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Marketing Strategy of Apple in China - Literature review Example

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The review "Marketing Strategy of Apple in China" focuses on the critical analysis of the existing academic literature which shall inform on Apple’s marketing strategy in China include principles relating to global business, such as the analysis of the international marketing environment…
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Marketing Strategy of Apple in China
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?Apple’s Marketing Strategy in China Literature Review Overview This chapter presents a survey of the existing academic literature which shall informon the analysis of data in answer to the research questions. Topics relating to Apple’s marketing strategy in China include principles relating to global business such as the analysis of the international marketing environment, considerations on the entry mode into a foreign market, the formulation of the appropriate marketing mix and the design of a viable competitive strategy. Implications of branding strategies and their influence on consumer behaviour are also examined. International marketing environment International marketing is “marketing in an internationally competitive environment, whether the market is home or foreign” (Cherunimal, 2010, p.1). The competitiveness of the global environment has been made possible by technological advances that have leveled the playing field for international businesses to penetrate cross-border markets (Friedman, 2007). Modern means of communication, which facilitates information gathering and business transactions, “allowing people around the world to compete, connect, and collaborate” (Cherunimal, 2010). Nor is the globalization trend limited to commerce and trade, such that “No institution, whether a business, a university or hospital, can hope to survive, let alone to succeed, unless it measures up to the standards set by the leaders in its field any place in the world” (Peter Drucker, 2007, p. 66). Several frameworks for international marketing planning have been conceptualized to capture its nature and scope, although the specific nuances of the process continues to evolve with the changing dynamics of globalization. Li and Li (2009) proposed an Internet-enabled, multi-agent-based hybrid framework, which was designed to address the three types of uncertainty conditions identified by Ashill and Jobber (2001), namely: state uncertainty, or the inability to forecast future events in the global marketing environment; effect uncertainty, which results from failure to understand the causes and effects of the changing environment; and response uncertainty, or the inability to predict how the market will respond to the changes. The framework is graphically portrayed in the following diagram: Figure 1: The Internet-enabled multi-agent-based hybrid intelligent support framework (Li & Li, 2009). The decision-making framework synthesizes the processes identified in earlier academic literature. Environmental scanning and monitoring involves the continuous observation of political, economic, social and technological events, and competitors’ moves (Jain, 1990). Strategic analysis assesses the strengths, weaknesses, opportunities and threats, evaluates the principal criteria or factors which the firm must address. Management identifies the strategic intention, risk, synergy effects, and market attractiveness, and thereby defines the firm’s competitive advantage. Go versus no-go decision under uncertainty is a pass/fail test conditioned by fulfillment of the Go condition and failure of the No-go condition (Cohen, Rolph & Steffey, 1998). The decision-makers decide the course of action and possible alternatives to take, with cognizance of the state, effect, and response uncertainties. Entry mode selection under uncertainty is the choice of the manner in which the firm enters the target market, given the degree of risk and the level of market control (Chee & Harris, 1998). Finally, formulating marketing strategies is concerned with the means of achieving the defined marketing goals and objectives towards creating the competitive advantage defined for the firm. These processes will be more closely described in the following sections. In the hybrid model, the processes are carried out by multiple software agents, working in an Internet-enabled system through a suitable software architecture and underlying integration method (Li & Li, 2009). Table 1: International marketing environmental assessment (IMEA) grid Source: Clarke, 2005, p. 163 In the analysis of the international marketing environment, a more complex approach is required compared to that of the typical domestic environmental audit. Clarke (2005) proposes a decision grid composed of twelve variables and three elements for international marketing audit. The foregoing table shows the grid. In the foregoing IMEA framework, some terms need explicit operational definition. History refers to the analysis of historical trade relations between the home and host country, particularly where infrastructures have already been created, such as those between former colonies and colonizers, or dependents and superiors in protectorates, or other similar historical perspective. The tie may be favorable or unfavorable, which will similarly impact upon the market entry decision. Financial analysis will include currency trends and stability of capital markets in both states and in the global environment. It also includes international payment guarantees in the nature of electronic payment transfers, immediate payment mechanisms, and other payment regimes. Rules refer to international trade rules and necessitate a determination of whether or not the home and target markets are bound by international and regional treaties and agreements. The assessment of trade rules and treaties for countries which are member-signatories to the World Trade Organization (WTO) should be attended by an analysis of the existing non-governmental organizations, or NGOs, that oppose the WTO. They are of two types: the first bases its opposition on perceived discrimination against poor countries, and the second protests against WTO’s perceived lack of concern for the environment and climate change. In both instances, trade relations between countries may be affected by a change of trade rules through lobbying and public relations activities (Clarke, 2005). Marketing entry strategy After the decision to enter into a market has been made (see multi-agent hybrid framework of Li and Li, 2009), management must decide the manner in which such entry is to be made. Through the years, the likely modes of entry have changed in step with the increasingly liberal environment in which international trade is undertaken. Exporting had traditionally been the predominant market entry strategy; to this day it remains to be the first-entry strategy of choice for many foreign companies because it affords a tentative means of introducing the exporter’s product and thereby testing the target market’s reception of that product. While indirect exporting entails less expense in the early stages, direct exporting has the advantage of reduced uncertainties, in that the partner in the host country is more knowledgeable about the target market, local customs, methods, and specific product needs (Walvoord, 1983). The following tables give a cursory glimpse of Walvoord’s matrix for export entry mode into a target market. Table 2a: Export Entry Matrix – Basic Definitions, Indirect export (Walvoord, 1983, pp. 20-21) Table 2b: Export Entry Matrix – Basic Definitions, Direct export (Walvoord, 1983, pp. 20-21) Licensing and Franchising are also similar but distinct entry modes (Sherman, 2011). Both modes are founded on an agreement for the licensee/franchisee to distribute the good or to use the proprietary assets of the licensor/proprietor, for a royalty fee paid by the former to the latter. Licensing is more commonly used by manufacturing firms, while franchising is more typical in service industries. The advantage to these entry modes is that the company may enter into the host country with relatively little capital of its own, as the licensee/franchises puts up the capital investment to market the parent company’s goods or services. However, the firm’s involvement is more complex than that of exporting (Peng, 2008). Contract manufacturing and management contracting are two similar but distinct modes of entry. In contract manufacturing (otherwise known as outsourcing, the exporter enters into a contract with a local firm for the latter to manufacture the exporter’s products. The exporter provides the necessary technology transfer, and retains responsibility for marketing and distributing the products. Contract manufacturing is best resorted to when the government of the host country requires the goods to be locally manufactured. Outsourcing is also advantageous because it avoids risks of currency conversion, requires minimal investment of capital, and allows the exporter to retain control of the company’s brand image and marketing strategies (Galster & Rupp, 2007). In management contracting, the local counterpart originates the contract and investment. The local firm invests the capital and builds the manufacturing facilities; it thereafter awards the contract to the exporter, whose obligation is to transfer the needed management skills and train the personnel in order to operationalize the business (Galster & Rupp, 2007). Foreign direct investment, or FDI, involves the direct infusion of capital of the parent company in fixed assets in the target country. It may variably involve strategic alliances with foreign partners (e.g. joint ventures), foreign acquisitions, or “green-field” wholly owned subsidiaries (i.e., wherein the parent company begins a new venture entailing construction of new facilities for the wholly-owned subsidiary’s operations). For FDIs, the disadvantage of complexity of operations, long-term management commitment, and high cost should be weighed against the advantages of long-term growth, development of a broad and deep market, and enjoyment of subsidies and fiscal benefits (e.g. tax breaks) provided by the host government (Peng, 2008). The timing of market entry has been of interest to researchers, particularly in the context of the firm’s relative risk and control over the host country operations (Carpenter & Nakamoto, 1990). Jiang (2005) explored the post-entry expansion and the influences of the first entry strategies on the firm’s investment decisions subsequent to entry. The study concluded that the timing of the first entry is an important determinant of both the probability and speed of expansion into the target market. The timing is also a moderating factor between the control exerted by the parent during the initial entry, and the expansion path of the firm after entry. Two alternative expansion paths were determined: the first is described as the “early-entry-plus-evolutionary-expansion route” wherein the firm makes an early, low-risk, low-control entry, and then only later does it gradually add subsidiaries; the other is a “late-entry-plus-aggressive-expansion path” wherein the parent company enters late into the market with relatively high control, and as the term implies, aggressively pushes for a high-profile presence in the market (Jiang, 2005). In either case, the repercussions will have an impact on the firm’s subsequent success in the market, depending on the environment and the nature of the business. The entry mode decision