GLOBAL ENTREPRENEURIAL
ECOSYSTEM-INTERNATIONAL
MARKET RESEARCH
VIRGINIA ARTEAGA-HAID
GLOBAL BUSINESS ADVISOR
2
Evaluate
Environment
Marketing
Plan
• Internal (Export Assessment)
• External (SWOT)
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Coordinate •
Marketing Mix •
GLOBAL MARKET RESEARCH
Targeted Product and Markets (4 P’s)
Strategy (Entry Methods)
Budget
Products
Global Pricing
Promotion
Distribution
Sales
September 10th. 2014.
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Internal & External Environment
September 10th. 2014
Internal Environment
4
Export readiness assessment:
Making good choices determines the success of entry
and operations in foreign markets. The more you
know about an opportunity, the better equipped
you will be to exploit it. Data and information are
critical.
1.
2.
3.
Goals and preferences of senior management
Experiences and capabilities of employees
Technical and production capabilities
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Alignment of Philosophies and Benefits
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Internal Goals
Exporting Benefits
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Do you foresee exports contributing to
sound, specific company goals?
Do you want foreign sales to be a more
significant facet of your business?
Are you willing to wait the 2-4 times
longer it may take to develop new export
business, compared with domestic selling?
What demands will the venture place on
company resources?
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Exports increase sales and
income
Exports diversify market risk;
offset lags in domestic demand
Exports extend product life
cycles
Exports use idle capacity;
reduce unit costs
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conomical/ Environmental
ocial/ Cultural
echnological
External Environment
currency
fluctuations
and
protected
industries and
sectors
September 10th. 2014.
External Environment
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Widely differing laws and business practices exist
in other countries
COMMON LAW
UK, federal courts of US, former UK colonies
Based on tradition, precedent and customs
 WRITTEN CODE LAW (CIVIL LAW)
Russia, Japan, parts of Europe
Detailed set of laws organized into codes, rarely revised,
greater consensus
 RELIGIOUS LAW (THEOCTRATIC LAW)
Saudi Arabia, Iran
Law based on religious precepts
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Export Plan. Global Market Research
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Global Market Research:
Is the process of analyzing company readiness to export,
assessing the suitability of products and services for foreign
markets and sales potential in identified countries, and
choosing qualify business partners.
Which markets are best to pursue?
What’s the best entry strategy for each target market?
What’s the action plan to implement the strategy?
Use market research to learn your product’s potential in a
given market, where the best prospects exist for success,
common business practices
September 10th. 2014.
GLOBAL MARKET RESEARCH
FIRST QUESTION:
Will your company be a reactive exporter or proactive exporter ?
Being proactive: Best ways to grow your business and keep it on a sustainable path, and
always consider your own experiences or knowledge of countries you have visited,
or counties where you have found potential buyers.
PRIMARY AND SECONDARY MARKET RESEARCH
Primary Market research consist in collecting information directly from the foreign
marketplace through interviews, surveys and other direct contacts with potential
customers; this is very time consuming and expensive.
Secondary Market Research: this is basically trade statistics for a country by industry and
by product, and focusing in market potential. This is relatively easy and less
expensive.
STEPS FOR A SUCCESSFUL GLOBAL MARKET RESEARCH:
1.
Screen potential markets. Statistics (import-export) by country-volume-value-port;
competition, business practices, foreign barriers, incentives and regulations.
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Identify and Select Best Markets-screening
Market Potential Matrix-Based upon statistics
Country 1
1
2
3
4
5
6
7
8
9
10
11
X
XX
X
XX
X
X
XX
X
XX
XX
XX
X
X
XX
XX
XX
X
X
Country 2
X
Country 3
XX
X
Country 4
Country 5
X
XX
X
XX
X
X
XX
X
XX
XX
X
X
Country
Columns/Criteria
1.
2.
3.
4.
5.
Largest export markets, latest year
Fastest growing export markets, past 3 yrs
Fastest growing export markets, latest year
Largest importing countries, latest year
Fastest growing importing countries, past 3 yrs
6.
7.
8.
9.
10.
11.
Fastest growing importing countries, latest year
Strong share of import market, latest year
Limited competition from local producers
High receptivity to products from your country
No significant market barriers
Recommended as a “best” export market
September 10th. 2014. 12
What to do after the market research
assessment
 Select two countries in which you think your product
has the best market potential
 Review the profile of each country-basic data
 Research information about the specific industry you
want to sell
 Research information about preferential treatment,
FTA, import duties, compliance and intellectual
property protection; trade barriers
 Rate each country and select 1 to 3
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September 10th. 2014.
Screen countries to identify target
markets
 There are more than 200 countries worldwide, it is not
possible to target them all, management needs to narrow the
list of potential markets.
 Exporting companies generally prefer countries with low trade
barriers, qualified intermediaries, and reliable marketing
infrastructure
 If you outsource, you have to choose the most appropriate
supplier countries.
