41. Entry modes in the international marketing, comparative analysis

A mode of entry into an international market is the channel which your organization employs to gain entry to a new international market.

Strategic Alliances (SA) Sometimes the relationships are between competitors

Joint Ventures (JV)

Joint Ventures tend to be equity-based i.e. a new company is set up with parties owning a proportion of the new business. Reasons:

Access to technology, core competences or management skills.

To gain entry to a foreign market.

Access to distribution channels, manufacturing and R&D are most common forms of Joint Venture.

Overseas Manufacture or International Sales Subsidiary

A business may decide that none of the other options are as viable as actually owning an overseas manufacturing plant i.e. the organization invests in plant, machinery and labor in the overseas market. This is also known as Foreign Direct Investment (FDI).

Licensing

Licensing includes franchising, Turnkey contracts and contract manufacturing. Licensing is where your own organization charges a fee and/or royalty for the use of its technology, brand and/or expertise.

Piggybacking whereby your new product uses the existing distribution and logistics of another business.

41. Adaptation vs. Standardization strategies for international firms

Standardisation involves the offering of identical product line at identical prices through identical distribution systems, supported by identical promotional programmes in several different countries.

The fundamental basis of the global standardisation school of thought is that the customers needs, wants and requirements do not vary across various markets and countries. They believe the world is becoming increasingly homogenised in its customer requirements. As they argue, standardisation of the marketing mix elements and creation of a single strategy for the entire global market promise including other lower costs, consistency with customers and uniformity associated with world-wide branding and customer mobility.

Adaptation concerns the completely “Localised” marketing strategies which contain no common elements whatsoever. The supports of international adaptation approach stress that differences between overseas markets in terms of market, technology, political, economic, cost and environmental factors require marketing activities which take specific country requirements into account.

41. Peculiarities of b2b marketing. Specifics of markets, products and main participants.

A B2B sale is to an organization. And in that simple distinction lies a web of complications that differ because of the organizational structure. The marketing mix is affected by the B2B uniqueness which include complexity of business products and services, diversity of demand and the differing nature of the sales itself (including fewer customers buying larger volumes). Because there are some important subtleties to the B2B sale, the issues are broken down beyond just the original 4 Ps developed by McCarthy.

B2b marketing differs fromconsumer marketing in three main ways:

1. market structure and demand;

2. the nature of the buying unit;

3. the types of decisions and the decision process involved.

B2b often has a large number of customers that have to be handled individually and also requires relationship development, frequently long-term, between the selling and the buying organizations.

Business-to-business marketing features:

• Transactions among and within value chains.

• Value primarily determined by business economic use.

• Small numbers of customers, many requiring personalized marketing, including customized products and prices..

• Large customers with formidable market power. (In B2B, your customers often are also your competitors.) Widely varying customer types and customer needs.

• Large-unit transactions.

• Complex and lengthy selling processes involving many players creating a demand decision chain.

• Deeper partnerships with members of the value chain, including customers.

• Channel management oriented up and down the supply chain.

• Sales focused on key account management, and multiple purchasing influencers (many of whom are not likely to be end users themselves).