Term Paper in International Marketing

HOW TO ENTER THE

INTERNATIONAL
MARKET

Matthew Rouwie O. Ong

BSBA MM 3-1D

Mr. Felix Ramos

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 Abstract

The international market is becoming increasingly open. The internet and

communication advancements enable new options for organizations in all forms. The

influence of these emerging innovations and the expanding world business climate is

explored in this paper to explain how the international market entry is emerging in the

context of global developments. The entire study explores the scope of discourse on

market entry motivations, approaches, strategies, and steps for executives of growing

companies of all sizes in all industries, which is profoundly relevant and analytical.

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Table of Contents

I. Introduction

Overview 3
International Market 3
Market Entry Strategy 4
Multinational Enterprise (MNE) 4

II. Body

Motives for Entering International Market 5

Relational Approach to International Market Entry 6
Digital Approach to International Market Entry 7
Hybrid Approach to Interntational Market Entry 7
Market Entry Strategies 8
Steps in Successfully Entering International Market 11

III. Conclusion 12

References 13

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I. INTRODUCTION

Overview

Important changes in international marketing science and practice have taken

place during the past three decades, guided by growing cohesion, global competition,

and altered foreign trade environments. In order to explore the relationships between

producers and consumers in international situations, most research takes a relational

trading viewpoint, but historical interpretations of global market access strategies

include three main approaches, according to their degree of relationalism: transactional,

relational, or hybridized.

International Market

It's possible to describe a market clearly or quite complexly. The arrangement of

structures, laws, and procedures relating to the trade of goods and services between

individuals or organizations is, in the simplest words, a market. It is possible to describe

markets in numerous ways, such as geography, user, commodity, or even consumer

behavioral attributes.

An international market is generally identified as a business outside the

international boundaries of the country of ownership of a business. An enterprise, to the

degree, that it is a legitimately independent organization like an organization from its

shareholders, is typically a resident of the country where it is incorporated. In the United

States, for instance, IBM was created. Therefore, IBM's foreign market is any

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geographical region beyond the federal limits of the United States where IBM conducts

business.

Market Entry Strategy

The expected approach of offering goods or services to a customer base and

exporting them there is a market entry strategy. It applies to forming and handling deals

in a foreign nation while exporting and importing resources. It is a vital instrument for

addressing what the company is trying to do and how is it going to do while introducing

new products. Whereas an export proposal appears to concentrate on only a few

goods or services, it will be presented with a blueprint for the whole sector by your

market entry strategy. In addition, it is the basis of how the organization seeks to

engage with potential consumers, accomplish growth goals, and develop good

partnerships in the new market. What and how to say, and how to say that will make

further sales are explained in the plan.

Multinational Enterprise (MNE)

It is an entity incorporating companies in two or more countries, irrespective of

the standard structure and domains of operation of such entities, functioning under a

decision-making framework facilitating consistent policies and a shared policy with one

or more decision-making facilities, in which the entities are so related, by property or

otherwise, that it is possible for one or more of them to carry out a decision-making

phase, assets, and obligations among others.

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II. BODY

Motives for Entering International Market

Efficiency Seekers. The goal is to validate existing investment mechanisms in

order to benefit from organizational leadership. These advantages also come from

levels of size and distance, but also from the liquidity of risks. Performance seeking is

thus seen as an advantage from the discrepancies between comparative advantages,

societies, administrative structures, economic institutions, etc. This also means output

intensity in a small number of locations. International corporations who pursue efficacy

are also established, significant, and globalized.

Network Seekers. Networking has been characterized as an aspect of the global

entrepreneurship community. This direction of the network in firms represents the

degree to which firms are active in associations, cooperatives, etc. Businesses and

other types of related social relations. For enterprises, networks, partnerships, and

alliances with collaborators outside the company may be quite important. Strategies

strive to cultivate, grow, and extend their current networks through the assessment of

the network searching motives.

Resource Seekers. Corporations searching for capital are those spending

overseas in order to acquire capabilities. The required resource may also be obtained at

a lower competitive rate, or it actually does not occur in the home nation at all. The

quest for raw materials, such as minerals (oil, zinc, copper, etc.) and industrial products

(rubber, tobacco, sugar, etc.) could interact with the demand for resources. Often, these

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tools are essential to a company's existence, in specific, if the properties make up a

substantial part of the output.

Strategic Resource Seekers. Intangible assets that deal with infrastructure and

vital resources are strategic resources. The company's integrity. Examples of strategic

tools include patents, expertise, management quality, and competitive materials

required for the creation of comparative benefits. The firm advances its long-term

growth priorities by concentrating on building strategic capital. This is also achieved by

the purchase of international companies' properties. Consequently, the primary

motivation is either to preserve or improve the dominant advantage or to undermine the

rivals.

