Amphi #3. Competing in International Markets 1

International Marketing
Plínio R. R. MONTEIRO, Ph.D |

plinio.monteiro-ext@skema.edu
COMPETING IN
INTERNATIONAL
MARKETS
Link to course materials:

bit.ly/im-sk
PART I
MARKET ENTRY
STRATEGIES

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21/01/2022 Plínio Monteiro

2
Learning Objectives
• Identify, classify and explore different market
entry modes
• Explain the advantages and disadvantages of
different export modes and its business
implications.
• Explain the advantages and disadvantages of
using licensing, franchising, Joint ventures and
strategic alliances as a market-entry strategies.
• Describe the main hierarchical modes and
compare and contrast the foreign direct
investment alternatives

3
What is an entry mode?
• An institutional
arrangement for the
entry of a company’s
products and services Hierarchical
modes
into a new foreign
market.
Intermediate
• The choice of the way to modes
enter in a market will
affect business
performance and may
pose additional Export modes
opportunities and risks.

4
Entry modes
Exports: low
•Basic and low risk entry modes control, low
Export defined by the sales between risk, high
Modes: home (exporter) and host country ﬂexibility
(importer) companies/costumers
Intermediate
Intermediate •An organizational arrange s: shared
modes between different companies to control and risk,
split ownership
(contractual): explore new foreign market
Hierarchical: high
control, high risk, low
ﬂexibility.
Hierarchical •the firm completely owns and
modes: controls the foreign entry mode
More details in “Market Entry Strategies (27:03)” https://web.microsoftstream.com/video/93656d11-31fd-

4e7a-af46-0cf42e749e55

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EXPORT MODES

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Major types of exporting
Export
modes
Indirect Direct Cooperative

export export export

7
Indirect export modes
• A manufacturer’s use independent
export organizations located in its own
country (or a third country) to operate
in a new country (alike a domestic
sale). Appropriate for firms:
– With limited global expansion objectives
– using international sales as a means of
disposing of surplus production
21/01/2022 8
Direct export modes
• In this mode the company assumes
responsibility for the entire export
project. You can do that by using:
Distributors: Export agents:

• An independent company that • An independent company that
stocks the manufacturer’s sells on to customers on behalf
product, but has substantial of the manufacturer, does not
freedom to choose its own stock the product and earns
customers and price profits from commission paid by
the manufacturers.

9
Cooperative export mode
• A cooperative arrangement between
a group of companies (usually SMEs)
to find a third company (or Joint
Venture) to export in the name of the
association. The export marketing
group usually:
– Negotiating rates/shipping taxes
– Perform market research
– Find selling agents abroad
10
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• In the following examples, do you
believe that the conditions are
favorable or unfavorable for using
exports entry mode?
– A young small business that sells durable
consumer goods in its first international
experience.
– A large-scale enterprise (LSE) in the
electronics sector (Smartphones, tablets,
notebooks, etc...) with huge international
experience entering the Brazilian market.
12
Intermediate entry
modes

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Intermediate entry modes
Intermediate
entry modes
Contract Strategic
Licesing Franchising Joint Venture
manufacturing alliances

14
Contract manufacturing
• A contract to outsource the
manufacturing to an external partner,
one that specializes in production and
production technology. You may
choose this when:
– It’s important to the production stay close
to customers
– Foreign production costs are low
– Transportation are high
– Trade barriers (tariff or nontariff) exists.
15
Licensing
• Exchange of rights, such as
manufacturing rights, to another in
exchange for payment. Types or rights
transference could be:
– Patent covering a product or process
– Manufacturing know-how
– Technical advice and assistance
– Marketing advice and assistance
– Use of a trademark brand name
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Franchising
• An exchange of rights between a
franchisor and franchisee, such as the
right to use a total business concept
including use of trade marks, against
some agreed royalty. The exchange
could be on:
– Product and brand name
– Business format (‘package’)

17
Joint venture
• An equity partnership typically between two
partners. It involves two ‘parents’ creating
the ‘child’ (the joint venture acting in the
market). This approach could be used to:
– Have access to complementary technology or
management skills can lead to new opportunities
– Increase speed of market entry in host countries
– Share costs of global operations in R&D and
production
– To avoid host country regulatory issues (Less
developed countries may restrict foreign ownership)

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Wooclap time
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purposes:
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OR

19
•Which intermediate entry
mode seems to be
adequate for each of the
following examples?