is challenging enough to make given the uncertainties of a familiar market, as when the firm is entering at a late stage as examined in Jiang (2005); however, it is more difficult for a firm to decide how, or even whether, to enter a market that is largely untested, and particularly if a competing firm is contemplating entry into the same target. Narasimhan and Zhang (2000) found that when competition motivates entry into a foreign market, pioneering advantages and laggard’s disadvantages play a determinative role in the decision of the firm to rush its entry into an untested market. In such a case, the paradoxical phenomenon of “disadvantaged pioneers” may arise; therefore, a firm with a larger pioneering premium (i.e. the premium that consumers are willing to pay for a pioneering brand) will be better positioned by waiting before entering the untested market, but a firm with a smaller pioneering premium will likely perform better if it makes its market entry earlier (Narasimham & Zhang, 2000; Nastasi & Reverberi, 2007). In any case, generic market entry strategies may better suit developed markets (Stiegaert, Ardalan & Marsh, 2006) and underdeveloped or emerging markets (Cherian, et al., 2010), depending upon whether the firm is in industrial, commercial, or services (Ming-Je & Chwo-Ming, 1990; Keillor, Davila & Hult, 2001; Chuan, 2008; Ekeledo & Ayachandran, 2009). Marketing mix strategy Marketing mix has been defined as the set of selling tools that help companies aim at the target customers in marketing their products or services (Kotler, 2003, cited in Yu-Jia, 2011). The term “marketing mix” pertains to the product as a complex entity. Beyond the attributes of the physical good or actual service, there is created in the mind of the consumer the image of the firm as a result of the consumer’s perceptions and feelings created by purchase and use of its products and services (Proctor, 2000). The approach to marketing therefore goes beyond the basic product, but extends to those aspects of the product offering which the consumer encounters – the price, the promotion, and the place or distribution. Most popular among the marketing mix strategies is the 4Ps model suggested by McCarthy and Perreault (1994), referring to product, price, promotion, and place, the four factors that defined the firm’s distinctive marketing approach. Product pertained to the attributes of physical product including variety, quality, design, features, brand name, packaging, size, service, warranties, and return (Kotler, et al., 2009). Price included the list price, discount, allowance, payment period, and credit terms. Promotion takes into consideration the advertising, the sales promotion, the sales force, and the relationship of the firm with the public. Place, on the other hand, is comprised of the elements of channel, coverage, assortments, location, inventory, and transport (Kotler, et al., 2009). Logan (1997) sought to determine the degree to which customization of the marketing mix may create advantages for the firm, in response to the trend where the quality and design of goods and services are being increasingly determined by consumer feedback. These have implications on the specific element. Products properties are categorized into three levels: the basic or core properties, the enhanced properties, and the augmented properties. Enhanced properties are those added to the core properties, such as styling, features, and improved quality, while augmented products combined the core and enhanced products with added intangible benefits such as training, service, and logistics support. Core products may be customized by manipulating their enhanced and augmented properties to better meet customers’ tastes and preferences, over and above the basic need. Purchase price is partially customizable where the customer may opt for variations of the product elements, such as added toppings to a pizza or additional accessories in a car. Communications to customers may be customized to a significant degree in light of today’s digital technologies, such as social networking and mobile marketing (Leppaniemi & Karjaluoto, 2008). Finally, distribution and logistics may be customized by resorting to technically-supported transportation and inventory systems such as electronic data interchange or EDI, where customers may monitor continuously and adjust orders, schedules and places of deliveries, and other aspects of the distribution process (Logan, 1997). After-sales service and technical support further provide customization potential and thus mediate the relationship between customer loyalty and marketing mix strategy (Yu-Jia, 2009) Over time, a successful marketing mix may lose ground due to the changes in the environment and the market, to the point that it becomes necessary for the firm to change its marketing mix policies in order to stay competitive. Such changes usually trigger a commensurate market response which are intended by the company to be positive, but may be negative in so far as the long-time consumers of the product are concerned. Ailawadi, Lehmann & Neslin (2001) inquired into the response in the market toward major reductions in coupons and deals, simultaneous with a substantial increase in advertising, by a large-scale retail consumer-products manufacturing firm. The responses were different depending upon the brand; for the average brand, promotions through deals and coupons tended to increase market penetration more strongly than does advertising. Thus, the net effect of a simultaneous increase in advertising and decrease in promotional deals and coupons was to decrease the market share of the brand (Ailawadi, et al, 2001). The marketing mix may be instrumental in enabling a firm to survive economic downturns. To illustrate, Featherston (2009) enumerated ten strategies by