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Export problems (I)

Export problems (I). 1 . Culture culture differs and is difficult to understand self-reference thinking sterotyping 2. Market factors distribution structure customs & duties specific norms, specifications, laws market information media habits. Export problems (II).

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Export problems (I)

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  1. Export problems (I) 1. Culture • culture differs and is difficult to understand • self-reference thinking • sterotyping 2. Market factors • distribution structure • customs & duties • specific norms, specifications, laws • market information • media habits

  2. Export problems (II) 3. Financial factors • securing payment • exchange rates 4. Organisational factors • finding labour force • control and coordination

  3. The seven deadly traps 1. Entering markets in order of size or growth of demand go where strategy will work best 2. Underestimate foreign competitors 3. Expectations that customer motivations will be similar worldwide the real world is not a global village 4. Entering markets at the wrong price 5. Market entry without planning the expansion process 6. Association with poor partners 7. Losing brand exclusivity (Simmonds 1999)

  4. Key success factors • Planning and controlling • Product strength and uniqueness • Service • Product adaptation • Support to intermediaries • International competence and experience • Commitment • Low price? High price?

  5. Key success factors - 2 • Service aspects • Quality • Brand image • Export experience and scale • Financial resources for export • Information • Physical distribution

  6. International marketing management process

  7. Reasons to go abroad

  8. Macro-level research (General market potential) • socio-economic statistics • geographical factors • political stability/openness - Rejected markets • Product-class related factors • cultural framework • growth trends similar products • stage of development - Rejected markets • Macro-level research (General market potential) • competition • customer buying behaviour • channels • key success factors vs. strengths/weaknesses • profit potential - Rejected markets + • Target markets prority listing • Entry strategy A model for selecting foreign markets Filter 1 preliminary opportunities + Filter 2 potental opportunities + Filter 3

  9. Strategy in Globalizing Markets • Preparedness for internationalization - international sales ratio - market presence in key markets - modes of operation: level of control and involvement - dominant market position • Industry globality - concentrated industry - homogeneity and cross-border demand - liberal trade & investment policy - market interdependence Solberg, 1997

  10. The Nine Strategic Windows Frame (Solberg, 1997) High Preparedness for internationalization Middle Low Low Middle High Industry Globality

  11. The Nine Strategic Windows Frame (Solberg, 1997) High Middle Preparedness for internationalization Low Low Middle High Industry Globality

  12. The European/Global challenge Customer Global convergence Efficiencies Pan-European or Global Approach - Economies of Scale - Economies of Scope

  13. Risks of Pan-European marketing • Cultural differences persist • Differences in market infrastructure • Differences in competitive structure • Different legal context • Internal friction • Costs of co-ordination

  14. Standardization • Product Policy • Brand Name • Logistics • Positioning But …

  15. Adaptation required for: • Local Selling • Customized Service • Local Pricing • Local Distribution • Local PR and Sales Promotion

  16. Adaptations due to: • Legal Differences • Competition • Buyer Behaviour • Distribution Structure • Market Position • Market Development

  17. The Belgian Compromise Global Local Glocal - A subtle mix … - Coordination - A strategic frame but flexibility - Alliances when needed - Communication systems - Global management as team player

  18. Standardization strategy toward CEE (1) • Typical elements of standardization strategy for CEE markets - value-based positioning ( Q, image) - product and brand elements -pricing -pioneering strategy in high end markets -exporting approach

  19. Standardization strategy toward CEE (2) • Typical adaptations - non-core elements ( packaging, sales promotion) - creative selection ( product-mix, advertising) - regional management

  20. Key problems identified by head-quarter executives • Lack of qualified local managers • Operational focus , no long run view • Lack of marketing competence • ‘fire fighters’

  21. Key problems identified by subsidiary executives • Short term goals block our strategic expansion • Reaching decisions takes too long due to bureaucracy and paper work • HQ feels that what works in one market should work everywhere • Too much marketing constraints

  22. Comparison Matrix for Entry Modes

  23. Evolution of a Manufacturer’s Decision on Entry Mode Time Branch export/subsidiary Sole venture Joint venture Control Licensing Agent/distributor export Indirect export Risk 0

  24. Entry Strategies (I)

  25. Entry Strategies (II)

  26. A process model of international market withdrawal

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