This document discusses techniques for international market selection and analysis. It covers strategies for product-market expansion like market penetration, market development, product development, and diversification. It also introduces some tools from the International Trade Centre for market analysis, including Trade Map, Market Access Map, and others. These tools can be used to analyze markets based on factors like growth rates, market share changes, export performance, and prospects for diversification. Bubble graphs in Trade Map allow positioning products in a portfolio model according to life cycle stage to determine strategies.
Dividend Policy and Dividend Decision Theories.pptx
Market focus training in 17 18sep13
1. International Market Selection
( Techniques and Analysis)
Dr. Mahmoud Fath-Allah
Economist, Foreign Trade Advisor
(Trade Facilitation Project (TFP
September 17-18, 2013
This study/report/brochure/booklet (specify) is made possible by the support of the American people through
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. Government
5. Market Penetration Strategy
When the product is in the current market, it can
still grow. There are three major approaches to
increasing current product's market share:
1. Encourage current customers to buy more.
2. Attract competitor’s customers.
3. Convince non-users to use the product.
6. Market-Development Strategy
When the current product is launched in a new
market, there are three approaches to develop the
market:
1. Expand distribution channels.
2. Sell in new locations.
3. Identify the potential users.
7. Product-Development Strategy
When a new product is launched in the current
market, the intensive growth strategies could be to:
1. Develop new features.
2. Develop different quality levels.
3. Improve the technology.
8. Diversification
When a new product is launched in a new market,
diversification makes good sense as better opportunities are
found outside the present business. The diversification
strategies are of three types:
1. Concentric Diversification Strategy: Develop new products
with the earlier technology for new segments
2. Conglomerate Diversification Strategy: Develop new
products for new markets.
3. Horizontal Diversification Strategy: Develop new products
with new technology for old customers.
11. Bubble graphs in Trade Map
Positioning products according to growth rates and
changes in market share
Adapted to each analytical need:
• National supply vs. international demand
• National supply vs. international demand growth
• Export performance relative to market demand
• Prospects for market diversification
13. Portfolio model of product selection based on stage in life cycle
Babies Stars
Dogs Cash cows
High
Mark
et
Grow
th
Low
Product Life Cycle
Low Relative Market Share High
14. Bubble size is proportional to sales of product
Babies Stars
Dogs
Cash cows
Farm-direct Organic coffee
Specialty coffee
Instant coffee
High
Mark
et
Grow
th
Low
Low Relative Market Share High
The intuition is to analyse the export portfolio of countries:
1. In terms of product specialization ;
2. But also in terms of market orientation or adaptation to the international demand. Lets take the example of Ecuador.
We compare the *growth of world demand for Ecuador export products (on the vertical axis) with the Ecuador * actual export performance, measured as the change in world market share (on the horizontal axis).
We can classify products into four categories:
*Champions; i.e. internationally dynamic products in which Ecuador is gaining world market share. Positive indicators both on supply & demand.
*Underachievers, in which the Ecuador’s supply capacity has not kept pace with the growth of international demand, and exporters are falling behing.
*Third: losers in declining markets: the most difficult segment. Usually the message is that you need to divest (or harvest) if you are in this quadrant.
*and finally: Achievers in adversity, where Ecuadorian exporters have been successful despite sluggish growth of world trade, often on the basis of niche marketing strategies.
* On this chart, the size of the bubbles reflects the export value. As we see here, Ecuador has a number of achievers in adversity in the leading export sector, in particular Bananas.
The message is this approach is that trade development and marketing strategies need to be adapted to the specific characteristics of the market concerned.
This methodology is inspired by marketing techniques, and in particular Portfolio models. You can see here the famous Boston model (or matrix). These models are used by large TNC in order to take strategic decisions in terms of investment and marketing instruments.
It allows the analysis of a firm ’s portfolio in terms of its share in the market (business strength) and market growth (or attractiveness).
The different circles (or bubbles) correspond to the different SBU (strategic branch unit), and their size is proportional to their corresponding sales turnover.
The idea is to reduce investment/promotion in dogs, increase investments/promotion in succesful babies, investments being financed by cash cows and stars.