which companies catering to the retail market may deliver to customers the products and services they need in the way they are needed. The ten strategies are: (1) Understand the customers, how they behave in different environments and what motivates them to purchase; (2) Leverage on customers’ insights to prioritize those aspects of the product or service leading to transactions; (3) Create in-store “theater” to drive purchase, since visibility of products triggers the decision to buy; (4) Effectively use in-store signage and shopper messaging, utilizing the right communications channel for the good or service; (5) Improve retail execution by aligning specific brands with the appropriate outlets and locations; (6) Activate touch points with the customer through digital means; (7) Use mobile content to drive store traffic and activate sales; (8) Build consumer-based promotional events, not just tactics, to maximize contact and improve visibility with the customers; (9) Pursue joint marketing efforts with affinity partners that build brand experience; and (10) Closely monitor changes in shopping behavior (Featherston, 2009). Competitive strategy By competitive strategy is meant the analysis of competitors in the context of the industry structure, forecasting trends, and identification of goals by which the firm may survive and grow (Porter, 1980). Strategies are plans for interacting with the competitive environment for the purpose of attaining the organizational goals (Daft, 2010). Probably the most popular instrument for analyzing the competitive environment is Porter’s Five Forces Model of competitive analysis. The five forces which a firm’s competitive strategy must address are the internal rivalry among existing competitors, the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, and the threat of substitute products or services. If the forces are intense, such as they are in the airlines or hotel industries, then there is little probability that firms in the industry, though profitable in their operations, will be able to earn above-average returns on investment. However, where the forces are benign, then there is a wide range of possible alternatives a firm may take in order to differentiate itself from its competitors. The industry structure therefore defines the possibility of above-average profitability for the firm. The strongest force becomes the determinant of whether a firm will succeed or not, depending on its ability to address it. The five-forces model is graphically depicted in the diagram following. Figure 2: Porter’s Five Forces Model (Porter, 2008) Competitive strategy has much to do with marketing strategy, but encompasses more than the marketing aspect. Competitive strategy integrates production, financial, and human resources functions, as well as nearly every aspect of the business, with marketing, in order to realize the competencies and directions identified by marketing strategy. For instance, the design and manufacture of the good or production of the service enables a high degree of competitiveness in the market with the inclusion of innovation and differentiation in the production process (Weerawardena & Mort, 2012). If all things are certain in the environment, then there would be little sense in determining an appropriate competitive strategy; however, the element of uncertainty is what challenges and at the same time motivates the search for the best possible competitive strategy. In an early study, Wernerfelt and Karnani (1987) examined the interplay of competition and uncertainty in the formulation of competitive strategy. The study recognized that competitive strategy under uncertainty necessitates a trade-off is between the acting early while the uncertainty exists and postponing action to a later time after the uncertainty has been resolved. A second trade-off exists between the decision to focus resources on one scenario or course of action to maximize what is hopefully a positive outcome, or of spreading resources among various scenarios in order to maintain flexibility in case the desired outcome does not materialize. The study found that while generally a strategy of flexibility is best adopted under conditions of uncertainty, there are specific circumstances where focus may prove advantageous and the firm may achieve profitability; for instance, small firms may fare better with a focused strategy while big firms should undertake a strategy of flexibility, under situations of greater competition. Small firms will benefit from the greater upside potential, are prepared to move faster, and will risk less than bigger firms. If a firm decides to focus, it should choose the scenario wherein it should focus, considering its position in relation to its competitors. As for the timing, the general principle is still for postponement of aggressive strategies until the uncertainties are resolved; however, smaller firms may commit to the market earlier and reap first-mover advantage, while hedging its risks. Larger firms may enjoy economies of scale when it does decide to adopt an aggressive strategy, enabling it to focus its resources where the conditions are right. Whichever strategy the firm decides to adopt – focus, flexibility, or wait – it should adopt the position where its strengths against the competitor work to its greatest advantage (Wernerfelt & Karnani, 1987). In a study that focused on small and medium enterprises (SME), Renko, Sustic and Butigan (2011) sought to devise a technique by which the five-forces model may be applied. The method employed an approximation of the strengths of the firm along the five forces, in a quantitative scale ranging from 0 to 5. The diagram following illustrates the model’s application. Figure 3: Comparison of perceived strength of competitive forces (Renko, et al., 2011, 383). The