Post on 22-Jan-2021
BC Beef Market Research Project For Asian Markets in Greater Vancouver
Prepared by Dr. Warveni Jap Thompson Rivers University
School of Research, Innovation, and Graduate Studies Kamloops, British Columbia
Canada
September 30, 2013
Funding Provided By
Project Proponent and Administrator: BC Association of Cattle Feeders
Funding for this project has been provided by Agriculture and Agri-‐Food Canada and the BC Ministry of Agriculture through the Canada-‐BC Ranching Task Force Funding Initiative. The initiative is delivered by the Investment Agriculture Foundation of BC.
Agriculture and Agri-‐Food Canada (AAFC) and the Ministry of Agriculture are committed to working with industry partners. Opinions expressed in this document are those of Dr. Warveni Jap and not necessarily those of AAFC or the Ministry of Agriculture.
© 2013 by WARVENI JAP ALL RIGHTS RESERVED
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TABLE OF CONTENTS
1. Introduction and Acknowledgement 2. Context of the Research 3. Methodology 4. Results 5. Conclusion 6. Recommendations 7. References
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1. INTRODUCTION AND ACKNOWLEDGEMENT
The applicant and industry sponsor for this research project is the British Columbia Association of Cattle Feeders (BCACF), which was founded in 1988 to support the needs of cattle feeders in British Columbia. The primary objective of the Association is to bring information, technology, education, and other services to the BC cattle feeders (BCACF report 2011). Furthermore, this project was made possible through funding from Agriculture and Agri-‐Food Canada and the B.C. Ministry of Agriculture and delivered by the Investment Agriculture Foundation of British Columbia. The principal investigator in this project is Dr. Warveni Jap who worked on this project through the Office of Research, Innovation and Graduate Studies (RIGS) at Thompson Rivers University (TRU). This project focused on the results of market research from Asian markets in Greater Vancouver and the recommendations are based on the market research findings. The project management was provided by Gillian Watt from former TRU RIGS. There were two research assistants involved in this market research project, namely, Hong (Christina) Yang who was the interpreter to the Chinese participants, and Nishi Saraswat who was a former TRU post-‐baccalaureate in business program involved more in Chinese consumer behaviour study in BC and Canada markets. Bill Freding and Dimity Hammon who were from BCACF provided valuable information and insights on the BC beef industry. We also sincerely appreciate the tremendous assistance from Desmond Liew, Dr. John D. Ramsay, Lily Li, May Ma, Prof. Ding Guo, Dr. Chak Au to introduce and connect us with those Chinese restaurant owners and Head Chefs for interviewing them effectively and efficiently in this market research project. Additionally, we are grateful to those Chinese participants who were willing to spend their time and to share their beef market knowledge and experiences in Greater Vancouver markets to this market research project. Last but not least, we are sincerely thankful to former TRU Associate Vice President Dr. Donald Noakes, current TRU Associate Vice President Dr. Will Garrett-‐Petts, Director Research Partnerships, Enterprise Creation Dr. Lincoln Smith, Project Manager Ms. Gillian Watt, Dean of School of Business and Economics Dr. Russell Currie, and Department Chair of Marketing, International Business, and Entrepreneurship Ms. Deborah Lawton who fully supported this project to make this project possible.
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2. Project Opportunity and Purpose A key success factor for participants in the B.C. beef industry in the future will be its ability to fine tune their product attributes and image, to meet the preferences of those emerging markets with a greater willingness to pay. Market intelligence will play a critical first stage role in the development of higher valued beef, produced specifically to meet the needs of these higher end markets. The Asian markets in Vancouver, B.C. offer such an opportunity for B.C.’s beef industry. A recent research project commissioned by the B.C. Association of Cattle Feeders titled “Market and Logistics Research for Two Regional Beef Value Chains in B.C., Canada” identified the Asian restaurant markets in Vancouver as a market opportunity and a segment for which further market research was recommended. The household buying power within the Asian market is rapidly increasing and with this may come an increased demand and discernible taste for beef products with certain valued attributes. To serve these markets effectively however, the B.C. and Canadian beef industries need to gain a better understanding of the market dynamics including product preferences, values placed on different production practices, packaging, sales and distribution systems. As the B.C. beef production and processing industry is at a cost disadvantage to larger economies of scale within the country, it is important for the beef and processing industry in this province to develop core competencies in serving these niche domestic markets effectively with high value products and services designed exclusively to meet their needs. By effectively developing the Vancouver Asian markets, the B.C. industry may obtain higher prices for these valued products at levels that will increase gross margins for both producers and processors. Benefits of Project Improved competitiveness of Canadian and B.C. beef within the Asian markets in the Vancouver market by:
1. Developing a closer understanding of the preferences and value placed on different products as well as product and service attributes of the Asian retail, and foodservice markets in Vancouver B.C.
