Chapter 8 The international Market Selection Process
The International Market
Selection Process
Literature:
Chapter 8, ”Global Marketing” + p. 775-779 the Jobber-book
Approaches to Market Selection
The coincidence approach
• Choosing a new market is not a planned process
• A market is chosen because:
– The management might have preferences based on personal experience
– Opportunities through local network
– Or other change agents might
The near-market approach
The near-market approach
•
•
•
•
•
•
•
Require limited resources
Proactive approach
Experience is transferred to new markets
Low psychic distance
Depending on one or a few markets
Low diversification of risk
Uncertain if the most profitable market is chosen
The international market screening
(IMS) approach
Macroenvironmental issues
Economic
Socio-cultural
Political-legal
Foreign
Market
selection
Microenvironmental issues
Market attractiveness
• Market size and growth rate
• Competition
• Costs of serving the market
• Profit potential
• Market access
Company capability profile
• Skills
• Resources
• Product adaptation
• Competitive advantage
6
The international market screening approach How to define a market?
1.A country or group of countries
2.A group of customers with similar characteristics, across country boarders
Usually the first definition is used, because of:
•Available data
•Distribution and media management
The international market screening approach • An analytical approach
• All countries are potential
• The company evaluate:
– Market potential
– Sales potential
– Profit potential
• Resource intensive
The international market screening
(IMS) approach
IMS – step 1
Selection of relevant segmentation criteria:
•Measureability (eg. size and puchasing power)
•Accessibility (effectively reach)
•Substationality/profitability
•Actionability
IMS – step 1
Segmentation criteria to consider in IMS – step 1:
IMS – step 2
• Developing relevant segments based on the chosen criteria:
– Analysis of the market based on the chosen
general
Selection Process
Literature:
Chapter 8, ”Global Marketing” + p. 775-779 the Jobber-book
Approaches to Market Selection
The coincidence approach
• Choosing a new market is not a planned process
• A market is chosen because:
– The management might have preferences based on personal experience
– Opportunities through local network
– Or other change agents might
The near-market approach
The near-market approach
•
•
•
•
•
•
•
Require limited resources
Proactive approach
Experience is transferred to new markets
Low psychic distance
Depending on one or a few markets
Low diversification of risk
Uncertain if the most profitable market is chosen
The international market screening
(IMS) approach
Macroenvironmental issues
Economic
Socio-cultural
Political-legal
Foreign
Market
selection
Microenvironmental issues
Market attractiveness
• Market size and growth rate
• Competition
• Costs of serving the market
• Profit potential
• Market access
Company capability profile
• Skills
• Resources
• Product adaptation
• Competitive advantage
6
The international market screening approach How to define a market?
1.A country or group of countries
2.A group of customers with similar characteristics, across country boarders
Usually the first definition is used, because of:
•Available data
•Distribution and media management
The international market screening approach • An analytical approach
• All countries are potential
• The company evaluate:
– Market potential
– Sales potential
– Profit potential
• Resource intensive
The international market screening
(IMS) approach
IMS – step 1
Selection of relevant segmentation criteria:
•Measureability (eg. size and puchasing power)
•Accessibility (effectively reach)
•Substationality/profitability
•Actionability
IMS – step 1
Segmentation criteria to consider in IMS – step 1:
IMS – step 2
• Developing relevant segments based on the chosen criteria:
– Analysis of the market based on the chosen
general