International Market Selection

International Marketing Research

a) Problem Identification b) Elimination of the Influence of Self Reference Criteria (SRC) c) Appointment of Research Agency d) Deciding the Research Methodology i) Decision on entry in foreign market ii) Estimating market size iii) market Selection iv) International marketing mix decision v) Implementation & controlling marketing plan

International Marketing Research

e) Deciding the Data Need f) Identifying of Sources of Research g) Preparing Research Design h) Collection of Data i) Field Survey ii) Observation iii) Experimentation i) Analysis & Interpretation of Data j) Preparing the Research Report

Objectives of Entering Foreign Markets

1) Proactive Factors 2) Reactive Factors

Proactive Factors
a) b) c) d) e) f) g) h) i) Higher Profits Goodwill & Reputation Financial Benefits & Incentives Innovations Technological Edge Tax Incentives Managerial Initiatives Economies of Scale Information Knowledge

Reactive Factors
a) b) c) d) e) f) Domestic Market Saturation Competitive Pressure Domestic Recession Poor Domestic Response Excess Capacity Government Actions

Factors affecting selection of Foreign Markets

A) Firm related factors B) Market related factors C) Other factors

Firm related factors

Ethnocentrism (home country orientation) Polycentrism (host country orientation) Regiocentrism (regional orientation) Geocentrism (world orientation)

Market related factors

A) General factors: - economic factors - business regulations - political factors B) Specific factors: - trends in domestic market - trends in export and import - nature of competition - supply conditions of raw materials

Other factors
Political restrictions Special requirements Product specification Distant location Market accessibility Business community

International Market Selection Process

International marketing objectives Parameters for selection Preliminary screening Short listing of markets Evaluation and selection Test marketing Commercial production

Methods of entering foreign markets

Exporting: direct, indirect Licensing Franchising Contract manufacturing Contract marketing Joint ventures Foreign direct investment Mergers & Acquisitions

Constraints in entering international markets

Political restrictions Political instability Incompatibility of technical standards Cost of product adaption Trade barriers Trade blocs Distance of market Psychic factors

Concept of international market segmentation

International market segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buying behaviour.

Importance of international segmentation

Increase market opportunities Helps in foreign market decision Helps to identify and compare market opportunities Help to design product Help to fix prices Assists in deciding distribution strategies Helps to decide promotion mix Helps to increase sales volume Helps to provide better services to customer

Bases of international market segmentation

Geographical Demographic segmentation (age, sex, income, education etc) Psychographic segmentation (social class, life style etc) Behavioural segmentation (usage rate, loyalty, attitude etc)