 Failure to do right market selection can be very costly
 Country ranking are not static, they evolve over time due to
shifting economic events, emergent technologies, or countryspecific developments.
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September 10th. 2014.
Targeted products and Markets
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September 10th. 2014.
4P’s
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Localization/adaptation: Whether/how to adapt
product, packaging, literature
Distribution: Whether to sell direct to buyer or use
local rep, sales office, etc. (locating a foreign
buyer)
Advertising & promotion: (Whether/how to
promote and media to use
Product pricing: Base price and whether /how much
to discount
Export Mode: Whether to export directly or use
domestic export representative
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Screening countries for permanent
presence
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To do international business should be seeing as a
long term investment
You should consider other factors: country risk,
regulatory, political, economic and cultural barriers,
and the legal environment for protecting your
products and services
Government incentives
Long term growth prospects
Cost of doing business
Competitive environment –local and international
September 10th. 2014.
Screening industry market potential
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There are several methods for estimating industry market
potential:
 Attending international trade shows
 Ask supplier network
 Monitor key industry-specific indicators –specific drivers
 Monitor key competition
 Perform simple trend analysis
Best resources:
 Best market reports
 Country commercial guide
 Industry reports
 International market report
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Definition of Products & Services for
Target Market
September 10th. 2014
Provide products and services for the
targeted markets
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Individualism
vs collectivism
Power
distance
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Language, religion, views on education,
social mobility, economic philosophy
Society & culture- Hofstede’s dimensions
Uncertainty
avoidance
Masculinity vs.
feminity
September 10, 2014.
(New) Product Development
Modification Process
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The adaptation and separate version
decision process includes
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Differences in technical standards
(Example: NTSC or PAL)
Standardization pressures are
internal to the company and include
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Economies of scale in R&D and
production (reduced with each
product modification)
Variations in customer needs,
behavior and ability to buy
(geography, temperature, income)
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Product usage (micro chip)
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Company size
Government standards and
restrictions (CE Mark)
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Country of origin effect
September 10, 2014.
Technical Compatibility and Product
Standards
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Power usage (voltage)
Power outlet configuration
European certification and compliance
requirements: CE Mark, e mark, ROHS,
Weee
CCC, SABS
Other country certification requirements
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After Sales Service and Support
Requirements
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Can be presented as
customer centric and / or
regulatory issues
Customer centric because
addressing these items
becomes a part of
localizing or adapting a
product
Regulatory because a
foreign government may
require changes as a part
of a non tariff barrier
(Weee)
•Efforts for appropriate
support include
•Marketing materials and
translations
•Support materials (end user,
and technical)
•Training (end user, and
technical)
•Product modification
•Product warranties
ITC 2010
10/4/2015
Product Liability Implications-commercial practices
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International sales / distribution agreement limit
liability of potential damages in the use of the
product in foreign markets,
Make sure that a distributor does not add to or
change warranty statements
Distributor carries ample liability
coverage
September 10, 2014.
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Legal / Regulatory Requirements for
Pricing
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Import Licenses
– Not having may keep the importer from being able to pay the exporter.
Importers obtaining license and exporters mitigating risk will affect price.
 Government standards and testing
– foodstuffs, consumer products may have varied requirements in different
nations. Most will fall on the exporter or manufacturer.
 Product labeling
– affecting printing / packaging costs
 Quotas
– Limits on the import of certain products. Pricing must be set
appropriately not to exceed quota.
 Government procurement barriers
– Control on the amount of local content in products can increase or
decrease the cost of goods.
 Service and investment barriers
– Preferential treatment for local services requires
firm to manage
ITC 2010 a 10/4/2015
pricing in order to compete.
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Selecting Foreign Partners
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Once you have selected your target market, the next step is
to decide on the type of partner the firm needs for foreign
venture. This partners are vital to the international business
success.
Partners include such entities as distribution – channel
intermediaries and suppliers, as well as collaborative venture
partners such as joint venture partners and franchises.
Companies must exercise great care when choosing partners,
common goals and objectives.
Other aspects when seeking foreign partners include:
financial resources and stability; competent manager;
technical staff; sales personnel; strong knowledge of the
industry; good reputation in the market; ready access to
distribution channels you can use; sense of commitment and
loyalty to the exporter (YOU).
September 10, 2014.
Estimate company sales potential
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Once your company has a list of promising country markets,
verified industry market potential, and identified qualified
business partners, the next major activity is to “estimate
company sales potential in each market”
In order to estimate sales potential can be challenging, it
requires to obtain fine information from the market, making
forecast about expenses and revenues requiring judgment
and knowledge obtained from the target market
In estimating company sales potential, managers collect and
review research findings addressing the following key
concerns:
Risk tolerance of senior managers, financial and human
resources, pricing and financing of sales, network in the
market, partners capabilities, access to distribution channels,
local and third country competition, market penetration
September 10 . 2014
timetable.
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THANK YOU
Email: [email protected]
Phone: 214-8605862
YOU
September 10, 2014.
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