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Chapter 5
Market Selection




               International Marketing
              Chapter-5 Market Selection
Objectives
 What is the basis of market selection
 What is market selection process
 What are the determinants of market
 selection
 What are the contents of market profile
 What are the factors which determine
 market selection
               International Marketing
              Chapter-5 Market Selection
Introduction
One of the most important decision in IM is
market selection
A company which wants to enter many
market should do it systematically
Market selection is based on a thorough
evaluation of the different markets with
reference to certain well defined criteria
It is also necessary to prepare a profile of
the selected markets to help the company to
formulate the marketing strategy.
                 International Marketing
                Chapter-5 Market Selection
Market Selection Process
1.   Determine international marketing
     objectives
2.   Determine parameters for market
     selection
3.   Preliminary screening
4.   Detailed investigation and short listing
5.   Evaluation and selection
                  International Marketing
                 Chapter-5 Market Selection
Determinants Of Market
Selection
1.   Firm related factors
2.   Market selection decision
3.   Market related factors




                  International Marketing
                 Chapter-5 Market Selection
Firm related Factors
 A firm whose export objective is only to
 sell a marginal surplus will select a foreign
 market to suited to serve this purpose
 The planned business strategy may also
 influence the market selection
 The market selection is also influenced by
 the international orientation of the
 company
                 International Marketing
                Chapter-5 Market Selection
General Factors
1.   Economic factors
2.   Economic policy
3.   Business regulations
4.   Currency stability
5.   Political factors
6.   Ethnic factors
7.   Infrastructure
8.   Bureaucracy and procedures
9.   Market hub
                  International Marketing
                 Chapter-5 Market Selection
Specific Factors
1.   Trends in domestic production and
     consumption and estimates for the
     future of the products concerned
2.   Trends in imports and exports and
     estimates for the future
3.   Nature of competition
4.   Government policy and regulations
     pertaining to the industry
                International Marketing
               Chapter-5 Market Selection
5.   Infrastructure relevant to the industry
6.   Supply conditions of raw materials and
     other inputs
7.   Trade practices and customs
8.   Trade practices and customs
9.   Cultural    factors   and      consumer
     characteristics
                  International Marketing
                 Chapter-5 Market Selection
Evaluation Matrix
 An evaluation matrix is often used for
 ranking the markets with reference to
 their attractiveness for the company
 The evaluation matrix will include the
 relevant general and specific factor
 The countries to be evaluated may be
 listed on the horizontal axis and the
 factors on the vertical axis
              International Marketing
             Chapter-5 Market Selection
Each factor is assigned a raw score and
a weightage
The weighted score is obtained by
multiplying the raw score with the
respective weightage
Markets are ranked by comparing the
total weighted scores

              International Marketing
             Chapter-5 Market Selection
Evaluation Matrix
 Table 5.1




              International Marketing
             Chapter-5 Market Selection
Market Profile
 The market profile of product is a fairly
 detailed account of relevant market
 characteristics
 It provides those information which are
 needed for the formulation of the
 marketing strategy
 A market profile will, help in the
 formulation of appropriate marketing
 strategy, pricing strategy, distribution
 strategy and promotion strategy
               International Marketing
              Chapter-5 Market Selection
Contents of Market Profile
1.   Trends in the domestic production,
     demand, imports and exports and the
     forecasts of the same for the future.
2.   Competitive characteristics – the
     competitors,       their    competitive
     strategies and weakness of the
     competitors

                  International Marketing
                 Chapter-5 Market Selection
3.   Market segment characteristics – the
     number of segments an their size, the
     success factors in each segment,
     determinants of demand in each segment
     , competitive characteristics of each
     segment, growth potentials of the
     segments etc.
4.   Customer characteristics including tastes
     and preferences, attitudes, buying habits,
     usage characteristics, etc.
                   International Marketing
                  Chapter-5 Market Selection
5.   Channel characteristics including trade
     practices
6.   Promotion characteristics
7.   Factors relevant to pricing, laws
     related to product, price, promotion,
     distribution, imports etc.


                  International Marketing
                 Chapter-5 Market Selection
Market Segment Selection
 A firm has to make strategic decision
 about the segment of the foreign
 market that it should enter.
 The segment that a firm may enter
 depends on a number of factors like the
 firm related factors, product related
 factors, competitive factors, and other
 market related factors.
               International Marketing
              Chapter-5 Market Selection
A firm with an innovative product and
marketing strength may choose the
most lucrative segment/segments.
Small and new firms, often look for
niches for an entry into the market.



