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24 Cards in this Set
- Front
- Back
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1. keep cost as low as possible
2. examine every potential market and possible location |
Issues/Concerns in Market and Site Searching |
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1. identify basic appeal
2. Assess the national business environment. 3. Measure market or site potential. 4. Select the market or site. |
4 Step process of Screening potential market and sites |
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Identify the basic appeal - Suitability of climate - absolute bans (restrictions = additional cost - access to materials, labor, financing |
assessing the basic demand for the product and the availability of resources |
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Assess the National Business Environment - Cultural : Language, attitudes, religious beliefs, traditions, work ethic - Legal and Political : Government regulation, government bureaucracy, political stability - Economic : Fiscal and monetary policies, currency issues - Cost of transporting goods, country image |
Assessment of the cultural, political and legal as well as economic and financial factors cultural = level of adaptation or modification political and legal = investment barriers, fdi regulations, environmental regulations & info reqts economic = risk of depreciating currency and liquidity, productivity and inflation transport cost =affects location of logistics |
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Measure Market or Site Potential
- Current sales, income elasticity, market potential indicator - Quality of workforce, materials, infrastructure |
different levels of economic development that affect what kinds of goods are sold, the manner in which they are sold, and their inherent features |
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1. Names, production volumes, and market shares of the largest competitors
2.Volume of exports & imports of the product 3. Structure of wholesale & retail distribution networks 4. Background on the market, including population figures and key social trends 5. Total expenditure on the product (and similar products) in the market 6. Retail sales volume and market prices 7. Future outlook for market and potential opportunities |
Factors in analyzing industrial markets to forecast growth through income elasticity |
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income elasticity
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Sensitivity of demand for a product relative to changes in income.
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1. Market Size - size of overall economy to rank from largest to smallest population 2. Market Growth Rate - growth in GDP & energy consumption;target rapidly expanding. 3. Market Intensity - buying power per capita private consumption or GDP per capita at PPP 4. Market Consumption Capacity - spending capacity from the % of middle class 5. Commercial Infrastructure - channels of distribution and communication # of telephones, TVs, PC, internet host per capita; density of paved roads or #of vehicles per capita; & population per retail outlet. 6. Economic Freedom- extent of free-market by a summary of government trade policies, government involvement in business, the enforcement of property rights, and the strength of the black market. 7. Market Receptivity - “openness” by volume of international trade as % of GDP. 8. Country Risk- political, economic, and financial risks. |
8 Main variables in market potential indicator for emerging markets (5MEC2) |
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Measuring site potentials
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site-screening process to assess the quality of the locally available resources. |
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Select the Market or Site • Field trips • Competitor analysis |
visit each remaining location in order to confirm earlier expectations and to perform a competitor analysis. |
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1. Number of competitors in each market
(domestic and international) 2. Market share of each competitor 3. Whether competitor’s product appeals to a small market segment or has mass appeal 4. Whether competitor focuses on high quality or low price 5. Whether competitors tightly control channels of distribution 6. Customer loyalty to competitors 7. Potential threat from substitute products 8. Potential entry of new competitors into the market 9. Competitors’ control of key production inputs ( labor, capital, and raw materials) |
Issues that competitor analysis must address |
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market research |
Collection and analysis of information used to assist managers in making informed decisions. to better understand both buyer behavior and business environments abroad |
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1. Availability of data 2. Comparability of data 3. Cultural differences |
3 Main Difficulties in Market Research |
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1. int'l org - free info on product demand 2. government agencies which provide • National trade laws and other regulations • Trade shows, trade missions, & special events • Export counseling for specific countries • Import tariffs and customs procedures • The value of exports to other countries |
Sources of Secondary International data |
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secondary market research
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Process of obtaining information that already exists within the company or that can be obtained from outside sources. |
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primary market research |
Process of collecting and analyzing original data and applying the results to current research needs.
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- trade shows and trade missions - interviews and focus groups - surveys - environmental scanning |
Methods of conducting primary market international research |
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trade show |
Exhibition at which members of an industry or group of industries showcase their latest products, study activities of rivals, and examine recent trends and opportunities. |
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trade mission |
International trip by government officials and business people that is organized by agencies of national or provincial governments for the purpose of exploring international business opportunities. |
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focus group |
Unstructured but in-depth interview of a small group of individuals (8 to 12 people) by a moderator in order to learn the group’s attitudes about a company or its product. |
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interview and focus groups |
methods of research to assess buyers’ emotions, attitudes, and cultural beliefs. |
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consumer panel |
research in which people record in personal diaries information on their attitudes, behaviors, or purchasing habits |
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survey |
Research in which an interviewer asks current or potential buyers to answer written or verbal questions in order to obtain facts, opinions, or attitudes |
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environmental scanning |
Ongoing process of gathering, analyzing, and dispensing information for tactical or strategic purposes. |
