International Marketing

1.0 Introduction

According to the case study, PK Electrics is a manufacturing company which was established in 1987 in Zhejiang province. Over the years the organisation has developed a good reputation for quality and customer service.

But the rate of growth has begun to decline recently. As a result the management team are aware of big changes in international tradng with Chinese economy becoming more market-based. Now the company is looking outside China for new markets to enhance their growth and business performance.

2.0 Discussions

1. Identify and explain why PK Electrics is considering entering international markets.

As the PK Electrics is considering entering international markets, there are various reasons.

 domestic market saturation

The actual level of saturation can depend on consumer purchasing power as well as price and technoloy. Although PK Electrics has developed a good reputation for quality and service, it becomes more and more difficult to cater people's living standards. What's more the recently rate of growth has begun to decline with sales rising 5% and profits by 2% last year. In the domestic market the organisation has less development space to earn more.

 fierce competition from domestic and foreign companies

PK Electrics should find further investments and seek for development in foreign markets. The PK Electrics' pricing is competitive and in the past the Organisation has used price-based promotions to attract new customers. So competition at home reduce growth and profits.

 Seek for more opportunities.

Since China has joined the WTO in Decemeber 2001 and Chinese economy has become more market-based, Pk Electrics has more opportunities and the domestic market dose not offers any prospects for significant growth. PK Electrics can also see a growing demand in international markets. The firm may benefit from the image of being an 'international player'.

2. Identify a minimum of two sources of information that PK Electrics should access before deciding which international markets to enter.

When considering entering new international markets, PK Electrics needs to evaluate the effectiveness of strategy information on the potential markets.

 WTO

The WTO exists to regulate international trade. It covers the information of trading goods, services, and intellectual property. PK Electrics could get information about tariff data, MFN exemptions and Trade Policy from it. So it can help PK Electrics choose a proper market to enter and how to trade in new international markets. Visit www.wto.org. for specific information.

 ITC

The International Trade Centre is the technical cooperation agency for operational, enterprise-oriented aspects of trade development. It works in six areas--product and market development, development of trade support services, trade information, human resource development, international purchasing and supply management and needs assessment and programme design for trade promotion. It helps PK Electrics understand WTO rules, strengthen enterprise competitiveness, and develop new trade promotion strategies. (http://www.itd.org)

 ASEAN

PK Electrics has advantages to enter the coutries of Southeast Asian because there are some developing southeast Asian countries such as Singapore, Malaysia and Thailand near China. The Association of Southeast Asian Nations is to accelerate economic growth, social progress and cultural development in the region and to promote regional peace and stability. It can help PK Electrics. (http://www.aseansec.org/home)

3. Identify the key opportunities and threats associated with entry into international markets. Give a detailed explanation of at least two key factors that PK Electrics would face.

The most common method of structuring and analying all the information gathered from a marketing audit is through SWOT Analysis.

 Strengths:

 The use of consumer advertising and promotion and the collection of consumer and trade feedback.

 The organisation has developed a good reputation for quality and consumer services.

 Weaknesses:

 with rising economic growth and disposable incomes, people's demond improved. The organisation is facing difficulty.

 Over the two last years the rate of growth has begun to decline.

 Opportunities

 more open market.

To PK Electrics, since China has joined the WTO, it helps Chinese entrepreneurs have freedom to make win-win strategies, not only increase the sales and profits, but also acquire reputation in the international markets. It is possible for PK Electrics to explore a market with larger scale and reach more customers.

 The competitive advantages.

PK Electrics' product has used priced-based promotions as well as the good reputation so it will attract more customers in international markets.

 Highly-Developed Communication Technology

It will be easier for PK to find consumer groups. The market will expand and there will be more extensive sales. Also, sales methods will be more diverse.

 Threats

 Government policy

Governmental policies that regulate competition within an industry, provide legislative constraints on methods of operation within an industry, or are designed to protect indigenous companies from foreign rivals. To protect domestic products, some governments will impose protectionist measures to discourage imports. This will lead PK fail to enter oversea markets.

 Threat of new entrants.

New entrants to an industry will bring new capacity and the desire to gain market share, and the competitive rivalry will increase. The threat posed by new entrants will largely depend upon the barriers. PK Electrics, as a new entrant, must realise this.

 Threat of substitutes products