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AnalyzingInternational Opportunities
12
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 2
Chapter Objectives
• Explain each of the four steps in the market- and site-screening process
• Describe the three primary difficulties of conducting international market research
• Identify the main sources of secondary international data and explain their usefulness
• Describe the main methods used to conduct primary international research
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 3
StarbucksStarbucks
• Global success• Renewed focus:
• Coffee• Fair-trade image• Market research
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 4
Screening Markets and SitesScreening Markets and Sites
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 5
Identify Basic AppealIdentify Basic Appeal
Basic demand&
Available resources
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 6
Discussion QuestionDiscussion Question
What are the four main steps in the process of screening potential new markets and sites for operations?
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 7
Answer to Discussion Answer to Discussion QuestionQuestion
First, a company must identify a location’s basic appeal, whether this be product demand or resource availability. Second, it must assess the national business environment, including cultural, political, legal, and economic forces, as well as the cost of logistics and the image of a country. Third, it must measure the market or site potential, which requires collecting detailed data on each market and site under consideration. And fourth, a company must select the single best market or site by taking field trips to sites making the final cutoff and performing competitive analyses.
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 8
Cultural ForcesCultural Forces
Site selection Education level Technical skills Work ethic
Site selection Education level Technical skills Work ethic
Market selection
Global product Tailored product
Market selection
Global product Tailored product
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 9
Political and Legal ForcesPolitical and Legal Forces
Government bureaucracy Administrative delays
Political stability Unforeseen changesPolitical stability Unforeseen changes
Government regulation Investment barriers Profit repatriation
Government regulation Investment barriers Profit repatriation
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 10
Political RiskPolitical Risk
Social unrest can drive out international companies
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 11
Economic ForcesEconomic Forces
Country finances
Currency and liquidity
Country finances
Currency and liquidity
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 12
Other ForcesOther Forces
Logistics Logistics
Country image Country image
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 13
e-Business Forcese-Business Forces
Market access Infrastructure Content and standards
Market access Infrastructure Content and standards
Legal issues Privacy and security Intellectual property
Legal issues Privacy and security Intellectual property
Financial matters Electronic payments Tariffs and taxation
Financial matters Electronic payments Tariffs and taxation
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 14
Discussion QuestionDiscussion Question
The key element of
political risk that concerns
companies in markets
abroad is __________.
a. Slowing innovation
b. Spiking logistics costs
c. Unforeseen political change
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 15
Answer to Discussion Answer to Discussion QuestionQuestion
The key element of
political risk that concerns
companies in markets
abroad is __________.
a. Slowing innovation
b. Spiking logistics costs
c. Unforeseen political change
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 16
Industrialized Markets Industrialized Markets
PotentialPotential
Demographics Competitor market shares Import/Export volumes Distribution network Marketing approaches Retail sales levels Income elasticity
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 17
Emerging Markets PotentialEmerging Markets Potential
Market size Market growth rate Market intensity Market consumption capacity Commercial infrastructure Economic freedom Market receptivity Country risk
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 18
Measuring Site PotentialMeasuring Site Potential
Labor and management Productivity Wage levels Training needs Local infrastructure
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 19
Field trips Engage in negotiations Meet customers/others Gain firsthand exposure
Competitor analysis Competitor numbers/shares Competitor strategies Channel access Customer loyalty Access to inputs
Select the Market or SiteSelect the Market or Site
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 20
Discussion QuestionDiscussion Question
What are the key components of a “market-potential indicator,” and why is it useful to firms evaluating emerging markets?
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 21
Answer to Discussion Answer to Discussion QuestionQuestion
The market-potential indicator is one way for companies to rank export markets in terms of their appeal. Components to include in a market-potential analysis are market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, and country risk. The indicator’s usefulness lies in the fact that hard data on market size is often unavailable in emerging markets.
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 22
International Market ResearchInternational Market Research
Marketing strategyField research
Data analysis
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 23
Market Research DifficultiesMarket Research Difficulties
CulturalCulturaldifferencesdifferences
AvailabilityAvailabilityof dataof data
ComparabilityComparabilityof dataof data
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 24
Secondary Data SourcesSecondary Data Sources
International organizations
Government agencies
Industry/Trade associations
Service organizations
Internet and World Wide Web
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 25
Methods of Primary ResearchMethods of Primary ResearchMethods of Primary ResearchMethods of Primary Research
Trade shows and missionsTrade shows and missions
Interviews and focus groupsInterviews and focus groups
Consumer panelsConsumer panels
Environmental scanningEnvironmental scanning
SurveysSurveys
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 26
Discussion QuestionDiscussion Question
Each of the following is a difficulty of researching international markets except __________.
a. Data comparabilityb. Cultural differencesc. Data availabilityd. Environment scanning
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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 12 - 27
Answer to Discussion Answer to Discussion QuestionQuestion
Each of the following is a difficulty of researching international markets except __________.
a. Data comparabilityb. Cultural differencesc. Data availabilityd. Environment scanning
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Printed in the United States of America.
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall