Market focus training in 17 18sep13
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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.
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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 the U.S. Agency for international Development (USAID). The contents of this (specify) are the sole responsibility of (name of organization) and do not necessarily reflect the views of USAID or the United States . Government
- 2. Contents - International Market Selection. - Product/ Market expansion. - ITC Market Analysis Tools.
- 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.
- 9. Discussion
- 10. ITC Market Analysis Tools • Trade Map. • Market Access Map. • Trade Competitiveness Map. • Standard Map. • Investment Map.
- 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
- 15. National supply vs. world demand
- 16. National supply vs. world demand
- 17. Prospects for market diversification
- 18. Growth in demand for a local product
- 20. Thank you
Editor's Notes
- 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.