Lecture 5B

Information, market evaluation and

selection:

Types of new markets, and how to

assess them

1
This topic, in three lecture modules:

A. The role of information in international marketing

B. What types of information IMers need, and what they expect

to find when they go looking

C. Where they find their information and how they collect it

Problems of information acquisition due to operating

internationally
B. Information identifying types of markets

Scanning international markets:

IMR is expensive, so companies scan markets to find which ones

merit further in-depth investigation, based on –
• Accessibility: assess eg tariffs, non-tariff barriers, gov’t
regulations, barriers to entry eg Japan seen as rich but
inaccessible.
• Profitability: eg exchange rate level & convertibility, gov’t
subsidies to domestic firms, price controls, substitute
products, if customers can pay eg Russia.
• Market size: is the market big enough to sustain the
investment in building a presence?

3
Scanning international markets…

At this stage firms will expect to find 3 market types:

• : customers already serviced by

competitors; entry difficult without much product
differentiation or new product.

• : potential customers,
no existing supply, unfilled niche.

• : no demand exists now but trends

anticipate emergence of a need. Incipient markets
represent the highest risk.

4
Anticipating incipient markets to gain first-mover advantage:

• Demand pattern analysis: econometric comparisons of

countries at different levels of development (eg Kodak - see
next slide).
• Multiple factor indices: looking for correlation in demand
between products eg freezers/frozen food.
• Analogy estimation: given lack of data, compares ratios with
existing markets –
• Cross-section approach: eg GNIpc = purchasing power for a
product (luxury cars, cameras).
• Time-series approach: assumes product life cycle applies.
• Macrosurvey technique: anthropological approach, plots
development of social structures & consumer behaviours to
predict stage of development & market potential eg
emergence of supermarkets to replace small retailers & daily
shopping.
5
Example: Kodak’s global strategic approach to market
identification and development.