hnd 国际营销导论

 Introduction ........................................................................................ 1  The Reasons of Entering International Market ................................. 1  Sources of Information ...................................................................... 2  Key Opportunities and Threats Associated with Entry ..................... 2  Process of Markets Selecting ............................................................. 4  Modes of Market Entry Available to PK ........................................... 5  The Most Appropriate Method for PK Electrics ............................... 6  Conclusion ......................................................................................... 7  Reference ........................................................................................... 7

 Introduction

With the rise of the economy of our country, China got more and more high position in the international market. Thus, whatever the large or small firms in our country are more or less affected by global events and competition to some degree. In the case, we should evaluate the methods of accessing international market and help PK Electrics to find the best way to broaden its market.

 The Reasons of Entering International Market

It is the indispensable process for PK Electrics to continuously operating its business. And there are three reasons for PK Electrics to carry out this strategic plan:

Market saturation means there is limited or no growth available in domestic country market. With the great effort on advertising and promoting, and a good reputation for quality and customer service, the company found that the rate of growth has begun to decline over the last two years, from where we may consider that the electrics market in China began to be saturated. In the domestic country, fierce competition and limited requirement could cause PK Electrics a high cost. However, when the firm comes to the international market, a greater demand of electrical items would provide PK Electrics more opportunity to spread its products.

There may be an opportunity for PK Electrics to extend its product life cycle (PLC). In different country, a product may be at different stages in its PLC. For PK Electrics, the firms can try to cover the gap of performance declining by exporting. In this way, PK Electrics may gain more different PLC to maintain the continuous rise of sales and profits.

As long as expanding the electrics market, it can also enhance the brand impact. Since people seeking improvements to their homes and living standards, price, quality and even service will not be the key factors to attract customers. Thus, going abroad and becoming the transnational enterprises would be the greater promotion for PK Electrics’s brand image. This will also make the company more competitive in the domestic country market.

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 Sources of Information

In considering entering new international markets, the effectiveness of the strategy will depend on how much they understand to the potential market. There are two key sources of information for the managers to realize the overall situation of market. Primary sources are usually observed and recorded or collected directly from respondents.1 Thus, PK Electrics can make their own questionnaire to get some information they want to know. At the same time, the managers in PK Electrics could make observations to the internal environment of the potential markets to get some first-hand data.

Secondary sources are complied both inside and outside the organization for some purpose other than the current investigation. To know more about the situation of international market, PK Electrics can get secondary information through network, publications and prints about WTO which may contain the updated international trade event and suggestion. Besides, it is an appropriate method for PK Electrics to collect information from the database of local government or department of trade and industry, such as trade association.

 Key Opportunities and Threats Associated with Entry International Markets

When the company will enter into the international market, one thing they must to realize is the opportunities and threats which come from the new external environmental conditions. We can use PLEST (policy, legal, economy, society and technology) method to analyze the market attractiveness, by which the company may be able to make the most appropriate decision and enter into international market timely. Political risk

When a company enters into a foreign country, the first problem they should think

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about is the political factors. Political risk can be defined as the probability of domestic or foreign firms being adversely affected by the actions taken by the state. And the political risk may occur at three levels: National

At national level, the stability of the government should be firstly considered. When PK Electrics enter a foreign country, it may be high possible that the political situation would make a restriction to the development of the firm.2 At the same time, if PK Electrics can develop its business in a more stable country, the company could broaden its product life cycle with the driving of state economy. Industry

The potential for political risk is greater for strategic industries such as oil, steel...But for PK Electrics, it is a non-strategic company and will face less risk on it. Thus, for this point, PK Electrics could have risks.3 Company

At the company level, the risk would occur when the company occupies a large part in that industry and have an impact on GDP. I believe this is an opportunity for PK Electrics to promote it business abroad. Legal risk

Legal risks are the local country’s rules that govern the conducting of business in that country as well as the standards that products and services had to meet. Economic risk

The economic wealth of a country is based on its human, natural and technical resources, which may affect a country’s ability to produce globally competitive goods and service. Social-cultural risk

Social-cultural risk includes the size and growth of population and the urbanization. In the case, if the market country or city with a large population, the market may own a huge market potential which contributes to PK Electrics increasing sales. Thus, as

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the family planning for some countries, the control of population would lay great impact on the sale situation. If the population of the place that PK Electrics had changed, the firm should adjust the product injected volume to gain more sales. And the company should lay more emphasis on some main population center. Technique risk

Since the different level of development of the countries, some country may be unable to produce some high-tech product. When PK Electrics intends to enter in international markets, technique should be considered much more. The technique of production firms states the quality, producing efficiency and even the image of the brand. The managers in PK Electrics should change the price and the quantity of products according to the techniques and update their products with more new technique.

