Decision Making Process for International Markets
Identification
of International Markets
The first stage in international marketing is to identify the
right market where the exporter can sell his product profitably because one
market differ from one another and a person cannot sell his product in all the
market of the world. So, he has to segment them in such a way that he may be
able to meet the requirements of the market.
The
basic problem that a firm has to solve in the initial stage of planning its
international marketing strategy is to identify global marketing opportunities.
To identify and shortlist markets which offer or might offer in future
opportunities that can be exploited by it, a classification scheme for
segmenting the world markets is required.
There
are several bases of classification, principal among them are:
1)
Classification on the Basis of Stages of Demand:
i)
Existing Markets:
In
the existing markets, consumer needs are known and are already being serviced
by some products. The market opportunities can be assessed by estimating the
consumption rate and the share of imports in current consumption.
ii)
Latent Markets:
Latent
markets have potential customers, but because no one has offered a product to
fill the latent need there is no existing market.
iii)
Incipient Markets:
Incipient
markets do not exist in the present. However, conditions and trends can be
identified that point towards the emergence of future needs and preferences for
products and services that will create a latent market, which if supplied will
become an existing market.
2)
Classification on the Basis of Stages of Development:
i)
Industrially Developed Economies:
Industrially
developed countries provide a large market as they have no or little import
restrictions. These countries lay more emphasis on the production of more
sophisticated products and therefore insist more and more on research and
development. Therefore, they like to import goods of simpler technology and
simpler manufactures.
They
provide ample opportunities for the marketing of the following types of
products:
a)
Labour intensive products like electronics and light engineering goods because
these countries have an acute shortage of la.
b)
Spares and components and raw materials to field their industries as they are
not rich in agricultural raw materials.
c)
Decorative articles and craft articles because of their affluence.
d)
Anti-pollution equipment and those articles whose production has been banned
for risks of pollution because they are very particular about preventing
pollution.
As
these countries have modern technology they are willing to provide technology
to set up production and processing facilities in developing countries.
ii)
More Developed Developing Countries:
This
category would include countries like Brazil, Mexico, Hong Kong, India, etc.
They would like to update technology for current range of manufactures and
would like to import machinery and equipment to set up new manufacturing
facilities. They are also interested in setting up joint ventures in other less
developed countries.
iii)
Raw Material Exporting Economies:
This
category includes countries like those in the Gulf area and many countries ir.
Africa and Latin America. They are generally faced with large changes in
foreign exchange earnings because of fluctuations in their export prices. For
example, Gulf countries were having a good time because of the increase in oil
prices. They have inadequate infrastructure and therefore they need various
types of goods, almost anything – consumer durables, food products, transport
equipment, services facilities, etc.
iv)
Subsistence Economies:
This
type of economy is found in the least developed countries. They almost produce
nothing and depend very much on the imports. They need:
a)
Equipment to exploit their untapped resources
b)
Infrastructural facilities like railways, roads, building, transport
equipments, power generation equipments, transmission line tower etc.
c)
Turnkey projects like housing, schools, hospitals etc.
As
these countries lack infrastructures, the most developed countries do not offer
latest technology and therefore there is much scope for the developing
countries like India to export their products in these countries. New
industries can be set up in these countries.
3)
Other Basis of Division of World Markets:
i)
On the Basis of Population:
Population
could be another criterion for division of markets. The higher the population
of a country, the bigger is the market provided by it. Of course, when
analyzing population, it is necessary to look at (i) age groups and sex, (ii)
social class, (iii) educational background, (iv) Number of households, (v)
geographic concentration and differences, and (vi) the rates of change in each
of the above characteristics.
ii)
On the Basis of Gross National Products:
Gross
National Product (GNP) ant its rate of growth as also the standard of living of
its population could provide another basis for classification of countries. In
fact, the large industrialized nations like the United States, West European
countries, Japan, Australia and Canada are the best markets for consumer goods
and consumer durables even though these countries manufacture these products
themselves, because the people are wealthy enough to be able to buy imported
products and in many cases prefer to do so.
No comments:
Post a Comment