International Marketing Management (Subject) / Phase 3: we decide how to enter (Lesson)

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• What is a international market entry mode? An international market entry mode is an institutional arrangement necessary for the entry of a company's products, technology, and human and financial capital into a foreign territory. Different modes of entry represent different levels of: .Commitment .Control .Involvement .Risk
• International Marketing Channel of Distribution is a... system composed of marketing organizations that connect the manufacturer to the final users or consumers of the company's products in a foreign market =the marketing channel in foreign market together with the channels by which the market is reached  two flows: .flow of transaction .flow of physical products -> Importance of the entry mode decision
• The choice of the channel has an impact on the following: .Price that final users or consumers will pay; channel margins affect the final price .Efficiency witch which products are sold .Production decisions .The time and cost required to internationalize  .The marketing mix
• The Whole Channel Concept /seller/ ->/seller's headquaters organization for export or international marketing/ -> /channelss between nations/ -> /channel within nations/ -> final user or buyer
• Choice of Entry Mode #two common approaches .Choice of entry mode is based on experience / Historic experience has led to a general approach which favours the use of one entry mode in particular .Choice of entry mode is based on analysis / Evaluation of market needs, purchasing behaviour, potential customers and the competence of the marketing organization.
• Choice of Entry Mode #three basic rules .Naive Rule > companies follow an established pattern of behaviour without question .Pragmatic Rule > companies enter markets using a low risk method and only intensify their involvement in the territory if the previous step was succesful .Strategy Rule > The company analyises and selects the ,,right'' mode on a case-by-case basis
• Companies often employ multiple modes of entry simultaneously #four forms of multiple entry modes have been identified Unrelated modes: company uses more than one mode in a foreign market. There is no connection between the two; e.g. selling to different industries in the same country. Segmented Modes: different modes for different segments Mode complementarity: different modes covering different stages in the value chain; e.g. licenced manufacturing and distribution Competing Modes: different modes compete with each other in the same segment
• Factors influencing the choice of mode are: Target market characteristics: size, spread, attractiveness Possibilities of access to market: competition, infastructure etc. The nature of the product, stage plc development Availability of marketing ability company knowledge, experience and ressources governmental and legal considerations + the decision making process can be complex, due to the number of influecing variables. At time the process can demand a certain level of subjective or qualitative judgement.

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