20
An LSE in the pharmaceutical
industry search for cost advantages
trough reallocating supplies in
global supply chain
A. Contract Manufacturing
B. Franchising
C. Direct exports
D. Cooperative exports

21
A restaurant chain is planning to
expand to foreign markets, while
keeping strict control over its
business model but sharing risks with
third party enterprises.
A. Joint venture
B. Franchising
C. Direct exports
D. Licensing
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Hierarchical modes

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Hierarchical modes
THE FIRM OWNS AND THIS APPROACH ALLOWS

CONTROLS THE FOREIGN GREATER INFLUENCE AND
ENTRY CONTROL, BUT ALSO
MODE/ORGANIZATION. REPRESENTS HIGHER RISKS.

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Types of Hierarchical modes
21/01/2022 25
What is a Subsidiary and a
foreign Branch?
SUBSIDIARY
• is a local company owned and operated
by a foreign company under the laws and
taxation of the host country
FOREIGN BRANCH
• is an extension of and a legal part of the
manufacturer (often called a sales office).
Taxation of profits takes place in the
manufacturer’s country.
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Region centres
The regional HQ (‘lead country’) will usually play the
role of coordinating and stimulating sales in the whole
region.
Advantages Disadvantages
• Synergies on • Potential for
regional/global increased
scale bureaucracy
• Scale efficiency • Limited national
• Ability to leverage level responsiveness
learning on cross- • Missing
national scale communication
between head
office and centre
12-27
Methods of establishing a
wholly-owned subsidiary
• A entry mode that • When the company
enables rapid entry establish operations
providing in some cases from the ground and
customers and where no appropriate
managerial experience acquisition targets are
to make a bridge into available or they are
the market. too costly
Acquisition Greenfield

28
Advantages Summary of acquisition
Quick access to Expensive option

Distribution channels High risk
Labour force Integration
Management concerns
experience
Local knowledge
Disadvantages
Local contacts
Established brand
names
12-29
Summary of
greenfield investment Advantages Disadvantages
Optimum Slow entry

technology of new
possible markets
Optimum High
format investment
possible cost
12-30
Wooclap time
•For attendance
purposes:
Skema account
OR

31
•O que Podemos colocar aqui
Rafael?

32
REFERENCES
• Keegan, W. J., & Green, M. C. (2017). Global
Marketing (9th ed.). Edinburgh Gate:
Pearson. (Chapter 8-9)
• Kotabe, M., & Helsen, K. (2007). Global
Marketing Management (4th ed.). New
York: John Wiley & Sons. (eBook available on
scholarvox). (Chapter 9)
• Hollensen, S. (2014). Global Marketing (6th
ed.). Edinburgh Gate: Pearson (Chapter 9,
10, 11 and 12).
33
Part II
Global Branding and
marketing mix
decisions
bit.ly/im-sk
1/21/2022
Learning Objectives
• Debate on the benefits and drawbacks of
standardized and adapted marketing mix
decisions.
• Explain global product and branding decisions
• Explain how internal and external variables
influence international pricing decisions
• Explore the determinants of international channel
decisions
• Discuss the challenges and decisions on global
communications and sales

35
Standardization and adaptation
of the international marketing
21/01/2022
mix
36
Product & Brand
Promotio
n
Price
Place

37
Product and Brand

decisions

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38
Product decisions

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Product/communication modes
Product
Standard Adapt New
Straight Product
Standard
extension adaptation
Product
Promotion invention
Promotion Dual
Adapt
adaptation adaptation
More details in “Global Product decisions (16:28)” https://web.microsoftstream.com/video/29fdfd0a-

c682-4154-bb96-3f6654e92a7e
Wooclap time
•For attendance
purposes:
Skema account
OR

41
•Pensei em ter interações com as
figuras a seguir.

42
‘Organics’ ‘straight extension’ to Argentina (only
language is adapted)
figuras a seguir.
•Ex shampoo:
– Which factors could lead the
‘Organics’ to use the ‘straight
extension’ to enter in Argentina?

44
Kellogg’s dual adaption for
Indian market
figuras a seguir.
•Ex shampoo:
– Which factors could lead Kellogg’s
to change the main ingredient (from
corn to rice) and the main appeal
(from fun and strong childhood to
family breakfast) to enter in the
Indian Market?

