Reviving Traditions in Research on International Market Entry: Volume 14

This special volume of Advances in International Marketing is devoted to international market entry issues. This is an important managerial decision in the internationally active company, and the papers featured here reveal new research findings. It is guest edited by Professor Tiger Li of Florida International University.

Over the last decade, market entry activities have continued to play a critical role in global economic development. In the transitional economies in China, Russia, and the Eastern European countries, newly emerged private enterprises, both large and small, have operated beyond national borders to build their wealth and social identities. In the developed economies in North America, Europe and the Pacific Rim, more and more companies have relied on joint ventures and direct investment abroad to relieve pressure from mature domestic markets. In the developing economies in Asia, Latin America, and Africa, governments have continued to embrace direct and indirect exports as a means to emerge from deprivation and poverty and participate in market globalization.

Despite the proliferation of countertrade (CT) literature, it has not been examined from a marketing process perspective. This study attempts to fill this gap. The concept of Reverse marketing, which is a direct consequence of CT, is introduced. A conceptual CT framework, which makes a distinction between commodity and differentiated products, is developed. The central point of this concept and, ultimately, of this article is that the reverse sequencing of marketing processes leads to many costly inefficiencies. The analyses that follow suggest that, in the majority of cases, firms should engage in CT only as a last resort.

While it is widely acknowledged that host governments play some role in framing the governance structure that is available to multinational corporations, some argue that in recent years the influence of host governments on MNCs in terms of the level of ownership and control over their foreign ventures has diminished. The authors examine the degree of MNC’s control in foreign investment by presenting and testing a model of government influences on MNC’s control over its foreign market venture. Based on a survey of U.S. MNCs, the authors find that host government preference does influence MNC’s ownership control over its foreign market venture, which in turn influences its management control over the venture.

Although research on channel integration has evolved into a major stream in literature in international marketing, channel integration in new product export remains unexamined. Drawing on transaction cost analysis, organizational capability, and marketing control perspectives, the authors develop a conceptual model of channel integration in new product export. They further test the model using data collected from the computer software industry. The findings indicate that both channel integration and new product competitive advantage exert positive impacts on product market performance in foreign markets. The results regarding asset specificity, country risk, and firm size offer interesting insights about the linkage between these antecedents and channel integration.

Market entry strategies range from foreign direct investment to licensing with varying levels of commitment, risk and opportunity. Exporting products or services is one of the most common of the intermediate market entry strategies. It is typically accomplished through authorized international channels of distribution. However, when significant price differences exist between markets, alternative, parallel channels of distribution are almost certain to arise. These parallel channels, often referred to as gray marketing, are generally legal but unauthorized distribution channels that create an alternative export market entry. After a review of the literature, a case study highlights these complex issues from the perspective of both manufacturer and parallel marketer. The case study provides a tool for evaluating theory and a basis for discussing this important alternative mode of market entry. The case and the discussion which follows also highlight the role of international trade shows as an important element of the marketing mix for entering many foreign markets.

The People’s Republic of China has long craved advanced technologies, and has undertaken an overwhelming number of changes in its intellectual property laws in order to foster domestic innovation and to encourage foreign investment. China implemented its first patent law in 1985. However, implementation and enforcement of this law and its amendments have been difficult, such that many foreign firms are reluctant to invest in Chinese markets. This paper describes the many changes that have been made to Chinese patent laws, and then illustrates patent activity in China as those changes have been implemented. Managerial issues are discussed in detail.

This research focuses on several important strategic concerns for multinational corporations (MNCs) which are exploring strategic alliances in the China market. The results suggest that multinational corporations need to assess and re-assess continuously the business conditions in China, in order to understand this market better and be successful in future business dealings with China, a market that still has great growth potential. The significant differences exist between Western MNCs’ executives and their Chinese counterparts. The results also suggest that MNCs should focus on joint venture partners’ marketing capabilities, and bridge the differences between the joint venture partners.

This paper aims at advancing research on the identification and the first test of the primary steps companies follow to generate and maintain enablers of long-term marketing relationships in cross-cultural business. To achieve the objective, the authors first identify the communication difficulties in generating and maintaining long-term relationships in bi-cultural or multi-cultural settings. They then develop the building blocks, or enablers, that are needed to form and maintain enduring relationships. They finally illustrate the suggested process by describing the use of enablers in two contrasting cultures, the Anglo-Saxon and the Latin, using samples from the United States and Chile, respectively.