International Market Entry and Development - Essay Example

? International Market Entry and Development International market choice can be regarded as one of the most worthy choices made by organizations pursuing to involve in global business. Commercial entities in the era of globalization have warmed up to, and necessitated a shift in the direction of the internationalization of companies. Organizations that aspire to enter into the global market must adopt an appropriate style of admission into the foreign market in order to render the finest utilization of their reserves. Nevertheless, in spite of its implication, the moves assumed by several organizations in highlighting gainful and serviceable markets amid the global milieu are regularly based on impromptu conclusions and intuition (at worst), instead of an orderly marketplace research to align organizations with fitting foreign markets. The paper explores a number of issues enveloping international market entry and growth. International Market Entry and Development A. Market Research in Appraising Foreign Market Potential The practice of market research pursues to expose the market potential of targeted foreign market. This encompasses investigating if the targeted export market enjoys the crucial means to procure imported products, in addition, to whether the needs and prospects of the target market are being sufficiently met. The evaluation of new market’s potential incorporates information centering on features such as competition, market volume and the economy expansion rate, and present trade restrictions. The examination of market prospective also engages competitive strength analysis by highlighting the competitors in the new market, additionally to comparative extent delivery of the objective market shares (Sakarya, Eckman & Hyllegard, 2007). Market size evaluation incorporates an appraisal of the allocation of the overall market share within the new country that the organization can sensibly anticipate acquiring, as dictated by dynamics such as competition and pricing. Market growth evaluation entails an appraisal of the present demand and future claims, plus unexploited or unmet demand (Sakarya, Eckman & Hyllegard, 2007). There are a number of competitive tactics that may manipulate the choice of new foreign markets such as forestalling the entrance of related organizations or going into a market where huge competitors are deficient. B. The Considerations for Product Adaptation in Foreign Markets Product adaptation details a broad range of concerns varying from superiority and manifestation of products, to other features such as assembly, casing and modeling. Merchandise may have to be adjusted dynamically to match the physical, social, or obligatory prerequisites of a new market (Ajami, 2006). Likewise, the product might be redesigned or repackaged to suit varied consumer likings. In seeking product adaptation, organizations ought to be cautious of the downsides linked with adaptation. Inclusive adaptation of marketing solutions is not fundamentally constructive given that it hinders organizations’ capacity to employ benefits derived from features such as economies of scale (Ajami, 2006). Nevertheless, product adaptation assists organizations to appraise and efficiently exploit enriching differentiations, in addition, to distinguishing the company’s attributes and potential. Several factors that steer product adaptation encompass differential exploitation of conditions, political and regulatory pressures, changing client behavior models, competition, and coalition with the marketing concept (Goldman & Nieuwenhuizen, 2006). The edifying and psychological dynamics impacting on product adaptation comprise of facets such as consumption models (models of purchase and patterns of usage), and psychological attributes outlining outlooks towards the brand. C. Approaches to Amending Promotional Tactic to Fit Foreign Markets Segmentation, Targeting, and Positioning Segmentation in marketing is typically commenced at the client level. Nevertheless, in international marketing, it is vital to perceive the states as segments (Czinkota & Ronkainen, 2007). This allows the marketers to spotlight common features of countries and avoid information burden that may occasion. It is critical to appreciate that distinctions amongst countries are evident and considerable; for this reason, averages may not be essentially consequential. State-level segmentation may be carried out on spheres such as geography (based on the contention that bordering countries have intertwining set of traits such as topography, environment, income levels, and demographics. Segmentation profiles choices on who to spotlight or the manner in which to execute positioning by means of the varied components of the marketing mix. This, consecutively, outlines distribution policy and promotional policy. When monitoring far-reaching markets, it is crucial to be cautious of the drawback of endeavoring to trade “all products to all consumers,” given that this is a counterproductive approach as the corporation may misrepresent its characteristic appeal to its highlighted division (Czinkota & Ronkainen, 2007). The twin approaches to international segmentation encompass: at the macro level in which countries are conceived as divisions updated by the states collective attributes (Goldman & Nieuwenhuizen, 2006). At the micro level, the central focus pivots on segments in which two divisions exist, namely: intra-market s and inter-market segmentation. D. The Strategic Marketing Planning Process Strategic marketing process denotes organized attempt for supervising planned change encompassing the following: positioning the corporation through tactic and capacity forecasting, and resourceful administration of opposition amid implementation. Strategic management seeks to sustain alignment by connecting the entity’s activities with its operating milieu. This enables the entity to remain allied to the general transformations observed in the immediate world (whether external or internal) (Zekiri & Angeloya, 2011). Marketing planning permits the structuring/review of marketing objectives comparative to presentation; appraisal of marketing prospects and resources; modification or conception of marketing strategy; establishment or adjustment of the arrangement for execution and direction; and, lastly, execution of the marketing policy. International strategic marketing planning has ultimately turned out to be progressively more important due to the initiation of worldwide competition