Planning process and entry modes

1. Global marketing management
PART II
INTERNATIONAL MARKETING

2. The planning process
Planning is essential
to success
First time?
- What products?
- In which market?
- What level of resource commitment?
Already committed?
- Allocating efforts and resources
- New or old market segments?
- Keep or drop products?Systematic guide to
plan operations in
several countries

3. Phase 1: Preliminary analysis and
screening
It is essential to evaluate potential markets, no matter the previous involvement of the company
in international marketing operations.
First countries
screening to
eliminate those
that do not offer
sufficient potential.
Establish screening
criteria. Depends
on company’s
objectives.
Analysis of the
environment
(Home & Host
countries)
Provide basic
information to
evaluate the
potential of
markets.
Standardized or
adapted marketing
mix?
Company VS Country’s
constraining factors and
potential.

4. Phase 2: Defining target markets and
adapting the marketing mix
Detailed examination of the
marketing mix elements.
Marketing mix is evaluated
in light of the data
generated in Phase 1,
avoiding mistakes on 4P.
Country fact book
(5 Types of information)
Search for similar
segments across
countries.
Opportunities for
economies of scale in
marketing programs.
 Are there market segments
that allow common
marketing mix tactics across
countries?
 Which environmental
adaptations are necessary
for successful acceptance?
 Will adaptation costs allow
profitable market entry?

5. Phase 3: Developing the marketing plan
Marketing plan is developed
for the target market.
Single
country
Global
market
Analysis
Action
program for
the market
Selection of an
entry mode
 What?
 By whom?
 How?
 When?

6. Phase 4: Implementation and control
Any plan requires coordination and control during the period of implementation.
Coordinating and
controlling the
complexities of
international
marketing.
Continuous
monitoring.
Metrics of
performance.

7. Alternative market-entry strategies
Exporting
Contractual
agreements
Strategic alliances
Foreign direct
investment
Classified by
degree of equity.
 Risk
 Return
 Control
A company may employ a
variety of entry modes in
several markets.

8. Exporting
Direct exporting Indirect exporting
First international step
when a company sells to
a customer in another
country.
A company sells to an
importer/distributor in
the home country which
in turns export the
product.
Internet
(Virtual stores)
Direct sales

9. Contractual agreements
Transfer of knowledge
rather tan equity
Long-term, non equity associations between a
company and another in a foreign market.
Licensing Franchising
For small and medium sized
companies where the capital is
scarce. Viewed as a supplement.
Patent rights, trademark rights
and the rights to use technological
processes.
Form of licensing in which
Franchiser provides a standard
package of products, systems and
management services and
Franchisee provides market
knowledge and capital.
Combination of skills.

10. Strategic alliances
Strategic international
alliance
International joint
ventures
Business relationship established
by two or more companies to
cooperate out of mutual need and
to share risk in achieving a
common objective.
Rapid expansion, Access to new
technology, innovation, reduced
marketing costs, etc.
Partnership of two or more
participating companies that have
joined forces to create a separate
legal entity.
Consortia
Could be classified as IJV except
for two unique characteristics:
- Involve a large number of
participants.
- Frequently operate in a
country where none of the
participants is currently active.

11. Foreign direct investment
Investment within a foreign country.
◦ Why? Low cost labor, avoid high import taxes, reduce costs of transportation, gain access to technology
or raw materials.
Firms may:
 Invest in or buy local companies
 Establish new operations facilities.