advantage in this technique is not necessarily that quantification increases the accuracy of the estimation method, because the quantities estimated can only be as accurate as the degree of detail and observation that led to the qualitative assessment which underlies the estimation process. The advantage of quantification is that it forces the strategist to more objectively evaluate the intensity of the forces and their effect on the firm. Customer behavior Consumer behavior may loosely be thought of as the manner in which a person buys products; this laymen’s definition, however, falls short of the marketing concept of consumer behavior, which encompasses “the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, activities, experiences, people, and ideas by (human) decision-making units (over time)” (Hoyer & McInnis, 2008, p.3). According to the American marketing Association, consumer behavior is “the dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct exchange aspects in their lives” (De Mooij, 2011, p 21). There are a variety of factors that determine or influence consumer behavior. One framework that illustrates how personal and environmental factors impact upon consumer behavior is shown in the diagram that follows. In the diagram, consumer behavior is perceived to be influenced by perception or sensation, cognition (understanding), affect (feeling), beliefs, social and other influences that bear upon the consumers’ purchase decision. The function of marketing research is to determine the effects of these factors on consumer behavior by acquiring data that may be gleaned from (1) inquiries and information searches initiated by consumers; (2) the popular choices in the market indicated by brisk and voluminous sales; (3) the expressed preferences of consumers; and (4) various other direct or indirect means of communication which firms may initiate, such as via surveys or interviews. Marketing research collates and analyzes these data, which then are integrated into a comprehensive and viable market strategy that drives consumer behavior towards making the purchase decision (Perner, 2008). Source: Perner, 2008. http://www.consumerpsychologist.com/marketing_introduction.html There are a number of underlying constructs which appeal to or prevail upon one or more of the personal factors that influence consumer behavior, some of which include endorsements by sports and movie celebrities, favorable word-of-mouth information, and brand reputation among peers, role models and reference group. These three channels of information were determined by existing literature to positively influence consumers’ purchase decision (Tiwari and Abraham, 2010). Another factor which significantly impacts upon the development and retention of consumer loyalty is that of service recovery. Effective service recovery is vital for the firm to maintain its favorable relationship with the consumer and to retain their good will, particularly during service failures. In order to effect recovery, it is also necessary to provide fair compensation for perceived damages. However, perceived damages are essentially subjective and are open to abuse by opportunistic customers. The study by Wirtz and McColl-Kennedy (2009) found determinants of consumer opportunism in dealing with service recovery. Consumers were more likely to abuse service recovery when dealing with larger firms than smaller ones. Consumers were also more likely to be opportunistic with regard to one-time transactions with the firm, rather than when in a relationship is established between firm and customer by virtue of repeated and regular transactions. The study concluded that increased claiming in general, and opportunistic claiming in particular, did not result in an increase in customer satisfaction with the firm’s service recovery (Wirtz & McColl-Kennedy, 2009). This indicates that for customers to be truly satisfied with the firm’s products and services and develop a loyalty to the firm or its brand, quality service of goods must be delivered from the start instead of relying on service recovery to remedy a bad situation. Furthermore, regular relationships should be developed with customers to encourage repeated transactions and at the same time minimize costs associated with opportunistic consumer behavior. The purpose of marketing, and business in general, is the creation of value for the consumer; therefore, value must be perceive by the consumer in the product or service that the firm offers for purchase (Perner, 2008). In devising a competitive strategy, the impact on customer behavior becomes a necessary consideration particularly in international marketing where behavior is defined by culture. Customer behavior responds to the type of relationship the company develops with its customers. Through effective branding techniques, it is possible for a firm to develop customer loyalty to specific brand images with which the customer strongly relates to and identifies with (Chung-Fah & Sung-Lin, 2009). Branding The term brand is usually defined as the individualized characteristics, symbols, or images that distinguish the products or companies from its competitors (Yu-Jia, 2011). The concept of branding and brand equity are closely related, because the intention behind creating a distinctive image of the product and firm (i.e., the objective of branding) is to create in consumers a sense of loyalty, awareness of the brand, perceived quality and brand association. The term brand equity is defined as “a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers” (Aaker, 1991, p.15). While Aaker admits of negative value in brand equity, most other writers define brand equity as the incremental positive value or premium which the brand name, symbol, or image commands in the market, over and above the actual benefit the product