Chapter Five Global Markets and Buyers

Copyright © Houghton Mifflin Company. All rights reserved Figure 5.1: Internation al Market Selection

Copyright © Houghton Mifflin Company. All rights reserved Figure 5.2: A Model for Selecting Foreign Markets

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Filter 1: Macrolevel Research (General Market Potential) –Economic Statistics –Political Environment –Social Structure –Geographic Features

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Filter 2: Macrolevel Research (General Market Potential) –Growth Trends for Similar Products –Cultural Acceptance of Such Products –Availability of Market Data –Market Size –Stage of Development –Taxes and Duties

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Filter 3: Microlevel Research (Specific Factors Affecting the Product) –Existing and Potential Competition –Ease of Entry –Reliability of Information –Sales Projections –Cost of Entry –Probable Product Acceptance –Profit Potential –“Feel”

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Criteria for Selecting Target Countries –Market Size and Growth

Copyright © Houghton Mifflin Company. All rights reserved.5 - 8

Copyright © Houghton Mifflin Company. All rights reserved.5 - 9

Copyright © Houghton Mifflin Company. All rights reserved

Copyright © Houghton Mifflin Company. All rights reserved

Copyright © Houghton Mifflin Company. All rights reserved

Copyright © Houghton Mifflin Company. All rights reserved

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Criteria for Selecting Target Countries –Political Conditions

Copyright © Houghton Mifflin Company. All rights reserved

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) Criteria for Selecting Target Countries –Competition

Copyright © Houghton Mifflin Company. All rights reserved Screening Global Marketing Opportunities (cont’d) –Example Sources of Information The International Market Research Mall (ecnext.imrmall.com) U.S. Department of Commerce U.S. State Department U.S. Embassy Commercial Attaché in Foreign Country Foreign Country Commercial Attaché in Host Country World Wide Web

Copyright © Houghton Mifflin Company. All rights reserved Techniques of Making Market Selection Decisions List of Selection Criteria –Macrolevel Gross National Product –General Market Factors Related to the Product: Medical Concentration –Microlevel Factors Specific to the Product –Final Screening of Target Markets

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Copyright © Houghton Mifflin Company. All rights reserved Techniques of Making Market Selection Decisions (cont’d) Market Indexes for Country Selection –Market Size –Market Growth –Market Intensity Ongoing Market Screening

Copyright © Houghton Mifflin Company. All rights reserved Grouping Global Markets Rationale for Grouping Markets Marketing Activities Influenced by Country Groupings –Market Research –Product Development and Modification –Distribution –Promotion

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups Economic Factors Political Factors Geographic Factors Types of Market Groups

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –Europe* European Economic Area (EEA) European Union (EU) European Free Trade Association (EFTA) European Monetary Union (EMU) Commonwealth of Independent States (CIS) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –North America* North Atlantic Treaty Organization (NATO) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –Africa* East Africa Cooperation French African Community Arab Maghreb Union Economic Community of West African States (ECOWAS) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –Latin America* MERCOSUR Andean Common Market Central American Integration System Caribbean Community and Common Market (CARICOM) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –North America* U.S.-Canada Free Trade Agreement North American Free Trade Agreement (NAFTA) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –Middle East* Arab Common Market Economic Cooperation Organization (ECO) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Growth of Formal Market Groups (cont’d) Major Market Groups –Asia* Arab Common Market (ACM) Economic Cooperation Organization (ECO) Association of South East Asian Nations (ASEAN) Asia Pacific Economic Cooperative (APEC) *See Table 5.5 in Text for Detailed Listing of Countries in Each Major Market Group

Copyright © Houghton Mifflin Company. All rights reserved Figure 5.4: Global Buyer Analysis Process

Copyright © Houghton Mifflin Company. All rights reserved The Consumer Market The Ability of People to Buy Consumer Needs

Copyright © Houghton Mifflin Company. All rights reserved Source: Euromonitor Plc, Figure 5.5: Consumer Expenditure Patterns of Selected Countries (Percentage of Total Spending)

Copyright © Houghton Mifflin Company. All rights reserved The Consumer Market (cont’d) Buying Motives –Family Structure

Copyright © Houghton Mifflin Company. All rights reserved Source: Robert T. Green and Isabella Cunningham, “Family Purchasing Roles in Two Countries,” Journal of International Business Studies, Spring-Summer 1980, p. 95. Reprinted by permission.

Copyright © Houghton Mifflin Company. All rights reserved The Consumer Market (cont’d) Buying Motives –Religion –Educational Systems The Buying Process