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
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.
The International Marketing Plan: Instruments of Action
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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