Entry mode and international factors- Export readiness: the organization’s ability to conduct international trade including:o Prior experienceo Management commitment to international expansiono The firm’s financial strengtho International knowledge: Foreign market knowledge Internationalization process knowledge- Low readiness = less intense entry modes (e.g., indirect export or export without FDI)- High readiness = more intense entry modes (e.g., FDI)Entry Mode and External Factors- Competitive Positiono Strong domestic market position and strong brand help foster international success- Macro/Industry Issueso Government policies such as product certifications and standards (e.g., CE Mark) or allowed foreign ownership- Current and Future market potentialo Greater market potential usually means more involved modesIndirect Exporting- Exporting is manufacturing a product in one country and shipping it to another for final sale- Indirect exporting is when a third party, and not the manufacturer, conducts the export- Types of indirect exporting include piggybacking and export management companies (EMCs)- Indirect exporting offers benefits of additional sales without risk and cost of direct involvement nor prior experience- Indirect exporting provides the manufacturer with very little control or feedback and prevents the manufacturer from gaining important internationalization knowledgeMajor Modes of Market entry- Indirect Exporting- Direct exporting- Direct exporting with FDI- Foreign manufacturing, sales, and/or distribution- Licensing- Joint ventures and strategic alliancesFDI: Foreign manufacturing- Wholly Owned foreign productiono Acquisition vs. Greenfield Acquiring an existing local manufacturer is quicker, eliminates a potential competitor, and takes advantage of existing contactswith labor and government.  Greenfield (building from the ground up) takes longer but enables the use of the latest technology, avoids organizational culture clashes, and a ‘fresh start’ on building brand.o Wholly owned operations result in a greater percentage of the profits, more control, and increased experience and feedbacko However, wholly owned operations are costly in terms of capital and management resources (e.g., time and energy) and put the firm at greater economic and political risk.Partner Selection- Financial and pricing considerationso What margins or commissions are needed?o Which currency will be used?o What payment terms will be used?- Marketing support and considerationso What is the appropriate level of advertising and promotion?o How much training of the partner in necessary?- Communicationo What amount (frequency) and level (email, phone, face-to-face) of communication is necessary?o Should regional and/or global sales meetings be held?- Market Exclusivityo How to balance exclusivity with a partner’s motivation and capabilities?Finding Foreign Partners- Step 1: Identify as many potential partners as possibleo Primary and secondary research using online databases, identifying distributors of complementary products, and making use of trade associations, trade shows, and trade missionso Government resources such as the U.S Commercial Service’s Gold Key or state-based resources- Step 2: Visit the country and meet with potential partnerso Meetings can be arranged at trade shows and trade missionso Meetings should include a visit to partner’s facilityContract Negotiations- Cultural considerationso Differences in cultures impact how individuals negotiate- Exportations of each partnero What does each partner want?- Win-win or Win-lose?o Win-win is best for both parties- Distributor agreementso Should spell out responsibilities and interest of each party- Exclusive or nonexclusive?o Exclusive allows for greater motivation (in theory)o Nonexclusive may be more common when more experiencedDistribution Environment and Strategy- Distribution strategyo Standardization or adaptation? Which channels in each market are most profitable Economies of scale and market similarity favor standardized approaches Local differences in regulations and availability of channels favor adaptation The firm’s preferred level of involvement also impacts distribution choices. o Direct versus indirect channels Direct channels are more effective and make sense when the potential sales volume is high, however direct channels are more resource intensiveo Selective versus intensive distribution Intensive is selling through any retailer that wants the product Selective is selling through only limited retailers. 4/15/14Multiple dimensions of brand knowledgeThe reality that emerges from the varied research activity in branding through the years is that all different kinds of information may become linked to brand, including the following:- Awareness- category identification and needs satisfied by the brand.- Attributes- descriptive features that characterize the brand name product either intrinsically (e.g, related to product performance) or extrinsically (e.g, related to brand personality or heritage)- Benefits – personal value and meaning that consumers attach to the brand’s product attributes (e.g, functional, symbolic, or experiential consequences from the brand’s purchase or consumption.- Images – visual information, either concrete or abstract in nature.- Thoughts – personal cognitive responses to any brand-related information.- Feelings – personal affective responses to any brand-related information.- Attitudes – summary judgments and overall evaluations to any brand-related information.- Experiences – purchase and consumption behaviors and any other brand-related