MARKET SELECTION: DEFINITION
The marketer has a key role in the strategic planning process:
many planning tools depend upon concepts of market share,
market definition, segmentation, positioning, product life
cycles and customer relationship management (CRM).
Key steps in formulating an international marketing strategy
Export market selection: determining the markets in which to compete, and the sequence of entries.
Export market direction: determining whether to build, hold or divest in markets being served
MARKET DEFINITION AND
Market segmentation: a breakdown into segments of
customers for particular products in particular countries.
Market segmentation is a crucial and complex function:
Need to consider countries, channels, customer
Unique customer groups may be based on countries or
consumer types across countries.
It is critical that there be careful analysis prior to
commitment to international expansion
EXPORT MARKET SEGMENTATION
Many possible ways; may use multiple methods.
Need to consider:
(a) measurability: ability to identify potential segments (b) accessibility: ability to reach and serve
(communicate and deliver)
(c) profitability: is market large enough to be worth
(d) actionability: can effective programs be
formulated for attracting and serving
MARKET SELECTION PROCESS:
REACTIVE vs PROACTIVE
Reactive; responding to inquiries; very common, especially
for small or new exporters.
Proactive; formal or informal search.
Before actually deciding which market(s) to enter, in-depth
research must be carried out regarding all differences
between the home and country and foreign country that may
affect the desirability, costs, and potential benefits of
marketing, and how to do business there.
MARKET SELECTION PROCEDURES
EXPANSIVE vs CONTRACTIBLE
Expansive: working outward from core; to
nearest neighbor (nearest in distance or
similarities); may adapt products and/or segment
markets or neither.
Contractible: reducing large number of possible
candidates looking at general market indicators
and specific product indicator.
‘Knock-out’ factors have to be decided upon and
stipulated: as noted further in the text these
Prohibitive product characteristics in obvious
conflict with cultural, religious or other factors.
Prohibitive market factors such as prohibitions,
boycotts, very high Customs duties or other
Generally there are three stages in process: (a)
preliminary screening, (b) determining specific
country characteristics and weights of factors,
and (c) ranking.
MARKET SELECTION STRATEGIES
high levels of effort in a few markets;
slow/gradual expansion over time.
resources spread over many markets;
fast rate of growth in the number of markets
CONSIDERATIONS AFFECTING CHOICE OF
EXPORT MARKET EXPANSION STRATEGY
power of specialization,
scale and market
greater market knowledge;
higher degree of control;
learning of the export
process and the experience
less dependence on
lower perception of risk.
Differing customer segments for different
products in a country may cause a company to
set up more than one type of entry method.
Any model needs to be supplemented with indepth information regarding product factors, environmental factors, export marketing factors,
political risk assessment etc.
The Internet is making it easier for ‘patriotic
shoppers’ in some countries to find domestically
produced goods suppliers where imported
FOREIGN MARKET PORTFOLIOS: TECHNIQUES AND
ANALYSIS : STANDARDIZED APPROACH
Portfolio analysis to...
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