RESEARCHING INTERNATIONAL MARKETS Terpstra Ch 7

BASIC DECISIONS REQUIRING DATA Which market to enter? screening general business environment evaluating specific product market –supply side : – competition, distribution –demand side: –usage, attitudes (culture etc) How to enter the market

Business environment (PEST, SLEPT) potential demand -potential risks Your assignment task: –Decide the key factors (Terpstra Ch 2-5) in assessing the business environment –Research your chosen country eg using Euromonitor database –Identify the gaps in the available data

Demand: macro factors Doole and Lowe 1999 Accessibilty ––tariffs, quota, regulations Profitablity –Exchange rates, currency issues –Subsidies and price controls Market size –Per capita GDP, growth, –inflation, cost of living, unemployment –Consumer spending, leisure time

Risks Kotler (p415) suggests two types to investment and assets – from government actions – from terrorism and civil war to operational profitablity –from strikes and unrest –from economic downturns, inflation, exchange rate changes

Risk assessment Control Risk Group website – – Rates countries' risk levels by –Political –Security –Travel Leisure and tourism depend on customer confidence which is very vulnerable to any hint of danger. Corruption - see

Does this mean only investing in developed countries ? NAFTA EU Japan ASEAN Ohmae K. Triad Power: the shape of global competition

Errors in researching international markets Craig and Douglas (1995) Global Marketing Strategy Ch 3 Ignoring the need for research - ethnocentricity Too narrow research ignoring indirect competition ignoring regional or urban/rural differences ignoring differences in industry structure

Inadequate research –differences in consumer behaviour –differences in consumer attitudes Lack of published data (government/commercial) Problems of equivalence –categories – measurement –sampling –translation

Problems of data collection –different DMUs (eg role of woman in family) –availability and attitudes to methods (eg telephone) –politeness v honesty in replies Cultural bias in interpretation How to avoid error Back-translation Use local expertise Qualitative approach Usunier Chapter 5