Identifying foreign market06/09/2022 0 By indiafreenotes
Identification and selection of markets is the first stage in international marketing. Before making an entry in the international market, a firm has to identify those markets in which it can sell its products easily. To take this decision, firm has to analyse the potentials of various foreign markets and their respective marketing environments. Some markets may not be potentially good, and the firm’s objectives and resources may not allow it to operate in some other markets.
Therefore, a proper analysis is necessary for selecting the proper and appropriate foreign market. One market differs from another but still in one respect or the other, they can be grouped in different segments. 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. No matter how much attempt is made, the firm will not succeed unless it is marketing right product in the right market.
It costs lot of time and money to find out a suitable foreign market for a product. No firm has unlimited resources. Proper selection of markets would avoid waste of time and effort. One product may be more acceptable in some countries than in others. It would, therefore, be better to concentrate on a few markets than in more markets.
Key Factors in Product Selection
- If possible, avoid products which are monopoly of one or few suppliers. If you are the manufacturer make sure sufficient capacity is available in-house or you have the wherewithal to outsource it at short notice. Timely supply is a key success factor in export business.
- The product should be manufactured or sourced with consistent standard quality, comparable to your competitors. ISO or equivalent certification helps in selling the product in the international market.
- The price of the exported product should not fluctuate very often threatening profitability to the export business.
- Carefully study the various government incentive schemes and tax exemption like duty drawback and DEPB.
- Import regulation in overseas markets, especially tariff and non-tariff barriers. Though a major non-tariff barrier (textile quota) has been abolished – there are still other tariff and non-tariff barriers. If your product attracts higher duty in target country – demand obviously falls.
- Strictly check the government policies related to the export of a particular product. Though there are very few restrictions in export it is better to check regulatory status of your selected product.
- Registration/Special provision for your products in importing country. This is especially applicable for processed food and beverages, drugs and chemicals.
- Seasonal vagaries of selected products as some products sell in summer, while others in winter. Festive season is also important factor, for example certain products are more sellable only during Christmas.
- Keep in mind special packaging and labelling requirements of perishable products like processed food and dairy products.
- Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.