provides (Glynn, Woodside, 2009; Crane, 2010). The behavior-modifying capabilities of branding are of interest to researchers in both business and applied anthropology. Studies on human behavior have long established that attitudes serve different uses or functions (Katz, 1960). It is therefore to be presumed that consumers’ attitudes towards certain goods or services are pursuant to a utilitarian purpose, namely that of maximizing benefits by virtue of its use. However, there are attitudes of customers towards particular products that are influenced not by functional purpose, but because the product – or more appropriately, the brand – symbolizes the consumer’s values. LeBoeuf and Simmons (2010) establish that branding changes the way consumers associate products with attitude functions. Branding enables a “function-matching” phenomenon in consumer attitudes, which explains branding’s persuasive effect on customers’ purchase decision. Branding couched in one language may create associations or evoke unintended symbolisms in the context of other languages or cultures. China, one of the largest if not the largest emerging market of the world, has attracted multinationals to establish their presence in the country. There are special implications for branding in China, and there have been contentious issues in the matter of translating international brand names to Chinese. There are significant linguistic differences between Chinese and English, which poses challenges in the translation of brand names. Alon, Littrell and Chan (2009) cite the case for Coca-Cola, concentrating on the characters which are pronounced closest to “ko-ka-ko-la” without considering the significance of the phrases when written. The resulting translation sounded like “ko-ka-ko-la” when pronounced, but conveyed a meaning close to “female horse fastened with wax” when read in Mandarin. The study goes on to describe four strategic approaches to global product-naming, specifically: dual extension, brand meaning extension, brand feeling extension, and dual adaptation. These four alternative methods, where carefully applied, should sufficiently hurdle the brand nuances to contribute to the firm’s brand equity, positioning, unique advertising, and competitive advantage, while appealing to the local consumers in both content and context (Alon, et al., 2010). One case that bears examining is the experience of French food company Danone Group (DG) in establishing a branding strategy targeted at the Chinese market. DG entered China in 1987 at a time when the barriers to western products had just begun to erode. Like many multinational enterprises that have been internationally successful, DG’s initial entry into China was a failure, partly because foreign dairy products were thought to be less fresh than locally-produced products. Thereafter the company rethought its commercial approach to the Chinese market, and now ranks as one of the leading foreign food producers in this company. Its overall branding strategy takes into consideration the elements of the Chinese culture; for instance, its corporate logo and brand are absent from the packaging of the goods which are marketed by the local producers (i.e., Bright Dairy and Wahaha), whose logo and brand are displayed on the product’s packaging. This branding flexibility has earned DC financial success, although in time the firm seeks to gradually increase its brand visibility while remaining adapted to local specificities (Melewar, Badal, & Small, 2006). Synthesis The foregoing survey of academic literature explored the theoretical foundations upon which the dissertation is based. Discussions on the international marketing environment underscored the complexities involved in analysing the target market located in a foreign country. There are implications involved which are not otherwise encountered in domestic market scanning and analysis. Subsequent to environmental scanning and monitoring, there are the added concerns of establishing the mode of entry which the firm must consider prior to formulating its marketing strategies. Selecting the appropriate market entry alternative requires the consideration of several factors, most important of which are the attendant degree of commitment, risk exposure, capital outlay, and the control or influence of the parent firm over the cross-border subsidiary, partner, franchisee or lessee. Initial entry of most firms are through exporting, either direct or indirect, because it affords the least risk and requires the least investment, although success in the initial entry may pave the way to a gradual shift to an expanded entry and firmer commitment to the operations in the host country. Global marketing mix, competitive and branding strategies also entail a different set of considerations from that of domestic markets. Products and services will need to be customized along cultural specificities pertaining to the local culture and business environment in the target market. The adoption of a strategic framework such a Porter’s five forces model, proper timing and flexibility vs focus strategies will prove useful in assessing the host market, while branding in the context of a foreign language and culture will pose challenges for the multinational enterprise. The central goal in the selection of market mix, competitive and branding strategies is to elicit the intended customer behaviour towards arriving at a favourable decision to purchase the product. These strategies should therefore effectively convey to the consumer the functional benefits and values associated with the product good or service. The subsequent discussion on Apple’s entry into China shall be underpinned by the aforementioned issues and factors. Bibliography Aaker, D A 1991 Managing Brand Equity. 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