2. Developing a closer understanding of the needs of the secondary processors and distributors who play a critical role in serving the Asian retail and food service markets.
3. Developing key relationships within the Asian food service, retail and distribution sectors will enable further market development for B.C. and Canadian Beef.
4. Recommendations from this research will provide information for value chains within B.C. and Canada to more effectively develop and service the Vancouver Asian market. This will
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lead to more effective carcass utilization and improved margins for producers and processors.
3. CONTEXT OF THE RESEARCH The purpose of this research project is to determine the “appetite” for branded BC beef in BC markets, in particular in Asian markets in Greater Vancouver. One such example of a B.C. brand, Certified BC Beef, is an umbrella “brand” of beef that has been certified by the BC Association of Cattle Feeders as being born, raised and processed in British Columbia. Under that umbrella group, there can be several local brands that guarantee that the cattle have not been given any additional hormonal implants or steroids or fed with any antibiotics intended as growth stimulants. Some of the local brands may include a “grass fed” criteria. Such brands of BC beef may have attributes that are perceived by the consumer to be healthier and better quality than ”commodity beef”. A few of these potential perceived attributes are as follows:,
a) More healthy because they are free of hormone implants and synthetic growth promotants b) More environmentally friendly because of a lower carbon footprint due to reduced transportation of animals or product, etc. c) More humane handling practices – animals stay longer in their natural environment, d) Better for the local economy -‐calves kept in B.C. to background, finish and process
contribute up to $1,800/animal additional revenue to the B.C. economy
To reiterate, the purpose of this research is to:
1. help BC beef producers and processors identify the right distributors, customers, and consumers in the value chain by understanding better what they really need and want to better service the Asian beef markets in Vancouver Lower Mainland
2. assist BC beef producers and processors to optimize their BC market distribution channels more effectively and efficiently.
Ultimately, this research study would encourage and promote the consumption of more BC finished and processed beef by BC residents as well as to advance BC economic development and growth.
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4. METHODOLOGY This is a qualitative study with some quantitative components. This research study employed a phenomenological qualitative approach by using semi-‐structured in-‐depth one-‐on-‐one personal interviews to explore further the Chinese business operators’ buying behaviour towards beef in Vancouver and Richmond areas. The participants were from high-‐end Chinese restaurants (including hotel restaurants), meat retailers and distributors with a total sample of 20 participants. The aim of this qualitative interview is to gain the perspective of the interviewees, so that the investigated topics could be further explored (Hair, Wolfinbarger, & Bush, 2008; Daymon & Holloway, 2004). The list of the 20 participants was be provided by the Principal Investigator's (PI's) Chinese friends who were well-‐established professionals and business people from China and Hong Kong, but lived in Vancouver and Richmond more than 15 years long. They also were very well-‐known professionals and public figures in Lower Mainland Chinese community and have very broad Chinese connection down there as well. The Chinese connectors contacted their friends (those high-‐end Chinese restaurant owners/managers/head chefs) first to introduce the purpose of the project and the PI. Furthermore, when necessary, the Chinese Connector would fax the survey questions (sample interview questions) to the potential participants for their further reference and understanding about the research project. Basically, the participants were the owners/managers/head chefs from the Chinese high-‐end restaurants (including hotel restaurants), high-‐end meat retailers and distributors in Lower Mainland. Once the participants agreed to participate, with the restaurants’ permission, the PI and the Research Assistant made appointments for visiting and interviewing the restaurants accordingly.
