2. 14 Assessing and Analyzing Markets International Business
This chapter covers:
Environmental analysis and market screening
Market indicators and factors
Market demand
Trade missions
Problems with marketing research
Country and segment screening
The internet as a market research tool
Assessing and Analyzing
Markets
International Business
by Ball, McCulloch, Frantz,
Geringer, and Minor
McGraw-Hill/Irwin
Copyright © The McGraw-Hill Companies, Inc. All rights reserved.

3. Chapter Objectives Discuss environmental analysis and market screening
Explain market indicators and market factors
Describe some statistical techniques for estimating market demand and grouping similar markets
Appreciate the value to businesspeople of trade missions and trade fairs
Discuss some of the problems market researchers encounter in foreign markets
Understand the differences between country screening and segment screening
Identify sources of information for the screening process
Appreciate the utility of the Internet as a source of market research data
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4. Assessing and Analyzing Markets
Market Screening
A modified version of environmental scanning in which the firm identifies markets by using the environmental forces to eliminate the less desirable markets
Environmental Scanning
A procedure in which a firm scans the world for changes in the environmental forces that affect it
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5. Market Screening
Permits management to identify a small number of desirable markets be eliminating those less attractive
Two Types of Screening
Country Screening
Using countries as the basis for market selection
Segment Screening
Using market segments as the basis for market selection
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6. Initial Screening Basic Need Potential Foreign Trade and Investment
If the need is lacking, then no reasonable expenditure of effort and money will enable the firm to market its goods and services
Easier for producers of specialized industrial materials or equipment than for widely consumed products
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Foreign Trade and Investment
If the need potential cannot be readily established for the good or service, analysts can use
U.N.’s International Trade Statistics Yearbook, Volume II to identify export and import quantities

7. Foreign Trade and Investment
Other helpful resources include
International Trade Administration site on the Internet (
U.S. Exports of Merchandise on the National Trade Data Bank
U.S. International Trade in Goods and Services (FT900) by the Department of Commerce
Annual Worldwide Industry Reviews and International Market Research Reports prepared by various U.S. embassies
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8. Second Screening Financial and Economic Forces
Financial Forces
Trends in inflation
Exchange rates
Interest rates
Credit availability
Paying habits of customers
Rates of return on similar investments
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9. Economic Forces
Measures of market demand based on economic data include
Market indicators
Market factors
Trend analysis
Cluster analysis
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10. Economic Forces Market Indicators Market Factors
Economic data used to measure relative market strengths of countries or geographic areas
Buying Power Index enables marketers to compare relative buying power
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Market Factors
Economic data that correlate highly with market demand for a product
If the analyst of a foreign market has no factor for that market, he or she can use the “estimation by analogy”

11. Economic Forces Trend Analysis Cluster Analysis
A statistical technique by which successive observations of a variable at regular time intervals are analyzed to establish future values
Cluster Analysis
A statistical technique that divides objects into groups so that the objects within each group are similar
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12. Third Screening Political and Legal Forces
Entry Barriers
Import restrictions, local participation requirements, local content restrictions, government-owned competition
Profit Remittance Barriers
Undue restrictions on repatriation of earnings, limits to FDI, inability to provide foreign exchange
Policy Stability
Political climate, government stability, public unrest
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13. Fourth Screening Sociocultural Forces
Screening on the basis of sociocultural factors is challenging
Sociocultural factors are fairly subjective
“Data” are difficult to assemble, particularly from a distance
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Sources of assistance to analyze and interpret sociocultural forces include
Consultants
U.S. Department of Commerce specialists
Professional organizations and universities

14. Fifth Screening - Competitive Forces
The number, size, and financial strength of the competitors
Their market shares
Their marketing strategies
The apparent effectiveness of their promotional programs
The quality levels of their product lines
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The source of their products--imported or locally produced
Their pricing policies
The levels of their after-sales service
Their distribution channels
Their coverage of the market

15. Competitive Forces
Countries where strong competitors make a profitable operation difficult are eliminated from list unless management
is following a strategy of being present wherever its global competitors are
believes entering a competitor’s home market will distract the competitor’s attention from its home market
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16. Final Selection of New Markets
A personal visit to potential markets is essential is selecting markets. Visits to potential markets can be through
A Field Trip
Should not be hurried
Government-Sponsored Trade Mission
A group of business or government people visit markets in search of business opportunities
Less cost than going alone and greater impact
Trade Fairs
A large exhibition at which companies maintain booths to promote the same of their products
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17. Final Selection of New Markets
Research in Local market
Face-to-face interviews reveal information that would never be written
Management should hire a local research group
The person in charge of the project must have experience in that country on one culturally similar in the same geographic area
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18. Local Research Problems
Cultural
Language
Literacy
Social desirability bias
Technical
No up-to-date maps
Streets have different names
Houses not numbered
Only wealthy have telephones
Mail deliveries can take weeks or cost money
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19. Final Selection of New Markets
Research as Practiced
Competition is frequently less intense in developing nations because
there are fewer competitors
management is struggling with problems other than marketing, which keep them from devoting more time to the marketing function
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20. Segment Screening Segment Screening Definable Identify and measure
Large
Large enough to be worth the effort needed
Accessible
Reachable for either promotional or distribution purposes
Actionable
Able to control the components of marketing programs
Capturable
The potential still exists to “capture” the segment
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21. TRADE MISSION CALENDAR
February 15-16, Explore BC - Vancouver, Canada
March 16-17, Men's Cosmetics and Skin Care Trade Mission - Montreal, Canada
March 15-20, Aerospace Executive Service at the Australian International Airshow - Avalon Airport, (Geelong) Australia
June 7-8, Explore BC - Vancouver, Canada
June 14-15, REPCAN Toronto, Canada

22. UK Trade Fairs
trade fairs and exhibitions UK offers a comprehensive listing of all the consumer, public, industrial and trade exhibitions to be held in major venues around the UK