Premium Essay

Market Entry

In: Business and Management

Submitted By Prakash26
Words 416
Pages 2
learnmarketing.net view original (slow to load)

Tweet
Follow
+1 Learnmarketing
Home | Lessons | Theory | BTEC | LearnMarketing Mobile | Video Channel | Glossary| Marketing Quizzes | Contact Us | Links | Resources For Sale | Marketing PowerPoints | Blog |

For Marketing Learners Globally

Search Popular Links : |SMART| Marketing Theory | Marketing Mix | Ansoff Matrix |

INTERNATIONAL MARKETING
MARKET ENTRY METHODS

There are a number ways businesses can sell their products in international markets. The most appropriate method will depend on the business, its products, the outcome of its Marketing Environment analysis and its Marketing Plan. This article talks you through market entry options.
Diagram showing international marketing market entry methods

Direct Export

The organisation produces their product in their home market and then sells them to customers overseas.

Indirect Export

The organisations sells their product to a third party who then sells it on within the foreign market.

Licensing

Another less risky market entry method is licensing. Here the Licensor will grant an organisation in the foreign market a license to produce the product, use the brand name etc in return that they will receive a royalty payment.

Franchising

Franchising is another form of licensing. Here the organisation puts together a package of the ‘successful’ ingredients that made them a success in their home market and then franchise this package to overseas investors. The Franchise holder may help out by providing training and marketing the services or product. McDonalds is a popular example of a Franchising option for expanding in international markets.

Contracting

Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. The manufacturer of the product will contract out the production of the product to another…...

Similar Documents

Free Essay

“Overseas Market Entry Methods”

...The theme of my presentation is “Overseas Market Entry Methods” In this case I would like to tell you about : 1) Scheme of the Methods; 2) Exporting; 3) Joint Venture; 4) Direct Investment; 5) Advantages and Disadvantages First method includes: 1)Direct Export - the organization produces their product in their home market and then sells them to customers overseas 2)Indirect Export - the organizations sells their product to a third party who then sells it on within the foreign market Another less risky market entry method is licensing. Here the Licensor will grant an organization in the foreign market a license to produce the product, use the brand name etc in return that they will receive a royalty payment. ( ex. Coca-Cola) Another of form on market entry in an overseas market which involves the exchange of ideas is contracting. The manufacturer of the product will contract out the production of the product to another organization to produce the product on their behalf. Clearly contracting out saves the organization exporting to the foreign market. (example: hotel chain “Hilton”) The ultimate decision to sell abroad is the decision to establish a manufacturing plant in the host country. The government of the host country may give the organization some form of tax advantage because they wish to attract inward investment to help create employment for their economy. Joint Venture Ownership is a cooperation of foreign and local investors of the capital in order......

Words: 334 - Pages: 2

Premium Essay

Barriers to Market Entry and Exit

...+256718275925 caloolgeele@hotmail.com Introduction The analysis of barriers to entry and exit is fundamental to the assessment of market power and market efficiency. A firm or firms may exercise market power for a significant period of time only if barriers to new entry exist. Thus in determining whether or not a proposed merger is against the public interest, or whether a firm (or firms) is abusing monopoly or market power in antitrust cases, analysis of entry conditions is of primary importance. One might therefore expect to see rather extensive and sophisticated analyses of entry conditions, or barriers to entry, in monopoly and merger cases that come before competition authorities in the United States, United Kingdom, or member states of the European Union (EU). One might also expect that competition authorities would have placed a great deal of emphasis and effort on achieving a coherent and consistent framework for the analysis of entry barriers in a manner that makes use of the latest thinking on the subject by industrial organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power. While clear and fairly precise statements and indeed, guidelines or......

Words: 5265 - Pages: 22

Premium Essay

Foreign Market Entry

...Foreign Market Entry Modes Expansion into foreign markets can be achieved via the following mechanisms: Exporting is the process of selling of goods and services produced in one country to other countries. There are two types of exporting: direct and indirect. Direct exports Direct exports represent the most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. Types Sales representatives Sales representatives represent foreign suppliers/manufacturers in their local markets for an established commission on sales. Provide support services to a manufacturer regarding local advertising, local sales presentations, customs clearance formalities, legal requirements. Manufacturers of highly technical services or products such as production machinery, benefit the most form sales representation. Importing distributors Importing distributors purchase product in their own right and resell it in their local markets to wholesalers, retailers, or both. Importing distributors are a good market entry strategy for products that are carried in inventory, such as toys, appliances, prepared food. Advantages • Control over selection of foreign markets and choice of foreign representative companies • Good information feedback from target......

