Researching and Analysing Overseas Markets

Researching and Analysing Overseas Markets • Background information • Five rules for international research • Entry evaluation procedure • Stage 1 - Country identification • Stage 2 - Preliminary screening • Stage 3 - In-Depth screening • Stage 4 - Final selection

Market information • Market potential • Consumer / customer attitudes and behaviour • Channels of distribution • Communications and media • Market sources • New products

Competitive information • Competitive business strategy and goals (mission and rationale of the company) • Competitive functional strategies and programmes (target markets, marketing mix, etc) • Competitive operations (morale, employee transfers, i.e. detail)

Foreign exchange • Balance of payments, interest rates, etc • Prescriptive information e.g incentives, controls, regulations. • Country monetary and fiscal policy • Expectations of bankers, traders, analysts, etc • Government policy in relation to its own competitiveness e.g China, USA

Resource information • Human resources • Money • Raw materials • Acquisitions and mergers, joint ventures

General conditions • Economic factors - e.g. growth • Social factors e.g. customs, attitudes • Political factors e.g investment climate • Scientific and technological factors - major developments and trends • Management and administrative factors e.g. report procedure

Sources of information • Human sources e.g company executives • Documentary sources e.g too much! • Perception sources e.g. what we see and hear • Information and media • face-to-face conversation • telex/fax/e-mail • sight, smell, taste

Five rules for international research • One: • what information do I need? • Where can I get this information? • Why do I need this information? • When do I need this information? • What is this information worth in £ ? • What is the cost of not obtaining this information?

Two: Start with desk research • Three: Identify the type of information that is available from overseas sources • Four: Know where to look (or find somebody that does) • Five: Do not assume that the information that you gain is comparable or complete. Keegan 1995

Entry evaluation procedure Stage 1 - Country identification Stage 2 - Preliminary screening Stage 3 - In-Depth screening Stage 4 - Final selection

Stage 1 - Country identification • Candidate countries are identified and listed • broadly based on general statistical information • conduct population comparisons to predict market potential • Indonesia 18 million, Malaysia 17 million • Brazil 50 million, Chile 13 million

Stage 2 - Preliminary screening • Rating the identified countries • macro level - political stability, geographical distance, economic development • Weed out countries from consideration • anticipated cost of entry are calculated e.g. warehousing, product support, distribution

Stage 3 - In-Depth screening • Core of attractiveness evaluation • data specific to industry/market • Market size • Market growth - business cycle, computing rates of growth • competitive intensity - e.g. US Dept of Commerce ‘Market Shares Report’ • Trade barriers

Stage 4 - Final selection • Objectives brought to bear for a match • Revenues and costs are compared for ‘leverage’ • Weights can be added to criteria based on objectives • This leads to a final ranking • Personal visits are made. ‘Direct experience’ leads to final decision Johansson (1999)

Researching and Analysing Overseas Markets