Core Concepts of Marketing

130 CHAPTER 6 MARKETINGINGLOBALMARKETS

7. Offerbyforeigndistributor


8. Increasinggrowthrate


9. Smoothingoutbusinesscycles
   Otherempiricalstudiesovera numberofyearshavepointedtoa widevarietyofreasons
   whycompaniesinitiateinternationalinvolvement.These~ncludethesaturationofthedomes-
   ticmarket,whichleadsfirmseithertoseekotherlesscompetitivemarketsortotakeonthe
   competitorinitshomemarkets;theemergenceofnewmarkets,particularly~nthedevel-
   opingworld;governmeJltincentivestoexport;taxincentivesofferedbyforeigngovern-
   mentstoestablishmanufacturingplantsintheircountriesinordertocreatejobs;the
   availabilityofcheaperormoreskilledlabor; andanattempttominimizetherisksofa reces-
   sioninthehomecountryandspreadrisk^6

ReasonstoAvoi d InternationalMarkets

Despiteattractiveopportunitie~,mostbusinessesdonotenterforeignmarkets.Thereasons

givenfornotgoinginternationalarenumerous.Thebiggestbarriertoenteringforeignmar-

ketsisseentobea fearbythesecompaniesthattheirproducts arenotmarketabieover-

seas,anda consequentpreoccupationwiththedomesticmarket.Thefollowingpointswere

highlightedbythefindingsinthepreviouslymentionedstudybyBarkerandKaynak,who

listedthemostimportantbarriers: 7

1. Toomuchredtape


2. Tradebarriers


3. Tran;..portationdifficulties


4. Lackoftrainedpersonnel
   5.Lackof incentives


5. Lackofcoordinatedassistance


6. Unfavorableconditionsoverseas
   8.Slowpaymentsb y buyers


7. Lackofcompetitiveproducts


8. Paymentdefaults


9. Languagebarriers
   itisthecombinatioaofthese factorsthatdeterminesnotonlywhethercompaniesbecome
   involvedininterm:tionalmarkets,butalsothedegreeofanyi:1Volvement.

TheStagesofGoingInternational

Earlier inourdiscussionondefinitions,weidentifiedseveraltermsthatrelatetohowcom-

mitteda firmistobeinginternational.Hereweexpandontheseconceptsandexplainthe

rationalebehindthisprocess.Twopointsshouldbenoted.First, theprocesstendstobe

rankedin orderof"leastriskandinvestment" to" greatestinvolvement." Second, theseare

notnecessarilysequentialsteps,eventhoughexportingisapparenLlymostcommonasan

initialentry.