Market Entry and Expansion When entry a new market, especially to China, exporting is a good choice. There are many forces that lead us to choose the exporting. It involves more risk and investment as the firm sets up its own presence in the host country but the potential return is also greater. When choosing exporting as the market entry mode, there are many advantages and disadvantages exist: Advantages Exporting can minimizes risk and investment. Since the industry and the head quarter are at the home country, it can decline the risk and investment in other counties. It just need one thing—export.
In addition, exporting can also maximizes scales and use existing facilities to expend the market. When we develop the industry in other countries especially a new environment, there are many conditions that we are not sure, we can use the existing resource to save the investment and minimize risk, that’s why exporting can be benefit for developing a new market. Disadvantage There still some disadvantages of exporting. Firstly, the company may be viewed as an outsider and it can not be accepted easily in a new environment, we should look into the consumer, and make it out what customers’ need.
Another disadvantage is that exporting need a lot of tariff costs and a high level of barriers to entry the new market. Because of the exporting, the corporation may spend a lot of fund on exporting, at the same time, there are many differences between the two countries, just like culture, custom policy and so on, they are all the restrictions when entering a new market. In the next five years, the corporation will become more and more mature, and we should change the way of the market entry. At that time, foreign direct investment (FDI) is a suitable way to operate the industry in a foreign market.
Since we have been there for almost five years, we have enough fund to set up new company there. FDI can be benefit to the development of the company. It can gets greater knowledge of the local market so that we can know better of the consumers’ needs. What’s more, the company can be considered as an insider which is a good opportunity to get closer to the consumers. The most important reason is that FDI can minimize knowledge spillover, it is save for the company developing out of the home country.
Country-of-origin The origin of the product is Belgium which is a developed country, it will leave a good impression on the consumer. Codiva is also a famous brand of the whole world, it is beneficial to the corporation to marketing the product. Consumer Ethnocentrism and Consumer Animosity When marketing the product, ethnocentrism is not important and effective to the consumer, the product should harmonize the local culture which is easy to accept to the consumer. Animosity is also a force we should consider.
Choosing a foreign market without animosity will helpful to develop the industry, and decrease the barriers of entry. Summary According to the whole report, we have concluded the details of the description of the nature of the product, service and environment justification for country recommendation. To develop the industry maturely and successfully, we indicates the competitor identification. When setting up industry outside the home country, we analysis both of the current and the future scheme in order to make a bright development for the corporation.
Customer is the most important element in the market, we made a deep understanding of them to know what they need. Then market segmentation, target marketing and positioning analysis can be beneficial to us to make the company more hopeful and promising. At last, international marketing mix and other international marketing related factors have mentioned to make a plan to the company. We have totally analysis the whole factors that related to the company in order to develop the industry more successfully outside the home country.