The Principal Investigator (PI) conducted the interview in Chinese Mandarin language while the Chinese Research Assistant took notes to gather the interview data during interview. If the interviewees spoke Chinese Cantonese, then the Chinese Research Assistant would be conducting the interviews, whereas the PI would be taking notes instead. Indeed, both Chinese Mandarin and Chinese Cantonese had the same writing systems, but different pronunciation only. The interview questions were the same as the survey questions. Also, the interview data were noted by the Chinese Research Assistant as well as the Principle Investigator (PI) when needed during the interview. There were seven open-‐end research questions in the one-‐on-‐one in-‐depth interview, it was estimated to take about 4-‐5 minutes to discuss each questions resulting in 30-‐45 minutes for each interview. There are significant cultural differences between the West and Chinese culture (Hill, 2013; Hill & McKaig, 2012; Cateora et al., 2012). Therefore, this present study attempted to explore and
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understand more in-‐depth about Chinese Canadian consumption behavior and preferences towards beef products. Specifically, this market research project attempted to understand further how Asian Canadians living in the Greater Vancouver area perceive BC beef branding and products through one-‐on-‐one in-‐depth interviews. The following are the research questions of this research project, as follows: RQ 1: What are your first and foremost concerns/preferences in choosing the source of your beef? Why? RQ 2: Are you aware that there is B.C. produced and processed beef available that has been raised and finished under low stress conditions within our province and is free of antibiotics and artificial growth implants?
• What do you think about it? • If yes, what brands are you aware of? • Is this of interest to you or your clients?
RQ 3: Do you think your clients would be willing to pay more for a branded B.C. beef product that has been produced and processed locally without hormones, antibiotics, and has lower environmental impact (e.g., low carbon footprint). Why? RQ 4: How long have you been patronizing with your beef supplier(s)? How much and frequently do you purchase from them in a week? What do you think about your business relationship with them so far? Would you be open to building a relationship with a producer who has a branded B.C. beef product?
• If so would you like to retain your current distributor, or would you prefer to deal directly with the B.C. Producer’s sales representative? Why and why not?
RQ 5: Currently, an online ordering tool is being developed by the B.C. Association of Abattoirs that will enable chefs to purchase beef on a carcass basis direct from producer/abattoir teams and obtain a cost per serving calculation based on their cutting instructions. This will assist chefs in carcass optimization based on their seasonal menus and client preferences. Would this tool be of interest to you? RQ 6: What would be your advice to the B.C. beef producers and processors to build their products and services to best meet your needs?
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RQ 7: Any other comments? To address these questions, eleven sub-‐research qualitative and quantitative questions had been developed to address the following points:
• Meat quality is the most important for their business • Prices is the most important for their business • The brand name of the supplier is very important for their business • The source of the beef is very important for their business • Meat cut is very important for their business • Their customers’ preferred types of beef • Packing sizes are very important for their business • Customer services are very important for their business • Terms of payment • Their major customers • Any comments and suggestions to BC Beef Industry for better business relationship with
their companies?
5. RESULTS Interview Findings Interview Question 1: What are your first and foremost concerns/preferences in choosing the source of your beef? Why? Based on the interview findings, all the participants put high quality as their first priority followed by competitive prices.
Participant RS-‐1: We are concerned with quality and price. If the quality is very good but the price is expensive, we will still consider it.
Participant SH-‐1: The quality of the beef is the most important. Our customers think that
Canadian beef is the safest and healthiest in the world. The beef must be fresh and tender. Different parts of the cattle can be used to make different dishes. We prefer AAA grade beef.
Interview Question 2:
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Are you aware that there are branded B.C. produced and processed beef products available that have been raised and finished under low stress conditions within our province and is free of antibiotics and artificial growth implants?
• What do you think about it? • If yes, what brands are you aware of? • Is this of interest to you or your clients?
All the participants were not aware of branded BC beef available in the market, and also they did not pay attention to the brands of the beef. Rather, they relied fully on their long-‐term suppliers.
