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Global Market Entry

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14 views19 pages

Global Market Entry

Uploaded by

20BCC535 SAIMAHARAJ G
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Tapping

into Global
Markets
Benefits of Foreign Markets
 Better profit opportunities
 Larger customer base allows for economies of scale
 Can diversify markets
 Counteract global competitors
 Follow customers
 Transfer ideas and products
But there are RISKS…
•General risks associated with entering a new market (domestic or
foreign). These risks involve a company’s inability to understand customer
needs and develop an offering to address these needs, to correctly identify
competitive threats, to build effective supply and distribution networks, or
to promote the offering in an effective and cost-efficient manner.

• Specific risks associated with doing business in a different country.


These risks involve not understanding the nuances of the foreign country’s
business culture and the intricacies of foreign regulations; lacking skilled
managers with international experience; and having business disrupted by
commercial and political changes such as tariffs, currency fluctuations,
and even a government change leading to expropriation of foreign
property.
Major Decisions in International
Marketing
1. Which Markets to Enter?
 How many markets to enter
 Waterfall Approach: Gradually entering
countries in sequence
 Sprinkler Approach: Entering many countries
simultaneously
 Born Global: Market to the entire world from
the outset
2. Evaluating Potential Markets
 Consider:
 Physical proximity
 Cultural proximity
 Fewer countries
 Underserved populations
 Successfully entering developing markets requires a special set
of skills and plans, along with the ability to do several things
differently and well.1 Selling in developing areas can’t be “business
as usual.” Economic and cultural differences abound, a marketing
infrastructure may barely exist, and local competition can be
surprisingly stiff.
Modes of Entering Foreign Markets
Modes of Entering Foreign Markets
 Indirect exporting
 Working through independent intermediaries
 Domestic-based export merchants
 Domestic-based export agents
 Cooperative organizations
 Export-management companies
Modes of Entering Foreign Markets
 Direct exporting
 Handling one’s own exports
 Domestic-based export department
 Overseas sales branch
 Traveling export sales representatives
Modes of Entering Foreign Markets
 Licensing
 Licensor issues a license to a foreign company to use
a manufacturing process, trademark, patent, trade
secret, or other item of value for a fee or royalty
 Management contract
 Contract Manufacturing
 Franchising
Modes of Entering Foreign Markets
 Joint ventures
 Foreign investors have often joined local investors in a joint
venture company in which they share ownership and control
 Direct Investment
 The foreign company can buy part or full interest in a local
company or build its own manufacturing or service facilities
 Acquisition
 Acquiring local brands for their brand portfolio
Deciding on the Global Marketing
Program
At one extreme is a standardized marketing
program worldwide, which promises the greatest
consistency across individual countries.

At the other extreme is a localized marketing


program in which the company, consistent with
the marketing concept, believes consumer needs
vary and tailors its marketing to each target group.
Deciding on the Global Marketing
Program
Advantages of Standardized Disadvantages of
Program Standardized Program
 Economies of scale  Differences in consumer needs,
 Lower marketing costs wants, usage patterns
 Power and scope  Differences in consumer
 Consistency in brand image response to marketing programs
 Ability to leverage good ideas  Differences in the brand
 Uniformity of marketing practices development process
 Differences in legal environment
Global Product Strategies
Straight Extension. Straight extension introduces the product in the foreign market
without any change. This strategy is tempting because it requires no additional research
and development expense, manufacturing retooling, or promotional modification.

Product Adaptation. Differences in consumer behavior, as well as historical market


factors, have led marketers to position products differently in different markets. Because
of all these differences, most products require at least some adaptation.

Product Invention. Rather than using or adapting its current products, a company
might choose to develop new products for its global markets.

Dealing with Counterfeit Products. As companies develop global supply chain


networks and move production farther from home, the possible occasions for corruption,
fraud, and quality control problems increase. Sophisticated overseas factories seem able
to reproduce almost anything. Name a popular brand, and chances are a counterfeit
version of it exists somewhere in the world.
Global Brand Strategies
 Consider:
 How to position the brand
 Whether to adapt the brand
 Any country-of-origin effects
 Brand adaption
 Certain elements may require change
 Country of origin effects
 Use positive associations
Global Pricing Strategies
1. Set a uniform price everywhere. PepsiCo might want to charge $1 for
Pepsi everywhere in the world, but then it would earn quite different profit
rates in different countries. Also, this strategy would make the price too high in
poor countries and not high enough in rich countries.
2. Set a market-based price in each country. PepsiCo would charge what
each country could afford, but this strategy ignores differences in the actual
cost from country to country. It could also motivate intermediaries in low-price
countries to reship their Pepsi to high-price countries.
Global Communication Strategies
 Use the same message everywhere
 Use the same message and creative theme
globally but adapt the execution to a specific
market
 Develop a global pool of ads and select by
country
 Create country specific ads
Global Distribution Strategies
 Channel differences
 Various distribution systems

 Size and character of retail units

 Gray market
 Diverts branded products from authorized distribution channels either in-

country or across international borders


 Gray markets create a free-rider problem, making legitimate distributors’
investments in supporting a manufacturer’s product less productive and
selective distribution systems more intensive to reduce the number of gray
market possibilities.
 They harm distributor relationships, tarnish the manufacturer’s brand equity,
and undermine the integrity of the distribution channel. They can even pose
risks to consumers if the product is damaged, relabeled, obsolete, without
warranty or support,

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