international marketing

As the global marketplace continues to expand, the firm's location strategy should shift from domestic to international. The purpose of this report is to illustrate the merits and drawbacks of the statement that mode of entry is the most important aspect of international market selection. In order to evaluate this statement, this report will give the following issues: define the international marketing selection and entry mode selection; the importance of mode of entry, the important of entry motive and time.

International market selection is deciding which country a firm would intend to sell their product or service to, which market segment in that country they will target, and why. The mode of entry is how a firm will penetrate that market in that particular country; e.g. exporting, licensing, franchising and foreign direct investment. (Frank Bradley 2005) International market selection is completely different from entry mode selection. But the latter depends on the former.

The decision of how to enter a foreign market can have a significant impact on the successful of international marketing selection. The appropriateness of a specific entry mode related to the ease or difficulty with which a firm can enter new international markets (Gannon, 1995). Successful foreign market entry requires a superior performance on all aspects of marketing: ‘entry is one of the supreme tests of competitive ability. No longer is a company proving itself on familiar ground, instead it has to expose its competencies in a new area’ (Yip, 1982).

The mode of entry is important. However, the international market selection includes five questions: why and when to enter, where and how to enter, what factors to detain entry. All of the five factors are important. Firstly, the firm’s motive should be mentioned. Dunning(1993)analyzed that the firms have four main motives to enter the international market: marking-seeking, follow the customer, oligopoly interaction and resource-seeking. If the firm wants to gain the advanced technology, the developed county should be considered to the target market. If the resources’ gaining is the aim, some areas like South America and the Southeast Asian should be considered Secondly, the entry time is also important factor. Entry the international market has high risk; it should be known that whether the time is appropriate to enter. Schnaars (1986) divided the competitive companies into 3 categories with the time of entry the international market: pioneer, early follower and late entrant. Enter too early, the law and regulations are imperfect, some infrastructure like transportation is inadequate, the time of internationalization in the target market is immature. These factors will cause the company’s high operation costs and high risk. Enter too late; it will be hard to enter the target market which is saturated. Therefore, whether the entry time is correct relating to the operation is success or failure in the international market.

To sum up, all of the five factors are important when the companies select the international market, because neglecting any factors in the five can cause the international market selection failure.

References

Frank Bradley (2005): ‘strategic challenge of international market entry’, International Marketing Strategy. PP 225-279. London.

Gannon, M (1995) Towards a Composite Theory of Entry Mode Choice, PhD Dissertation, Graduate School of Business, University College Dublin, Dublin, March.

Yip, G. S. (1982) ‘Gateways to entry’, Harvard Business Review, 60(September-October) 85-92