
-2.636512275

-0.512404856
-0.393314262

0.1668688
-0.4044093

-0.349459173
-1.043033523

80
81
82

-0.406807
-0.723413
0.2080331

-0.3022651
0.0633615
-0.3291827

0.354367773
-0.51303991
0.209799826

-0.130606285
-0.095706115
-0.11043628

-1.027412811
0.265613544
-1.717026867

-0.254706494
-0.388035828
-0.310358132

-1.4132622
-0.2342414
-0.8541389

-0.349459173
-0.500236206
-0.786712568

not and the shortest distance matrix is computed and also the values of vector
for each year (see Table 3). By computing the lower and upper limits of 5years average, it is observed that all countries (except, England, India and US)
are in rang of lower and upper limit of di. It maybe reveals that England, India
and U.S for Khorasan industries have absolute-advantage and other target
markets have relative-advantage. The scores of PAC and Numerical
Taxonomy (NT) for the target markets are shown in Table 4. As exhibits in
Table 4, the export target markets for Khorasan industries are divided to 8
levels represented from first to eighth categories. As shown in table 5, the noncompatibility is ranked to the three importing countries, namely England, India
and US.

3. EMPIRICAL RESULT
A factor analysis using the Principle Component Analysis (PAC) with
Numerical Taxonomy was conducted to identify the salient factors influencing
the export target market of Khorasan province. The eight indicators must be
normalized and have order to be used in PAC. All eight indicators have the
same order and from now on are referred to as xj j=1 8. The indicators are
standardized for each year and 5-years average. They are standardized through
predefined mean and standard deviation for each indicator. The standardized
matrix is shown in Table 2. The Eigen values and proportion of the sample
variance of the 8 indicators are presented in Table 3. Also, Compatibility or

100
96

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

No.

Country

Table 3: Compatibility/Non and Shortest Distance for the 82 Export Target Market

Compatibil

Shortest

No.

ity/Non

Distance

0.9144

30

Country

Compatibil

Shortest

No.

ity/Non

Distance

Thailand

1.3275

59

Country

Compatibil

Shortest

ity/Non

Distance

Kenya

2.9123

Azerbaijan

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

South Africa
Albania
Germany
Austria
Ethiopia
Jordan
America
Uzbekistan
Spain
Australia
Afghanistan
Algeria
U. A. Emirates
Indonesia
England
Ukraine

+
+
+
+
+
+
+
+
+
+
+
+
+
+
Non
+

2.4021
1.1785
2.6691
0.5140
1.5365
1.6446
1.5620
2.1223
0.91129
1.4333
1.1795
0.8445
0.6687
1.5211
9.1610
0.0223

31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

Ukraine
Tunisia
Syria
Libya
South Korea
Tanzania
China
Denmark
Zimbabwe
Japan
Ivory Coast
Singapore
Senegal
Swedish
Switzerland
Chile

+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+

.0223
.8645
.9282
.9282
1.3881
.9644
.9644
.8449
.5556
1.3949
1.9990
2.4318
1.1875
0.6514
0.8049
1.1791

60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75

Canada
Croatia
Congo
Kuwait
Georgia
Lebanon
Luxembourg
Poland
Malta
Malaysia
Moroccan
Uganda
Norway
Niger
Nigeria
New zealand

+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+

3.4794
2.10877
6.6536
4.4816
0.9143
5.0071
1.7936
1.5768
2.0481
2.6111
2.6560
3.9452
2.0454
1.2242
0.5556
0.5082

18
19
20
21
22
23
24
25
26
27

U.S
Italy
Bahrain
Brazil
Belgium
Bulgaria
Pakistan
Portugal
Tajikistan
Taiwan

Non
+
+
+
+
+
+
+
+
+

3.8222
0.5082
.6687
1.8110
0.6191
0.7652
1.2345
1.1041
0.6123
1.7282

47
48
49
50
51
52
53
54
55
56

Iraq
Saudi Arabia
Oman
Ghana
Russia
France
Filipina
Finland
Cyprus
Kyrgyzstan

+
+
+
+
+
+
+
+
+
+

1.0260
0.5051
0.5051
1.7941
1.3001
0.5460
0.4175
1.0390
0.7345
1.0286

76
77
78
79
80
81
82

Netherland
India
Hong Kong
Yemen
Hungary
Egypt
Ireland
Total
Mean
Variance

+
Non
+
+
+
+
+

3.8525
1.1420
0.9445
1.6292
0.5140
0.6123
0.7952
103.884
1.26688
1.24222

28

Turkmenistan

1.5556

57

Kazakhstan

1.3087

29

Turkey

1.0302

58

Qatar

1.9576

S.D

3.49597

-0.9622

101

1.11455

Gharzi and Alroaia


Using Component Model and Numerical Taxonomy Analysis in Order to Ranking Export Target Markets of Industrial Goods in Iran

