Global Marketing

CTL in Association with University of Wales

2nd Term
MBA 0510-L Global Marketing

Aim of the Assignment
To critically analyse the advantages and disadvantages of using licensing as a market entry tool giving two detailed examples of companies from different countries that use licensing as a global marketing strategy

Supervised By - Lipi Begum.

Author - Rajkiran Sonavane
Student ID - 28002383
Email - [e-mail]

Abstract

This report focuses on the advantages and disadvantages of using licensing as a market entry tool in the global market supported by examples of two companies from different country origin with their operations in other countries. The companies/ brands chosen as examples are Tata Motors from India and Coca-Cola from USA. The report is formulated using data gathered from existing secondary sources like the books, news articles, websites, advertisements and commercials. Any information supported with evidence has been referenced using the Harvard referencing system. The report covers Introduction, Main body, Conclusion and Recommendation. The examples will be included in the main body.

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Introduction

The report is about companies that use licensing as a market entry tool. The aim of the assessment is to understand how a company can use licensing to enter the global market, what are the benefits and disadvantages of using such a strategy in general and in context to the examples being used?

A company or a business can enter the global market by; • ‘Direct investment’ which involves all the cost to the company, • ‘Indirect exporting’ which involves product distribution for a fee or commission (Vrontis, 2005,1st para), • Sale of products through website e.g. eBay. • ‘Contract manufacturing’ which enables rapid entry with low investment of cash, time and talent; control over marketing, after sales services and trademark protection; avoids

References: Vrontis, et.al, (2005) The use of entry methods in identifying multinational companies’ Adapt Stand behaviour in foreign markets Delaney L., (2006). Twenty essential factors to consider before going global, US-SME Toolkit (Online) Accessed from: http://us.smetoolkit.org/us/en/content/en/2257/Twenty-Essential-Factors-to-Consider-Before-Going-Global (Accessed 29/07/09) Homiez., (2005) Everything related to the Coca Cola Company, Accessed from: http://www.echeat.com/essay.php?t=27357 (Accessed 1st August 2009) Accessed from: http://www.yet2.com/app/insight/insight/20010401_landgraff (Accessed 1st August 2009) (Accessed 5th August 2009) Bibliography Albaum G., et.al, (1998) International Marketing and Export Management, 3e, Addison Wesley Longman Publishing Company. Keegan J.W., (2007) Global Marketing Management, 7e, Prentice Hall of India Pvt. Ltd. Hoffman D., et.al. (2003) Marketing Best Practices, 2e, Thomson South Western Graham C., (2005) International Marketing, 12e, Tata McGraw Hill Graham J. L., Cateoria P. R., (2002) International Marketing, 11e, Tata McGraw Hill Publishing Company ltd Kotler P., Armstrong G., (2008) Principles of Marketing, 12e, Pearson Prentice Hall. Solomon M. R., (2007) Consumer Behaviour, 7e, Prentice Hall of India pvt.ltd. Hollensen S., (2001, 2004) Global Marketing, A Decision Oriented Approach, 3e, Pearson Education Limited Skinner S Etzel M. J., et.al., (2007). Marketing,13e, The McGraw Hill Publishing company ltd. Holton R.H., (1989). Foreign investment and joint ventures: an American perspective. In U.S.- China Economic Relations: Present and Future, Institute of East Asian Studies) Terpstra V., Sarathy R., (2000) Lipscomb, E. B., (1993). Licenses; Lipscomb 's Walker on Patents, 3ed. Lawyers Co-operative Sherman A. J., (2004) ‘Structuring licensing programmes and Agreements’ Franchising & licensing, 3e, AMACOM books Appendices Life cycle benefits of Licensing; (Hollensen S., 2004, p.312) [pic] Licensing protects patents, especially in countries that give weak protection for products not produced locally. Local manufacture may also be an advantage in securing government contracts. (Hollensen S., 2001, p. 327) As per Albaum G Licensing helps the licensor to get access to the licensee’s technology, management, equipment, knowledge of the market to exploit the local markets and gain royalty based income. (Holton, 1989, p.227) Disadvantages of licensing; Trade mark ‘over licensing’ can increase income at the initial stage, but in a long run it could bring a difficult situation. (Hollensen S., 2001, p. 311) The licensee may prove less competent than expected at marketing or other management activities