46
‘Promotion Adaptation’ of Lux
Soap: UK – India
figuras a seguir.
– Is there differences in the main
message appeal (Unique Selling
Proposition) in both countries? What
values and symbols are behind the
campaigns? Which cultural
differences underlie this promotion
adaptation?

48
Global brand
concepts
More details in “Global Branding decisions (33:46):”
https://web.microsoftstream.com/video/fd096f5d-0116-49d9-8502-
d1bb5d247c50

bit.ly/im-sk
Brands
Brand is “a name, term, sign, symbol, or Images and
Source of experiences
design, differentiation in the
customer’s
or a combination of them, intended to between
products mind
identify the goods or services of one
seller or group of sellers and to A promise
made by a
differentiate them from those of A quality
company
certificate
competitors.” (American Marketing about a
product
Association, 2015).
Branding decisions

51
Social, Legal and regulatory adaptation
Package Labels
• Needs to met • may differ by
country standards. country regarding
• May require various products
adaptations
(format,
information and
processes)
Aesthetics Warranties
• Aesthetic need to • Need to fill country
fill country cultural specifications and
and social also could be a
particularities source of
competitive
advantage
Global Brand and product
Challenges
Does this strategy fit the company and/or
its markets?
Does it anticipate scale economies?
How difficult will it be to develop a

global brand team?
Can a single brand be imposed on all

markets successfully?
What are the main challenges to adpat

or standardize our Brands and products?
Wooclap time
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purposes:
Skema account
OR

54
• Rafael adicionar interação
relacionada ao produto e marcas

55
Complementary videos
Market Entry Strategies (27:03): This lecture is focused in presenting the main entry
modes available to business operate in foreign markets.
https://web.microsoftstream.com/video/93656d11-31fd-4e7a-af46-
0cf42e749e55
Global Product decisions (16:28): This video discuss the four main types of product
decisions in international marketing, plus the role of innovation in this context
https://web.microsoftstream.com/video/29fdfd0a-c682-4154-bb96-
3f6654e92a7e
Global Branding decisions (33:46): The focus of this video its to discuss global branding
decisions, relating the usage of global versus local brands and the degree of internalization
and externalization of brands assets https://web.microsoftstream.com/video/fd096f5d-
0116-49d9-8502-d1bb5d247c50

56
REFERENCES
• Hollensen, S. (2014). Global Marketing (6th
ed.). Edinburgh Gate: Pearson (Ch 14-17).
• Keegan, W. J., & Green, M. C. (2017). Global
Marketing (9th ed.). Edinburgh Gate:
Pearson (ch 10-14).
• Kotabe, M., & Helsen, K. (2007). Global
Marketing Management (4th ed.). New
York: John Wiley & Sons. (eBook available on
scholarvox). (Ch 10-13)

57
How are you coming out of
this class? What’s the main
new content that you
learned or discovered in the
lecture? Please comment.

58
END OF LECTURE

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21/01/2022 59

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International Marketing

Plínio R. R. MONTEIRO, Ph.D |

Link to course materials:

Link to course materials:

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

More details in “Market Entry Strategies (27:03)” https://web.microsoftstream.com/video/93656d11-31fd-

1/21/2022 Plínio Monteiro

Link to course materials:

21/01/2022 Plínio Monteiro

Indirect Direct Cooperative

1/21/2022 Plínio Monteiro

Distributors: Export agents:

1/21/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

Link to course materials:

21/01/2022 Plínio Monteiro

1/21/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

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Link to course materials:

21/01/2022 Plínio Monteiro

THE FIRM OWNS AND THIS APPROACH ALLOWS

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Quick access to Expensive option

Optimum Slow entry

21/01/2022 Plínio Monteiro

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Product and Brand

Link to course materials:

21/01/2022 Plínio Monteiro

Link to course materials:

21/01/2022 Plínio Monteiro

Standard Adapt New

More details in “Global Product decisions (16:28)” https://web.microsoftstream.com/video/29fdfd0a-

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

Link to course materials:

21/01/2022 Plínio Monteiro

Does it anticipate scale economies?

How difficult will it be to develop a

Can a single brand be imposed on all

What are the main challenges to adpat

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

21/01/2022 Plínio Monteiro

Link to course materials:

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