Words: 533 - Pages: 3

Premium Essay

Market Entry Strategy

...Market entry Strategy Glitter is a local company which is currently dealing with fashion accessories, wedding planning and advertising. The company wants increasing its sales by introducing new and modified products on the market. Executives constantly look at new market entry opportunities as a way to generating rapid growth, diversifying their portfolios, and preempting competition—and, occasionally, secretly satisfying their entrepreneurial spirit. There are various ways in which a company can enter in to market. No one market strategy works for all markets. In the case of Glitter, I suggest following strategies are the main entry options open to them. Organic Growth Organic growth strategy involves strengthening your company using its own energy and resources. This is the process of business expansion due to increasing overall customer base, increased output per customer or representative, new sales, or any combination of the above, as opposed to mergers and acquisitions. This approach to company growth is slower than others, but it has relatively low up-front costs, making it an attractive option for small-business owners as Glitter who want to expand their companies but don’t have large amounts of liquid capital. Developing your company’s strengths through organic growth can make you a stronger competitor in your industry. For instance, a company that continually devotes its profits to improving its quality-control department offers increasing value to......

Words: 3610 - Pages: 15

Premium Essay

Modes of Entry Into International Markets

...Modes of Entry into International Markets (Place) How does an organization enter an overseas market? Background A mode of entry into an international market is the channel which your organization employs to gain entry to a new international market. This lesson considers a number of key alternatives, but recognizes that alteratives are many and diverse. Here you will be consider modes of entry into international markets such as the Internet, Exporting, Licensing, International Agents, International Distributors, Strategic Alliances, Joint Ventures, Overseas Manufacture and International Sales Subsidiaries. Finally we consider the Stages of Internationalization. It is worth noting that not all authorities on international marketing agree as to which mode of entry sits where. For example, some see franchising as a stand alone mode, whilst others see franchising as part of licensing. In reality, the most important point is that you consider all useful modes of entry into international markets - over and above which pigeon-hole it fits into. If in doubt, always clarify your tutor's preferred view. The Internet The Internet is a new channel for some organizations and the sole channel for a large number of innovative new organizations. The eMarketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those pre-existing companies that now employ eMarketing approaches as part of their overall marketing plan. For some companies......

Words: 1201 - Pages: 5

Premium Essay

Global Market Entry Strategies

...Chapter 9: Global Market Entry Strategies The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions will heavily influence the firm’s other marketing-mix decisions. Global marketers have to make a multitude of decisions regarding the entry mode, which may include: * (1) The target product/market * (2) The goals of the target markets * (3) The mode of entry * (4) The time of entry * (5) A marketing-mix plan * (6) A control system to check the performance in the entered markets 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 2. Choosing the Mode of Entry Decision Criteria for Mode of Entry: * Market Size and Growth * Risk * Government Regulations * Competitive Environment/Cultural Distance * Local Infrastructure Classification of Markets: * Platform Countries (Singapore & Hong Kong) * Emerging Countries (Vietnam & the Philippines) * Growth Countries (China & India) * Maturing and established countries (examples: South Korea, Taiwan & Japan) Key criteria for choosing entry modes: * Company......

Words: 888 - Pages: 4

Free Essay

Market Entry Strategy

...MARKET ENTRY STRATEGY The market entry strategy framework encompasses several services that are put together to help our customers to enter a new market. These services can be delivered separately depending on your needs and stage in the internationalisation process.  With our proven market entry strategy framework, we assess whether you should enter a market or not, why, and how. The strategic framework comprises 4 phases that focus on specific issues of the market entry: - Market assessment - Business case development - Implementation roadmap - Go live After each phase, based on the deliverables produced, the client will decide whether or not the entry in the new market must be pursued. Each assignment begins with a “start up” aimed at developing a complete understanding of the client organization, products and processes, as well as a finalising and initiating the project. Each element within the strategic framework will deliver strategic reports for the project sponsor and management board.  Market Entry Strategy Framework This phase is the formalization of the information collected in phase I. This must be done in close collaboration with the client, since assumptions need to be validated to produce coherent figures in the financial analysis. The following sections of the analysis are used to assess: - The attractiveness of the market - The difficulties to enter in the market and the capabilities the client has to overcome them - The potential......

