International Marketing: Market Expansion Strategies

Export Selling vs. Export Marketing
Export selling does not involve tailoring the product, price, or the promotinal material to suit the requirements of global markets.
The only marketing mix element that differs is the PLACE.
It may work well:
-For unique products with little or no international competition.
-For companies which are new to exporting (Initial experience are gathered from export selling).
Export Selling vs. Export Marketing
*Export marketing does not simply take the domestic product “as is”. It is modified as needed to meet preferences of international target markets.
*Export marketing requires:
-An understanding of the target environment,
– The use of marketing research and identification of market potential,
-Decisions about marketing strategies.
* It is necessary if:
-Companies mature in the global marketplace,
-New competitors enter the market.
Understanding The Market Potential
*Market potential estimation are conducted by economists or marketers:
-Size and concentration of customer segments,
-Projected consumption statistics,
-Competitive pressures.
*Analysis of foreign trade statistics is extremely important for identification of suitable markets for your products.
*Personal visits
-Partner search
-Expectations of local distributors/agents
*Trade shows
Organizational Export Activities
1. The firm is unwilling to export
2. The firm explores the feasibility of exporting
3. The firm exports to one or more markets on a trial basis
(Export selling)
4. The firm is an experienced exporter to one or more markets
5. The firm pursues country-or region focused marketing
6. The firm evaluates global market potential
Key Export Participants
Foreign purchasing agents: Seeking out the manufacturer whose price and quality match the specifications of their principal
Export sales specialist: Responsible from international sales
Export broker: Receives a fee for bringing together the seller and the overseas buyer
Export merchants: Importer who buys directly from foreign producers for re-packaging and re-selling under its own brand (with or without any additional processing).
Export management company (EMC): The services of an EMC may include foreign market research, marketing strategies, foreign distribution, establishing a logistics system, managing and training a foreign sales force, shipping and export information and details, and arranging financial aid and foreign language translation services.
Piggyback marketing: It occurs when a manufacturer distributes another firm’s product(s).
Freight forwarder is a “travel agent for freight.” An independent agent that aids and facilitates the shipments of exported goods, freight forwarders are familiar with the procedures and regulations for shipping products overseas.
Direct Representation in a Market
+++ Control
Program development
Resource allocation
+++ Communication
!!! Need more effort
!!! In smaller markets, it is usually not feasible because low sales volume does not justify the costs
Small manufacturers face with the same problem
Sourcing
Outsourcing means
Shifting production jobs or work assignments to another company o cut costs
Management vision
Factor costs and conditions
Customer needs
Logistics
Country infrastructure
Political factors
Foreign exchange rates
Global Market Entry Strategies Licensing, Investment and Strategic Alliances
Steps to ”low involvement-low costs” from ”high involvement-high costs”:
1-exporting
2-licencing
3-contract manufacturing
4-joint venture
5-acquisition
Market Expansion Strategies
Market and country concentration: Narrow focus
Market concentration and country diversification: Country diversification
Market diversification and country concentration: Country focus
Market and country diversification: Global diversification
Potential Export Problems
Internal Barriers:
1-company barriers:
-marketing knowledge&information
-financial resource
-human resource
2-product barriers:
-product quality
-technical adaptability
All affect the export marketing strategy-individual or co-operative.
Potential Export Problems
External Barriers:
1.industry barriers:
-industry structure
-competition
2.market barriers:
-costumer barriers
-procedural barriers
3.macro environment barriers
-direct export barriers
-indirect export barriers