Marketing Entry Strategy

Selecting overseas markets and entry modes: two decision processes or one?

Adam J. Koch Lecturer, School of Business, Swinburne University of Technology, Melbourne, Victoria, Australia

Keywords

Market entry, Decision making, International marketing, Export, Marketing strategy

Introduction

Selection of overseas markets and entry modes lies at the very heart of any international strategy (Douglas et al., 1972; Goodnow and Hansz, 1972; Kobrin, 1976; Paliwoda, 1993; Root, 1994; Sarkar and Cavusgil, 1996; Simpson and Kujawa, 1974; Wind et al., 1973; Wind and Perlmutter, 1977). Importance of the relevant analysis, and of resulting decisions, grows with increasing dependence of companies on international business for survival and growth. Similarly, a growing intensity of competition would call for an improved quality of the overseas market and entry mode selection (Cavusgil, 1985; Douglas, 1989; Moyer, 1968). Market entry strategies include decisions on: . the choice of a target product/market; . the objectives and goals in the target market; . the choice of an entry mode to penetrate the market; . the marketing plan to penetrate the market; and . the control system to monitor performance in the target market (Root, 1994, p. 3). This paper examines the mutual relationship between two out of five decision categories mentioned above, namely the choice of a target market, and the choice of an entry mode to penetrate the market. It compares the logic of both choices and then seeks to demonstrate that these two need to be regarded as two aspects of the same decision process. It seeks to achieve this aim through a new proposed market and entry mode selection model. MEMS model is designed to conform with the proposed broad scope of the relevant decision process analysis (see Doyle and Gildengil, 1977; Sheth and Lutz, 1973; Hill et al., 1990; Sarkar and Cavusgil, 1996).

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