Market Entry Strategies.

A planned market entry strategy minimizes the uncertainties faced by new entrants.  There are three basic issues a firm wishing to 'go international' faces.

• Marketing: Which countries, which segments, how to manage and implement the marketing effort, how to enter – with intermediaries or directly, with what information,
• Sourcing: Whether to obtain products, or to make or to buy,
• Investment & Control: Joint venture, global partner, or acquisition?

Decision on marketing area depends on the 'value chain' - marketing function.

More attention needs to be paid on the marketing mix as compared to domestic marketing. The following are the elements that form the export marketing mix:

• Product support
• Price support
• Promotion/Selling support
• Inventory support
• Distribution support
• Service Support
• Financial support

Cunningham(1986) identified five strategies used by companies for entry into new foreign markets.

• Technical innovation strategy: Perceived and demonstrable superior products,
• Product adoption strategy: modification to existing products,
• Availability and security strategy: Overcome transport risks by countering perceived risks,
• Low price strategy: penetration price,
• Total adaptation and conformity strategy: foreign producer gives a straight copy of the product.

Entry Strategies:

• Exporting
• Licensing
• Joint Ventures
• Contract Manufacture
• Ownership
• Participation in Export Processing Zone (EPZ), or Free Trade Zones.

A global market can enter foreign market either from home market base, via direct or indirect exporting, or by foreign based production.  Within these two possibilities, marketers can adopt an "aggressive" or "passive" export path.

Indirect Export: Trading companies, export management companies, piggybacking or Counter-trade.

Entry from foreign base: Joint venture, Licensing, Contract Manufacture, Ownership or Export Processing Zone (EPZ).

Each method has its advantages and disadvantages to consider before the marketer makes a choice.

Questions:

• What are the three basic issues a marketer faces before a foreign entry?
• What are the six entry strategy options for market entry?