Participant FC-‐1: We are concerned with whether the beef is free of antibiotics and artificial growth implants. But, we have not paid attention to whether the beef has been raised and finished under low stress conditions. We are also not concerned with brand.
I think local customers will be interested in BC beef’s special attributes as they have high
standards for food. Participant RS-‐1: We value environmental protection. I think the fact that BC beef has been
raised and finished under low stress conditions within our province and is free of antibiotics and artificial growth implants can be a good selling point to our customers. We can also make promotion for BC beef with new menus. Our customers have high standards for food. I believe that if the quality and texture of the [BC] beef is good, it will benefit our restaurant.
Interview Question 3: Do you think your clients would be willing to pay more for a branded B.C. beef that has been certified as produced and processed locally without hormones, antibiotics, and has lower environmental impact (e.g., low carbon footprint). Why? In this particular question, almost half the participants would not mind paying higher prices for higher quality beef. Whereas, another half participants were willing to pay 5-‐10% higher price for much higher-‐quality beef in order to remain competitive to their food/dishes.
Participant RF-‐1: I am not sure. We will have to sample it first. We can accept a little price increase, but not too much.
Participant CH-‐1: If the price is more than 15% than the regular beef, then we will not consider
buying. But, we will consider purchasing BC beef if it is less than 10% higher price than the regular one.
Participant SH-‐1: I think our clients would be willing to because they care more about quality
than cost.
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Interview Question 4: How long have you been patronizing with your beef supplier(s)? How much and frequently do you purchase from them in a week? What do you think about your business relationship with them so far? Would you be open to building a relationship with a B.C. beef producer and processer team who provide a branded product? If so would you like to retain your current distributor, or would you prefer to deal directly with the B.C. Producer’s sales representative? Why and why not? About half of the participants were not sure if they would like to switch to new beef suppliers. It was mainly because they already had long-‐term sound relationship with their current supplier who had satisfied their needs and wants. However, another half of the participants were open to new suppliers as long as they [the new suppliers] delivered better services and higher-‐quality beef. Furthermore, most of the suppliers delivered their products to the restaurant daily except Sundays and holidays.
Participant TJ-‐1: We are satisfied with our current beef supplier. Our main concerns are quality, price, and delivery. If BC Beef can meet our requirements, we are willing to build a business relationship with BC Beef.
Interview Question 5: Currently, an online ordering tool is being developed by the B.C. Association of Abattoirs that will enable chefs to purchase beef on a carcass basis direct from producer/abattoir teams and obtain a cost per serving calculation based on their cutting instructions. This will assist chefs in carcass optimization based on their seasonal menus and client preferences. Would this tool be of interest to you? None of the participants were interested in using such computerization ordering method for theirs.
Participant SG-‐1: Chinese restaurant do not use this online service often. I do not think we will be interested.
Participant SH-‐1: We do not use the computer very often. The Head Chef is only responsible for
the quality of the products.
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Interview Question 6: What would be your advice to the B.C. Beef Producers and processers to build their products and services to best meet your needs? Every participant was very eager and interested in trying and tasting BC beef, and also they would like to have a sample from the B.C. Association of Cattle Feeders for making trials with themselves and their customers. On the other hand, many of them suggested that there should be more BC beef promotion available in the market for brand and product awareness to the public.
Participant RF-‐1: Our restaurant’s procedure usually has the Head Chef sampled the beef first, then ask the Head Chef to recommend it. The second step is a meeting between the restaurant managers. The third step is recommending the beef to the customers. We will use different brands of beef to make the same dish to compare the quality. We are interested in BC beef and want to have the sample to taste how the quality is.
Participant TJ-‐1: We think that BC beef has not promoted itself sufficiently. Many people
around me have not heard of BC beef. We only know that beef comes from Alberta. If the quality and prices are good, we would like to buy BC beef to support the BC economy.
Participant FC-‐1: Every year, there is the Annual British Columbia Chef of the Year Competition
at the BC Food Service Expo. I suggest the BC Association of Cattle Feeders sponsors it. Last year, our Chef won the first place with the beef roll.
