C H A P T E R
After reading this chapter, students should:
Know what factors a company should review before deciding to go abroad
Know how companies can evaluate and select specific foreign markets to enter
Know what are the major ways of entering a foreign market
Know to what extent the company must adapt its products and marketing
program to each foreign country
Know how the company should manage and organize its international
Despite the many challenges in the international arena (shifting borders, unstable
governments, foreign-exchange problems, corruption, and technological pirating),
companies selling in global industries need to internationalize their operations.
Companies cannot simply stay domestic and expect to maintain their markets.
In deciding to go abroad, a company needs to define its international marketing
objectives and policies. The company must determine whether to market in a few
countries or many countries. It must decide which countries to consider. In general, the
candidate countries should be rated on three criteria: market attractiveness, risk, and
competitive advantage. Developing countries offer a unique set of opportunities and
Once a company decides on a particular country, it must determine the best mode of
entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures,
and direct investment. Each succeeding strategy involves more commitment, risk,
control, and profit potential.
In deciding on the marketing program, a company must decide how much to adapt its
marketing program. At the product level, firms can pursue a strategy of straight
extension, product adaptation, or product invention. At the communication level, firms
may choose communication adaptation or dual adaptation. At the price level, firms may
encounter price escalation, dumping, gray markets, and discounted counterfeit products.
At the distribution level, firms need to take a whole-channel view of the challenge of
distributing products to the final users. In creating all elements of the marketing program,
firms must be aware of the cultural, social, political, technological, environmental, and
legal limitations they face in other countries.
Country-of-origin perceptions can affect consumers and businesses alike. Managing those
perceptions in the most advantageous way possible is an important marketing priority.