Question

Why do U.S. businesses aspire to go overseas? What are the different modes for entering an international market? Can marketer play as a change agent?

Answer 1

U.S. Businesses aspire to go overseas markets and operate there, because it provides them the opportunity to expand their business as well as isolate themselves from the economic fluctuations taking place in the domestic market. Besides, the competitive product portfolio and ability to cater the demand in overseas market, also make them move to the overseas market.  

There are different modes of entry into the international market. The first mode is exporting the goods. It involves producing the goods in the home country and exporting it to the overseas country where local distribution channels are used to help products reach the target audience. The second mode is joint ventures where the firm does tie up with the local players and form a setup with joint ownership. Here, the investment as well as return is shared between the partner firms. The third mode is FDI where all the investments are brought by the  firm itself. It is a high risk and high return strategy for going to the international market. The fourth mode is franchising where the parent firm sells franchisees in the overseas market and profit is shared. Here, the parent firm has very little investments and most of the investments come from the partners who buy franchisee. The fifth mode is licensing where local players are awarded the rights to produce the goods in the original brand name. It makes firms to earn royalties and licensing fee from the other players who buy the license.

Yes, marketers can play a role of change agent, when they introduce new goods and services to the consumers and help them link the products and services in a way that can satisfy their needs and wants in best ways. Though, it is slow and progressive process where marketers carefully customizes the messages and starts bending the preferences of the consumers. It brings change in buying behavior, product selection and value towards the products perceived by the consumers.