Participant RS-‐1: BC Beef should have food experts to develop menus to help promote the
beef. Only advertising and hard sales will not be effective and sufficient. Participant SG-‐1: If we are satisfied with the samples, we will be willing to promote it. We only
knew about Alberta beef before. So, BC Beef should promote more. After trying and tasting the BC Beef samples, we will talk with our manager and office about making new menus to help promote BC Beef.
Participant SH-‐1: We hope that BC Beef will have the same quality as Japanese Kobe beef. Even
if it is a little more expensive, we would be interested in purchasing if it is really high-‐quality beef. We also want the product advertisements in Chinese language other than English.
Participant CS-‐1: I suggest that BC Association of Cattle Feeders can invite Chinese chefs and
managers to our restaurant for promoting and trying different dishes by cooking with BC beef.
Participant JS-‐1: I have had BC beef before, and it was very delicious.
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Interview Question 7: Any other comments [or suggestions to BC beef industry for better business relationship with your company]?
• Fair & reasonable prices • High quality products • Good and sustainable delivery • Chinese sales service appreciated • Strongly support BC beef • Advertise BC beef in both languages (i.e., English and Chinese) • The BC Association of Cattle Feeders should sponsor the Annual BC Chef of the Year for
promotion • Interested in trying the sample from the BC Beef Association • Ask food experts to make menu to promote • BC beef needs to be promoted more aggressively • Look forward to the samples • Open to have new relationships with other beef supplier
Research Findings from Sub-‐Research Questions (i.e., Chinese Consumer Behavior & Perception on Beef Demand) Q #1: What is the value of the following attributes of locally produced beef to you and your guests eating experience? (n= 20)
Attributes Highly Valued (%)
Valued (%)
Slightly Valued (%)
No Value (%)
Taste & juiciness 64 27 9 -‐
Consistent tenderness 73 27 -‐ -‐
Supporting the local economy 36.5 45.5 18
Reducing food miles 18.5 45.5 9 27
Health aspects (no antibiotics & growth implants) 45.5 54.5 -‐ -‐
Environmental sustainability of production systems
28 36 18 18
Dry aging 14 days 18 37 27 18
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If a BC beef brand can offer all of the items you have chosen as having value, what % premium are willing to pay over the commodity brands?
The BRAND name of the supplier is very important for our business
Yes (%) No (%)
100 -‐
% Yes ( % ) No ( % ) Remarks
5 – 10 -‐ -‐ Depends upon the price is a generic answer.
10 – 15 -‐ -‐
15 – 20 -‐ -‐
25 – 30 -‐ -‐
Other -‐ -‐
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Do you currently know the origin of the beef you are buying?
Yes ( % ) No ( % )
36 64
Have you heard of any brands of BC beef that have been grown, finished, and processed in BC and are free of antibiotics and growth implants?
Yes ( % ) No ( % )
27 73
Appropriate MEAT CUTs are very important for our business
Yes ( % ) No ( % )
91 9
We buy the following types of beef
Types of Beef Minimum ( lbs / week )
Maximum ( lbs / week )
“nin nan” (Chinese stew) 10 60
Shanks -‐ 20
Stir Fried Beef 20 100
Short Beef (thick meat, short bones)
-‐ 30
Tripe 15 30
Beef Tendon 30 40
Ground Beef -‐ -‐
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PACKING SIZES are very important for our business (part 1/2)
Yes ( % ) No ( % ) Remarks
100 -‐-‐ Prefer: • 10 lbs/pack • 25 lbs/pack
PACKING SIZES are very important for our business (part 2/2)
Preferred Size Yes ( % ) No ( % )
SMALL 36.5 -‐
MEDIUM 45.5 -‐
STANDARD 18 -‐ Prefer Package with Cryovac
Yes ( % ) No ( % ) Does Not Matter ( % )
55.5 -‐ 44.5
Customer Services
Description Yes ( % ) No ( % )
Prefer sales & service directly from the producer brand
55.5
Prefer sales & service thru our existing distributor 64
Prefer the sales rep can speak Cantonese with us 82
Prefer the sales rep can speak Mandarin with us 82
Would you be willing to work with a BC Brand, and to accept frozen product to assist them in growing their capacity
82
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Customer Service: Delivery
1-‐2 Times/Week Daily (except Sundays)
63 % 37 %
Payment
Preferred Method of Payment
Yes ( % ) No ( % )
TT (electronic bank transfer) -‐ -‐
Cheque 91 -‐
Cash -‐ -‐
Other -‐ -‐
Preferred Payment Due Date
Preferably within 30 – 60 days after delivery
6. CONCLUSION
• Chinese population in BC is growing rapidly that consists of 30% Greater Vancouver’s population.
