This document discusses various methods for assessing international markets. It covers topics like market screening, environmental scanning, and different types of market screening including country and segment screening. It also discusses factors to consider in market screening like basic needs potential, financial/economic forces, political/legal forces, sociocultural forces, and competitive forces. The document then covers methods for collecting market data through surveys, trade missions/fairs, and the internet. It contrasts country screening with segment screening and provides criteria for identifying market segments.

1. Chapter 12
Assessing International
Markets
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 12-2
Learning Objectives
• LO1 Discuss environmental analysis and two types of market
screening.
• LO2 Explain market indicators and market factors.
• LO3 Describe some statistical techniques for estimating market
demand and grouping similar markets.
• LO4 Discuss the value to businesspeople of trade missions and
trade fairs.
• LO5 Discuss some of the problems market researchers
encounter in foreign markets.
• LO6 Discuss the different options for conducting survey-based
research.
• LO7 Explain the difference between country screening and
segment screening.
• LO1 Discuss environmental analysis and two types of market
screening.
• LO2 Explain market indicators and market factors.
• LO3 Describe some statistical techniques for estimating market
demand and grouping similar markets.
• LO4 Discuss the value to businesspeople of trade missions and
trade fairs.
• LO5 Discuss some of the problems market researchers
encounter in foreign markets.
• LO6 Discuss the different options for conducting survey-based
research.
• LO7 Explain the difference between country screening and
segment screening.

3. 12-3
Market Screening
• Market Screening
– Firm uses environmental
forces to identify desirable
markets
• Market Screening
– Firm uses environmental
forces to identify desirable
markets
• Environmental
Scanning
– Firm scans world for
changes in environmental
forces that might affect it
• Environmental
Scanning
– Firm scans world for
changes in environmental
forces that might affect it

4. 12-4

5. 12-5
Two Types of Market Screening:
Country and Segment
• Country Screening:
– Uses countries as basis for market selection
• Segment Screening:
– Uses market segments as basis for market
selection
• Country Screening:
– Uses countries as basis for market selection
• Segment Screening:
– Uses market segments as basis for market
selection

6. 12-6
Initial Country Screening
• Initial Screening – Basic Needs Potential
– A firm must assess if there is a basic needs
potential for its goods or services
• If the need is lacking, no reasonable expenditure of effort
and money will enable firm to market goods and services
– Assessment of basic needs potential
• Easier for producers of specialized industrial materials or
equipment
• More difficult for specialized consumer products
• Initial Screening – Basic Needs Potential
– A firm must assess if there is a basic needs
potential for its goods or services
• If the need is lacking, no reasonable expenditure of effort
and money will enable firm to market goods and services
– Assessment of basic needs potential
• Easier for producers of specialized industrial materials or
equipment
• More difficult for specialized consumer products

7. 12-7
Imports Do Not Completely
Measure Market Potential
• Researchers continue to analyze trade
flows.
• Reasons for inaccurate measurement of
import/export trade data:
– Poor marketing
– Lack of foreign exchange
– High prices
• Researchers continue to analyze trade
flows.
• Reasons for inaccurate measurement of
import/export trade data:
– Poor marketing
– Lack of foreign exchange
– High prices

8. 12-8
Second Screening - Financial
and Economic Forces
• Second Screening reduces potential
markets through analysis of financial
and economic forces:
– Inflation trends
– Currency exchange rates
– Interest rates
– Credit availability
– Paying habits of customers
– Rates of return on similar investments
• Second Screening reduces potential
markets through analysis of financial
and economic forces:
– Inflation trends
– Currency exchange rates
– Interest rates
– Credit availability
– Paying habits of customers
– Rates of return on similar investments

9. 12-9
Second Screening – Market Indicators
• Market Indicators:
– Economic data used
to measure relative
market strengths of
countries or
geographic areas
• Market Indicators:
– Economic data used
to measure relative
market strengths of
countries or
geographic areas
• Example:• Example:

10. 12-10
Second Screening – Market
Factors and Trend Analysis
• Market Factors
– Data that correlate highly
with market demand for a
product
• Estimation by Analogy:
– Process of using a market
factor that is successful in
one market to estimate
demand in a similar
market
• Market Factors
– Data that correlate highly
with market demand for a
product
• Estimation by Analogy:
– Process of using a market
factor that is successful in
one market to estimate
demand in a similar
market
• Trend Analysis
– Successive observations of
a variable at regular
intervals analyzed to
establish regular patterns
that are used for
establishing future values
• Trend Analysis
– Successive observations of
a variable at regular
intervals analyzed to
establish regular patterns
that are used for
establishing future values

11. 12-11
Second Screening – Cluster
Analysis & Periodic Updating
• Cluster Analysis
– Statistical technique that
divides objects into groups
so that the objects within
each group are similar
• Cluster Analysis
– Statistical technique that
divides objects into groups
so that the objects within
each group are similar
• Periodic Updating
– To reflect changes in
market data and other
related events
• Periodic Updating
– To reflect changes in
market data and other
related events

12. 12-12
Third Screening - Political
and Legal Forces
• Entry Barriers
– Import restrictions, local participation
requirements, local content restrictions,
government-owned competition
• Profit Remittance Barriers
– Restrictions on the repatriation of earnings, limits
to FDI, inability to provide foreign exchange
• Policy Stability
– Political climate, government stability, public
unrest
• Entry Barriers
– Import restrictions, local participation
requirements, local content restrictions,
government-owned competition
• Profit Remittance Barriers
– Restrictions on the repatriation of earnings, limits
to FDI, inability to provide foreign exchange
• Policy Stability
– Political climate, government stability, public
unrest

