Chapter 10: International Market Entry Strategies Flashcards
Phases of international marketing Involvement
No direct foreign marketing
No active cultivation of customers outside national
boundaries takes place, although products may
reach foreign markets
Phases of International Marketing Involvement
Infrequent foreign marketing
• Temporary surpluses result in infrequent overseas
marketing
• Little or no change in company organization or
product lines
Phases of International Marketing Involvement
Regular foreign marketing
- Firm has permanent productive capacity to produce goods to be marketed on a continuing basis in foreign markets
- Firm begins to be dependent on foreign profits
Phases of International Marketing Involvement
International marketing
•Firm becomes an international or multinational marketing firm dependent on foreign revenues
Phases of International Marketing Involvement
Global marketing
• Firm develops an overall strategy and image to maximize returns through some global standardization of its business activities
Market Entry Objectives:
Psychic distance
Market seeking
Efficiency seeking
Resource seeking
Psychic distance:
Market is considered distant due to psychological barriers
Market seeking:
Companies that venture into new countries become international because they are looking for new markets, actively seeking customers worldwide.
Efficiency seeking:
Firms want to enter countries/markets where they can achieve efficiency in different ways
Resource seeking:
Firms try to enter countries to get access to raw materials or other inputs for cost reduction
What helps the company in market opportunity assessment?
- To screen the market in relation to it’s objectives overall strategy, and the country’s economic, cultural and legal environment
- To assess whether the market is economically attractive or not
- To make an advanced in-depth analysis of market opportunity for its particular product
Proactive market selection:
Actively and systematically selecting a market
Reactive market selection:
Selecting a market at random or without a systematic analysis
What does the Boston Consulting Group (BCG) use to maximise the long-term profit and growth of a firm?
- Country attractiveness
* Competitive strength of the company
What are some country attractiveness traits?
Market growth
Market size
Competitive conditions
Market uncontrollables
What are some competitive strength traits of a company?
market share
Marketing ability and capacity
Product and positioning fit
quality of distribution services
Market entry strategies
Exporting:
- Easiest and most common approach as the risks of financial loss can be minimized
- Piggybacking: The company sells its products abroad using another company’s distribution facilities
Marketing entry strategies
Licensing:
•Patent rights: Only the owner of the rights can use the particular product technology
Market Entry strategies
Franchising:
- Permits flexibility in dealing with local market conditions and provides the parent firm with some degree of control
- Types -Master franchise, joint venture, and licensing
Market entry strategies
Strategic international alliances:
- Synergistic relationship that achieves a common goal where both parties benefit
- Strategic alliance: Two companies cooperate for a certain purpose
Market entry strategies
Joint ventures:
• Partnership of two or more firms that have joined
forces to create a separate legal entity
What are some characteristics of joint ventures?
• Partners share in the management
• Partnerships are between legally incorporated
entities and not between individuals
• Equity positions are held by each of the partners
Market Entry strategies
Consortia:
- Involve a large number of participants
* Frequently operate in a market in which none of the participants is currently active
Market entry strategies
Manufacturing:
•Also called a wholly-owned subsidiary within a foreign country
