Chapter 5

Market Selection
International Marketing
Chapter-5 Market Selection
Objectives
What is the basis of market selection
What is market selection process
What are the determinants of market
selection
What are the contents of market profile
What are the factors which determine
market selection
International Marketing
Chapter-5 Market Selection
Introduction
One of the most important decision in IM is
market selection
A company which wants to enter many
market should do it systematically
Market selection is based on a thorough
evaluation of the different markets with
reference to certain well defined criteria
It is also necessary to prepare a profile of
the selected markets to help the company to
formulate the marketing strategy.
International Marketing
Chapter-5 Market Selection
Market Selection Process
1. Determine international marketing
objectives
2. Determine parameters for market
selection
3. Preliminary screening
4. Detailed investigation and short listing
5. Evaluation and selection
International Marketing
Chapter-5 Market Selection
Determinants Of Market
Selection
1. Firm related factors
2. Market selection decision
3. Market related factors
International Marketing
Chapter-5 Market Selection
Firm related Factors
A firm whose export objective is only to
sell a marginal surplus will select a foreign
market to suited to serve this purpose
The planned business strategy may also
influence the market selection
The market selection is also influenced by
the international orientation of the
company
International Marketing
Chapter-5 Market Selection
General Factors
1. Economic factors
2. Economic policy
3. Business regulations
4. Currency stability
5. Political factors
6. Ethnic factors
7. Infrastructure
8. Bureaucracy and procedures
9. Market hub
International Marketing
Chapter-5 Market Selection
Specific Factors
1. Trends in domestic production and
consumption and estimates for the
future of the products concerned
2. Trends in imports and exports and
estimates for the future
3. Nature of competition
4. Government policy and regulations
pertaining to the industry
International Marketing
Chapter-5 Market Selection
5. Infrastructure relevant to the industry
6. Supply conditions of raw materials and
other inputs
7. Trade practices and customs
8. Trade practices and customs
9. Cultural factors and consumer
characteristics
International Marketing
Chapter-5 Market Selection
Evaluation Matrix
An evaluation matrix is often used for
ranking the markets with reference to
their attractiveness for the company
The evaluation matrix will include the
relevant general and specific factor
The countries to be evaluated may be
listed on the horizontal axis and the
factors on the vertical axis
International Marketing
Chapter-5 Market Selection
Each factor is assigned a raw score and
a weightage
The weighted score is obtained by
multiplying the raw score with the
respective weightage
Markets are ranked by comparing the
total weighted scores
International Marketing
Chapter-5 Market Selection
Evaluation Matrix
Table 5.1
International Marketing
Chapter-5 Market Selection
Market Profile
The market profile of product is a fairly
detailed account of relevant market
characteristics
It provides those information which are
needed for the formulation of the
marketing strategy
A market profile will, help in the
formulation of appropriate marketing
strategy, pricing strategy, distribution
strategy and promotion strategy
International Marketing
Chapter-5 Market Selection
Contents of Market Profile
1. Trends in the domestic production,
demand, imports and exports and the
forecasts of the same for the future.
2. Competitive characteristics the
competitors, their competitive
strategies and weakness of the
competitors
International Marketing
Chapter-5 Market Selection
3. Market segment characteristics the
number of segments an their size, the
success factors in each segment,
determinants of demand in each segment
, competitive characteristics of each
segment, growth potentials of the
segments etc.
4. Customer characteristics including tastes
and preferences, attitudes, buying habits,
usage characteristics, etc.
International Marketing
Chapter-5 Market Selection
5. Channel characteristics including trade
practices
6. Promotion characteristics
7. Factors relevant to pricing, laws
related to product, price, promotion,
distribution, imports etc.
International Marketing
Chapter-5 Market Selection
Market Segment Selection
A firm has to make strategic decision
about the segment of the foreign
market that it should enter.
The segment that a firm may enter
depends on a number of factors like the
firm related factors, product related
factors, competitive factors, and other
market related factors.
International Marketing
Chapter-5 Market Selection
A firm with an innovative product and
marketing strength may choose the
most lucrative segment/segments.
Small and new firms, often look for
niches for an entry into the market.
International Marketing
Chapter-5 Market Selection
Summary
The important steps in the market
selection process involves: international
marketing objective, parameters of
selection, preliminary screening, short-
listing of markets, evaluation and
selection.
The market selection is based on two
sets of factors: the firm-related factors
and the market related factor.
International Marketing
Chapter-5 Market Selection