             International Marketing
            Chapter-5 Market Selection
Summary
 The important steps in the market
 selection process involves: international
 marketing objective, parameters of
 selection, preliminary screening, short-
 listing of markets, evaluation and
 selection.
 The market selection is based on two
 sets of factors: the firm-related factors
 and the market related factor.
               International Marketing
              Chapter-5 Market Selection

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Market Selection

  • 1. Chapter 5 Market Selection International Marketing Chapter-5 Market Selection
  • 2. Objectives What is the basis of market selection What is market selection process What are the determinants of market selection What are the contents of market profile What are the factors which determine market selection International Marketing Chapter-5 Market Selection
  • 3. Introduction One of the most important decision in IM is market selection A company which wants to enter many market should do it systematically Market selection is based on a thorough evaluation of the different markets with reference to certain well defined criteria It is also necessary to prepare a profile of the selected markets to help the company to formulate the marketing strategy. International Marketing Chapter-5 Market Selection
  • 4. Market Selection Process 1. Determine international marketing objectives 2. Determine parameters for market selection 3. Preliminary screening 4. Detailed investigation and short listing 5. Evaluation and selection International Marketing Chapter-5 Market Selection
  • 5. Determinants Of Market Selection 1. Firm related factors 2. Market selection decision 3. Market related factors International Marketing Chapter-5 Market Selection
  • 6. Firm related Factors A firm whose export objective is only to sell a marginal surplus will select a foreign market to suited to serve this purpose The planned business strategy may also influence the market selection The market selection is also influenced by the international orientation of the company International Marketing Chapter-5 Market Selection
  • 7. General Factors 1. Economic factors 2. Economic policy 3. Business regulations 4. Currency stability 5. Political factors 6. Ethnic factors 7. Infrastructure 8. Bureaucracy and procedures 9. Market hub International Marketing Chapter-5 Market Selection
  • 8. Specific Factors 1. Trends in domestic production and consumption and estimates for the future of the products concerned 2. Trends in imports and exports and estimates for the future 3. Nature of competition 4. Government policy and regulations pertaining to the industry International Marketing Chapter-5 Market Selection
  • 9. 5. Infrastructure relevant to the industry 6. Supply conditions of raw materials and other inputs 7. Trade practices and customs 8. Trade practices and customs 9. Cultural factors and consumer characteristics International Marketing Chapter-5 Market Selection
  • 10. Evaluation Matrix An evaluation matrix is often used for ranking the markets with reference to their attractiveness for the company The evaluation matrix will include the relevant general and specific factor The countries to be evaluated may be listed on the horizontal axis and the factors on the vertical axis International Marketing Chapter-5 Market Selection
  • 11. Each factor is assigned a raw score and a weightage The weighted score is obtained by multiplying the raw score with the respective weightage Markets are ranked by comparing the total weighted scores International Marketing Chapter-5 Market Selection
  • 12. Evaluation Matrix Table 5.1 International Marketing Chapter-5 Market Selection
  • 13. Market Profile The market profile of product is a fairly detailed account of relevant market characteristics It provides those information which are needed for the formulation of the marketing strategy A market profile will, help in the formulation of appropriate marketing strategy, pricing strategy, distribution strategy and promotion strategy International Marketing Chapter-5 Market Selection
  • 14. Contents of Market Profile 1. Trends in the domestic production, demand, imports and exports and the forecasts of the same for the future. 2. Competitive characteristics – the competitors, their competitive strategies and weakness of the competitors International Marketing Chapter-5 Market Selection
  • 15. 3. Market segment characteristics – the number of segments an their size, the success factors in each segment, determinants of demand in each segment , competitive characteristics of each segment, growth potentials of the segments etc. 4. Customer characteristics including tastes and preferences, attitudes, buying habits, usage characteristics, etc. International Marketing Chapter-5 Market Selection
  • 16. 5. Channel characteristics including trade practices 6. Promotion characteristics 7. Factors relevant to pricing, laws related to product, price, promotion, distribution, imports etc. International Marketing Chapter-5 Market Selection
  • 17. Market Segment Selection A firm has to make strategic decision about the segment of the foreign market that it should enter. The segment that a firm may enter depends on a number of factors like the firm related factors, product related factors, competitive factors, and other market related factors. International Marketing Chapter-5 Market Selection
  • 18. A firm with an innovative product and marketing strength may choose the most lucrative segment/segments. Small and new firms, often look for niches for an entry into the market. International Marketing Chapter-5 Market Selection
  • 19. Summary The important steps in the market selection process involves: international marketing objective, parameters of selection, preliminary screening, short- listing of markets, evaluation and selection. The market selection is based on two sets of factors: the firm-related factors and the market related factor. International Marketing Chapter-5 Market Selection