Words: 673 - Pages: 3

Premium Essay

International Market Entry

...International Marketing Marketing Wine in the Chinese Market Executive Summary China’s demand for Western wine has rapidly increased. This has created a market opportunity for high end, quality wine companies from Australia to export their products to China. The product that will be focused on is Glandore Wine from the Hunter Valley. The report will focus on exporting this product into the Chinese market. There should be a strong focus on building brand reputation and maintaining long-term business relationships. There are multiple entry types into foreign markets yet Chinese regulations limit the mode of entry. The recommended mode of entry for Glandore wines is a Joint Venture. The decision between product standardisation and customisation is an important aspect of strategic decision-making. It is recommended that Glandore does not customise their core product of wine, however it is recommended that other product attributes are customised to appeal to the Chinese market. When promoting Glandore wine in the Chinese market there should be use of advertising, public relations, sales promotion and personal selling. Table of Contents Executive Summary ……………………………..…. 2 1. Introduction ………………………………………………... 4 2. 2.1 Market Entry………………………………………………4 2.2 Recommendations ………………………………………5 3. 3.1 Product Standardisation and Customisation ……..…..7 3.2 Recommendations…………………………………….….7 4. Promotion in China 4.1 Push......

Words: 3549 - Pages: 15

Premium Essay

Market Entry

... This section discusses the market entry strategy that is used to enter the South African market would be direct exporting through a distributor in South Africa. Through a distributor/intermediary but would these intermediary is customer based in the South African market. Participating in Trade shows and exhibits in association with African Farmers Workshop and Expo other similar associations to meet potential customers. Direct exporting would not require a large investment and understand and test reaction of customers. Using a distributor would be a good start for Agrium Inc. to enter South African market and understand how the product is accepted and expand into other parts of Africa. As the demand for imported fertilizers is increasing due to the limited and high prices of locally produced fertilizers and also the lack of fertile soil appropriate for agriculture this as posses the right time to enter and capture the market and a distributor would be a faster and easier way to enter the market. The trade shows and exhibitions would provide a good platform to interact and build a relationship with potential distributors. Even getting touch with the South African embassy, or the Canadian embassy in South Africa could be helpful to decide on a distributor, also become a member of Fertilizer Association of Southern Africa (FERTASA), which brings farmers and compnies providing any agricultural products together providing a good platform to meet more potential clients.  Agrium......

Words: 869 - Pages: 4

Premium Essay

Foreign Market Entry

...Foreign Market Entry Modes International Business and Institutions 1 Modes of Foreign Market Entry •  •  •  •  •  Exporting Licensing/Franchising Management Focus: Tata Group: Foreign Entry Strategies pp.443-444 Joint Ventures Wholly Owned Subsidiaries Mergers & Acquisitions (M&A) 2 Exporting •  Advantages –  Avoids the substantial costs of establishing operations in the host country –  Achieve experience curve and location economies •  Disadvantages –  High transportation costs, esp. for bulk products –  Tariffs –  Divided loyalties of local agents 3 Licensing •  An arrangement whereby a licensor grants the rights to intangible property to another entity (the licensee) for a specific period, in return, the licensor receives a royalty fee from the licensee. •  Intangible property: patents, inventions, formulas, processes, designs, copyrights, and trademarks •  Advantages –  Licensing firm does not need to bear the development costs and risks –  Make use of intangible property that a firm possesses that they do not want to develop itself 4 •  Disadvantages –  Does not give a firm tight control –  Limits a firm’s ability to coordinate strategic moves across countries –  Difficult to control its technological know-how— Opportunistic Behaviour of Licensee 5 Franchising •  Similar to licensing, but franchising involves longer term commitment and insisting strict rules on licensees •  Franchiser......

Words: 456 - Pages: 2

Free Essay

Market Entry

...Evaluating new markets 6.1 Criteria for evaluating new markets Criteria for evaluating the geographical market in general Criteria for evaluating industry markets inside the geographical market Key figures Key figures  Development of population  Development of GDP  Development of GDP per capita  Development of quantities in total and per sub-market  Development of prices in total and per sub-market  Development of market volume in total and per sub- market Legal restrictions for economic activities  Possible legal forms  Conditions for profit repatriation  Conditions for sales (e.g. local production)  Operations risks Society  Political system  Ethnic and religious groups  Languages  Demographic structure  Cultural distance  Political risks Market system  Players  Flows of products and services  Flows of information Producers and traders  Sub-markets  National and international competitors  Wholesalers and retailers  Competitive intensity Infrastructure Customers  Telecommunications infrastructure  Health care system  Link between customer segments and sub-markets; industry segments  Demand similarity  Traffic infrastructure  Customer segments © 2012 R. Grünig/D. Morschett 6. Evaluating new markets 6.2 Process for evaluating new markets 1. Producing an initial list of potential new markets 2. Eliminating the less attractive markets =......