Relational Approach to International Market Entry

Legal Considerations. Companies will benefit from the diligent use of promoting

critical as legitimate channels in markets with better legal environments to define

channel partner positions and requirements in emerging buyer-seller partnerships to

reduce IME risk. The contractual settlement provides a conduit that allows the sharing

of goals, the settlement of conflicts, the exchanging of facts, the clear transfer of

expertise, the managing of priorities between stakeholders, the increase of

responsibility standards and transparency in the partnership.

Market Considerations. In transnational interfirm relationships, physical and

psychological impairment, risk of vindictiveness, ambient turmoil, risk of contact

confusion, and even the possibility of outright deceit seemed to be important. A

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commitment to adapt to the environment is essential; if a marketplace is marked by

strong competition and little volatility, it may be troublesome to depend so much on

partnerships.

Digital Approach to International Market Entry

Legal Considerations. For marketing executives in this area, developments in

digital technology have given rise to a plethora of distinct concerns, particularly with

regard to the availability and distribution of information. Legally, diverse laws across

industries are subject to these emerging knowledge flows.

Market Considerations. Internet-enabled platforms draw distinctions easy for

consumers and facilitate comparative decisions by supplying various perceptions of

reliable knowledge on the fixed and variable costs features of prospective distribution

channels. In their marketing and buying activities, businesses and consumers that rely

on emerging platforms profit from rich knowledge accessed at lower production prices,

which can reduce the asymmetry of information among market participants and

minimize opportunism and dispute capacity

Hybrid Approach to International Market Entry

Legal Considerations. A significant role of customer relationship management is

to access timely, reliable consumer information, so regulatory requirements relating to

the right of consumers to capture, use, and secure data metrics can pose considerable

operating challenges and enforcement costs. In turn, this issue represents consumer

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data protection issues arising from the development of massive, interconnected

datasets that provide specific data at a personal level.

Market Considerations. In mobile multimedia environments, early partnerships

mostly display a transactional approach, with limited levels of commitment and belief, a

heavy price focus, a high propensity to turn, and greater risk per caption. In intensely

competitive virtual markets, local market existing companies needs to be adequately

tuned to environmental conditions. However, Internet-enabled networking networks

improve as the exchange volume rises, while potential threat and changing preferences

diminish.

Market Entry Strategies

Indirect Export. The strategy of entry into the market, which provides the lowest

degree of risk and the least influence of the market, is indirect exports under which

goods are brought by others overseas. The organization does not participate in

overseas promotions and there is no specific practice inside the company; transactions

are managed as domestic sales. Indirect exports, without needing special skills or

funding, will create new business opportunities. In addition, both the foreign understand

exactly how and the sales that these intermediate approaches generate are minimal.

The exposure to foreign markets throughout this strategy is very small.

Direct Export. In direct exports, the company is actively interested in the selling of

its goods in international markets and the company conducts the export duty alone

(instead of assigning it to others). In order to execute a direct export policy, the

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company must be represented in international markets, such as choosing local

members or brokers for business prospecting, approaching prospective buyers, and

bargaining on behalf of the exporting company.

Foreign Manufacturing. In such terms, a company may find it either impractical

or unacceptable to deliver local sources of output to international markets. For example,

shipping costs may be too high for large or bulky goods; import tariffs or restrictions may

make products uncompetitive; national brand regulation restrictions may prohibit entry

into the international market. In addition to being able to export there, either of these

requirements could cause the company to produce in international markets. Positive

reasons, such as the scale and competitiveness of the demand, lower manufacturing

costs, and government subsidies offered by public bodies, can also cause the

organization to export abroad.

Assembling. Assembling is a balance between international production and

exports. The organization manufactures any or much of the parts or elements of its

goods locally and exports them to international markets to be brought together as a final

product. The organization saves on freight expenses by exporting "completely knocked

down", and also on specific taxes that are slightly lesser on unassembled machinery

than on finished goods. Another advantage is the utilization of local workers, which

enables the company's penetration into the international sector.

Contract Manufacturing. In contract manufacturing, the output of the company is

manufactured by a local manufacturer under contract with the company in the

international sector. Since the deal only includes production, marketing is done by the
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company's distribution department, which retains market control. A need for facility

expenditure, shipping costs, and request duties is eliminated by contract production and

the corporation gets the privilege of labeling its goods as locally manufactured. In

contract manufacturing, the output of the company is manufactured by a local

manufacturer under contract with the company in the international sector.

Licensing. A further way of entering a global market with a small level of risk is

by licensing. It varies from contract production in that it is typically longer-term and

entails higher local producer obligations. Although the franchise system company

appears to be more actively essential in the creation and management of the marketing

campaign, licensing is close to the franchise agreement.

