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Reading 21 - International marketing - entering and operating in…
Reading 21 - International marketing - entering and operating in international markets
modes of entry
indirect exporting
may chose to start exporting indirectly - through independant organisation based in domestic market - org buys goods and sells on behalf of principle org
directly exporting
org exports themselves - manages contracts in international markets + marketing mix - handled in domestic/foreign office through intermediates in markets
offer more control + demonstrate greater commitment to market - size of market needs to justify expense
joint venture
two/more orgs form partnership - costs risks and profits shared between domestic and foreign orgs - if create separate entity - equity joint venture - otherwise - contractual joint venture
strategic alliances
combining capabilities + resources of orgs - could be previous competitors.
global strategic partnerships
link up between companies - pursue a marketing opportunity share resources and combine ideas
licensing
selling rights to use patent/tech/trademark.know-how to foreign orgs - agreed time - in exchange for royalty payments - based on volume of sales
franchising
company's pay to use brand - uses local knowledge and resources of franchisee - offers more control over intellectual property- provision of support services
contract manafacturing - contracts foreign company to produce product
management contracting
exporting of management services - foreign company supplies capital and org supplies know-how
direct investment
ownership of foreign subsidary/division
Globalisation versus customerisation
companies need to adapt offerings and communications to local preferences and conditions
need to decide to what extent they need to standardise or adapt approach when entering foreign markets
may invent or adapt products for foreign markets
marketing communications - adapted to varying degrees - can be suitable for multiple international markets or need to be changed
differences in use/reach of marketing channels - regs, coverage, readership and international penertration
cost - higher due to transport and tariffs - cost be passed on to consumer or cheaper variants released
distribution networks vary considerably
when entering emerging markets - need to consider 3 market segments
premeium - high purchase power
middle - value + good enough performance
low end - basic products at meagre price
good enough markets - increasingly attractive - difficult to compete against low end segments - does encourage innovation
emerging markets - also present challenges - lack of infrastructure, weak legal protection, limited capability - unpredictable customer behaviour