Validating the micro determinants of export performance model for halal food and beverages industries in Malaysia

Abstract

The global halal market has grown rapidly over the past decade due to the worldwide demand for halal products and services. Eventually, export marketing of halal food begins to gain research attention. However, theoretical studies that are related to this topic are scarce, particularly those concerning marketing strategy from Islamic perspective and psychic distance. In addition, the influence of export standard alongside Malaysian Halal certificate (JAKIM) received little empirical attention. Therefore, the main objective of the study is to investigate the antecedents of export performance in Malaysian Halal food and beverage industry. The data collected from I 02 firms in this industry are officially listed with MA TRADE and HDC. A structural equation modeling, specifically partial least squares, has been adopted to evaluate constructs including firm characteristics, capability to meet export standard, management characteristics, export marketing orientation, marketing mix, marketing from Islamic perspective, psychic distance and export performance. Results show that the model has good fit with the marketing strategy from Islamic perspective, marketing mix strategy, capability to meet export standard, firm characteristics and psychic distance. In this vein, the effect of export marketing orientation, adaptation of marketing strategy and management characteristics on export performance is not significant. Moreover, mediation test analysis revealed that marketing strategy from Islamic perspective and marketing mix strategy mediate the effect of psychic distance-people on export performance. The study contributes to halal knowledge and suggest that implementing the marketing strategy with consideration of Islamic practices together with a firm's capability to meet export standard can be a key to business success in the international market. The study shed light on the areas of focus for the government in order to help exporters to be more competitive in international market. In this respect, more support is required by the government to assist exporters to be equipped with international safety standard systems since a majority of firms in this indust1y are SMEs that suffer from lack of resources to invest on the required structure such as export standards. On the other hand, an implication for managers responsible for export halal products is to formulate its marketing practice in a direction that employ Islamic values and contemporary marketing mix strategy together. From the theoretical perspective, the study has determined various dimensions marketing from Islamic perspective from scattered sources and offered operationalization that could be useful in future studies. Moreover, the study expanded the conceptual framework of PD scale for assessing psychic distance.