13. 12-13
Fourth Screening -
Sociocultural Forces
• Sociocultural Forces Screening
– Sociocultural factors are fairly subjective
– Data are difficult to assemble, particularly from a
distance
• Sources:
U.S. Department of Commerce Data & Reports
Business International
Financial Times
The Economist
• Sociocultural Forces Screening
– Sociocultural factors are fairly subjective
– Data are difficult to assemble, particularly from a
distance
• Sources:
U.S. Department of Commerce Data & Reports
Business International
Financial Times
The Economist

14. 12-14
Fifth Screening – Competitive Forces
1. Number, size, and financial strength of competitors
2. Their market shares
3. Their marketing strategies
4. Apparent effectiveness of promotional programs
5. Quality levels of their product lines
6. Source of their products – imported or locally produced
7. Pricing policies
8. Levels of their after-sales service
9. Distribution channels
10. Coverage of the market (Could market segmentation produce
niches that are currently poorly served?)
1. Number, size, and financial strength of competitors
2. Their market shares
3. Their marketing strategies
4. Apparent effectiveness of promotional programs
5. Quality levels of their product lines
6. Source of their products – imported or locally produced
7. Pricing policies
8. Levels of their after-sales service
9. Distribution channels
10. Coverage of the market (Could market segmentation produce
niches that are currently poorly served?)

15. 12-15
Fifth Screening – Competitive Forces
• To compete in countries with STRONG
COMPETITION, management must:
– Maintain a strategic presence where global
competitors are, or
– Enter a competitor’s home market to distract
attention
• To compete in countries with STRONG
COMPETITION, management must:
– Maintain a strategic presence where global
competitors are, or
– Enter a competitor’s home market to distract
attention

16. 12-16
Final Selection of New Markets
• Field Trip
• Government-sponsored trade missions and trade fairs
• Local research
• Cultural issues
• Technical difficulties
• Research as Practiced
• Field Trip
• Government-sponsored trade missions and trade fairs
• Local research
• Cultural issues
• Technical difficulties
• Research as Practiced

17. 12-17
Collecting Data Using Surveys
• Customized Research
– Done by private, 3rd
party
research firms for a specific
firm
– Includes ethnographic
approach--research watching
customers use products.
• General Surveys
– Completed with no specific
firm in mind but reports are
sold commercially
• Omnibus Survey
• Proprietary Design
• Nonprofit Survey
• Customized Research
– Done by private, 3rd
party
research firms for a specific
firm
– Includes ethnographic
approach--research watching
customers use products.
• General Surveys
– Completed with no specific
firm in mind but reports are
sold commercially
• Omnibus Survey
• Proprietary Design
• Nonprofit Survey
• The Internet
– Offers firms ability to:
• Survey any country
24/7
• Have real-time data
analysis
• Use blogs instead of
focus groups
• Gather qualitative
data from large groups
over longer
timeframes
• Save on cost of
research
• The Internet
– Offers firms ability to:
• Survey any country
24/7
• Have real-time data
analysis
• Use blogs instead of
focus groups
• Gather qualitative
data from large groups
over longer
timeframes
• Save on cost of
research

18. 12-18
Segment Screening
• Issues in Segment Identification:
– Choices: Country segments or market segments?
– Are there commonalities across nationalities? Similar desires
regardless of country or language?
– Dealing with a physical market (a country) or a conceptual
market (“phone surfers in Japan”)?
– Do market segments extend across borders?
– How difficult is the data to gather?
• Issues in Segment Identification:
– Choices: Country segments or market segments?
– Are there commonalities across nationalities? Similar desires
regardless of country or language?
– Dealing with a physical market (a country) or a conceptual
market (“phone surfers in Japan”)?
– Do market segments extend across borders?
– How difficult is the data to gather?

19. 12-19
Criteria for Identifying and
Assessing Segments
1. Definable
 Can it be identified and measured?
1. Large
 Is the segment large enough to be worth serving it?
1. Accessible
 Can we reach it? If no, we will not succeed!
1. Actionable
 Can we apply our marketing mix to it?
1. Capturable
 Can we capture market share or is it already captured by
competition? Can we compete if we enter?
1. Definable
 Can it be identified and measured?
1. Large
 Is the segment large enough to be worth serving it?
1. Accessible
 Can we reach it? If no, we will not succeed!
1. Actionable
 Can we apply our marketing mix to it?
1. Capturable
 Can we capture market share or is it already captured by
competition? Can we compete if we enter?

20. 12-20
Two Screening Methods, Reconsidered
• Conventional View:
– The world is organized along national lines
• Need to Adopt an Expanded View,
because…
– Multiple subcultures exist within nations
– Subcultures are similar across nations
• Conventional View:
– The world is organized along national lines
• Need to Adopt an Expanded View,
because…
– Multiple subcultures exist within nations
– Subcultures are similar across nations

21. 12-21
GLOBAL gauntlet
Clotaire Rapaille:
Charlatan or code
breaker
Extraordinaire in
international market
research?
Clotaire Rapaille:
Charlatan or code
breaker
Extraordinaire in
international market
research?
• Does “the code”
really give insight
into consumer
motivation?
• Are these insights
sales drivers?
• Would your hire
Clotaire Rapaille?
Why or why not?
• Does “the code”
really give insight
into consumer
motivation?
• Are these insights
sales drivers?
• Would your hire
Clotaire Rapaille?
Why or why not?