IDENTIFYING AND SELECTING INTERNATIONAL MARKETS

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IDENTIFYING AND SELECTING INTERNATIONAL MARKETS
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INTRODUCTION

• Before making an entry in the international
  market, a firm has to identify those markets in
  which it can sell its products easily. A proper
  analysis is necessary for selecting the proper
  and appropriate foreign market. It is important
  for the firm entering the world market to segment
  them in such a way that it is able to effectively
  meet their requirements.

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CLASSIFICATION BASIS
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INDUSTRIAL DEVELOPMENT

1. INDUSTRIALLY DEVELOPED ECONOMIES- These
   countries provide a large world market as they
   have no restrictions on import. They lay more
   emphasis on the production of more sophisticated
   products and on research and development.

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• 2. RAW MATERIAL EXPORTING ECONOMIES- These types
  of economies are very much rich in minerals and
  other raw materials but there is lack of
  production technique, capital, labour etc., for
  performing productive functions. So these type of
  economies are exporters of raw material and
  importer of finished goods.

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• 3. MORE DEVELOPED COUNTRIES- These economies are
  growing fastly. Their infrastructure is not very
  sophisticated but they are progressing by
  adopting methods like technical advancement to
  set up their manufacturing units.

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• 4. SUBSISTENCE ECONOMIES- This type of economy
  is found in the least developed countries. They
  produce nothing and depend on imports. As these
  countries lack infrastructures, there is a much
  scope for the developing countries to export
  their products in these countries.

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POPULATION

• A smart exporter will always search market in
  a country where population is high. Because
  commodities are mainly used by the people living
  in the country. Therefore, higher the population
  of the country, higher will be the market
  potential. Segments of population can be made on
  the basis of age, sex,social class, educational
  background etc.

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GROSS NATIONAL PRODUCT

• Gross National Product, growth rate of economy
  and standard of living of population tell us that
  what we should produce and what type of price of
  product will run here.

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OTHER CHARACTERISTICS

• Markets can be classified on the basis of per
  capita income, market characteristics,variables
  like socio- economic variables, cultural
  groupings and other behavioral patterns.

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REQUISITES OF EFFECTIVE SEGMENTATION
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PROCESS FOR SELECTING OF FOREIGN MARKET

• FIRST STAGE- While selecting foreign
  markets, it is necessary that we should analyze
  the market and following factors must be studied
• Geographical factors
• Economic environment
• Social and Cultural environment
• Political environment

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• SECOND STAGE- Following factors must be
  considered
• Market Size
• Growth Rate of other products
• Government policies and Tax Procedures
• Acceptability

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• THIRD STAGE- This stage focuses on micro level
  considerations which includes
• Competition
• Cost of entry
• Possibility of Profit
• Reliability of information
• Cost of Test-Marketing

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• FOURTH STAGE- The last step of the screening
  process is an evaluation of potential market
  which include
• Target Market
• Strategies

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CRITERIA FOR ELIMINATING THE MARKET
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CRITERIA FOR SELECTINGTHE MARKET
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PREFERENCES AVAILABLE TO INDIAN EXPORTERS

1. THE GENERALISED SYSTEM OF PREFERENCES- Under
   this system developed countries, which allow duty
   free export from developing countries. If
   exporter want to avail benefits of above
   preferences he should have full knowledge about
   it and know whether his goods lies under this
   system or not.
2. EXCHANGE OF PREFERENCES AMONG DEVELOPING
   COUNTRIES- 16 developing countries, including
   India, have been exchanging preferences among
   themselves on 93 products under 1972 agreements.
3. IMPORT PROMOTION CENTRES IN SOME COUNTRIES-
   These centres are those which are opened in
   developing countries to encourage imports.
4. OTHER ADVANTAGES-Existence of rupee payment
   agreement, Trade dominated by persons of Indian
   origin, Existence of shipping facilities

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SOURCES OF INFORMATION AVAILABLE TO EXPORTERS

• Libraries maintained by foreign embassies in
  India.
• Reserve Bank of India Bulletin.
• Export-Import Bank
• Commercial banks and Export Credit Guarantee
  Corporation of India.

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SUGGESTIONS FOR ENCOURAGING INDIAS EXPORT

• Govt should set up control room in the trade
  ministry.
• Govt should set up training institutes.
• Govt should arrange for the production of goods
  that are in demand abroad.
• Govt should give priority to the export sector.

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