and the speedy transformations observed in international marketing. The central determinants of planning incorporate features such as business culture, regulations, delivery chain components, and, ultimately, competition. E. Strategies for Entering Foreign Markets Corporations that wish to internationalize ought to settle on an appropriate means of entry into the foreign market in order to render the finest exploitation of their resources. Various entry strategies employed by entities pursuing foreign markets incorporates domestic manufacturing via overseas production. Domestic assembly of products involves both indirect and express exportation. Indirect exporting incorporates features such as informal exporting, use of trading and export management entities, and collaboration in exporting. Direct exportation, in contrast, might involve features such as global representative, commercial auxiliary and local representatives (Belu & Caragin, 2008). Exporting is a moderately low risk tactic as not many ventures are assumed in the foreign country. Additional strategies feature foreign assembly incorporating attributes such as contractual manufacturing, franchising, joint ventures, and whole ownership. Licensing and franchising features the entity permitting the other entity to employ its trademarks and amassed expertise. The contention heralded by such a tactic is that the corporation is, indeed, nurturing a probable rival. The corporation may also utilize turnkey projects, whereby the company utilizes awareness and expertise drawn from one or more markets in order to gain a working venture for a consumer in the foreign market. Direct entry policies incorporate situations in which an entity either acquires another entity or constructs procedures “from scratch.” This heralds the maximum exposure, but also major prospects for earnings (Belu & Caragin, 2008). F. Considerations for Subsequent Market Expansion Entities going into fresh markets ought not to impede the growth of business since they run the danger of attracting a competitive disadvantage. The primary step in the route of growth details highlighting markets that possess the highest strategic implication to the business. Likewise, it is crucial to understand the edifying strengths impacting on international business. The cultural milieu is decisive as it weighs on the employment environment, socio-economic background, and the political orientation of the population (Zekiri & Angeloya, 2011). Cultural products, for example, by way of their marketing orientation encompassing mass advertising, sales sponsorship, and personal selling are predisposed to necessitate an enhanced amount of cultural understanding as the comprehension transmits powerfully to human communication in the course of selling. Other deliberations for worldwide expansion comprise observance to the prevalent regulations such as franchise laws. Similarly, it is necessary to recognize the manner in which the entity’s brand “translates” within the target market. This may involve acclimatizing the corporation’s brands and associated traits of the trademark to match the local language and preferences. G. The Challenges Presented by Global Product Management and Branding Marketing modifications are exceedingly liable to be triumphant if the introduced actions are directed by awareness of the strengths propelling the market performance, and insights that benefit the growth of protractible competitive gains. Global product management encounters major environmental strengths manipulating marketing activities such as altering end user markets, designing products worth of global reception, augmented influence of circulation and the advancement of conduits for product, time-based rivalry, and rising candidness of marketplaces. The delineated disputes also embody opportunities for intensification and marketing success. The entity may also encounter complicated exchanges between augmented implication of synchronizing brand behaviors (both internally and externally to the entity) and demands to spread out decision making. Further limitations to international product organization and branding surge from universal communication limitations, namely: language and cultural barriers, insufficient media communications, guidelines, and reigning local outlooks toward advertising. Every level of globalization portents modifications in the way in which the entity participates and demands varied strategies in harmony with outlined marketing agendas, development, association, and management of the international marketing endeavor. The entity may select to globalize its product plan (product designs, trademark, and product lines), and control its marketing statement and allocation. Other advertising strategies that the corporation may approve include amalgamated international marketing policy, international marketing mix component policies, international trademark strategies, compound global marketing policy, and spirited international marketing strategies. Conclusion Entering a foreign market bear the prospective to augment growth, earnings, and company’s trade name. Underpinning this preference based on which overseas markets to involve in, should be a planned direction that reflects on the market entry choice as a constituent of the corporation’s policy that reacts to the entity’s resource pedestal and its aggressive position. In order to launch successful tactics, a corporation should welcome in built competencies, as well as all-encompassing constraints in order to underscore fitting foreign target markets. Within the global markets, marketing performance, market dimensions, and consumer actions, all differ; consequently, international marketers must circumspectly apprise all market divisions in which they foresee competing. References Ajami, R. A. (2006). International business: theory and practice. New York, NY: M.E. Sharpe. Belu, M. & Caragin, A. (2008). Strategies of entering new markets. The Romanian Economic Journal, 27 (1), 83-98. Czinkota, M. R., & Ronkainen, I. (2007). International marketing. Mason, OH: Thompson. Goldman, G., & Nieuwenhuizen, C. (2006). Strategy: Sustaining competitive advantage in a globalised context. Cape Town: Juta. Sakarya, S., Eckman, M. & Hyllegard, K. (2007). Market selection for international expansion: Assessing opportunities in emerging markets. International Marketing Review, 24 (2), 208. Zekiri, J. & Angeloya, A. (2011). Factors that influence entry mode choice in foreign markets. European Journal of Social Sciences, 22 (4), 572-584. Read More