Marketing management assignment help online: Essay on international business and overseas market
Introduction
The following paper includes the discussion about export business. It includes factors which are to be considered to enter overseas market while taking into account the products to be offered in those markets. There are some specific factors which need to be taken care of for deciding which particular product to be offered in which market. Those factors are economic conditions of the market where product is to be offered, social and cultural values in that area, the level of competition between different company’s products, demand for products, the opportunities and barriers in entering the market. The essay is followed by a brief conclusion of what has been the crux of overall discussion.
Export business
Export may be defined as transportation of goods or commodity from one country to another. It is a process wherein goods produced in one country are send via shipment, air transport etc. to another country for the purpose of future sale. Export business is done with a view of global expansion and also to earn more and more revenue by increasing sale in foreign market. Exports can be financially rewarding and is also important for business growth. It directly affects the internal trade and economic stability of a country (Blythe and Zimmerman 2005). An economy will grow with a face pace if its exports increase more than its imports. Export growth is closely related with rate of economic growth and distribution of wealth in a country. There is a positive relation between economic growth and growth of exports. Export growth will lead to increase in demand for country’s output which would in turn provide economic growth. Purchase of productive intermediate goods can be facilitated through foreign exchange which would be generated by raising the level of exports. Exports also lead to greater productive efficiency. Thus the growth of exports effects economic growth positively in short and long run (Czinkota and Ronkainen 2007).
Factors to be considered to enter overseas markets and which products to offer in each market
There are several factors which need to be considered before entering foreign markets. It includes achieving cost efficiency at domestic level so that products produced are economic with superior quality. Product in order to enter foreign market should meet different standards that are applicable there. It is very important that the product meets tariff structure prevalent in foreign market so as to compete with foreign products (Gutterman 2002). Before entering foreign market the buying behavior of consumers in that particular market and different strategies of marketing needs to be studied carefully in order to make necessary changes at the production level if required.
The decision to enter foreign market benefits domestic market to a great extent. When a company decides to go global it will have to improve the quality of product while keeping it cost efficient. This will benefit the consumer in domestic country to get best quality product at economic prices. Before taking first step toward globalization few factors to be taken into account are discussed here.
Economic Condition: It all depends on economic conditions of a country if we can offer a product in that country or not. A country under which the economic condition of people is sound will happily accept manufacturers of domestic appliances like washing machines, vacuum cleaners etc. to enter its market. Because people there would be sound enough to afford all these luxury appliances. While on the other side, in a country with poor economic condition these luxury appliances would be of no use. In such a country where people are not economically sound, they would not be in a state to fulfill their bare necessities even, so all these luxurious domestic appliances would prove to be a failure in such markets owing to poor economic conditions (Lukac 2008).
The economic condition is one of the vital factors which are required to be considered while deciding to enter the overseas market. The product to offer also depends on these factors. Like if we take an example of country like Liberia or Central African Republic we can say that people in these countries are not financially and economically strong and they also does not use such electronic appliances, so before deciding any economic market it is vital for organization to analyze the economic condition of the economy. When selecting such country the organization must select the products which are cheap and can be afforded by people in that economy. When the company plans to enter countries like US, the company can sell superior products due to the prosperity of the economy and people have sound financials to afford such products. The company can offer products like vacuum cleaner, washing machine etc. The product which the company needs to provide or supply in each market also depends on the economic condition, while selecting a developed nation the company can look all the higher quality products in each appliances range while entering developing nation the company needs to look at the purchasing capacity of people as how much price and quality products the people can afford to buy. Thus depending on the economic condition of a country market would be decided and subsequently product for that particular market (Ajami and Goddard 2006).
Level of competition: Business gets highly affected by competition. Competition occurs when multiple companies try to sell their products to same group of consumers. Some markets may be highly competitive while other may not be so. Considering level of competition means how many other companies prevail in the market selling similar products and the amount of success they achieve in selling. It would also involve checking the skills and efficiency of local distributors in penetrating markets. Level of competition would indicate if a particular product would survive in a market or not and what changes to be made in terms of price and quality in order to suffice in foreign market (Brady 2010). If Asia is selected as the desirable market place to enter by the exported then the exporter has to face a lot of competition in the market due to the developing market place and having high competition, the company needs to market low prices products for facing the competition and can sell products like vacuum cleaner, refrigerator etc. The consideration of the level of competition is also one of the most vital factors in deciding the overseas market to enter.
