NATIONAL COLLEGE OF BUSINESS AND ARTS

Aurora Boulevard, Cubao, Quezon City  Telephone Nos. 913-87-85 to 87

MARKETING
MANAGEMENT

Deciding Whether to go International

Deciding Which Markets to Enter
Deciding How to Enter the Market

BY: JOANNE ALEXIS V. BISCOCHO

PROFESSOR: DR. MARCIAL M. MOJICA

 NATIONAL COLLEGE OF BUSINESS AND ARTS
Aurora Boulevard, Cubao, Quezon City  Telephone Nos. 913-87-85 to 87

INTERNATIONAL MARKETING DECISIONS

A. DECIDING WHETHER TO GO INTERNATIONAL

 Operating domestically is easier and safer.

 No need to learn foreign language laws.
 No need to deal with unstable currencies, face political and legal
uncertainties or redesign products to suit different customer expectations.

Factors that might draw a company into the international arena:

 Global competitors might attack the company’s home market by offering

better products or lower prices.
 Customers might be expanding abroad and require international servicing.
 Company’s home market might be stagnant, shrinking, and foreign
markets may present additional sales and profit opportunities.

The company must weigh several risks and answer many questions about its
ability to operate globally.

 Can the company learn to understand the preferences and buyer behavior
of consumers in other countries?
 Can it offer competitively attractive products?
 Will it be able to adapt to other countries’ business cultures and deal
effectively with foreign nationals?
 Do the company’s managers have the necessary international experience?
 Has management considered the impact of regulations and the political
environments of other countries?

B. DECIDING WHICH MARKETS TO ENTER

 Define international marketing objectives and policies.

 Decide what volume of foreign sales you want.
 Choosing in how many countries it wants to market.
 Deciding on the types of countries to enter.

INDICATORS OF MARKET POTENTIAL

 NATIONAL COLLEGE OF BUSINESS AND ARTS
Aurora Boulevard, Cubao, Quezon City  Telephone Nos. 913-87-85 to 87

Demographic characteristics

 Education
 Population size and growth
 Population age composition

Sociocultural factors

 Consumer lifestyles, beliefs, and values

 Business norms and approaches
 Cultural and social norms
 Languages

Geographic characteristics

 Climate
 Country size
 Population density – urban, rural
 Transportation structure and market accessibility

Political and legal factors

 National priorities
 Political stability
 Government attitudes toward global trade
 Government bureaucracy
 Monetary and trade regulations

Economic factors

 GDP size and growth

 Income distribution
 Industrial infrastructure
 Natural resources
 Financial and human resources

C. DECIDING HOW TO ENTER THE MARKET

MARKET ENTRY STRATEGIES

EXPORTING

- Simplest way to enter a foreign market.

- Passively export its surpluses from time to time or active commitment to
expand exports to a particular market.

Indirect Exporting
 NATIONAL COLLEGE OF BUSINESS AND ARTS
Aurora Boulevard, Cubao, Quezon City  Telephone Nos. 913-87-85 to 87

 Working through independent international Marketing

intermediaries (know-how and services)
 Less investment
 Less risk
Direct Exporting

 Seller handles their own exports.

 Investment and risk are somewhat greater but so is the potential
return.

Direct exporting can be conducted in several ways:

 Set up an overseas sales branch that handles sales,
distribution and promotion
 Send home-based salespeople abroad at certain times in
order to find business.
 Through foreign-based or through agents who sell the goods
on the company’s behalf.

JOINT VENTURING

- Joins with a host country partner to sell or market abroad

- An association is formed with someone in the foreign country.

Licensing:
 For a free royalty, the licensee buys the right to use company’s
manufacturing process, trademark, patent, trade secret, etc.
Contract manufacturing:
 In which a company contracts with manufacturers in a foreign
market to produce the product or provide its service.
Management contracting:
 In which a company contracts with manufacturers in a foreign
market to produce the product or provide its services
Joint Ownership:
 In which a company joints investors in a foreign market to create a
local business sharing joint ownership and control.

DIRECT INVESTEMENT

- Entering a foreign market by developing foreign-based assembly or

manufacturing facilities.

Advantage
 Lower costs in the form of cheaper labor or raw materials,
foreign government investment incentives and freight
savings.
 Improve its image in the host country because it creates jobs.
 NATIONAL COLLEGE OF BUSINESS AND ARTS
Aurora Boulevard, Cubao, Quezon City  Telephone Nos. 913-87-85 to 87

 Develops a deeper relationship with government, customers,

local suppliers and distributors, allowing it to adopt its
products to the local market better.
 Keeps full control over the investment.

Disadvantage
 Faces many risks, such as restricted or devalued
currencies, falling markets, or government changes.