Choosing A Global Market Entry Strategy Assess firm’s access to capital, current markets it serves, its manufacturing capacity, its proprietary assets, commitment of its management to the proposed strategy Exporting -> franchising -> strategic alliance -> joint venture -> direct investment Exporting: Exporting: producing goods in one country and selling them in another Least financial risk but only limited return Indirect exporting => exporting firm sells its good in the host country through an intermediary
Direct exporting => exporting company sells its products in the host country directly without the intermediaries (more risk but more returns) Franchising: Franchising = contractual agreement between a firm, the franchisor, and another firm/individual, the franchisee Allows franchisee to operate a business using a name and format developed and supported by the franchisor Strategic Alliance: Strategic alliances: collaborative relationships between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another Joint Venture: Joint venture: formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared Local partner offers foreign entrant greater understanding of the market and access to resources such as vendors and real estate Contract manufacturing => foreign firm contracts with a local firm in the host market to manufacture the product Management contracting => domestic firm provides management consulting and advice to a foreign firm (low-risk method of entering a country’s market without setting up operations there) Direct Investment: Direct investment: when a firm maintains 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries Potential high risks outweighed by high potential returns Complete control, no sharing of profits Choosing A Global Marketing Strategy Target Market: Segmentation, Targeting, and Positioning: Global STP more complicated than domestic STP More difficulty understanding cultural nuances Subcultures within each country must also be considered Consumers view products and their role as consumers differently in different countries Product/service must be positioned differently in different markets Develop/maintain global positioning strategy Segment/target markets should be defined by more than just geography Decide how to implement its marketing strategies by using the marketing mix The Global Marketing Mix: Global Product or Service Strategies: o Three potential global product strategies: Sell the same product/service in both the home country market and host country Sell a product/service similar to that sold in the home country but include minor adaptations Sell totally new products/services o Depends on needs of target market and PEST factors o Glocalization:
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- Fall '11
- Marketing, o Firm