International Markets Assessment And Entry Modes PDF

INTERNATIONAL MARKETS: ASSESSMENT AND ENTRY MODES “Think locally, offer value, and be patient. That last one is key: you can make an elephant dance, but it takes time to learn the right tune.” - Om Malik on marketing to India, Business 2.0  LEARNING OBJECTIVES: By the end of the di...

INTERNATIONAL MARKETS: ASSESSMENT AND ENTRY MODES “Think locally, offer value, and be patient. That last one is key: you can make an elephant dance, but it takes time to learn the right tune.” - Om Malik on marketing to India, Business 2.0  LEARNING OBJECTIVES: By the end of the discussion, the students should be able to: 1. Review the steps of market screening and techniques for environmental analysis, 2. Discuss the value of trade missions and trade fairs, 3. Describe some of the problems market researchers encounter in foreign markets; and 4. Explain international market- entry methods.  MARKET SCREENING APPROACHES AND TECHNIQUES Market Screening- a modified version of environmental scanning in which the firm identifies desirable markets by eliminating the less desirable ones. Environmental Scanning- a procedure in which the firm scans the world for changes in the environmental forces that might affect it.  MARKET SCREENING APPROACHES AND TECHNIQUES Country Screening- a screening that uses countries as the basis for market selection. Segment Scanning- a screening that uses market segments, a within- country analysis of groups of consumers, as the basis for market selection. INITIAL SCREENING- BASIC NEEDS POTENTIAL  SECOND SCREENING- FINANCIAL AND ECONOMIC FORCES Market Indicators- economic data used to measure relative market strength of countries or geographic areas. Market factors- economic data that correlate highly with market demand for a product. Trend Analysis- statistical technique used to estimate future values by successive observations of a variable at regular time intervals that suggest patterns. Cluster Analysis- statistical technique that divides objects into groups based on similarity. THIRD SCREENING- POLITICAL AND LEGAL FORCES FOURTH SCREENING- CULTURAL FORCES  FIFTH SCREENING- COMPETITIVE FORCES 1. The number, size, and financial strength of the competitors. 2. Their market shares. 3. Their marketing strategies. 4. The apparent effectiveness of their promotional programs. 5. The quality levels of their product lines. 6. The source of their products- imported or locally produced. 7. Their pricing policies. 8. The levels of their after- sales service. 9. Their distribution channels. 10. Their coverage of the market. (Could market segmentation produce niches that are currently poorly served?) FINAL SELECTION OF NEW MARKETS SEGMENT SCREENING 1. Definable 2. Large 3. Accessible 4. Actionable 5. Capturable  TRADE MISSIONS AND TRADE FAIRS Trade Mission- a market visit by business people and/or government officials (state or federal) in search of business opportunities. Trade fair- a large exhibition at which companies promote the sale of their products.  RESEARCH IN THE LOCAL MARKET AND AS PRACTICED Social Desirability Bias- the respondent’s desire to please that leads to answers designed to please the interviewer rather than reflect the respondent’s true beliefs or feelings. WHAT METHODS ARE AVAILABLE FOR ENTERING FOREIGN MARKETS?  NON EQUITY MODES OF ENTRY Turnkey project- an export of technology, management expertise, and possibly capital equipment where a contractor agrees to design and erect a plant, supply the process technology, provide the production inputs, train the operating personnel, and, after a trial run, turn the facility over to the purchaser.  NON EQUITY MODES OF ENTRY Licensing- a contractual arrangement in which one firm grants access to its patents, trade secrets, or technology to another for a fee.  NON EQUITY MODES OF ENTRY Franchising- a form of licensing in which one firm contracts with another to operate a business under an established name according to specific rules.  NON EQUITY MODES OF ENTRY Management contract- an arrangement by which one firm provides management to another firm.  NON EQUITY MODES OF ENTRY Contracted manufacturing- an arrangement in which one firm contracts with another to produce products to its specifications. EQUITY- BASED MODES OF ENTRY Joint venture- a cooperative effort among two or more organizations that share a common interest in a business undertaking. EQUITY- BASED MODES OF ENTRY Strategic alliance- collaboration with competitors, customers, and/or suppliers that may take non equity or equity form.