The markets where there are already several players are pertaining then the company must look for other markets. The overseas market where few companies are providing such products which the company indents to sell related to electronic appliances washing machines, vacuum cleaners etc. competition makes the survival, and entry of the company in the market tough which also ceases the company expected opportunities. The level of competition plays a vital role in deciding which overseas market to select. Looking at the products that needs to be sold in each market also depends on the level of competition. With organizations already prevailing in the market for any product like washing machines, then the company can go for vacuum cleaners so that it does not need to face higher level of competition and will also find new market and not the penetrated market place (Bermejo 2002).
Demand for products: It states that while selecting a foreign market first thing to be checked is the demand for product in that market. Before offering the product the market needs to be thoroughly checked if it would act as an incentive for our product if the market is large enough to accommodate product of similar nature with remaining others. The demand factor is also one of the most vital factors which need to be considered while deciding an overseas market to enter. The analysis of the demand for products the company is offering is vital because if there is no demand for the product in that market then there will just be expenditure on the part of the company to enter that market. The market where is high demand for the product and there are several new segments which can be explored by the companies then it is beneficial to enter that market and offer products which are not yet marketed in that area. Organizations need to consider the demand factor first and then decide whether to enter the market or not and which products to offer if there is a high demand for the product in the market. In case of products like refrigerator we can say that in cold places there will be no demand for it while in hot places it will be highly demanded, a company which tries to sell refrigerators in cold prone area like Northice in Greenland or Oymyakon in Russia which is already at freezing point then the products will not be sold much (Ajami and Goddard 2006).
Market infrastructure: It emphasizes on the need of sufficient infrastructure supporting sales and distribution of product. This would include facilities in terms of highways, air service, telephone, internet and other facilities for providing smooth operations. It is also vital for the organization to look at these facilities when selecting each country. The transportation and logistics is one of the vital factors in the electronic appliance business. The highly effective distribution network is required for the effective supply of products internally and growth of the company in that market. Products like refrigerators, washing machines require efficient supply chain while products like vacuum clear are smaller in size as compared to the other products like refrigerators and washing machines and can easily be transported. Thus it can be said that before entering any new overseas market the market infrastructure must needs to be evaluated (Gutterman 2002). If the exporter tries to sell the products in South Africa the it may not get enough infrastructures and cannot market products like refrigerators, washing machines due to the need of good market infrastructure.
Market Entry Barriers: It means if there is any prohibition or regulatory issues related to the entry of product in foreign market. The market entry barriers are also one of the most vital factor that needs to be taken into account while deciding which overseas market to enter and also which products to offer in that market. Market entry barriers denote the rules and regulations in the foreign market related to the entry and exist of any organization related to that industry. With the tightness of the regulations in any nation for the entry of the electronic appliances makes it difficult for the company to sell its products in that market. The competitive barriers like the monopoly market pertaining in any economy also make it difficult for any company to enter market and sell products. If the company tries to enter into China then it may find several difficulties to enter due to several laws. It is also difficult for the companies to enter the market when the monopolist have excessive powers which makes it difficult for companies and organizations to enter the market as they may face high price competition, quality issues or other factors (Czinkota and Ronkainen 2007).
Expected growth: Before selecting any overseas market the organization must evaluate in advance the expected growth potential in that market for the products in which the company is dealing. It is vital for the company to analyze this because with lesser growth expectations the company may judge not to enter that market as the entry costs are very high as the company needs to market its products aggressive in the initial period. It can also be said that with higher growth expectation the company can enter the market with aggressive budget related to marketing and advertisement, so the company must evaluate the expected growth potential of the market (Czinkota and Ronkainen 2007).
Conclusion
From the above analysis it can be concluded that there are several factors which needs to be considered when organizations plan to increase their business internationally. It can also e concluded that the manufacturer of the domestic electronic appliances need to consider the most vital factor the competitive level in the foreign market where it is intending to enter. It can also be concluded that the organizations needs to consider the economic condition of the economy before entering and deciding which products it intend to sell in the foreign market. With poor economic condition in any economy the manufacturer must analyze its products it is offering as that country may not have higher demand for such products. It can also be concluded that the organizations need to analyze the market infrastructure also in order to evaluate which economy to enter. The country with poor market and transportation infrastructure must not be selected for entering as that will make it difficult for the company to grow in that market. It can also be concluded that all these factors are vital for the organization to analyze and interpret in order to grow and survive in the foreign market. The legal regulations applicable in that market are also vital to be considered in order to analyze whether it will allow the company to enter the market and if allowed whether it will help the company to grow.
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