International

m Marketing

Professor: Carla Pennano

2023
Agenda for today
• The International Market Entry Evaluation Process
• Country Identification
• Preliminary Screening
• In-Depth Screening
• Final Selection
• Direct Experience
• The International Market Entry Evaluation Process
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• Basic foreign expansion entry decisions
• Basic Market entry Decision: which market??
• Basic market entry decision: timing of entry??
• Basic market entry decision: scale of entry??

• Disney Case
The International Market Entry Evaluation Process
• How to Enter a Foreign Market

• The International Marketing Entry Evaluation Process is a five stage process.

• Its purpose is to gauge which international market or markets offer the best
opportunities for our products or services to succeed.

• The five steps are: m

• Country Identification
• Preliminary Screening
• In-Depth Screening
• Final Selection
• Direct Experience
The International Market Entry Evaluation Process

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The International Market Entry Evaluation Process
• Step One - Country Identification
• The world is your oyster: you can choose any country to go into.
• To decide you conduct country identification: which means that you undertake a
general overview of potential new markets.
• There might be a simple match, for
example: m
• Two countries might share a similar
heritage  United Kingdom and
Australia
• A similar language  United States
and Australia
• A similar culture, political ideology or
religion  China and Cuba.
The International Market Entry Evaluation Process
• Step One - Country Identification
• Often selection at this stage is more straightforward, for example:

• A country is nearby  Canada

and the United States.
• Your export market is in the
same trading zone  m
European Union.
• Again at this point it is very
early days and potential export
markets could be included or
discarded for any number of
reasons.
The International Market Entry Evaluation Process
• Step Two - Preliminary Screening
• At this second stage one takes a
more serious look at those countries
remaining after undergoing
preliminary screening.
• You begin to score, weight and rank
nations based upon macro- m
economic factors such as currency
stability, exchange rates, level of
domestic consumption and so on.

• At this point is when you do a

PESTEL analysis and apply the
T&S Model.
Market decision entry grid

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The International Market Entry Evaluation Process
• Step Two - Preliminary Screening
• Now you have the basis to start calculating the nature of market entry costs.
• Some countries such as China require that some fraction of the company
entering the market is owned domestically - this would need to be taken into
account.
• There are some nations that are experiencing political instability and any
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company entering such a market would need to be rewarded for the risk that they
would take.

• At this point the marketing manager could decide upon a shorter list of countries
that he or she would wish to enter.

• At this point is when in-depth screening can begin.

The International Market Entry Evaluation Process
• Step Three - In-Depth Screening
• The countries that make it to stage three would all be considered feasible for
market entry.
• So it is vital that detailed information on the target market is obtained so that
marketing decision-making can be accurate.
• At this point one has to deal not only micro-economic factors.
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• Also local conditions such as marketing research in relation to the marketing mix,
to answer questions like this ones:
• What prices can be charged in the nation?
• How does one distribute a product or service such as ours in the nation?
• How should we communicate with are target segments in the nation?
• How does our product or service need to be adapted for the nation?
The International Market Entry Evaluation Process

• Step Three - In-Depth Screening

• All of this will information will for the basis
of segmentation, targeting and positioning.

• One could also take into account the value

of the nation's market, any tariffs or quotas
in operation, and similar opportunities or
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threats to new entrants.
The International Market Entry Evaluation Process
• Step Four - Final Selection
• Now a final shortlist of potential nations is decided upon.
• Managers would reflect upon strategic goals and look for a match in the nations at
hand.
• The company could look
at: m
• close competitors
• similar domestic
companies that
have already
entered the market

• … to get firmer costs in

relation to market entry.
The International Market Entry Evaluation Process
• Step Four - Final Selection
• Managers could also look at other
nations that it has entered to see if
there are any similarities, or learning
that can be used to assist with
decision-making in this instance.
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• A final scoring, ranking and
weighting can be undertaken based
upon more focused criteria.

• After this exercise the marketing

manager should probably try to visit
the final handful of nations
remaining on the short, shortlist.
The International Market Entry Evaluation Process
• Step Five - Direct Experience
• Personal experience is important.