Joint Ventures. With licenses, international joint ventures have something in

common. The main distinction is that the multinational company has an ownership stake

and a strategic presence in the global firm in joint ventures. A relationship is formed

between host-and-home-country businesses, typically leading to the formation of a third

party. This form of arrangement allows the foreign company greater control over

activities and therefore exposure to the understanding of the local sector. The foreign

company has a connection to the franchisee network infrastructure of partnerships and

is less vulnerable to risk confiscation due to the alliance with the national company.

Direct Investments. In this strategy, a multinational corporation makes a serious

venture in a global economy in a manufacturing facility. As there is complete

possession, that is the biggest contribution. In two major ways, a multinational

corporation can purchase completely foreign manufacturing facilities: it can establish a

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clear takeover or transaction in the host country and build its own establishments from

the initial concept.

Steps in Successfully Entering International Market

Set Clear Goals (1). Be clear on what the company plan to do in the market

segment, along with the amount of revenue that you would hope to achieve. Do not lose

perspective of the priorities as it fleshes out the solution to address the enterprise stay

on course and ensure that there are compatible prospects, products/services, and

positive growth goals. Research the Market (2). To get to introduce the latest market,

use all resources at the company's disposal, which includes; doing internet analysis,

traveling there in particular, observing trade fairs as a competitor or attendee, studying

about the industry, and establishing business connections in the field. Analyze the

Competition (3). The business will be benefited from a systematic strategic review

focused on surveys and trips to the target market to make key decisions. Choose a

Mode of Entry (4). There are various ways of accessing a new market. The services of a

dealer or agent-based there may be used by companies. The entity may become a

franchisee or purchase an established corporation. The group can also create a

completely new brick-and-mortar building. Determine the Finances (5). To help the

export company, find out if there is a need to get some money. If a client does not pay,

the client will still choose to get cover that covers the company from damages. Finally,

Generate a Strategy Document (6). Once established, this guide will be the framework

for the future, outlining the priorities, study outcomes, contacts, budgets, key things and

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deadlines for action, and how the organization will track and assess progress on a

regular basis.

III. CONCLUSION

A lengthy phase that involves attention to detail is designing a market penetration

plan. The lack of knowledge impacts the project's progress. Market analysis is a perfect

business assistant for start-up or business growth. In order to reveal the other side of

the coin, which has been concealed from the rest all this time, the company needs to

perform analysis. At first, it seems unlikely, but it will come up with a solution to the

strategies with a detailed analysis of the methods of rival firms. The collection of points

of touch with prospective clients would make it possible for a marketing strategy to be

produced.

In conclusion, it is important to remember that the organization is engaged in the

creation of a commercial campaign before choosing to enter an international market that

is advantageous for a specific market. Around the same time, the company employs not

only conventional marketing but also a marketing blend, skillfully integrating its

resources to place the company in a given market in a more favorable way. Economic

globalization exists in entirely different societies, unlike each other, because in various

cultural contexts, the same formal criteria of beginning a business will yield wholly

distinct performance.

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References

 Hansson, A., & Hedin, K. (n.d.). Small companies in Swedish incubators and

science parks Motives for internationalization. Retrieved from https://www.diva-

portal.org/smash/get/diva2:131423/FULLTEXT01.pdf
 Vineet Sansare. (2013, February 26). Market entry strategies. Retrieved

November 3, 2020, from Slideshare.net website:

https://www.slideshare.net/vineetsansare/market-entry-strategies-16784323
 Market Entry Strategy: Definition & Example Video. (2013). Market Entry

Strategy: Definition & Example - Video & Lesson Transcript | Study.com.

Retrieved November 3, 2020, from Study.com website:

https://study.com/academy/lesson/market-entry-strategy-definition-example.html
 International Market: Definition & Explanation. (2016, January 5). Retrieved from

https://study.com/academy/lesson/international-market-definition-lesson-

quiz.html.
 6 steps to create a winning market entry strategy | BDC.ca. (2020, September

12). Retrieved November 3, 2020, from BDC.ca website:

https://www.bdc.ca/en/articles-tools/marketing-sales-export/export/winning-

market-entry-strategy
 Adloonix. (2020, July 20). Market Entry Strategy: Definition & meaning | by

Adloonix. Retrieved November 3, 2020, from Medium website:

https://medium.com/@adloonix/market-entry-strategy-definition-meaning-by-

adloonix-d6be203ac165‌

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 Raj Runnoo. (2017). Market entry strategies. Retrieved November 4, 2020, from

Academia.edu website: https://www.academia.edu/8024620/Market_entry_strategies

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