Methods of market entry - Marketing Management

There are a number of ways in which a company can become involved in foreign markets depending on its level of commitment and involvement. Related to this, and having decided this degree of involvement and commitment, and determined which foreign markets are to be targeted, the company must determine how it will most appropriately enter these markets. There are two broad alternative methods. Each of these methods of entry has its own advantages and disadvantages and must be assessed against a number of criteria. Examples of criteria which may be used to assess the alternative methods of entry are:

Company-specific factors

  • corporate goals;
  • size of company, resources.

General factors

  • number of markets;
  • penetration within markets;
  • competition.

Political factors

  • government restrictions/incentives;
  • political risk, stability.

Control

  • more direct involvement affords greater control.

Incremental costs/investment requirements

  • marketing outlay varies directly with method of entry as do investment requirements.

Profit and sales potential

  • long-term sales and profit potential associated with each method of entry need to be considered.

Administrative requirements

  • documentation, red tape, management and legal time.

Personnel requirements

  • the more direct the method of entry, the greater the skills required.

Risk

  • political as well as commercial.

Flexibility

  • an optimal choice at one point in time may change over time and long-term involvement may require initial flexibility.

Alternative methods of entry

Alternative methods of entry


All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status

Marketing Management Topics