• They are affluent & educated consumers • High-‐quality lifestyle oriented • The beef demand for Chinese markets in Greater Vancouver is untapped and significant • The high-‐end Chinese restaurants are eager to try and promote BC beef for their business,
and also are willing to support BC local economy • Most of the participants were unaware of BC beef products and any BC brands such as
Certified BC Beef.
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7. RECOMMENDATIONS
• Lack of awareness of BC beef brands and products can be perceived as an excellent business opportunity to expand BC beef brands and products to Chinese markets in Greater Vancouver if proper brand management and delivery services are implemented strategically and professionally.
• Adopt differentiation strategy for niche marketing and profit optimization
• Chinese rely heavily on loyalty and mutual trust and benefits in their business relationship. Thus, it is important that BC Association of Cattle Feeders and BC Association of Abattoirs are also playing the same role when dealing business with them.
• Develop bilingual (i.e., English and Chinese) meat chart and code numbers for Chinese customers’ conveniences when ordering and purchasing BC beef from the Association members.
• Provide more strategic promotion tools for better services to the potential Chinese clients, such as:
o Bilingual (i.e., English and Chinese) pamphlets, website, and social media (e.g., Facebook, twitter)
o Initially, hire a part-‐time professional Chinese sales rep to be the bridge between Chinese clients and branded BC beef producers, and also to collect the necessary information of what the Chinese clients really need and want from BC Association of Cattle Feeders and BC Association of Abattoirs.
• Chinese language version in any website of branded BC beef products will provide better customer service to Chinese clients.
• Offer the requested samples in a timely way for their trials to help them develop new menus with BC beef.
• Eventually, BC beef producers may need a strategic alliance distribution center in Lower Mainland for providing better services and logistic coordination to the Chinese clients.
• Design and create the concept of “green marketing,” event marketing, and buzz marketing (e.g., Facebook, twitter) activities to promote awareness of BC beef brands to Chinese Asian markets in Greater Vancouver successfully, efficiently, effectively, and profitably.
• Actively participate in and sponsor the BC Beef Day, and also to join relevant other trade shows and event marketing to create and promote BC beef brands to the public more effectively and efficiently.
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• Invite high-‐end Chinese Restaurant owners, head chefs, purchasing managers, and general
managers to one of BC’s beef ranches to experience the countryside lifestyle and understand better about how the cattle ranchers raise and process BC beef and generate more buzz marketing in their Vancouver Asian markets.
• On the other hand, BC beef producers and processors should hold a dinner party in a high-‐end Chinese restaurant somewhere in Richmond to celebrate and promote BC beef products with those potential Chinese clients together with BC beef value chain members for establishing further and sound relationship with each other.
8. REFERENCES Cateora, P. R., Gilly, M. C., & Graham, J. L. (2013). International Marketing (16th ed.). New York:
McGraw-‐Hill Irwin. Daymon, C., & Holloway, I. (2004). Qualitative Research Methods in Public Relations and
marketing Communications. London: Routledge. Hair, J. F., Jr., Wolfinbarger, M., Ortinau, D. J., & Bush, R. P. (2008). Essentials of marketing
research. New York: McGraw-‐Hill Irwin. Hill, C. W. L. (2013). International business (9th ed.). New York: McGraw-‐Hill Irwin.
Hill, C. W. L. & McKaig, T. (2012). Global Business Today (3rd Canadian ed.). Toronto, ON: McGraw-‐Hill Ryerson.