Chapter 4 Preliminary Stages of the Research Process
Information Requirements for International Marketing Decisions • Market Orientation • Strategies Orientation • Problem Orientation
Market Orientation • Consists of: • Internationalization Process • Market Selection • Mode of Entry
Internationalization Process • Type and quality of management • Dynamic management • Commitment to developing foreign markets • Higher level of formal education among • managers
Market Selection • Market size and trends • Market structure and segmentation • Companies operating in that market • Lists of products and prices • Distribution channels • Media availability and rates
Mode of Entry • Exporting • Licensing and other forms of contractual agreements • Joint ventures • Wholly owned subsidiaries
Contingency Model of Mode of Entry Decision Recognition of the need to operate in a foreign market Evaluation of time, resources, and quality of information available Selection of a decision strategy Data collection and information processing Selection of a mode of entry
Strategic Orientation • Expansion Strategy • Standardization • EPRG framework
Expansion Strategy • Sprinkler strategy: • A firm decides which markets it plans to enter and simultaneously enter all these markets. • Waterfall strategy: • - The firm follows a roll out policy, entering the most profitable market first. • - Conservative approach.
Standardization • Market conditions: • Physical environment of a market like climate, product use conditions, and population size • Industry conditions: • Level of competition and technology • Varying prices of local substitutes • Local production costs.
Standardization (cont) • Marketing institutions: • Practices in distribution systems, Availability of outlets • Advertising agencies • Presence or absence of mass media channels • Legal restrictions • Tariffs and taxes; restrictions on advertisements
Problem Orientation • Problem Definition: • Cultural shock or psychological jolts in encountering a wide variety of unfamiliar value systems • - Self Reference Criterion • Unconscious tendency to assume that every one else has similar values, attitudes,lifestyles, etc. • Unit of Analysis • Region
Steps in avoiding Self Reference Criterion 1. Define problem in terms of home country culture 2. Define problem in terms of foreign country culture 3. Isolate SRC influence to see how it complicates the problem 4. Redefine problem withoutSRC influence and solve for foreign market situation