Presentation is loading. Please wait.

Presentation is loading. Please wait.

Chapter Fourteen Assessing and Analyzing Markets McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Similar presentations


Presentation on theme: "Chapter Fourteen Assessing and Analyzing Markets McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved."— Presentation transcript:

1 Chapter Fourteen Assessing and Analyzing Markets McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2 1-2 14-2 Learning Objectives  Discuss environmental analysis and market screening  Explain market indicators and market factors  Describe statistical techniques for estimating market demand and grouping similar markets  Discuss the value of trade missions and trade fairs  Discuss problems researchers have in foreign markets  Explain difference between country screening and segment screening

3 1-3 14-3 Assess and Analyze Markets  Market Screening  Firm (IC) identifies desirable markets: uses the environmental forces to identify desirable markets  Similar to environmental scanning  Environmental Scanning  Firm (IC) scans the world for changes in the environmental forces that might affect it LO1

4 1-4 14-4 Market Screening LO1

5 1-5 14-5 Two Types of Market Screening  Country Screening  Uses countries as focus of analysis for market selection  Segment Screening  Uses market segments as the focus of analysis for market selection LO1

6 1-6 14-6 First Step: Initial Screening  A firm must assess if there is a basic need potential for its goods or services in question  If the need is lacking, then no reasonable expenditure of effort and money will enable the firm to market its goods and services  Assessment of basic need potential  Easier for producers of specialized industrial materials or equipment  More difficult for specialized consumer products LO1

7 1-7 14-7 Initial Screening  Imports don’t fully measure market potential  Flow can be influenced by government policy regardless of import potential  Import data are a first indicator  Price level for imported product sales helps the market entry mode decision LO1

8 1-8 14-8 Second Screening  Initial screening narrows down country and market possibilities  Second screening reduces the potential markets through a preliminary financial and economic analysis  Inflation rate and forecasts  Exchange rates  Interest rates  Credit availability and paying habits of customers  Rates of return on similar investments

9 1-9 14-9 Second Screening: Use of Financial and Economic Forces  How to use the indicators collected?  Market indicators  Market factors  Trend analysis  Cluster analysis LO2

10 1-10 14-10 Market Indicators  Market indicators refer to economic data used to measure relative market strengths of countries or geographic areas  Market size = size of target population x consumption estimates  Market growth rate = average growth rate of target segment for products x real growth rate in GDP  E-commerce readiness  Mobile phones per 1,000 inhabitants  PCs per 1,000 inhabitants  Internet hosts per million  Use indicators developed such as above to create attractiveness index LO2

11 1-11 14-11 Resources With Which To Establish Need Potential  International Trade Administration site on the Internet (www.ita.doc.gov)www.ita.doc.gov  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 LO2

12 1-12 14-12 Market Factors  Market factors refer to data that correlate highly with market demand for a product  Estimation by analogy involves using a market factor in one country to estimate a potential country’s market demand  Trend analysis is a statistical technique that involves analysis of successive observations of a factor’s variables at regular time intervals to establish patterns  Use patterns for establishing future values  Cluster analysis is a statistical technique that identifies groups so that the objects within each group are similar LO3

13 1-13 14-13 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 the repatriation of earnings, limits to FDI, inability to provide foreign exchange  Policy Stability  Political climate, government stability, public unrest LO3

14 1-14 14-14 Fourth Screening: Sociocultural Forces  Sociocultural factor screening  Sociocultural factors are fairly subjective  Data are difficult to assemble, particularly from a distance  Sources  US Department of Commerce  Business International  Financial Times  The Economist LO3

15 1-15 14-15 Fifth Screening: Competitors’ Profile 1. Number, size, financial strength 2. Market shares 3. Marketing strategies 4. Apparent effectiveness of promotional programs 5. Quality levels of product lines 6. Source of products--imported, local 7. Pricing policies 8. Levels of after-sales service 9. Distribution channels 10. Market coverage LO3

16 1-16 14-16 Final Selection of New Markets  The final selection of new markets involves  making personal visit to markets  unhurried field trips  government-sponsored trade missions  trade fairs  face-to-face interviews: get unwritten information  hiring local research groups  appointing an experienced project manager who  has lived in the country or in culturally similar one  is from the same geographic area  is from the same industry  is familiar with your company LO4

17 1-17 14-17 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 delivery issues LO5

18 1-18 14-18 Research in Developing Nations  Less research performed  Often a seller’s market, minimal competition  fewer competitors  management struggling with problems other than marketing

19 1-19 14-19 Return to Segment Screening  Segments must be  definable: to identify and measure  large: to be worth the effort needed  accessible: for promotion and distribution  actionable: have control of marketing programs  capturable: reasonable potential for success LO6


Download ppt "Chapter Fourteen Assessing and Analyzing Markets McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved."

Similar presentations


Ads by Google