1. Export Market Entry Strategies Non-Export Mode
Lecture 6
Export Market Entry Strategies
Non-Export Mode

2. EXPORT MARKETING ENTRY STRATEGIES
Entry mode Marketing plan
Target Country Target Market
Penetration Penetration
Channel of distributions

3. International Marketing Channel of Distribution
A system composed of marketing organizations that connect the manufacturer to the final users of consumers of the products in a foreign market.
Product
MANUF CONSUMER
Border

4. Elements of Entry Strategy
(Decision) We should decide:
Objectives and goals in the target market
Needed policies & resource allocations
The choice of entry modes to penetrate the market
The control system to monitor performance of the market
A time schecule
Sales Appoach: just to sell and no need to stay long

5. Entry Modes
Entry mode is an institutional arrangement necessary for the entry of a company’s products, technology, human & financial capital into a foreign country/market.

7. Chanels between nations
Exporting: Simply & easy way. (Direct-indirect)
Licencing: International expercing by licence agreement
Contract Manufacturing: Contracting 4 manufacturing. Toyotasa/Nike (marketing by contractor)
Management Contracting: Local investor + outside company
Money know-how
Low risk
Manufacturing: Manufacturing abroad. (by himself)
Goverment, competitive pressure, market demands, restrictions, imports, cost, supplying power.
Assembly Operations: Represents cross between exporting and foreign manufacturing. Manufacturer exports components & parts. Assembled in market
Joint Venture: Forming new company for national interests.

8. Channels within nations
Distributors / Subsidiary
Wholesalers
Retailers
Consumers
Stores/malls

9. Type of Entry Mode (How far shall we expand?)
Target Market
The nature, size & geographical distribution of customers.
The needs, requirements, & preferences of these customer.
The level of economic development of the market
Products
Nature of the product
Unit volume + weight + bulk
Technical complexity.
Availability of Marketing Organization
Existing structure of distribution: YAYSAT (star)
Company Considerations
Marketing management capability & know how
Newness of the company to international marketing activities
Size of the company & width of its product line
Financial strenght & ability to generate additional capital
CAC if needed
Govermental Policies
General regulations
Discourage export

10. How can we decide entry strategy?
Naive rule: Only one way usance entry mode for each target. (Sadece distributorler ile export yapacağız.)
Pragmatic rule: Use a workable entry mode. For each workable. (Low risk rule) + profitable ( en iyi olmayabilir)
The strategy rule: (Use right entry mode for each markets) All entry modes are evaluated systematicaly then choose the best mode.

11. NON – EXPORT ENTRY MODES
There are 3 basic alternative ways that a manufacturer can engage in overseas production:
A manufacturing plant can be established
Assembly operations can be set up
A strategic alliance can be formed with one or more Co.

12. Manufacturing Facilities
Location
Climate for foreign capital (Political/economic/industry/dynamics/size/geographical /tax).
Production Considerations (Lost/ personnel&labor/facilities/cost of power transport) Real estate/cost of raw materials/capital equipment.
Special conditions (Industry conditions/competition).
Political Risk
Transfer risk (Capital, payments, products, tech persons).
Operational risk (Policies, regulations, local op. Marketing, production, financing, biz, focus)
Ownership-control risk (Inhibit ownership/control)
General instability risk (Future viabilility)

15. 2. Assembly Operations
Manufacturer exports all or most of its products in a “knocked-down” condition. These parts are put together to form the complete product.
Nigeria

16. 3. Strategic Alliances
a- Licencing
b- Contracting
c- Joint-Venture

17. a- Licencing:
A company in one country (licensor) enters into a contractual agreement with a company or person in another country (licensee) whereby the licensee is given the right to use something owned by the licensor.
Contract
Licensor Licensee
Giving right
Border

18. Involves: Technology know how, manufacturing process (patented&non-patented)
Trade mark, brandname, logo
Product/facility design
Marketing knowledge&processes
Other types of knowledge&trade secrets
Initial payment (machinery)
Annual minimum (min. guarantee)
Annual percentage fee (royalty)
Additional fee (initial payment prohibition). /New plants.

19. b- Contract Manufacturing:
Technology transfer + direct investment. (IBM, HP, DE produced by SCI, solectron, menix).

20. Management Contracting:
The local investor provides the capital for enterprise, while the international marketer provides the necessary know-how to manage the company. (Hilton)

21. c- Joint-Venture: Partnership in two sides – technical and emotional.
Technical: Joining of technical contributions
Emotional: Feeling of cooperative effort.
A new company.