International bussiness the challenge of global competition 11e chapter 15

Learning Objectives Discuss environmental analysis and two types of market screening  Explain market indicators and market factors  Describe some statistical techniques for estimatin

Assessing and Analyzing

Markets

McGraw-Hill/Irwin

International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc All rights reserved.

chapter fifteen

Learning Objectives

 Discuss environmental analysis and two types of market

screening

 Explain market indicators and market factors

 Describe some statistical techniques for estimating market

demand and grouping similar markets

 Discuss the value to businesspeople of trade missions and

trade fairs

Learning Objectives

 Discuss some of the problems market researchers

encounter in foreign markets

 Explain the difference between country screening and

segment screening

 Identify sources of information for the screening process

 Discuss the utility of the Internet as a source of market

research data

Assessing and Analyzing Markets

• Market Screening

– A version of environmental scanning in which the

firm identifies desirable markets by using the

environmental forces to eliminate the less desirable markets

• Environmental Scanning

– A procedure in which a firm scans the world for

changes in the environmental forces that might

affect it

Market Screening

number of desirable by eliminating those

judged to be less attractive

Initial Screening

– If the need is lacking, then no reasonable

expenditure of effort and money will enable

the firm to market its goods and services

– Easier for producers of specialized industrial

materials or equipment than for widely

consumed products

Initial Screening

• Imports Don’t fully measure market

potential

• Resources to establish need potential

– International Trade Administration site on the

Internet (www.ita.doc.gov)

– U.S Exports of Merchandise on the National

Trade Data Bank

– U.S International Trade in Goods and Services

(FT900) by the Department of Commerce

– Annual Worldwide Industry Reviews and

Second Screening: Financial and

Economic Forces

• Measures of market demand based on

economic and financial data

– Market indicators

– Market factors

– Trend analysis

– Cluster analysis

Market Indicators

• Market Indicators

– Economic data used to measure relative market

strengths of countries or geographic areas

– Possibilities:

• Market size

• Market growth rate

• E-commerce readiness

Trend Analysis

• Trend Analysis

– Statistical technique by which successive observations

of a variable at regular time intervals are analyzed to establish regular patterns that are used for establishing future values

Cluster Analysis

• Cluster analysis

– Statistical technique that divides objects into

groups so that the objects within each group are

similar

Third Screening:

Political and Legal Forces

– Import restrictions, local participation requirements,

local content restrictions, government-owned

competition

– Undue restrictions on repatriation of earnings, limits

to FDI, inability to provide foreign exchange

– Political climate, government stability, public unrest

 Sociocultural factors are fairly subjective

 Data are difficult to assemble, particularly from a

distance

Fifth Screening: Competitive Forces

competitors

promotional programs

Fifth Screening: Competitive Forces, cont’d.

locally produced

Final Selection of New Markets

• P ersonal visit to potential markets is

essential

– Field Trip, unhurried

– Government-Sponsored Trade Missions

– Trade Fairs

• Research in Local Market

– Face-to-face interviews reveal information that

would never be written

– Hire local research group

• Person in charge of the project must have

experience in that country or culturally similar one in same geographic area

Local Research Problems

– Streets have different names

– Houses not numbered

– Only wealthy have telephones

Research in Developing Nations

• Competition is frequently less intense in developing nations because

• fewer competitors

• management struggling with problems other

than marketing

Return to Segment Screening

– Definable: identify and measure

– Large: to be worth the effort needed

– Accessible: for promotion and distribution

– Actionable: have control of marketing programs

– Capturable: potential exists