 Process of Markets Selecting

Step 1

PK Electrics can collect information before select a target international market to enter via trade association, WTO website and National Statistics Online. Step 2

PK Electrics conduct the assessment of the attractiveness of the market by using PLEST analysis to identify the potential markets. From the analysis in PLEST, the firm is able to understand the threats and opportunities thoroughly. PK Electrics set standards according to the current situation to know which international market is the most appropriate. Step 3

PK Electrics did the assessment of the competitive environment for a given company by using Porter’s Five Forces Model to identify the target market which consists of suppliers, competitive rivalry, buyers, potential entrants and substitutes.4 Step 4

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PK Electrics selected the entry mode and marketing mix which consists of product mix, price mix, promotion mix and place mix.

 Modes of Market Entry Available to PK

The ways of assessing a market can be two types—marketing operation and productions operation.

There are three forms of market entry that appropriate to PK Electrics in marketing operations: Indirect exports

Indirect exporting results in the company’s products being sold abroad but do not provide the opportunity to increase its understanding of the export markets.5 Direct exports

Direct exports occur where the producing organization itself performs the export tasks rather than using an intermediary. In direct exporting, the exporter – as the name suggests – has a direct relationship with its overseas buyers. In direct exporting, the exporter—as the name suggests—has a direct relationship with its overseas buyers. However, without the help of the intermediaries, the programme may be high risk and cost. Piggybacking

Piggybacking, or complementary, occurs when one producing organization (the carrier) uses its own established international marketing channels to market the products of another producer (the rider) as well as its own.

There are three forms of production entry that appropriate to PK Electrics in marketing operations: Licensing

Licensing can be broadly defined including a variety of contractual arrangements whereby domestic companies make available their intangible assets to foreign

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companies in return for royalties or other forms of payment. In this way, the firms can reduce the limitation from import barriers, political risks and the cost of transportation .But it will easily cause more competitor and still have less control on it.

Franchising

Franchising is similar to licensing but the difference is enterprises should help foreign juridical entity with the aspects of production and management.6 To be successful, the firm must offer unique products or propositions, and a high degree of standardization. Contract manufacture

Traditionally, a firm in a high-cost country reaches agreement with a low-cost manufacturer. In this way, the firm may have less risk and local investment but would not be easy to maintain the quality of the product and have fewer markets to expand.7

 The Most Appropriate Method for PK Electrics

Io select an appropriate method for PK Electrics, the key factors that need to be considered are these five tips: Cost

Organizations have limited financial resources, therefore the cost of the entry method must be carefully considered. The cost of indirect exports is low because there is no need for PK to build exporting organizations or spend on transportation charges. Thus, PK Electrics can invite a middleman to sell its products abroad. Commitment

Commitment means how much effort is required to make the method work. For indirect exports, with the help of agents and distributors, PK Electrics Company will save time and money to get familiar with local market. Control

More commitment represents the greater level of control. Obviously, PK Electrics

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would have less control on the business. Speed

Speed is equal to the efficiency. For some special goods, they require fast entry methods in order to gain competitive advantage. As for PK Electrics, it does not emphasize the fast entry method. Thus, entry in the way of indirect exports is suitable. Risk

Indirect exporting can make PK enter and quit international markets flexibly. And for the less control of the business, PK Electrics will also share its risk to middlemen and agents. So the risk PK undertakes is minimal.

All in all, the most appropriate method to enter into the international market for PK Electrics is direct exports.

 Conclusion

By PK Electrics entering the international market, I got to know more in-depth understanding of some important strategic thinking for the good development of the company. The world is full of competition, Only if the enterprises prepare thorough information, carry out detailed analysis and conduct assessment can they find the most appropriate method for them to open a new world.

 Reference

http://baike.baidu.com/view

Scottish Qualifications Authority, 2009, Scottish Qualifications Authority, 2006, < Marketing: An Introduction>

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