Ch7

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Ch7

  1. 1. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/1 MARKET ENTRY STRATEGIES Session 7
  2. 2. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/2 MARKET ENTRY METHODS & THE LEVELS OF INVOLVEMENT IN INTERNATIONAL MARKETS
  3. 3. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/3 SUCCESSFUL MARKET ENTRY #1 • Criteria for Selecting Appropriate Market Entry Method – The company objectives and expectations relating to the size and value of anticipated business – The size and financial resources of the company – Existing foreign market involvement – The skills, abilities and attitudes of the company management towards international marketing – The nature and power of the competition with the market
  4. 4. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/4 SUCCESSFUL MARKET ENTRY #2 • Criteria for Selecting Appropriate Market Entry Method – The nature of existing and anticipated tariff and non-tariff barriers – The nature of the product itself, particularly any areas of competitive advantage, such as trademark or patent protection – The timing of the move in relation to the market and competitive situation
  5. 5. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/5 RISK & CONTROL IN MARKET ENTRY
  6. 6. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/6 INDIRECT EXPORTING #1 • Domestic Purchasing – Foreign organisation purchases the product for export to another country – Gives access to and limited knowledge of the international market – Little control over choice of markets entered – For longer term, need a more proactive approach • Export Management Companies / Export Houses – Specialist companies act as the export department for a range of companies – Help SMEs to initiate/develop/maintain international sales – Deal with documentation, government regulation
  7. 7. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/7 INDIRECT EXPORTING #2 • Piggybacking – An established international distribution network of one manufacturer used to carry products of a second – Particularly good for firms from developing countries – Often poorly considered terms and conditions • Trading Companies – Their extensive operations and controls enable operation in more difficult trading areas – Manage countertrade activities
  8. 8. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/8 THE COMPONENTS OF THE EXPORT MARKETING MIX EXPORT MARKETING MIX Product: Selection, development & sourcing Pricing: Policy, strategies, discount structures & trading terms Promotion: Corporate promotions & local selling, trade shows & literature Distribution: Sales force management, agents, distributors & logistics Services: Market research, training & sales servicing Finance & Administration: Budgets, order processing, insurance & credit control Technical: Specifications, testing & product quality
  9. 9. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/9 IMPORTANT FACTORS FOR SUCCESSFUL EXPORTING • Commitment of the firm’s management • Exporting approach emphasising the skills base • Good marketing and information communication system • Production capacity & capability, product superiority, competitive pricing • Effective market research • Effective national export policy Source: Katsikeas et al (1996)
  10. 10. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/10 SELECTION CRITERIA FOR FINDING A SUITABLE AGENT • Financial strength of the agent • Their contacts with potential customers • The nature and extent of their responsibilities to other organisations • Their premises, equipment and resources (including sales representatives)
  11. 11. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/11 ACHIEVING SATISFACTORY MANUFACTURER-AGENT RELATIONSHIP • Achieving Satisfactory Manufacturer-agent Relationship – Allocate time and resources to find a suitable agent – Ensure that both understand what each expects of the other – Ensure that the agent is motivated to improve performance – Provide adequate support on a continuing basis – Ensure that there is sufficient advice and information transfer in both directions
  12. 12. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/12 REASONS FOR SETTING UP OVERSEAS MANUFACTURE • Product – avoiding problems, e.g. perishability • Services – Dependant for success on local intellectual property, knowledge &sensitivity • Costs of transporting and warehousing • Tariff barriers and quotas • Government regulations e.g. local investment • Market – Local manufacture viewed favourably by market? • Government contacts • Market information feedback • International culture in firm • Local manufacture – faster response and just-in- time delivery • Lower labour cost
  13. 13. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/13 MINIMISING THE POTENTIAL PROBLEMS OF LICENSING #1 • Develop a clear policy and plan • Allocate licensing responsibility to a senior manager • Select licensees carefully • Draft the agreement carefully to include duration, royalties, trade secrets, quality control and performance measures Sarathy et al (2006)
  14. 14. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/14 MINIMISING THE POTENTIAL PROBLEMS OF LICENSING #2 • Supply the critical ingredients • Obtain equity in the licensee • Limit the product and territorial coverage • Retain patents, trademarks, copyrights • Be an important part of the licensee’s business Sarathy et al (2006)
  15. 15. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/15 FOREIGN MANUFACTURING STRATEGIES WITH DIRECT INVESTMENT • Reasons for investment in local operations – To gain new business: local production demonstrates strong commitment – To defend existing business – To move with an established customer – To save costs: e.g. labour, raw materials and transport – To avoid government restrictions
  16. 16. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/16 Who provides what in partnerships between firms from developed and developing countries
  17. 17. Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch7/17 DRIVING FORCES FOR THE FORMATION & OPERATION OF STRATEGIC ALLIANCES • Insufficient resources • Pace of innovation and market diffusion • High research and development costs • Concentration of firms in mature industries • Government co-operation • Self protection • Market access

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