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Lesson#16
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DETERMINING EXPORT POTENTIAL IN INTERNATIONAL
MARKETS
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DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS
Preliminary Screening of Countries
International marketers may use a three stage analysis to
determine which foreign countries offers best
potential for exports from their companies.
Stage One: Preliminary Screening -
involves defining the physical,
political, economic, and cultural
environment of the countries
Demographic/Physical Environment:
• Population size,
growth, density
• Urban and rural
distribution
• Climate and
weather conditions
• Shipping distance
•
Product-significant demographics
• Physical
distribution and communications network
• Natural resources
Political Environment
– System of
government
– Political
stability and continuity
– Ideological
orientation
– Government
involvement in business
– Government
involvement in communication
– Attitudes towards
foreign business (trade restrictions, tariffs, non-tariff barriers, bilateral
trade
agreement)
– National economic
and development priorities
Economic Environment
– Overall level of
development
– Economic growth:
GNP, industrial sector
– Role of foreign
trade in economy
– Currency,
inflation rate, availability, controls, stability of exchange rate
– Balance of
payments
– Per capita income
and distribution
– Disposable income
and expenditure patterns
Social/Cultural Environment
– Literacy rate,
educational level
– Existence of
middle class
– Similarities and
differences in relation to home market
– Language and
other considerations
The export marketer will eliminate some foreign markets from
further consideration on the basis of this
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preliminary screening. An example would be the absence of
comparable or linking products and
services, a deficiency that would hinder the potential for
marketing products
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