Market Selection

CHAPTER 5

MARKET SELECTION: DEFINITION
AND STRATEGIES

INTRODUCTION
 The marketer has a key role in the strategic planning process:

many planning tools depend upon concepts of market share, market definition, segmentation, positioning, product life cycles and customer relationship management (CRM).

 Key steps in formulating an international marketing strategy

are:
 Export market selection: determining the markets in which to compete, and the sequence of entries.
 Export market direction: determining whether to build, hold or divest in markets being served

MARKET DEFINITION AND
SEGMENTATION

 Market segmentation: a breakdown into segments of

customers for particular products in particular countries.

 Market segmentation is a crucial and complex function:
 Need to consider countries, channels, customer

segments etc.
 Unique customer groups may be based on countries or consumer types across countries.
 It is critical that there be careful analysis prior to commitment to international expansion

EXPORT MARKET SEGMENTATION
 Many possible ways; may use multiple methods.

Need to consider:
 (a) measurability: ability to identify potential segments
 (b) accessibility: ability to reach and serve
(communicate and deliver)
 (c) profitability: is market large enough to be worth separate attention
 (d) actionability: can effective programs be formulated for attracting and serving

MARKET SELECTION PROCESS:
REACTIVE vs PROACTIVE

 Reactive; responding to inquiries; very common, especially

for small or new exporters.

 Proactive; formal or informal search.
 Before actually deciding which market(s) to enter, in-depth

research must be carried out regarding all differences between the home and country and foreign country that may affect the desirability, costs, and potential benefits of marketing, and how to do business there.

MARKET SELECTION PROCEDURES
EXPANSIVE vs CONTRACTIBLE

 Expansive: working outward from core; to

nearest neighbor (nearest