Explain why the modes of entry into an international market are a major issue for managers to consider.
What will be an ideal response?
Marketers enter international markets and continue to engage in marketing activities at several levels of international involvement. Traditionally, firms have adopted one of four different modes of entering an international market; each successive "stage" represents different degrees of international involvement.
• Stage 1: No regular export activities
• Stage 2: Export via independent representatives (agents)
• Stage 3: Establishment of one or more sales subsidiaries internationally
• Stage 4: Establishment of international production/manufacturing facilities
Companies' international involvement covers a wide spectrum, from purely domestic marketing to global marketing. Domestic marketing involves marketing strategies aimed at markets within the home country; at the other extreme, global marketing entails developing marketing strategies for the entire world (or at least more than one major region of the world). Many firms with an international presence start out as small companies serving local and regional domestic markets and expand to national markets before considering opportunities in foreign markets. (The born global firm is one exception to this internationalization process.) Limited exporting may occur even if a firm makes little or no effort to obtain foreign sales. Foreign buyers may seek out the company and/or its products, or a distributor may discover the firm's products and export them. The level of commitment to international marketing is a major variable in global marketing strategies.
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