International Marketing
Chapter 7&8 – International Market selection and Entry
Approaches to market selection ← incremental entry vs simultaneous entries ◦ incremental → usually for small companies with fewer resources that wants to lower their risk preclude economies of scale. ◦ simultaneous → extensive resource thus, resulting in higher operating risk, may decide to leverage across asia pacific area, facilitate economies of scale. ← Concentrated approach vs diversified approach ◦ concentrated → resources limited/concentrated in limited number of markets which will reduce cost and operating risks. Economies of scale. Only concentrating on a number of market ◦ Diversified → spread risks exposure, broadens market knowledge, strategic flexibility, resources spread thinly. Will try few market in eg Asia, US, europe.
Screening the market selection
Analysing the attractiveness of individual markets. 2 elements: ← relate to overseas market, involves ◦ market characteristics, eg. Degree of the market segmentation, customer concentration, availability of close substitute, growth+sensitivity to imports. ◦ competitive condition, eg. Threat of new entrants (domestic+foreign), other exporters, concentration of domestic industry. ◦ Financial&economic conditions, eg, pricing practices, payment terms, currency parity, import tariffs and charges. ◦ Legislative and sociopolitical conditions, eg. Political stability, trade legislation, laws regarding customer+envi, employment norms, labour laws, intellectual property protection. ← Relates to firm, involves; ◦ management characteristics, eg, degree of institutional support, management resources capability, involvement in int contracts and alliances ◦ marketing, eg. Distribution network effectiveness, advertising+promotion capabilities, pricing approaches ◦ tech attributes, eg. Product design+development, cust service+support expectation, investment in
Approaches to market selection ← incremental entry vs simultaneous entries ◦ incremental → usually for small companies with fewer resources that wants to lower their risk preclude economies of scale. ◦ simultaneous → extensive resource thus, resulting in higher operating risk, may decide to leverage across asia pacific area, facilitate economies of scale. ← Concentrated approach vs diversified approach ◦ concentrated → resources limited/concentrated in limited number of markets which will reduce cost and operating risks. Economies of scale. Only concentrating on a number of market ◦ Diversified → spread risks exposure, broadens market knowledge, strategic flexibility, resources spread thinly. Will try few market in eg Asia, US, europe.
Screening the market selection
Analysing the attractiveness of individual markets. 2 elements: ← relate to overseas market, involves ◦ market characteristics, eg. Degree of the market segmentation, customer concentration, availability of close substitute, growth+sensitivity to imports. ◦ competitive condition, eg. Threat of new entrants (domestic+foreign), other exporters, concentration of domestic industry. ◦ Financial&economic conditions, eg, pricing practices, payment terms, currency parity, import tariffs and charges. ◦ Legislative and sociopolitical conditions, eg. Political stability, trade legislation, laws regarding customer+envi, employment norms, labour laws, intellectual property protection. ← Relates to firm, involves; ◦ management characteristics, eg, degree of institutional support, management resources capability, involvement in int contracts and alliances ◦ marketing, eg. Distribution network effectiveness, advertising+promotion capabilities, pricing approaches ◦ tech attributes, eg. Product design+development, cust service+support expectation, investment in