Tapping Into Global Markets

Top 10 Concepts

Michael TolentinoAteneo Graduate

School of Business

Outline:Tapping Into Global Market

1. Is expected in companies (why?)2. Are based on factors that draws

companies into the international arena (how?)

3. Should be rated into three criteria (how?) 4. Must first define (what?)5. Has two typical entry strategies (what?)

Outline:Tapping Into Global Market6. Have distinctions between (what?)7. Should have the best mode of entry

(what?)8. Makes companies decide on a marketing

program (how?)9. Can affect consumers and business alike

(how?) by country of origin perceptions.10. makes companies manage their

international marketing activity in three ways (how)?

Concpet 1:

Tapping Into Global Market Is Expected in

Companies

As products and services developed in one country are finding enthusiastic acceptance in other countries.

Companies cannot simply stay domestic and expect to maintain their markets.

Concept 2:

Factors that Draws Companies to the International Arena

Presents higher profits. Larger customer base. Independence from one market. Competition with global

competitors. International service is required

Concept 3:

Company’s Marketing Objectives and Policies

Marketing objectives and policies should be defined in deciding to go global. To market into few or many

countries? Which countries to market?

Concept 4:

Entering Global Market is Rated into Three Criteria

Market attractiveness Risk Competitive advantage

Concept 5:

Two Typical Entry Strategy

1. Waterfall Approach Gradually entering countries in

sequence.

2. Sprinkler Approach Entering countries simultaneously.

Concept 6:

Distinctions in Tapping Global Market

Developed Market High purchasing powers.

Developing Market Low purchasing powers.

Indirect Exporting – exports that are not handled directly by the manufacturer or producer but through an export agent.

Direct Exporting – international sales in which a producer or supplier controls all activities and collects all drawbacks.

Concept 7:

Mode of Entry into the Market

Licensing – right given to a foreign company to use a manufacturing process, trademark, patent, trade secret or other item of value for a fee or royalty.

Joint Ventures – foreign investors joins local investors to create a company in which they share ownership and control.

Concept 7:

Mode of Entry into the Market

Concept 7:

Mode of Entry into the Market

Direct Investment – direct ownership of foreign-based assembly or manufacturing facility.

Product Level Straight extension – introduces the

product in the foreign market without any change.

Product adaptation – alters the product to meet local conditions and preferences.

Product invention – creating new product that are well adapted to a foreign country’s needs.

Concept 8:

Decide On Marketing Program

Concept 8:

Decide On Marketing Program

Communication Level Communication adaptation –

companies run the same marketing communications programs used in the home market.

Dual adaptation – adapts both the product and communications in foreign country.

Concept 8:

Decide On Marketing Program

Price Level Price escalation – prices can be set

uniformly in every country, set a market-based price for each country or set a cost-based price in each country.

Dumping - Exporting goods at prices lower than the home-market prices.

Concept 8:

Decide On Marketing Program

Price Level Gray Market – Goods sold outside of

an authorized sale-territory at prices lower than being charged in the authorized sales area.

Counterfeit Products – Imitation goods sold made to pass off as a genuine item.

Concept 8:

Decide On Marketing Program

Distribution Level – companies needs to know how the product moves within the foreign country and take a whole-channel view of distributing products to its final users.

Country of origin perceptions are the mental associations and beliefs triggered by a country.

Mental associations and beliefs affects consumers and business alike.

Concept 9:

Country of Origin Effects

Concept 10:

Marketing Organization

Export department – a local department that handles the shipping out of its goods.

International division – handles all international activities which is usually headed by a division president.

Global organization – Has executives doing global operations, has management from different countries, purchases least cost of supplies and makes investments with anticipated returns.