HND IM MKT Outcome 2

单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,*,International Marketing,Unit Code: DG6M 34,Outcome 2,Tutor:,Geoffrey Yu,Review: Outcome 1,Identify and explain the reasons for entering international markets,Identify information sources on international markets,Identify and explain opportunities and threats in international markets,Outline and explain a typical process of selecting a foreign market to enter,Outcome Requirements,Identify the modes of market entry,Evaluate,the modes of market entry with,certain criteria,After determining which country to enter, its turn to decide on the,mode of entry,into this country,Overseas Investment,Foreign Direct Investment (Sales Promotion , Warehousing or Service Unit, Manufacturing Unit),Joint Venture (Sales Promotion , Warehousing or Service Unit, Manufacturing Unit),Licensing/Franchising/Sub-contracting,(Sales Promotion , Service Unit, Manufacturing Unit),Direct Exporting, Agents or Distributors,Indirect Exporting,Home-based Export Agents, Traders,Overseas-based Agents/Distributors,Partnership Agreement,Lets Check Advantages,and Disadvantages of,Each Mode,Indirect Exporting i,The companys products being sold overseas without its participation in the actual export and overseas marketing process,NO,understanding of the export market(s),Global Buyer,Global Procurement,Indirect Exporting ii,The export,intermediary (Middleman),- normally assumes responsibility for finding overseas buyers, shipping products and getting paid.,Indirect Exporting iii,Advantages,Concentrate on the its core competence,Limited commitment and investment required,Minimal risk,No previous experience required,Fully utilize the expertise of the export intermediary,Disadvantages,No opportunity to gain an understanding of its export markets (lack of market contact),No control over overseas sales, price and promotion,Never have the opportunity to accumulate overseas experience,Direct Exporting i,Producing organization itself performs the export tasks rather than using an intermediary. (Use its own established intl marketing,channels,to sell products to the wholesaler, retailer or end user in overseas place.,Overseas Sales Office,Direct Exporting ii,Advantages,Total control,Well know the local demand and organize the timely adaptation,Company keeps all the profits and well coordinate export process,Disadvantages,High risk,High costs in employing foreign trade expertise,Time and resource investment in organizing export process,Export Agent i,An overseas firm hired to facilitate a SALES contract between the exporter and their customer.,DO NOT take title to the goods; work on,commission,only,Foreign Trade company in China and overseas places,Indirect Agent,Direct Agent,Export Agent ii,Advantages,Agents have expensive knowledge and experience of the market,Little investment required,Low political risk,Disadvantages,Agent may lack commitment and motivation,Agents want a steady income,(seasonal goods may not be suited to the mode),Agent may be too small to exploit the whole market, not efficient for large markets,Export Distributor,Sell a range of a firms goods in a SPECIFIC geographic area,They earn profit, NOT commission,Compared with Agent, distributors are likely to be more committed to the sales,Franchising 授权 ii,Granting another independent organization the right to do business in a particular way,Franchisee shares the benefits of the companys advertising,Franchising ii,Advantages,High level of control,Low risk/cost methods of entry,Highly motivated business,Give protection of patents,Disadvantages,Problems with local legislation,High cost of marketing promotions to support franchisees,Cost and time involved in finding and monitoring franchisees,Problems with quality and service control,Licensing 许可i,Often prominent in the beer and soft drinks industries,Compared with franchising, licensees make more efforts on marketing and promoting in local places,Licensing ii,Advantages,Avoid import barriers (tariffs and quotas),Make good use of currency depreciation or cheap labour at local place,No need for local investment,Overcome the problems of high transportation costs,Low cost and commitment entry mode for small manufacturers,Disadvantages,Lack of control by the licensor over marketing plan in target country,Risk creating a competitor in 3,rd,market or even in manufacturers home market,Right exclusiveness to certain licensee at one place increases the risk in partner reliability,Contract Manufacturing,ODM & OEM,Adv. & Disadv. P137,Joint Ventures i,Sharing the ownership with local private or public interests via sharing capital or other resources (ALLIANCE),For the,politica,l or,competitive,imperative,Q: Do you know any,JVs in China?,Joint Ventures ii,Advantages,Access to expertise and contacts with local marketing,Reduced market and political risk; Overcome host country restrictions,Shared cost,o,f failure,Less costly than acquisitions or direct investment,Disadvantages,May be conflict between partners,Contributions not reasonably proportionated,Loss of control,Problems over dual systems: Cross-cultural management,Intl Merger & Acquisition (M&A),To gain or share technology,To gain a brand or brand portfolio,To gain market share,To gain a manufacturing presence in a low cost location,To gain distribution,To diversify into a more attractive or potential country,To gain an existing customer base,Intl Merger & Acquisition (M&A),Case,M&A in China,Wholly-owned Subsidiaries/ Foreign-owned Company,Advantages,Full control,Very profitable,Disadvantages,High risk, especially financial and political ones,Highest level of commitment,Maybe problems over handling profits,High costs,Try outlining,the Criteria,assessing the market entry modes via advantages and disadvantages of each modes,Criteria for Accessing International Markets,Cost and resource factors,Commitment,Control,Speed of implementation,Risk factors,Local limitations,(More details in Next PG),Commitment - how much effort is required to make the method work,Control- how much say will the company have in the planning, organizing and implementation,Speed- how long to organize and start business?,What are the risks in Intl MKT?,Risks in Intl MKT,Customer risk,Country risk,Foreign exchange risk,Poor quality risk,Cultural and language risk,Transportation and logistics risk,Unforeseen risk,Customer risk,The identity of your customer,Check if the customer is an existing legally established business,The usual period of credit offered in the customers country,The credit limit your are prepared to offer your customer,Customer risk,The customers trading history,Are they a prompt payer?,Have there been any changes to their normal payment patterns?,Insolvency/ bankruptcy,Country risk,Foreign exchange control (Nxt Pg),Sovereign,Import restrictions,Geographical disaster (annual flooding, drought, earthquake, etc),Political events,Instability of finance and economics,War or civil unrest,Foreign Exchange risk,Possible for the exchange rate to move between the quotation date and the date of settlement,Sellers market,Forward exchange contracts,Poor quality risk,Rejection and compensation by importers,How to avoid it?,Cultural and language risk,Tax sys., rules, regulations,In-market invesitgation,Transportation & logistics risk,Risk of theft, damage, lateness, etc,Obligations in Incoterms 2000,Unforeseen risks,Natural disaster,Terrorist action,Unexpected situation,Diagram P 166-167,Market Entry Comparison Table,Right Entry Mode Selection Process,P 168,(Profit contribution, risk, non-profit objectives),Overall: The,Difference,between Domestic and Intl MKT,Question?,Identify the modes of market entry,Evaluate the modes of market entry with,certain criteria,OUTCOME 2,