International market penetration

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There are a variety of ways in which a company can enter a foreign market. No one market entry strategy works for all international markets. Direct exporting may be the most appropriate strategy in one market while in another you may need to set up a joint venture and in another you may well license your manufacturing.

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As soon as a company enters a new market, it strives for market penetration. The main objective behind the market penetration strategy is to launch a productenter the market as swiftly as possible and finally, capture a sizeable market share. Market penetration is also, sometimes used as a measure to know whether a product is doing well in the market or not.

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Preparing to enter a new international market is an all or nothing strategy. Extensive research, preparation, and adequate funding, among other things, must all be at the forefront of a strategy for a successful international market penetration. To ensure a successful international market penetration, make it relevant to your target market.

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Market penetration refers to the successful selling of a product or service in a specific market. It is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Igor Ansoff first devised and published the Ansoff Matrix in the Harvard Business Review inwithin an article titled "Strategies for Diversification".

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Graphic: Business Wire. There are many reasons businesses look for international expansion, but before all of that, you will first need a strong market entry strategy. Business today are not restricted to any geographical boundaries.

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Market penetration is a measure of how much a product or service is being used by customers compared to the total estimated market for that product or service. Market penetration can also be used in developing strategies employed to increase the market share of a particular product or service. Market penetration can be used to determine the size of the potential market.

The decision of how to enter a foreign market can have a significant impact on the results. Expansion into foreign markets can be achieved via the following four mechanisms:. Exporting is the marketing and direct sale of domestically-produced goods in another country.

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Firms typically approach international marketing cautiously. They must analyze the market opportunity as well as their internal capabilities to determine which approach will be the best fit. Often businesses start with a lower-risk strategy and progress to other strategies involving additional investment and risk and additional opportunity after they have proven initial success.

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Shop now. In fundamental terms, entering a new country-market is very like a start-up situation, with no sales, no marketing infrastructure in place, and little or no knowledge of the market. Despite this, companies usually treat this situation as if it were an extension of their business, a source of incremental revenues for existing products and services.

By: Ewan Roy. Whenever organizations try to enter a market, they will encounter some obstacles or conditions that make entry more challenging, more expensive or even impossible. Without a full understanding of the different types of market entry barriersorganizations may choose an ineffective market entry strategy.

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