Pk Electrics's International Marketing Analysis

Topics: World Trade Organization, International trade, General Agreement on Tariffs and Trade Pages: 8 (2265 words) Published: November 28, 2010
PK Electrics’s international marketing analysis



The reasons of entering international markets3
Market Saturation3
Market-related factors3
Product Life Cycle4

Two sources of information4
The World Trade Organization4
The International Trade Centre5

Key Opportunities and Threats5
Key Opportunities5
Key Threats6

The Selection Process PK Electrics would Use6

Modes of Market Entry7

Most Appropriate Mode for PK Electrics8



Since PK Electrics was established in 1987 in Ningbo, Zhejiang province, China. It has grown from a local supplier producing a limited range of electrical cabling and switches to a national supplier of a wide range of electrical supplies including: cables, sockets, switches and light fittings. It has three factories based in Zhejiang province and good reputation for quality and customer service and competitive price. This report aims to demonstrate the reason of considering entering international markets and the sources of information they should access before entering it. Following by that, it will identify the key opportunities and threats associated with entry into international markets and the process of selecting market to attempt. Then, it will show the advantage and disadvantages of different entry modes and will choose a best method to follow. The reasons of entering international markets

Market Saturation
Fierce competition from domestic and foreign companies, high cost of production and shortage of the required managerial and technical skills are some reasons why firms might find further investments in home markets less attractive than foreign markets. In PK Electrics, the past few years have seen continual growth, but over the last two years the rate of growth has begun to decline with sales rising 5% and profits by 2% last year. It implies the domestic market tends to be saturation. Market-related factors

Because the management team are aware of big changes in international trading that have occurred over the last 10-15 years with the Chinese economy becoming more market-based and the more recent impact of China joining the World Trade Organization in December 2001. Beside, they have recently met with Trade delegations from several different countries. As a result for these, there may be untapped markets or new opportunities for PK Electrics. For example, if they entry into international market timely, they may gain their market share before other competitors through their good reputation for high quality and customer services as well as competitive price. Moreover, high-income countries provide the greatest demand potential. Product Life Cycle

Many firms have tended only to operate at home as long as performance there was satisfactory. A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. [www.] The product revenue and profits can be plotted as a function of the lift-cycle stages as shown in the graph below:

As PK Electrics’ rate of growth has begun to decline with sales rising 5% and profits by 2% last year, perhaps some of its products life cycle has being entering into the fourth stage that is decline stage. So, as a result for this, to allocate more money to research and develop is significant, meanwhile, entering into international market can be a power to force the company change its product mix and innovate new products. Two sources of information

As mentioned above, PK Electrics has a desire to enter into international market, but before that, it should access some sources of information and they will be shown below. The World Trade Organization

In 1995, The World Trade Organization (WTO) was established to succeed the General Agreement...
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