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International Marketing

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International Marketing ­ MKT630
VU
Lesson # 23
MODES OF ENTRY INTO INTERNATIONAL MARKETS
Licensing
Licensing:
Is a contractual arrangement in which a firm (the licensor) sells the right to use its intellectual property
(technology, patents, work methods, brand names, trade marks, copyrights, and company name) to a
firm (the licensee) in return for fees
Roles of licensing in internationalization:
· helping firms survive and compete within a rapidly changing international industrial environment
· factors contributing to rapid growth of licensing
­ protectionism and regulation of FDI
­ licensing of universities research results
­ emergence of small, high-technology firms
­ rising R&D costs
­ shortening product life cycles
­ cross-licensing
Licensing contract:
I licensing contract defines the terms of agreement between a licensor and a licensee. It is important that
the contract adequately covers all the important aspects of the relationship. I licensing contract normally
includes the following;
· boundaries of the agreement
­ The first step in negotiating a licensing contract is to specify the boundaries of the agreement,
that is which rights and privileges to be included in the agreement and the issues which are not to
be included.
· compensation
­ compensation under a licensing agreement is called a royalty - can be a flat fee, a fixed amount
per unit sold, or a percentage of sales of the licensed product or service.
· rights, privileges, constraints of the licensee and the licensor
· dispute resolution mechanism in case any dispute arises
· contract duration for the licensing agreement
Licensing risks:
It is important that both the licensee and the licensor understand the risks involved in any such
agreement so that steps are taken to avoid any issue that might arise in future. Key issues that a licensing
association may face are in the following
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International Marketing ­ MKT630
VU
·
limiting market opportunities for the licensor and the licensee if they both agree to work with each
others and not with any other firm in similar business
·
the licensor may be creating a future competitor in form of the licensee
·
loss of control of technology by the licensor as information and rights of use are allowed to the
licensee
·
minimum performance by licensee may be agreed in the contract, but in reality the potential for the
business may be much larger in the market ­ licensee may opt to just achieve the minimum
performance to fulfill the contractual obligations
·
misuse of trademarks by the licensee
Critical success factors of licensing:
In the following are the critical success factors of a licensing agreement;
· avoiding licensing arrangements with any firm that could become future competitor
· trade protection
· specifying compensation practices for breaching agreement
· setting standards for performance, quality
· careful selection and evaluation of prospective licensee
· maintain long term relationship with licensee
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Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION