This document discusses international marketing and global market entry strategies. It covers four phases of the international planning process: preliminary analysis and screening, defining target markets and adapting the marketing mix, developing a marketing plan, and implementing and controlling the plan. It also describes alternative market entry strategies such as exporting, contractual agreements like licensing and franchising, strategic alliances like joint ventures and consortia, and direct foreign investment. The best strategy depends on a company's capabilities and a market's characteristics.

1. International Marketing
15th edition
Philip R. Cateora, Mary C. Gilly, and John L. Graham

2. Global Marketing
Management
• The trend back toward localization
– Caused by the new efficiencies of customization
– Made possible by the Internet
– Increasingly flexible manufacturing processes
• From the marketing perspective customization is
always best
• Global markets continue to homogenize and
diversify simultaneously
– Best companies will avoid trap of focusing on
country as the primary segmentation variable

3. Benefits of Global Marketing
• When large market segments can be identified
– Economies of scale in production and marketing is
important competitive advantages for global companies
• Transfer of experience and know-how
– Across countries through improved coordination and
integration of marketing activities
• Marketing globally
– Ensures that marketers have access to the toughest
customers (Testing ground))
– Market diversity carries with it additional financial
benefits
– Firms are able to take advantage of changing financial
circumstances

4. International Planning
Process
Exhibit 12.1

5. Phase 1: Preliminary analysis and screening –
matching company and country needs
• Evaluation of potential market  doesn’t matter
whether New or heavily involved in international
marketing.
• Company’s strength, weakness, products,
philosophies, modes of operation and objective
must be matched.
• Screening out unpromising possibilities.
• Emerging Market special problem inadequate
marketing infrastructure, underdeveloped
distribution channels.

6. Phase 1: Preliminary analysis and screening –
matching company and country needs
• it is important to determine the reasons for
entering a foreign market and the returns
expected from the investment.
• Evaluation criteria; such as, minimum market
potential, minimum profit, ROI, acceptable
competitive levels, standard of political stability,
legal requirements.
• Environmental analysis (Uncontrollable both
home and host)

7. Phase 2: Defining target markets and adapting the
marketing mix accordingly
• A more detailed examination of the components
of the marketing mix is the purpose phase 2.
• Once target markets are selected, the marketing
mix must be evaluated in light of data generated
in phase 1.
• Incorrect decisions  inappropriate product or
costly mistakes in pricing, advertising and
promotion.
• Primary goal  marketing mix adjusted to the
cultural constraints.

8. Phase 2: Defining target markets and adapting the marketing
mix accordingly
• The answers to three major questions are
generated in Phase 2:
1. Are there identifiable market segments that allow
for common marketing mix tactics across
countries?
2. Which cultural/environmental adaptations are
necessary for successful acceptance of the
marketing mix?
3. Will adaptation costs allow profitable market
entry?

9. Phase 3: Developing the Marketing Plan
• Marketing plan is developed for the target
market – whether it is a single country or a
global market set.
• The plan starts with –situation analysis, selection
of entry mode, and specific action program for
the market.
• What is to be done, by whom, how it is to be
done, and when.

10. Phase 4: Implementing and Control
• The go decision in phase 3 triggers
implementation of specific plans and
anticipation of successful marketing.
• All marketing plans need coordination and
control during the period of implementation.
• The planning process is a dynamic, continuous
set of interacting variables with information
continuously building among phases.

11. Alternative Market-Entry
Strategies (1 of 2)
• An entry strategy into international market should reflect
on analysis
– Market characteristics
• Potential sales
• Strategic importance
• Strengths of local resources
• Cultural differences
• Country restrictions
– Company capabilities and characteristics
• Degree of near-market knowledge
• Marketing involvement
• Management commitment

12. Alternative Market-Entry
Strategies
Exhibit 12.2

13. • Companies most often begin with modest export
involvement
• A company has four different modes of foreign
market entry
– Exporting
– Contractual agreements
– Strategic international alliances
– Direct foreign investments
Alternative Market-Entry
Strategies (2 of 2)

14. Exporting
• Exporting can be either Direct or Indirect.
• Internet
• Direct sales: setting up an office with local or
expatriate managers and staffs.

15. Contractual Agreement
(1 of 2)
• Contractual agreements
– Long-term,
– Nonequity association between a company and another in
a foreign market
– Transfer of technology, processes, trademark, human
skills.
• Licensing
– A means of establishing a foothold in foreign markets
without large capital outlays
– A favorite strategy for small and medium-sized companies
– Legitimate means of capitalizing on intellectual property in
a foreign market

16. Contractual Agreement
(2 of 2)
• Franchising
– Franchiser provides a standard package of
products, systems, and management services
– Franchise provides market knowledge, capital,
and personal involvement in management
– Expected to be the fastest-growing market-
entry strategy

17. Strategic International
Alliances
• Four characteristics define joint ventures:
– JVs are established, separate, legal entities
– The acknowledged intent by the partners to share
in the management of the JV
– There are partnerships between legally
incorporated entities such as companies,
chartered organizations, or governments, and not
between individuals
– Equity positions are held by each of the partners

18. Strategic International
Alliances
• Consortia
– Similar to joint ventures and could be classified as
such except for two unique characteristics
• Typically involve a large number of
participants
• Frequently operate in a country or market in
which none of the participants
is currently active
– Consortia are developed to pool financial and
managerial resources and to lessen risks
– Sematech (R&D in Texas by IBM, Intel, HP,
Motorola)

19. Direct Foreign Investment
• Factors that influence the structure and
performance of direct investments
– Timing (First movers have advantages but Risky)
– The growing complexity and contingencies of
contracts
– Transaction cost structures
– Technology transfer
– Degree of product differentiation
– The previous experiences and cultural diversity of
acquired firms
– Advertising and reputation barriers

20. The End