Performance Evaluation of an Export Promotion Agency: Music Finland Case Study Leena Lamberg Advisor: Prof. Doutora Rita Coelho do Vale Dissertation submitted as partial fulfilment of requirements for the degree of International MSc in Business Administration at Católica-Lisbon School of Business and Economics, Universidade Católica Portuguesa September 2013 Acknowledgements I would like to express my gratitude to my supervisor Professor Rita Coelho do Vale for her engagement in this dissertation project. Her time, enthusiasm and constructive comments greatly improved this thesis. Music Finland played an essential role in this work. Special thanks to Riku Salomaa for a great level of commitment and information disclosure throughout the project, and Andy Prinkkilä for being the initiator in getting this collaboration started. Additionally, I would like to thank Jules Parker from Polaroid Management and Nick Triani from Soliti for their time for interviews and reviewing the case study. Finally, I would like to thank my parents and my sister for their constant support throughout my studies. i Abstract This dissertation focuses on performance evaluation of export promotion agencies (EPA) through a case study on Music Finland, an export promotion agency, and their initiative in the UK. The organization’s current actions to promote Finnish music in the UK and the metrics in place are examined in detail, followed by a literature review of extant theories on the related topics of exporting, branding and country-of-origin effect. A new metric of applied service quality gaps analysis is introduced to identify follow-up procedures for the organization to implement in the future. Within the UK initiative Music Finland promotes Finnish artists through allocating funding, providing marketing assistance, organizing promotional activities and offering training to increase export know-how, which is well in line with the EPA activities identified in the literature. The current metrics are mainly financial and descriptive, with a relatively strong focus on collecting client feedback. In line with previous research findings in literature that emphasize the importance of a strong organizational brand, service quality and stakeholder relationships, a new metric of service quality gaps analysis is introduced to assess the service quality perceptions of the UK partners and Finnish client organizations. The management practices and metrics in place together with the service quality gaps analysis can be used as a benchmark for other EPAs on performance evaluation, and can provide basis for further research in the field of performance evaluation of export promotion agencies. ii Resumo A presente dissertação insere-se no âmbito da avaliação de desempenho de agências de promoção à exportação (APE) seguindo um case study sobre a Music Finland, uma agência de promoção à exportação, e a sua actividade no Reino Unido. As acções correntes das organizações para promover musica Finlandesa no Reino Unido e as métricas usadas são examinadas em detalhes, seguido de uma revisão de literatura acerca das teorias existentes nos tópicos relacionados com exportação, marca e pais de origem. Uma nova métrica para análise aplicada de falhas de qualidade de serviço é introduzida para identificar procedimentos de acompanhamento para implementação futura pela empresa. Dentro da iniciativita no Reino Unido, a Music Finland promove artistas Finlandeses através de financiamento, acções de marketing, actividades promocionais e fornecendo formação para desenvolver conhecimentos à exportação, a qual segue as actividades das APEs identificadas na literatura. As métricas correntes são maioritáriamente financeiras e descritivas, com um foco relativamente forte na recolha de feedback dos clientes. Em linha com resultados anteriores, os quais enfatizam a importância de uma forte marca organizacional, qualidade de serviço e sólidas relações com stakeholders, a nova métrica de análise de falhas de qualidade do serviço é apresentada para avaliar as percepções de qualidade de serviço dos parceiros no Reino Unido e das organizações de clientes Finlandesas. As práticas de gestão e métricas em questão juntamente com a análise de falhas de qualidade do serviço podem ser usadas como benchmark para outras APEs na avaliação de desempenho, e servir de base para estudos futuros na área de avaliação de desempenho das agências de promoção à exportação. iii Contents Acknowledgements .................................................................................................................... i Abstract ..................................................................................................................................... ii Resumo .................................................................................................................................... iii 1 Introduction ........................................................................................................................ 1 1.1 Music Finland ............................................................................................................... 1 1.1.1 Music Finland UK 2012-2013 ................................................................................ 2 1.2 Research topic ............................................................................................................. 2 1.3 Problem statement and research questions ................................................................ 3 1.4 Academic and managerial relevance ........................................................................... 3 1.5 Structure of the thesis ................................................................................................. 4 2 Case Study: Music Finland UK Initiative .............................................................................. 5 2.1 Music Finland ............................................................................................................... 5 2.1.1 The Music Industry Boosting its Presence ............................................................ 6 2.1.2 Music Finland Business Model .............................................................................. 6 2.1.3 Music Finland Services Portfolio ........................................................................... 7 2.1.4 Client organizations .............................................................................................. 8 2.1.5 Current metrics ..................................................................................................... 8 2.2 The UK Initiative 2012-2013 ...................................................................................... 10 2.2.1 Objectives ........................................................................................................... 10 2.2.2 Why the UK? ....................................................................................................... 10 2.2.3 Characteristics of the British music market ........................................................ 11 2.2.4 Activities ............................................................................................................. 11 2.2.5 Partners .............................................................................................................. 14 2.2.6 Attitude towards Finnish music .......................................................................... 15 2.3 The next steps ............................................................................................................ 15 2.4 Exhibits ....................................................................................................................... 17 3 Literature review .............................................................................................................. 23 3.1 Exporting .................................................................................................................... 23 3.1.1 Export barriers .................................................................................................... 23 3.1.2 Export promotion agencies ................................................................................. 25 3.2 Brand equity and branding ........................................................................................ 26 3.2.1 Branding in B2B environment ............................................................................. 26 3.2.2 Importance of branding in exporting .................................................................. 27 iv 3.2.3 Umbrella branding .............................................................................................. 27 3.3 Country-of-origin effect ............................................................................................. 28 3.4 Discussion .................................................................................................................. 29 4 Teaching note ................................................................................................................... 32 4.1 Case synopsis ............................................................................................................. 32 4.2 Topical Areas .............................................................................................................. 32 4.3 Teaching objectives ................................................................................................... 33 4.4 Student Assignments ................................................................................................