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14
Assessing and AnalyzingAssessing and AnalyzingMarketsMarkets
International Businessby Ball, McCulloch, Frantz,
Geringer, and Minor McGraw-Hill/Irwin Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
This chapter covers:
•Environmental analysis and market screening
•Market indicators and factors
•Market demand
•Trade missions
•Problems with marketing research
•Country and segment screening
•The internet as a market research tool
Chapter ObjectivesChapter Objectives Discuss environmental analysis and market
screening Explain market indicators and market factors Describe some statistical techniques for estimating
market demand and grouping similar markets Appreciate the value to businesspeople of trade
missions and trade fairs Discuss some of the problems market researchers
encounter in foreign markets Understand the differences between country
screening and segment screening Identify sources of information for the screening
process Appreciate the utility of the Internet as a source of
market research data14-3
Assessing and Analyzing MarketsAssessing and Analyzing Markets
Market Screening A modified version of
environmental scanning in which the firm identifies 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 affect it
14-4
Market ScreeningMarket Screening
Permits management to identify a small number of desirable markets be eliminating those less attractive Two Types of Screening
Country Screening Using countries as the basis for market
selection Segment Screening
Using market segments as the basis for market selection
14-5
Initial ScreeningInitial Screening
Basic Need Potential 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
14-6
Foreign Trade and Investment If the need potential
cannot be readily established for the good or service, analysts can use U.N.’s
International Trade Statistics Yearbook, Volume II to identify export and import quantities
Foreign Trade and InvestmentForeign Trade and Investment
Other helpful resources include 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 International Market Research Reports prepared by various U.S. embassies
14-7
Second ScreeningSecond Screening Financial and Economic ForcesFinancial and Economic Forces
Financial Forces Trends in
inflation Exchange rates Interest rates Credit availability Paying habits of
customers Rates of return
on similar investments14-8
Economic ForcesEconomic Forces
Measures of market demand based on economic data includeMarket indicatorsMarket factorsTrend analysis Cluster analysis
14-9
Economic ForcesEconomic Forces
Market Indicators Economic data used to
measure relative market strengths of countries or geographic areas
Buying Power Index enables marketers to compare relative buying power
14-10
Market Factors Economic data that
correlate highly with market demand for a product If the analyst of a
foreign market has no factor for that market, he or she can use the “estimation by analogy”
Economic ForcesEconomic Forces
Trend Analysis A statistical technique
by which successive observations of a variable at regular time intervals are analyzed to establish future values
Cluster Analysis A statistical technique
that divides objects into groups so that the objects within each group are similar
14-11
Third ScreeningThird Screening Political and Legal Forces Political and Legal Forces
Entry Barriers Import restrictions, local participation
requirements, local content restrictions, government-owned competition
Profit Remittance Barriers Undue restrictions on repatriation of earnings,
limits to FDI, inability to provide foreign exchange
Policy Stability Political climate, government stability, public
unrest
14-12
Fourth ScreeningFourth ScreeningSociocultural ForcesSociocultural Forces
Screening on the basis of sociocultural factors is challenging Sociocultural
factors are fairly subjective
“Data” are difficult to assemble, particularly from a distance
14-13
Sources of assistance to analyze and interpret sociocultural forces include Consultants U.S. Department of
Commerce specialists
Professional organizations and universities
Fifth Screening - Competitive ForcesFifth Screening - Competitive Forces
The number, size, and financial strength of the competitors
Their market shares Their marketing
strategies The apparent
effectiveness of their promotional programs
The quality levels of their product lines
14-16
The source of their products--imported or locally produced
Their pricing policies
The levels of their after-sales service
Their distribution channels
Their coverage of the market
Competitive ForcesCompetitive Forces
Countries where strong competitors make a profitable operation difficult are eliminated from list unless management is following a strategy
of being present wherever its global competitors are
believes entering a competitor’s home market will distract the competitor’s attention from its home market
14-15
Final Selection of New MarketsFinal Selection of New Markets
A personal visit to potential markets is essential is selecting markets. Visits to potential markets can be throughA Field Trip
Should not be hurriedGovernment-Sponsored Trade Mission
A group of business or government people visit markets in search of business opportunities
Less cost than going alone and greater impact Trade Fairs
A large exhibition at which companies maintain booths to promote the same of their products
14-16
Final Selection of New MarketsFinal Selection of New Markets
Research in Local market Face-to-face interviews
reveal information that would never be written
Management should hire a local research group The person in charge
of the project must have experience in that country on one culturally similar in the same geographic area14-17
Local Research ProblemsLocal Research Problems
Cultural Language Literacy Social desirability bias
Technical No up-to-date maps Streets have different
names Houses not numbered Only wealthy have
telephones Mail deliveries can take
weeks or cost money14-18
Final Selection of New MarketsFinal Selection of New Markets
Research as Practiced Competition is frequently less intense
in developing nations because there are fewer competitors management is struggling with
problems other than marketing, which keep them from devoting more time to the marketing function
14-19
Segment ScreeningSegment Screening Segment Screening
Definable Identify and measure
Large Large enough to be worth the effort needed
Accessible Reachable for either promotional or distribution
purposes Actionable
Able to control the components of marketing programs
Capturable The potential still exists to “capture” the
segment
14-20
TRADE MISSION CALENDARTRADE MISSION CALENDAR
February 15-16, 2005 Explore BC - Vancouver, Canada
March 16-17, 2005 Men's Cosmetics and Skin Care Trade Mission - Montreal, Canada
March 15-20, 2005 Aerospace Executive Service at the Australian International Airshow - Avalon Airport, (Geelong) Australia
June 7-8, 2005 Explore BC - Vancouver, Canada
June 14-15, 2005 REPCAN 2005 - Toronto, Canada
UK Trade FairsUK Trade Fairs
trade fairs and exhibitions UK offers a comprehensive listing of all the consumer, public, industrial and trade exhibitions to be held in major venues around the UK