Words: 1994 - Pages: 8

Premium Essay

Foreign Market Entry and Diversification

...Foreign market Entry and Diversification Dr. Sarita Wesley BUS 599- Strategic Management November 12, 2011 Global beer market trends Over the past decade, the global beer market has undergone a lot of change. Developments and improvements in the quality and appeal of beer brands have resulted in a strong organic growth in the beer category. Brewers have responded to the declining beer consumption trends in developed markets. The decline of beer consumption in developed markets is due to high unemployment rates, high fuel prices, and reduced consumer spending. Industry consolidation has continued and the four largest brewers-Anheuser-Busch InBev, SABMiller, Heineken, and Carlsberg- produce almost half of all industry volume and generate up to 70 percent of industry profits. The beer consumption in countries like Africa, Asia, and South American continue to rise. This is primarily driven by the growth in population and incomes. Improvements in beer quality and appearance have also lead to the rise of beer consumption. Consumers have begun to shift from informal and unregulated forms of alcohol to attractively branded and safer commercial beers. Modelo’s international expansion Grupo Modelo’s international expansion began with the United States. As Modelo continued to produce beer domestically, they entered into distribution contracts with companies that possessed local knowledge of the beer market and gave them the freedom to market the product appropriately, yet......

Words: 1155 - Pages: 5

Premium Essay

Foreign Market Entry Modes

...M0414102 Foreign market entry modes 1. Exporting: Exporting is the process of selling of goods and services produced in one country to other countries. There are two types of exporting: direct and indirect. * Direct Exports The most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. The main characteristic of direct exports entry model is that there are no intermediaries. Advantages: * Control over selection of foreign markets and choice of foreign representative companies * Good information feedback from target market, developing better relationships with the buyers * Better protection of trademarks, patents, goodwill, and other intangible property * Potentially greater sales, and therefore greater profit, than with indirect exporting. Disadvantages: * Higher start-up costs and higher risks as opposed to indirect exporting * Requires higher investments of time, resources and personnel and also organizational changes * Greater information requirements * Longer time-to-market as opposed to indirect exporting * Indirect exports Indirect export is the process of exporting through domestically based export intermediaries. The exporter has no control over its products in the foreign......

Words: 1200 - Pages: 5

Premium Essay

Market Entry Strategy

...A market entry strategy is to plan the a method of delivering goods or services to a target market and distributing them there. when importing or exporting services, it refers to establishing and managing contracts in a foreign country.Market entry is more than examining a set of economic data. Successful market entry begins with assessing feasibility, factors such as the trends, the culture, the nature of the competition and the opportunity. There are a variety of ways in which organizations can enter foreign markets. The three main ways are by direct or indirect export or production in a foreign country. Exporting methods include direct or indirect export. In direct exporting the organization may use an agent, distributor, or overseas subsidiary, or act via a Government agency. In effect, the Grain Marketing Board in Zimbabwe, being commercialized but still having Government control, is a Government agency. The Government, via the Board, are the only permitted maize exporters. Bodies like the Horticultural Crops Development Authority (HCDA) in Kenya may be merely a promotional body, dealing with advertising, information flows and so on, or it may be active in exporting itself, particularly giving approval (like HCDA does) to all export documents. In direct exporting the major problem is that of market information. The exporter's task is to choose a market, find a representative or agent, set up the physical distribution and documentation, promote and price the product.......

Words: 429 - Pages: 2

Premium Essay

Market Entry

...He is a professor at Missouri State University and granted permission to use it for this course on health marketing. A key observation to notice throughout this reading assignment is that in the history of business (or commercial) marketing there has been no reference to health, prevention, wellness or medicine as products or services to motivate people to buy or to sell or market to people. An important concept to note however, from the article is that marketers evolved to applying theories of behavior, the same as health educator‟s use. Among these are concepts borrowed from established disciplines, such as psychology and sociology and suggesting that marketing is a social science. Please note that the bold text are from the original text from Dr. Hermans. The article begins now. Bartels, Robert (1976) “The History of Marketing Thought,” 2nd edition, Highlights selected by Dr. Hermans are from chapters 1,2,3,4,9,10,11,12,13,and 14. Accessed on Sep 18, 2009. Available at http://www.faculty.missouristate.edu/c/ChuckHermans/Bartels.htm Chapter 1: The Meaning of Marketing The establishment of a market economy wrought marked changes in the social and economic structure. A new attitude toward business revolutionized the economy of the country and that revolutionary element was identified by the term „marketing.‟ Historical accounts of trade lead one to conclude that marketing has always existed. Was the original use of the term marketing merely an application of a new name......

Words: 7603 - Pages: 31