Table 4: Taxonomy Ranking of Khorasan Export Target Market for Compatibility Countries

Country

fCi

Rank

Category

Country

fCi

Rank

Category

Country

fCi

Rank

Category

Iraq

0.551052

Nigeria

0.432553

Pakistan

0.458859

29

Kuwait
Greece
Hungary
Afghanistan
Ireland
Syria
Oman
Lebanon
Malta
Egypt
Libya
Croatia
Yemen
Norway
Saudi Arabia
Congo

0.528929
0.515689
0.490504
0.484410
0.546997
0.531969
0.514257
0.511361
0.495115
0.448074
0.525821
0.499521
0.459643
0.484028
0.508548
0.492760

1
1
1
1
2
2
2
2
2
2
3
4
4
4
5
5

1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2

Bahrain
U. A. Emirates
Morocco
Finland
Cyprus
Malaysia
Kazakhstan
Bulgaria
Denmark
Ivory Coast
Kenya
Swedish
Uzbekistan
Canada
Ukraine
Switzerland

0.507460
0.501267
0.431463
0.479843
0.479043
0.417159
0.459628
0.489039
0.482983
0.482881
0.447726
0.477344
0.485972
0.423274
0.477615
0.458546

9
10
11
12
12
12
14
15
15
15
17
18
19
20
21
21

3
3
3
4
4
4
4
4
4
4
4
4
4
5
5
5

Senegal
Austrian
Albania
Azerbaijan
Zimbabwe
Jordan
Tunisia
Chile
Armenia
Italy
Japan
Singapore
Spain
Turkey
South Korea
China

0.442567
0.476648
0.473779
0.472341
0.433071
0.461272
0.446172
0.412688
0.458780
0.449815
0.414355
0.383847
0.452756
0.430999
0.413351
0.196604

29
30
32
33
33
34
34
35
37
38
39
40
41
42
43
45

6
6
6
6
6
6
6
7
7
7
7
7
7
7
7
7

Netherland
Luxembourg
Hong Kong
Kyrgyzstan
Georgia
Uganda
New Zealand
Qatar
Poland

0.456168
0.475724
0.403223
0.491021
0.477586
0.449321
0.447475
0.489239
0.453709

5
6
6
7
7
7
7
8
8

2
2
2
3
3
3
3
3
3

Russia
France
Portugal
Tajikistan
Belgium
Tunisia
Filipina
Turkmenistan
Ghana

0.440786
0.438345
0.466014
0.461945
0.465155
0.453637
0.416885
0.456662
0.428537

24
24
25
25
27
27
27
28
28

5
5
5
5
5
5
5
6
6

Taiwan
Ethiopia
Algeria
Australia
South Africa
Germany
Brazil
Indonesia

0.420175
0.449139
0.438158
0.425466
0.438779
0.433209
0.372532
0.386032

46
47
49
56
56
57
60
62

7
8
8
8
8
8
8
8

Table 5: Taxonomy Ranking of Khorasan Export Target Market for Non compatibility Countries
Country

fCi

Rank

Category

England
India
US

0.6298512
0.5856212
0.4828465

1
2
3

102

Caspian Journal of Applied Sciences Research, 1(12), pp. 91-104, 2012

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4. CONCLUSION
The paper presents a unique approach for selection
of target markets and ranking them based on eight
indicators and PCA-NT. In addition, ranking of
target market, taken varied across firms and have
different influences on firm export intensity and
export growth, respectively. Whereas more market
entries and reentries increased both firm export
intensity and firm export growth, continued export
market presence by firms led to greater export
intensity for Khorasan province industries.
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strategic actions to effect and/or modify an
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