Marketing Internacional - Formas de Entrada - Pilar Barra Hernández

Introduction to Market Entry Strategies

Overview of Topic 4

• Pilar Barra introduces the content of Topic 4, focusing on market entry strategies for international markets.

• The discussion will cover various forms of exportation, manufacturing contracts, and direct investment.

Exportation Types

Indirect Exportation

• Indirect exportation involves using intermediaries in the home country to facilitate exports.

• This method is akin to domestic sales as all marketing tasks are handled by other companies, particularly independent intermediaries.

Direct Exportation

• Direct exportation entails selling directly from the origin market or a subsidiary to an importer or distributor abroad.

• Unlike indirect exportation, manufacturers manage all aspects of exporting themselves, including market research and pricing.

Modes of Direct Exportation

Sales Channels

• Key channels include direct sales to end customers in foreign markets and working with agents (representatives) versus distributors (customers).

Establishing Subsidiaries

• Companies may establish commercial subsidiaries; a subsidiary has its own legal identity while a branch does not.

Strategic Alliances and Joint Ventures

Collaborative Approaches

Export Consortia

• Export consortia involve collaboration among firms sharing costs related to commercial infrastructure for exporting.

Joint Ventures

• Joint ventures are created when two or more companies from different countries collaborate on specific activities, often within the same sector but leveraging distinct advantages.

International Franchising

• International franchising allows businesses to license their products or brand names along with operational know-how to foreign entities. Examples include global brands like McDonald's.

Manufacturing Contracts and Direct Investment

Manufacturing Agreements

• Manufacturing contracts allow a company’s products to be produced by another manufacturer in a foreign market under contractual terms. Marketing remains the responsibility of the original company.

Entry Modes for International Business

Licensing and Manufacturing Agreements

• The first mode of entry discussed is producing under a contract, where a company receives a percentage of the product manufactured.

• The second mode involves licensing manufacturing rights, allowing others to produce the product in exchange for royalties, which includes transferring patents, copyrights, trademarks, and know-how.

Types of Licenses

• Common licenses granted are typically related to patents and know-how.

Establishing a Local Presence

Acquisition of Foreign Companies

• One method to enter foreign markets is through acquisition, where a company buys an existing foreign business to leverage its assets, brand recognition, distribution networks, and management capabilities.

Direct Investment

• Another approach is direct investment in creating new companies abroad with local management teams that operate under the parent company's control.