国际营销报告.docx

International Marketing: An Introduction
Outcome 1, 2
The Outlook of PK Electrics

Candidate Name: Xiong Feng
Grade and Class: Business 4
Return date: 21/06/2011

Introduction:
The report will analyze things; including PK Electric factory involves the knowledge and skills of the international marketing. PK electric was founded in 1987 Ningbo, Zhejiang province, China. This is a country suppliers’ scope of supply includes: cable extensively, socks, switch, and electrical, light fittings. The aim is to provide a report that will explain and identify why PK electric to enter the international market. Know what information source to help PK electric factory select appropriate international market entry. The report describes enter the international market opportunities and risks. Explain the process and mode, namely the PK will use chosen market access, and what a way to enter the market will be the most suitable for PK electric products.
Why PK electric is considering entering international markets?
First, along with the development of the domestic market economy, similar product competition between more fierce， domestic market risk increase，the enterprise need to expand market.
And, PK Electrics over the last two years the rate of growth has begun to decline with sales rising 5% and profits by 2% last year. PK Electrics in domestic demand market without apparent growth prospects
At the same time, December 2001 the china joining the World Trade Organization. For the Chinese enterprises to enter the world market has the international institutional safeguard.
Two sources of information PK should access before to deciding which international markets to enter.
In PK decided to enter the international market, it will make some information such as the international trade environment, clear, government policy, the situation of the country development, etc. There are some international system to provide some information sources such as the WTO, foreign investment consulting services, the international trade centre (ITC), the Asian source online, the association of southeast Asian nations (asana), and so on.

l PK can obtain the primary data by using the method of interviewing consumers. PK should prepare some questionnaire and deliver to the people in order to know the view from consumers. Quality than analysis, the competitor's products production, marketing environment PK advantage. And set a time to enter the international market.
l PK can also get secondary data by using the Internet search method. PK needs to access the information of WTO, because it exist regulation of international trade. The main principle is non-discrimination, which take the products from different countries equal treatment. PK can know trade and industry department, and the trade countries including the WTO information. Its suits PK to know more about the international market.
Opportunities and threats
Because PEST stands for political, economic, social and technological and is the simplest of the three analyses, concentrating on only four main factors
This classification distinguishes between:
l Political factors. These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
l Economic factors. These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour.
l Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staffs are living longer. It also means some firms such as Asia have started to recruit older employees to tap into this growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines have increased whereas demand for toys is falling.
l Technological factors: new technologies create new products and new processes. MP3 players, computer games, online gambling and high definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.
So, I think, PEST analysis, suitable for analysis of PK of opportunities and threats.

The PK’s opportunities include:
The commodity of PK product isn’t sensitive commodity, and then china government encourages foreign trade. so, the some commodity of the company will obtain some preferential policy, for example, the government will improve some service, simplify working process and the china may make good relationship with the other country obtain some benefit request that is helpful the company enter the market.
Emerging network service will help the company directly find the customer, the customer will be easy to find the company, and the market will expand. Enter to the new appropriate market will increase the profit. PK‘s product have price competitive and have developed a good reputation for quality and customer service .so PK enter a right market will increase his profit.
The PK’s threats include:
When the PK enter a new market, it will suffer the host company‘s compete, or PK may be haven’t a free competition environment. For example the people of Japan have a very strong consciously protect the domestic industry and cultural. So the foreign industry is difficult enter its market.
Some countries have the different technological standard. For example the UK’s electric socket is different from the china. So if the PK enters UK, they will spend some money on change the products standard. And the country's political, economic and social is stable, laws and policies is sound. Enter foreign market, whether can be get reasonable protection.
Select process enters a new market
A company wants to enter an international market need a process to analysis, the process is included:
Setp1：
PK Company wants to enter a new international market. It must give some reasons that why our organization need it enter a new market, And whether fit the company’s mission and objective.
Sept2：
PK Company are needs collect some information and source to know the market’ situation that may be selected. At the same time, understand their culture, the country economic development level and the people’s consume level and so on.
Sept3：
PK Company needs to provide some source and evidence， testify to the company have chance and strength to enter these international market.
Setp4：
The PK Company has selected some country that may enter, then we need to analysis the country will bring what opportunity, treat, the company’s strength and weakness. According to analysis, discussion or on the spot investigation’s result, we chose a most appropriate market that we will enter.
Sept5：
We need to analysis which entry mode fit for our company’s power, source and capital. And use a good and fit for company’s method enter. Finally，PK company through the market selected, determining direction, get through implement the fit mode enter the market.
Market entry modes
The PK have many available entry methods for international market, that be include direct exporting, indirect exporting, joint venture, Overseas production and foreign direct investment.
Exporting: Exporting is any kind of goods or consumer goods, to shipping, road transport or by air from production to leave and transported to the world. In economics, an export is any good or commodity, from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers.
Direct exporting: The direct exports is an enterprise not through domestic intermediaries, enterprise products are directly sold the products to foreign customers. Strictly speaking, adopt the way to direct exports, the enterprise is truly began entry into the international marketing. The difference of direct exports and indirect exports is that enterprises should complete the export management tasks independently; this means that companies have to spend some money and energy to engage in export user, Agents, Distributors, Company branches abroad.
Indirect exporting: Indirect export is the company sold its product to foreign intermediaries, to be responsible for products to enter the host market.
The channel of indirect export has Export houses, Manufacturers' export agents, buying offices, piggybacking.
Joint venture: Joint venture entry takes place when an international company shares in the ownership of an enterprise in a target country with local private or public interests.” It means two or more parent companies agree to share capital, technology, human resources, risks and rewards in a new entity like a company.
Overseas production: Franchise owners to contract by the form allow the operation mode of operation. In the marketing process, if marketing proper can be have business to PK to join or investment, in the performance of the franchise to perform some rules.
Direct foreign investment: It can take form of joint international acquisitions. In the direct access to foreign markets later, PK can also named in some foreign enterprise to invest, so can expand the size of the market.
Moat appropriate method to enter market
If PK Electric use country (condition) outside direct export, it will use of the existing equipment, land and other resources. So the product cost is low, then PK Company won't spend a lot of time, they just use some time to reach the goal of national standards. It's lower risk. If the entry modes have wrong, they can correct it quickly. Because the company is their own, so they can perform some flexible project. Because of the direct export their company's control process, the more closely linked export to overseas, so its net profit will be high. But it will be one department and hiring employees, know how to carry out the work. This will add some cost of products. And product export will be affected currency. If the entry modes have wrong, they can correct it quickly. Because the company is their own, so they can perform some flexible project. Because of the direct export their company's control process, the more closely linked export to overseas, so its net profit will be high. But it will be one department and hiring employees, know how to carry out the work. This will add some cost of products.
There are many factors of indirect exports direct export is the same, the difference is due to the third part to join, and so net profit will be lower than its direct exports. PK Company can't get all information of foreign markets, so it will affect PK Company planning many commodities demand.
PK Company can share joint venture capital, technology, human resources, and then the company would reduce the pressure and reducing the company's risk. But originally the company will cost many times on screening potential partners, will partner with some conflict, and so will indirectly affect work. This will be limiting the company's flexibility.

If PK Company of foreign direct investment to enter the market, the company will spend a lot of time to find a suitable land, initially it will invest a lot of money to build the basic equipment and drop a lot of time. So can also bring good sales, but it has a certain risk and very high reversible.
According to the above analysis, the direct export is most appropriate PK electric company to enter new markets. So the PK Electric company can use low cost to create a good sales.
Reference
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