Market Entry Strategy

Prof Ashish Saraf

Market Definition for Entry Strategy

Steps: Market Characterization and identification Definition Market segmentation and Product match Selection

Market Characteristics
Entry Strategy begins by market characterization. The typical characteristics are:
Sales Potential Penetration Scale Input Reward Risk

Firms Capability and Competency

The market industry- sector and characteristics must be matched by firms capability and Product Line: Financial resources Production Resources Human resources R&D Experience Management Experience Synergy in product line and in distribution For a detailed list see table in p. 53

Economy of Scale and the Experience Curve

The description in the scale section pp. 48-50 is mistaken. We need to fix it. Hence, in this digression we review the notions of: economics of scale (a characterization of the production function at one fixed point in time) and The experience curve The experience curve is the AC (average cost) as a function of time.
Decisions regarding economy of scale affect industrial

organization of the firm (centralization/ decentralization) at a point in time. The experience curve affects evaluation of product life cycles and competitive pressures over time.

Market Defintion
Traditional Approaches Generic Title followed by physical properties or distribution channels characterization Product focused Consumer Focused Approaches Cross Elasticity Homogeneous Uses Hierarchical Market Definition Perceived Similarity
Perceptual Mapping and Guttmans SSA (Multidimensional

Scaling.)

Emerging View

Market Segmentation and Targeting

Segmentation Bases Demographics Attitudes Usage Rate Preference/ Choice (benefit Segmentation) The list is clearly non-exhaustible Targeting group segmentation requires the tabulation

of relationship between product type and consumer segment

Market Selection
Affected by Business and Marketing Strategy The need to set priority and a decision making

process for selection based on multiple criteria Focus on a few markets Refinements Comments:
Oligopolistic Competition and advantages of Market Entry Entry New and Old Markets

Summary