Chapter Four Country Attractiveness MKT568 Global Marketing Management Dr. Fred Miller 3-1

Chapter Four Country Attractiveness

Chapter Four Country Attractiveness

MKT568

Global Marketing Management

Dr. Fred Miller

3-1

Environmental Dimensions for Research

Political Risk Forms and levels of risk

Physical Climate, topography, space, pop

density, etc

Sociocultural Social interaction, hierarchies, interdependence, etc

Economic Income, employment, prices, development, etc

Regulatory Government agencies and systems, laws,ordinances, etc.

Porter’s DiamondCompetitive Advantage for Countries

Porter’s DiamondCompetitive Advantage for Countries

Firm strategy, structure and rivalry

Related and supporting industries

Demandconditions

Factorconditions

Source: Adapted and reprinted with the permission of the Free Press, a division of Simon and Schuster, from The Competitive Advantage of Nations, by Michael E. Porter. Copyright © 1990 by Michael E. Porter

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Political Risk FactorsPolitical Risk Factors

Exhibit 4.2 Source: Steven J. Kobrin, “Political Risk: A Review and Reconsideration,” Journal of International Business Studies 10, no.1 (1979), p. 67-80. Reprinted by permission.

Factors Level 1: General Instability

Examples Revolution, External aggression

Level 2: Expropriation

Nationalism, Contract revocation

Level 3: Operations

Import restrictions, Local content rules, Taxes, Export requirements

Level 4: Finance

Repatriation restrictions, Exchange rates

Sample Political Risk Report

Basic Evaluation Procedure

Four stage process & data sources Project Componentcountry identification: Introduction

grouping,

preliminary screening: Part 1 Business Int’l indices

in depth screening: Part 2DoC ID: msumgtmkt, PW racersCommercial data: Euromonitor, DIALOG

final selection: prior data, judgment Analysis of reportsSpecial criteria

Competitive attack, leading markets, Direct experience

Country Teams

Latin America

Argentina

Brazil

Chile

Mexico

Asia

China

India

Indonesia

Japan

South Korea

Thailand

Europe

France

Germany

Italy

Spain

UK

World Bank Comparative Data

Population Pyramids

Basic Evaluation Procedure

Four stage process & data sources Project Componentcountry identification: Introduction

grouping,

preliminary screening: Part 1 Business Int’l indices

in depth screening: Part 2DoC ID: msumgtmkt, PW racersCommercial data: Euromonitor, DIALOG

final selection: prior data, judgment Analysis of reportsSpecial criteria

Competitive attack, leading markets, Direct experience

Euromonitor Data for In Depth Screening

Data Sources in International Market Assessment

At what stage of the international market assessment process would you typically use each of the following sources of data?

Personal interviews with potential intermediaries in the country

Statistical information from various sources

Market studies purchased from Euromonitor or other sources

Lists of the world’s countries

Trade reports purchased from industry associations

Descriptive information on cultural/religious/ethnic factors

US DoC’s consular lists of potential agents

Forecasting Methods (Pro Forma)

Early Product Life Cycle (PLC) stagesbuild-up, analogy, judgemental-jury,expert,Delphi

Later PLC stagesextrapolation, regression

Forecasting market sharecompetitors, domestic and import competition

Yearly Increase in Household Ownership of TV Sets, 1946-70

Yearly Increase in Household Ownership of TV Sets, 1946-70

4-19

Exhibit 4.8

Source: Lindberg, 1982. Adapted with permission. ©1982 by the American Marketing Association.

1970196519601955195019460

5

10

13

United States United Kingdom Germany,West

Forecasting Methods (Pro Forma)

Early Product Life Cycle (PLC) stagesbuild-up, analogy, judgemental-jury,expert,Delphi

Later PLC stagesextrapolation, regression

Forecasting market sharecompetitors, domestic and import competition

Sample Essay Questions

HouseHelp Inc. produces a line of moderately priced, handheld electronic kitchen appliances which it markets on the benefits of convenience, ease of use and time savings. For its international market assessment analysis, the firm wishes to use one statistical measure related to each of the following: target market, product strategy, distribution strategy, promotion strategy and pricing strategy. Identify one measure for each factor and explain its relevance.

Statistics and Marketing Strategy

Total GNI ($US bil)GDP growth rate GNI per capita ($US)GNI per capita PPP($US)Gini = Income to top 10%Inflation RatePopulationAge DistributionUrbanizationLiteracyLife Expectancy

Child MalnutritionEnergy use per capitaKM of paved roadsInternet users per 1000Percent HHs with TVMainline phones per 1000 peopleMobile subscribers per 1000International voice/bandwidth Consumer Expend Beer $US MilBeer as % of Alcohol SpendingPer Capita Consump (L’s per head)VAT on beer (% of price)

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Match Statistics with Strategy ElementsMatch Statistics with Strategy Elements

Target Market: definition, size, purchasing power, etc

Product: brands, lines, characteristics, packaging, etc

IMC: message, media, promo, sponsorship, etc.

Distribution; breadth, intensity, stores, HORECA, etc

Price: levels, lines, discounts, channel, etc

Sample Essay Questions

HouseHelp Inc. produces a line of moderately priced, handheld electronic kitchen appliances which it markets on the benefits of convenience, ease of use and time savings. For its international market assessment analysis, the firm wishes to use one statistical measure related to each of the following: target market, product strategy, distribution strategy, promotion strategy and pricing strategy. Identify one measure for each factor and explain its relevance.

How would these measures change for; 1) a consumer electronics company, 2) a producer of branded food products, 3) a cosmetics firm, 4) a specialty retailer, or 5) a mass merchandise retailer.

Sample Essay Questions

HouseHelp Inc. produces a line of moderately priced, handheld electronic kitchen appliances which the firm markets on the benefits of convenience, ease of use and time savings.

Identify and explain one method for forecasting sales in countries where this type of product is new. For countries where this type of product has been sold for many years. Identify and explain two factors you would use to estimate the firm’s market share in the first year after entry.

Chapter Four Country Attractiveness

Chapter Four Country Attractiveness

MKT568

Global Marketing Management

Dr. Fred Miller

3-1