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     INTERNATIONAL ENTRY MODES,[object Object],Presented By:,[object Object],AmitKumar,[object Object],Avanika Babel,[object Object]
THIS PRESENTATION WILL COVER THE FOLLOWING:,[object Object],Introduction,[object Object],Criteria for country selection,[object Object],Various market entry modes,[object Object]
INTRODUCTION,[object Object],In today's globalizing world, firms are increasing, looking towards other regions of the world to trade in. ,[object Object],What are the steps taken by the executives of these firms before deciding on which market to enter? ,[object Object],How do they make sure they make their journey a successful one? ,[object Object]
Introduction contd.,[object Object],The decision requires an analysis of the aspects of the foreign market.,[object Object],                - Whether to go abroad,[object Object],                - Which markets to enter,[object Object],                - How to enter those markets,[object Object],                - Choice of marketing program,[object Object],                -Marketing organization,[object Object]
Introduction Contd.,[object Object],Criteria for Country selection :,[object Object],1. Country/market Attractiveness in terms of the following:                o Market size               o Market growth and need potential in terms of demand,[object Object],2. Company strength in terms of brand and accessibility,[object Object],3. When the risk e.g. political is marginal compared to opportunities,[object Object],4. Customer response,[object Object],5. Competitive situation,[object Object]
Introduction contd.,[object Object],A firm becomes proactive i.e. pulled by the potentials and advantages in the foreign market due to the following reasons:,[object Object],1. The firms specific advantages in terms of profit,[object Object],2. The advantage of having a unique brand,[object Object],3. When a firm possesses technological advantages,[object Object],4. The availability of resources in the foreign countries,[object Object],5. Economies of scale,[object Object],6. Economic and political factors,[object Object]
Introduction Contd.,[object Object],A firm becomes reactive i.e. pushed by bad domestic markets when the following is evident:,[object Object],1. The pressure of domestic competition,[object Object],2. Poor domestic market due to stagnant or declining sales figures,[object Object],3. Saturated domestic markets,[object Object],4. Overproduction,[object Object]
Choosing Product to trade in I.M,[object Object],anything that can be offered to market to satisfy a want or need.,[object Object],They can be physical goods, services, experiences, events, persons, places, properties, organizations, information's & ideas.,[object Object],What are new products?,[object Object],New product line,[object Object],Addition to product line,[object Object],Repositioning to new market segments,[object Object],Improvements/revisions,[object Object],Cost reductions,[object Object],Reason of failure of different foreign companies like Kellogg's, Pizza hut, Mac Donald, Dominos was-,[object Object],Gross overestimation of spending patterns of Indian consumers,[object Object],Gross overestimation of strength of the transnational brand,[object Object],Gross underestimation of the strengths of ethnic Indian products,[object Object]
INTERNATIONAL  BUSINESS APPROACHES,[object Object],ETHNOCENTRIC   APPROACH,[object Object],POLYCENTRIC     APPROACH,[object Object],REGIOCENTRIC   APPROACH,[object Object],GEOCENTRIC      APPROACH,[object Object]
ETHNOCENTRIC APPROACH,[object Object],Under this approach , companies market the products in various countries in the same way it does domestically.,[object Object],POLYCENTRIC APPROACH,[object Object],Under this approach, the companies customizes the marketing mix to meet the taste, performance and needs of the customers of each international market.,[object Object],REGIOCENTRIC APPROACH,[object Object],Under this approach, the company operating successfully in a foreign country thinks of thinks of exporting other neighboring countries of the host country.,[object Object],At this stage, the concerned subsidiary considers the regional environment ( such as laws, culture, policies etc) for formulating the policies & strategies.,[object Object]
GEOCENTRIC APPROACH,[object Object],Under this approach, the company analyses the tastes, preference and needs of the customers in all foreign markets and then adopts a standardized marketing mix for all the foreign markets.,[object Object],Coca-cola adopted this strategy by selling its popular soft drink with the same content, packaging, branding & advertisement themes worldwide,[object Object],Whirlpool designs a world-washer – small, stripped-down automatic washing machine for Mexico, Brazil & India. However, it modified its product for Indian market to wash the delicate “sarees”.,[object Object]