• Marketing managers should travel

to a particular nation to
experience firsthand the
nation's culture and business
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practices.
• On a first impressions basis at
least one can ascertain in what
ways the nation is similar or
dissimilar to your own domestic
market or the others in which your
company already trades.
The International Market Entry Evaluation Process
• Step Five - Direct Experience

• Now you will need to be careful in

respect of self-referencing.

• Remember that your experience

to date is based upon your life
mainly in your own nation and m
your expectations will be based
upon what your already know.

• Try to be flexible and

experimental in new nations, and
don't be judgmental - it's about
what's best for your company.
The International Market Entry Evaluation Process
Basic foreign expansion entry
decisions

A firm contemplating foreign

expansion must make three
decisions:

• Which markets to enter and m

when??

• What is the scale of entry??

• Basic market entry decision:

which market??
The International Market Entry Evaluation Process
200 nation-states

• Different long-run profit potential for

firms
• Size of market
• Purchasing power (present wealth)
• Future wealth
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• Benefits cost & risks trade off - rank
markets
• Future economic growth rates
• Free market system & country´s
capacity for growth
• Stable and developing markets
without upsurge in inflation rates or
private-sector debt
The International Market Entry Evaluation Process
Basic Market entry Decision: which
market??

Value an international business can

create in a market

• Suitability of product for market

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• Nature of indigenous competition

• Not widely available & satisfies an

unmet need

• Greater value translates into an

ability to charge higher prices & build
sales volume more rapidly
The International Market Entry Evaluation Process
Basic Market entry Decision: which
market??

Process of country evaluation and

selection

• Scan for alternatives

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• Choose & weight variables

• Collect & analyze data for variables

• Use tools to compare variables &

narrow alternatives

• Make final country selection

The International Market Entry Evaluation Process
Basic market entry decision: timing of entry??

Early entry - firm enters foreign market before other foreign firms

• First mover advantage

• Ability to preempt rivals &

capture demand by establishing m
strong brand name

• Build sales volume and ride

down the experience curve with
a cost advantage

• Create switching cost that tie

customers into products &
services
The International Market Entry Evaluation Process
Basic market entry decision: timing of entry??

First mover disadvantages - pioneering costs

• Time & effort in learning the rules of the game

• Mistakes due to ignorance

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• Liability of being a foreigner

• Costs of promoting & establishing a product -

educating consumers
(KFC in Chine --> benefit to McDonald´s)
The International Market Entry Evaluation Process
Basic market entry decision: scale of
entry??
• Large scale entry
• Requires commitment of
significant resources & implies rapid
entry (Dutch ING spend billions to
acquire US operations) m
• Strategic commitment
• Decision that has long term
impact & is difficult to reverse
(entering market on large scale)
• Change the competitive playing
field & unleash number of changes -
e.g. how competitors might react
• Can limit strategic flexibility
The International Market Entry Evaluation Process
Basic market entry decision:
scale of entry??

Small scale entry:

Advantages:
• Time to learn about the
m
market.
• Limits company exposure.

Disadvantages:
• May be difficult to build
market share.
• Difficult to capture first-
mover.
The International Market Entry Evaluation Process
Basic market entry decision: scale of
entry??

Basic market entry decisions

Discussion based on developing country

considerations
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• Can use multinationals to learn &
benchmark against

• Can focus on niches the multinationals

ignores or can´t serve

• Can piggyback with multinationals

In class exercise: https://www.youtube.com/watch?v=Sz1BNfc50Io
Imagine that you are the CMOs of the DISNEY company that has operations in:
Anaheim – California, Orlando, Tokyo, Paris, Hong Kong, Shanghai, strategically
analyze which international markets you should enter in the next 5 years:

1. Do the Country Identification process and discard those countries you will not
analyze or enter. Provide arguments on why you made this decision.

2. Develop an international market decisionm entry grid (in

excel), including all the variables you would consider in
order to analyze your destination countries.

3. Select 5 countries you would like to analyze in order

to take your product abroad and prepare the grid for
those 5 countries.

4. Make a final decision and select 2 countries your

CMO will travel to in order to make a better decision.
In class exercise

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In class exercise

In order of admission number:

1. Anaheim - California
2. Orlando
3. Tokyo
4. Paris
5. Hong Kong
6. Shanghai m
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