ENTRY STRATEGIES OF

INTERNATIONAL MARKETING
WHAT IS ENTRY STRATEGY

• A market entry strategy is the planned

method of delivering goods or services to
a target market and distributing them
there.
• When importing or exporting services, it
refers to establishing and managing
contracts in a foreign country.
MODES OF ENTRY STRATEGIES

• Exporting
• Licensing
• Franchising
• Turnkey Project
• Foreign direct investments
• Mergers & Acquisitions
• Contract manufacturing
• Management contracts
• Joint Venture
• Acquisitions & Mergers
• Business process outsourcing
EXPORTING
• Exporting is the marketing and direct sale of
domestically-produced goods in another country.
• Exporting is a traditional and well-established
method of reaching foreign markets.
Exporting commonly requires coordination
among four players:
• Exporter
• Importer
• Transport provider
• Government
Advantages Of Exporting
Need for limited finance
• Exporting does not require that goods be produce in target country
no investment in foreign production facility is required.

Less Risks
• Exporting involves less risk as the company understand the culture ,
customer and the market of the host country gradually.

Motivation for exporting

• Motivation for exporting are proactive and reactive. Proactive
motivations are opportunities available in the host country. Reactive
motivators are those efforts taken by the company to export the
product to a foreign country due to the decline in demand for its
product in the home country.
Forms of Exporting

• Direct exporting
• Indirect exporting
• Intra-corporate transfers
Indirect exporting

• It is exporting the products either in their

original form or in the modified form to a foreign
country through another domestic company.
• Various publishers including Himalya Publishing
House, sell their products i.e. books various
exporters in India, which in turn export these
books to various foreign countries.
Direct exporting

• It is selling the products in a foreign country

directly through its distribution arrangements or
through a host county’s company.
• Baskin Robbins initially exported its ice-cream to
Russia in 1990 and later open 74 outlets with
Russian partners. Finally, in 1995 it established
its ice-cream plant in Moscow.
Intra-corporate transfers

• These are selling of products by a

company to its affiliated company in host
country (another country).
• Selling of products by Hindustan Lever in
India to Unilever In USA.
• This transaction is treated as exports in
India and imports in USA.
FACTORS TO BE CONSEDERED
WHILE EXPORTING
• Government policies.
• Marketing factors.
• Logistical considerations.
• Distribution issues.
LICENSING

• In this mode of entry ,the domestic

manufacturer leases the right to use its
intellectual property (ie) technology , copy rights
,brand name etc to a manufacturer in a foreign
country for a fee.
• It is based on a contractual agreement between
the owner of the property (or its agent) known
as the licensor; and a licensee – normally a
manufacturer or retailer.
Advantages

• Low investment on the part of licensor.

• Low financial risk to the licensor.
• Licensor can investigate the foreign
market without much efforts on his part.
• Licensee gets the benefits with less
investment on research and development.
• Licensee escapes himself from the risk of
product failure.
Disadvantages
• Both parties have to maintain the product quality and
promote the product .Therefore one party can affect the
other through their improper acts.
• Chance for misunderstanding between the parties.
• Chance for leakages of the trade secrets of the licensor.
• Licensee may develop his reputation.
• Licensee may sell the product outside the agreed
territory and after the expiry of the contract.