Global Product Strategies,[object Object]
Strategy for new product launch,[object Object],Waterfall approach,[object Object],Sprinkler approach,[object Object]
STRATEGIC OPTIONS,[object Object],[object Object],Same approach as home market,[object Object],[object Object],Makes changes to fit new market requirements,[object Object],[object Object],Entirely new approach is developed for the new market,[object Object],[object Object],	Same product, all markets,[object Object],[object Object],	Only some aspects of the product is standardized,[object Object]
OPTION 1.,[object Object],PRODUCT EXTENSION – COMMUNICATION EXTENSION,[object Object],Product Strategy	Communications Strategy	Highlight,[object Object],Extension	Extension			 Standardized product with same,[object Object],				communications strategy across the,[object Object],				globe.,[object Object],				- This strategy is Cost effective,[object Object],				- Allows for greater economies of ,[object Object],				scale,[object Object],				- Rarely used for consumer type ,[object Object],				products except soft drink and some 			luxury type goods,[object Object],				-Used mainly for industrial type,[object Object],				products,[object Object]
OPTION 2.,[object Object],PRODUCT EXTENSION – COMMUNICATION ADAPTATION,[object Object],Product Strategy	Communications Strategy	Highlight,[object Object],Extension	Adaptation			Standardized product with different,[object Object],				communications strategies across the,[object Object],				globe.,[object Object],				- Cost effective because 				communications adaptation is,[object Object],				less expensive than the tailoring,[object Object],				product to a local market.,[object Object],				- Can be used for consumer type 				products eg. Bicycles,[object Object]
OPTION 3.,[object Object],PRODUCT ADAPTATION - COMMUNICATION EXTENSION,[object Object],Product Strategy	Communications Strategy	Highlight,[object Object],Adaptation	Extension			Changes made to the product, same					communications strategy across the 					globe.,[object Object],				- Product formulations are changed,[object Object],				without consumers knowing it. E.g.,[object Object],				detergents ,[object Object],				- Entails research, development,[object Object],				expenses and tooling costs.,[object Object],				- Do not allow for economies of scale,[object Object],				to the extent possible under an product 			extension strategy,[object Object],				- savings can be realized from the 			creation of a single communications 			strategy,[object Object]
OPTION 4.,[object Object],PRODUCT ADAPTATION - COMMUNICATION ADAPTATION,[object Object],Product Strategy	Communications Strategy	Highlight,[object Object],Adaptation	Adaptation			Dual adaptation:							Changes made to the product, changes 					made to communications strategy 							,[object Object],				- Recognizes the socio-cultural,[object Object],				differences from country to country,[object Object],				-To make this option profitable, the 			foreign market or markets need to be 			of sufficient volume,[object Object],				- Calls for extensive research and 			development expenses and tooling 			costs,[object Object]
OPTION 5.,[object Object],PRODUCT INVENTION,[object Object],Product Strategy	Communications Strategy	Highlight,[object Object],Invention	Develop new communications	Usually redesigning of an original 					product at a lower level of,[object Object],					complexity. 							,[object Object],				- Recognizes the socio-cultural,[object Object],				and economic differences from 				country to country,[object Object],				-Leads to more purchases as a result 			of the reinvention of the product,[object Object]
STANDARDIZATION vs ADAPTATION,[object Object],Factors encouraging product standardization:,[object Object],[object Object]
Production
Marketing/communications
Research & Development
Stock Holding
Easier management and control
i.e. familiarity
Homogeneity of markets
i.e. markets available without adaptation
e.g. Denim jeans,[object Object]
(except industrial & agricultural products)
Where “made in” image is important
e.g. France for perfumes, Sheffield for stainless steel
For a firm selling a small proportion of its output overseas, the incremental costs may exceed the incremental sales value
Consumer mobility for travellers/tourists for example standardization is expected in certain products:
Camera film
Hotel Chains,[object Object]
Consumer Demographics
Culture
Local custom & Tradition
Condition of use
Price
Mandatory Modification:

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