The International Marketing Plan

The design of a company’s market entry strategy for a given product/target country requires the formulation of a marketing plan as well as the choice of an entry mode. The entry mode is intended to penetrate the foreign

Table 3

Stages in the International Evolution of a Manufacturing Company

target country; the marketing plan is intended to penetrate the foreign target market.

The foreign marketing plan is an action program that specifies market­ing objectives and goals; policies and resource allocations to achieve objec­tives and goals; and a time schedule. The plan also includes an analysis of the target market, a description of the market environment, a competitive audit, a financial analysis, and a control system. The foreign marketing plan is examined in Chapter 7, and only some preliminary comments are offered here.

Plan objectives may include objectives for sales volume, market share, profits, and return on investment, and objectives for marketing effort, such

as setting up a distribution network, reaching an advertising goal, position­ing the product, and so on.

To design a marketing plan, managers must make decisions on the product, pricing, channels, logistics, and promotion. Taken together, these decisions comprise the “marketing mix” of the plan. These five policy areas are described in Table 4.

The foreign marketing plan is intimately related to the entry mode. Most significantly, the entry mode determines the degree of a company’s control over the marketing program in the target country. Some entry modes (indirect exporting and pure licensing) allow a company little or no control over the marketing program. Other modes afford limited control (agency/distributor exporting and joint ventures), while still others allow full control (branch/subsidiary exporting and sole ventures). Regardless of the entry mode, however, a company should be concerned with the marketing of its product in a target country. Even when its product is marketed under the direction of independent outside firms, a company’s profits will depend on the market performance of those firms. Furthermore, a company cannot select the most appropriate entry mode unless it makes at least a tentative marketing plan for the product/target market in question. The foreign marketing plan becomes, therefore, a critical input to the entry mode decision. Decisions on the entry mode and marketing plan are truly joint decisions.

Table 4

The International Marketing Plan: Instruments of Action

Product A combination of tangible and intangible attributes that confer benefits on users. These attributes form three subsets: physical, package (including trademark), and service (pre- and post-purchase). A given product may have one, two, or all three dimensions.
Price Price is the exchange ratio between a product and money. A company’s pricing discretion is dependent on the degree of product differentiation achieved in the market. Together with sales volume, price determines sales
Channel A chain of marketing agencies that links the producer to his final buyers. The distinctive channel flow is a series of transactions that ultimately transfer ownership to final buyers. The producer may own none, some, or all of his channel agencies.
Logistics A chain of agencies that accomplishes the physical movement of a product from the producer to his final buyers. Logistic activities include transportation, handling, and storage, as well as the choice of production location.
Promotion All communications initiated by a seller that are addressed to final buyers, channel members, or the general public, and are intended to create immediate sales or a positive image for the seller’s product and/or company. Promotion includes personal selling, advertising, sales promotion, and publicity.

A Logical Flow Model of the Entry Decision Process

Figure 4 presents a logical flow model of the entry decision process. In the remainder of this text, we shall flesh out this model, with the intent of helping managers make better decisions.

Source: Root Franklin R. (1998), Entry Strategies for International Markets, Jossey-Bass; 2nd edition.

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