2. 312MKT International Marketing
Lecture Nine

3. Learning objectives
Identify other market entry options available to companies seeking to develop new markets
Understanding more factors affecting the selection of market entry mode
Understanding the relevancy of this process to the charity sector

4. In Last Week’s Lecture We Looked at:

5. Market Entry Method
The following criteria are necessary to consider when deciding on a market entry method:
The company objectives and expectations relating to the size and value of anticipated business.
The size and financial resources of the company
Its existing foreign market investment
The skills abilities and attitudes of the company management towards international marketing
(Doole and Lowe, 2012)

6. Factors for Selecting Foreign Appropriate Market Entry Mode
Internal factors
Desired mode
characteristics
Transaction-
specific factors
External factors
Entry mode
decision
(Hollensen, 2017)

7. Other Factors/Attributes That Managers Should Consider Also in The Charity Sector

8. Where Did These Additional Factors Come From?

9. Defining Marketing in the Valuntary Sector
Professor Philip Kotler developed the following definition in the 1970s which has stood the test of time:
Marketing is the analysis, planning, implementation, and control of carefully formulated programmes designed to bring about voluntary exchanges of values with target markets to achieve institutional objectives.
Marketing involves designing the institution’s offerings to meet the target market’s needs and desires and using effective pricing, communication, and distribution to inform, motivate, and service the markets.
(Kotler and Fox, 1985, p. 7)
(Source: Bruce, 1998)

10. Defining Marketing in the Valuntary Sector
According to Kotler and Fox understanding customer needs is another important attribute that charity managers should consider when deciding on market entry method
(Source: Bruce, 1998)

11. Factors for Selecting Foreign Appropriate Market Entry Mode
Internal factors
Desired mode
characteristics
Transaction-
specific factors
External factors
Entry mode
decision
(Hollensen, 2017)

12. The Case of Oxfam Internal Factors: Firm Size Reduced resources
Unique capabilities and needed skills
International experience
Special nature of product/service or offering
Desired Mode Characteristics
Not risk averse: the decision maker actually takes the risk, yet tries to control its implications with effective internal analysis through innovative management practices

13. The Case of Oxfam Transaction specific Factors
Considering the tacit nature of know-how related to the organization
External Factors:
Socio-cultural distance between home country and host countries (and between host countries)
Country risk

14. The Case of Oxfam https://www.youtube.com/watch?v=KL4aPGP-Prs 2014
A high-flying company executive goes undercover to ensure his businesses are in good shape.
2014
Oxfam CEO Mark Goldring is worried the charity is over stretched so he goes undercover to investigate whether it is raising the maximum amount of money possible and spending it wisely. When he travels across the world to a frontline disaster zone, he is frustrated by the dangerous conditions his employees are working in and is forced to consider whether Oxfam has more to worry about than just its finances
Web-Link:

15. Market Entry Methods and the Levels of Involvement in International Markets
Wholly-owned subsidiary
Company acquisition
Assembly operations
Joint Venture
Strategic Alliance
Licencing
Contract manufacture
Direct Marketing
Franchising
Distributors and agents
Sales force
Trading companies
Export management companies
Piggyback operations
Domestic purchasing
Levels of
Involvement
(Doole and Lowe, 2012)

16. Market Entry Method Licencing
A form of management contract in which the licenser confers to the licencee to use one or more of the following: patent rights, trade-mark rights, copywrites and/or process know-how.
In some situations, the licenser may continue to sell essential components or services to the licensee as part of the agreement
(Doole and Lowe, 2012)

17. Market Entry Method Licencing Examples
Olympic Games Committee: has been successful in licencing the use of brands characters and themes
Simpsons: the most successful licenced TV show
Web-Link:
(Doole and Lowe, 2012)

18. Market Entry Method Advantages of Licencing For Licenser
Financial and management commitments can be kept low
The high cost of setting up a manufacturing, retailing or marketing subsidiary can be reduced and tariff and non-tariff barriers can be avoided. Therefore it is particularly useful to use where:
Direct involvement is not possible
Market segments to be targeted are not sufficiently large
for full involvement
(Doole and Lowe, 2012)

19. Market Entry Method Advantages of Licencing For Licenser
The licensee pays for the licence normally as a percentage of sales and thus, as the sales grow, so does the revenue to the licenser.
Considerable control exists as the licencee uses the rights or know-how in an agreed quantity of product, and the licensee markets and purchases products for an agreed fee
(Doole and Lowe, 2012)

20. Market Entry Method Advantages of Licencing For Licensee
Relative low outlays.
Possible to capitalize on established know-how with little risk and avoid the high research and development cost associated with launching a new product in many markets
(Doole and Lowe, 2012)

21. Market Entry Method
Foreign manufacturing strategies with direct investments
Company Acquisitions and Mergers
Acquisitions: pressure to produce short-term profits means that speed of market entry is essential and this can be achieved by acquiring an existing company in the market.
It gives immediate access to a trained labour force, existing customer and supplier contracts, recognized brands, an established distribution network and an immediate source of revenue, e.g. Lenovo's acquisition of IBM’s PC decision.
(Doole and Lowe, 2012)

22. Market Entry Method
Foreign manufacturing strategies with direct investments
Company Acquisitions and Mergers
Disadvantage
A company may take over a demotivated labor force, a poor image and reputation, and out-of-date products and processes.
Takeover of companies regarded as county’s heritage or key to security can raise considerable national resentment
(Doole and Lowe, 2012)

23. Jaguar and Land Rover Charity Work In Brazil
A Creative Approach!
Web-Link:

24. Doole and Lowe: Chapters 5, 7 Hollensen: Chapters 9,10,11,12 and 13
References
Doole and Lowe: Chapters 5, 7
&
Hollensen: Chapters 9,10,11,12 and 13