21-1 Chapter Questions What factors should a company review before deciding to expand? How can companies evaluate and select specific markets to enter?

21-1

Chapter Questions

• What factors should a company review before deciding to expand?

• How can companies evaluate and select specific markets to enter?

• What are the main ways to enter a new market?

• Should the company adapt its products and marketing program to each new market?

• How should the company evaluate and control its activities?

21-2

Global Firm

A firm that operates in more than onecountry and captures R&D, production,

logistical, marketing, and financial advantages in its costs and

reputation that are not available to purelydomestic competitors.

21-3

Regional Free Trade Zones

• European Union

• NAFTA

• MERCOSUL

• APEC

21-4

Major Decisions in Marketing Expansion

Deciding whether to go

Deciding which markets to enter

Deciding how to enter

Deciding on the

marketing program

Deciding on the

marketing organization

21-5

Choosing markets strategically

• 3 main criteria:

– market attractiveness,

– risk, and

– competitive advantage

• Developing markets and countries offer a

unique set of opportunities and risks.

21-6

Four Stages of Internationalization

No regular export activities

Export via independent agents

Establish sales subsidiaries

Establish production

facilities abroad

21-7

Nescafe Markets in Russia

21-8

Five Modes of Entry into Foreign Markets

Indirect

exporting

Direct

exportingLicensing

Joint

ventures

Direct

investment

Commitment, Risk, Control, Profit Potential

21-9

Indirect Exporting

• Contract with an import/export

company to manage the flow of goods

and money

21-10

Direct Exporting Methods

• Domestic-based export department

• Overseas sales branch or subsidiary

• Traveling export sales representatives

• Foreign-based distributors or agents

21-11

Licensing

21-12

Global Marketing

Advantages• Economies of scale

• Lower marketing costs

• Power and scope

• Consistency in brand image

• Ability to leverage

• Uniformity of marketing practices

Disadvantages• Differences in

environment

• Differences in consumer needs, wants, usage patterns

• Differences in brand development process

21-13

Price Choices

• Set a uniform price everywhere

• Set a market-based price in each country

• Set a cost-based price in each country

21-14

Whole-Channel Concept

Seller

International headquarters

Channels between nations

Channels within nations

Final buyers

21-15

Global Organization Strategies

World as Single MarketWorld as Single Market

MultinationalMultinational

“Global”“Global”

18-16

Marketing Audit

Comprehensive examination of the

marketing environment, objectives,

strategies and activities

to determine problems and opportunities,

and a plan of action to improve

the company’s marketing performance

•© Copyright 2008 Pearson Education Canada