Approaches to Entry Mode

In this unit we will take a look at the various approaches to market entry and we will particularly consider exporting as a market entry strategy.

. This makes it an ideal first step to internationalisation for many firms and a useful strategy for firms in risky and uncertain markets. The export decision is influenced by three sets of influences on the firm:

• Experience and uncertainty effects
• Behavioural and firm specific influences
• Strategic influences on exporting

The firm’s activities at the pre-export stage have an important influence on the firm’s initial export direction, and several factors affect the firm’s decision to internationalise:

• Degree of international orientation
• Previous experience
• Perceptions of risk and return

Government-sponsored export stimulation measures, product characteristics and unsolicited export orders also play an important role at the early stage of exporting.

Opinion among researchers and managers is divided on the issue of the relationship between firm size and export success:

• The importance of a positive managerial attitude to exporting and the necessity of committing managerial and financial resources to the internationalisation process is crucial to the success of the firm, irrespective of size
• The costs associated with exporting – market research, product adaptation, market visits, shipping and agency fees – have a strong influence on a firm’s export activity; large firms may have an advantage over smaller firms
• In assessing the cost of exporting and competitiveness the areas of service, quality, design and product uniqueness are very important. The exporting firm succeeds by being cost competitive and also by being competitive in other areas of marketing

In this unit we shall:

• Examine the range of market entry options available to the firm in terms of the formulation of their international marketing strategy
• Analyse the role of exporting in the internationalisation of an organisation
• Assess the pre-conditions and steps required as a prelude to effective internationalisation

On completion of this unit you will be able to:

• List the set of factors that influence the firm’s export decision
• Decide when exporting is the most attractive entry mode
• Acknowledge that exporting may be a step in the process of deeper commitment to internationalisation
• Discuss the importance of managerial attitude to exporting
• Evaluate the costs associated with exporting
• Realise how pre-exporting activities can influence the firm’s initial exporting direction

Unit 5 Reading

The unit reading considers the various approaches to market entry and exporting as a market entry strategy. The chapters will consider the different approaches to the choice of entry mode, the advantages and disadvantages of the main export modes and the main intermediate entry modes.

Required Reading:

Hollensen, S. (2016) Global Marketing (7th Ed). Pearson Education Limited: Harlow,

Chapter 9: Some approaches to the choice of entry mode

Chapter 10: Export modes

Chapter 11: Intermediate entry modes

Chapter 12: Hierarchical modes

This reading will be required for contributing to part of the 5&6 discussion.

Unit 6: International Marketing Mix – Product

To those of you have already studied a course in marketing the concept of the ‘marketing mix’ will be familiar to you. More commonly they are referred to as the 4Ps of product marketing (product, price, place and promotion) and recently extended to the 7Ps (adding people, processes and physical evidence).

For this module we will concentrate upon the first 4Ps of the 7Ps and look at those elements in greater detail over the next few units. In this unit we will consider product, which often comprises one of the first decisions taken by a marketer when formulating the international marketing mix.

In this unit we shall:

• Analyse the key concepts relating to the product element of the international marketing mix
• Assess the characteristics of services marketing in terms of the marketing mix
• Examine the relevance of the product life cycle (PLC) as a useful model for making product decisions and formulating strategies
• Discuss the importance of branding in international marketing strategy

On completion of this unit you will be able to:

• Apply the main concepts of product in terms of goods and services and as a key element of the international marketing mix
• Evaluate a product in terms of the PLC and apply the knowledge in terms of formulating future marketing strategy
• Explain the key concepts relating to branding within a global context

Unit 6 Reading

The unit reading considers the Product elements of the marketing mix. The chapter will consider the characteristics of the product and the question of branding.

This reading will be required for contributing to part of the Unit 5 & 6 discussion.

Required Reading:

Hollensen, S. (2016). Global Marketing (7th Ed). Pearson Education Limited: Harlow, pp. 480-526.

Chapter 14: Product Decisions