international markets – identification, selection and entry

International Marketing Strategy – Identification, Selection & Entry

3.1 Identifying, Selecting and Targeting International Markets

3.1.1 Identifying Potential International Markets

Market identification begins with systematic research that combines an external environmental scan with reliable market data.

Research methods

• Primary research – data collected specifically for the market under study (surveys, focus groups, in‑depth interviews, test‑markets). Provides current, specific insights but can be costly and time‑consuming.
• Secondary research – data already published (government statistics, industry reports, trade‑association publications, company annual reports). Faster and cheaper, but may be outdated or not perfectly relevant.
• Sampling – selecting a representative subset of the population. Common techniques: random, stratified, quota. Limitations: sampling error, non‑response bias.
• Reliability & validity – reliability = consistency of results; validity = extent to which data measure what they intend to measure. Reliability is enhanced by repeatable procedures; validity is improved by using well‑designed instruments and cross‑checking sources.
• Data analysis – descriptive statistics (means, percentages), comparative analysis (benchmarking against other markets), trend analysis (growth rates) and simple forecasting.

Macro‑environment analysis – PESTEL

Micro‑environment analysis

• Competitors – number, size, market share, strategic intent.
• Customers – buying behaviour, price sensitivity, brand loyalty, decision‑making units (B2B).
• Suppliers & distributors – reliability, cost structure, local network strength.
• Market structure – retail formats, channel depth, e‑commerce penetration, regulatory barriers to entry.

Market‑attractiveness criteria (weighted scoring)

3.1.2 Market Segmentation, Targeting and Fit

Segmentation bases (Cambridge requirement 3.1.6)

• Geographic – region, country, climate, urban/rural. Why useful? Geographic variables highlight legal differences, distribution costs and cultural distance.
• Demographic – age, gender, income, education, family size. Why useful? Demographics give a quick proxy for purchasing power and product‑usage patterns.
• Psychographic – lifestyle, values, personality, social class. Why useful? Helps adapt positioning to local aspirations (e.g., status‑seeking vs. sustainability‑focused consumers).
• Behavioural – usage rate, loyalty status, benefits sought, purchase occasion. Why useful? Directly links to marketing‑mix decisions such as pricing and promotion intensity.

Customer‑relationship marketing (CRM) – requirement 3.1.7

• CRM objectives – acquire new customers, increase repeat purchase, maximise customer lifetime value, gather market intelligence.
• Typical CRM tools – loyalty cards, personalised e‑mail newsletters, mobile‑app rewards, CRM software dashboards, B2B account‑management portals.
• Example 1 (B2C) – A coffee chain launches a digital loyalty app in Mexico: a free drink after ten purchases, push notifications with local promotions, and data capture on preferred flavours.
• Example 2 (B2B) – An industrial supplier of hydraulic components introduces a points‑based loyalty scheme for its distributors in Germany. Points are earned for each order and can be redeemed for technical training sessions, encouraging repeat orders and providing the supplier with usage data for product development.

Prioritisation & weighted scoring (fit assessment)

1. Assign a weight to each attractiveness criterion (e.g., 30 % market size, 20 % growth, 15 % competitive intensity, 10 % economic stability, 15 % regulatory environment, 10 % cultural fit).
2. Score each shortlisted market on a 1‑5 scale against every criterion.
3. Calculate the weighted total for each market and rank them from most to least attractive.

3.1.3 Product Portfolio Analysis (A‑Level requirement)

Placing each product in the BCG matrix clarifies the level of investment needed for overseas launch.

3.1.4 Selecting Target Markets (Segmentation → Fit)

1. Market screening – apply the weighted‑scoring model from 3.1.1.
2. Segmentation analysis – break the chosen country into geographic, demographic, psychographic and behavioural segments.
3. Fit assessment – match the firm’s strengths (technology, brand equity, distribution network), CRM capabilities and product‑portfolio position with the needs of each segment.
4. Prioritisation – rank segments by strategic fit, resource requirements and risk tolerance; select the most promising one(s) for entry.

3.2 Choosing an Entry Mode

3.2.1 Entry‑mode options (including A‑Level extensions)

Illustrative examples

• Starbucks entered China primarily through franchising with local partners, allowing rapid expansion while retaining brand standards.
• Toyota formed a joint venture with Suzuki in India (Maruti Suzuki) to gain local manufacturing capacity and distribution networks.
• Apple uses direct exporting to most EU countries, shipping finished goods from its factories in China and using local retailers.
• Unilever acquired the local soap manufacturer in Kenya, creating a wholly‑owned subsidiary to protect its strong brand portfolio.

3.2.2 Factors influencing the choice of entry mode (Cambridge requirement 3.2)

• Desired level of control over the marketing mix (product, price, place, promotion).
• Availability of financial, managerial and technological resources.
• Degree of market risk – political stability, economic volatility, cultural distance.
• Strength of intellectual‑property protection in the host country.
• Speed of entry required to meet competitive pressures.
• Long‑term strategic objectives – brand building, cost minimisation, learning‑by‑doing, market‑share leadership.
• Experience of the firm in international operations (learning curve, previous successes/failures).
• Nature of the product – perishable, high‑tech, luxury, or low‑margin – which influences the need for local adaptation or proximity to customers.

3.3 Developing an International Marketing Plan

1. External & internal analysis – PESTEL, Porter’s Five Forces, SWOT, market‑research findings, product‑portfolio review.
2. Set clear, measurable objectives – e.g., “Achieve 5 % market share in the premium skincare segment of South‑Korea within three years and generate £2 m in sales.”
3. Select target markets – apply screening, segmentation and fit assessment (sections 3.1.1‑3.1.4).
4. Choose the most appropriate entry mode – weigh control, risk, investment and strategic fit (section 3.2).
5. Adapt the marketing mix (4 Ps)
   • Product – localisation of features, packaging, branding, compliance with local standards.
   • Price – consider purchasing power, local taxes, competitive pricing, possible price‑skimming vs. penetration.
   • Place – distribution channels (retail, e‑commerce, local agents), logistics, warehousing, channel‑partner selection.
   • Promotion – culturally appropriate advertising, media mix (TV, social‑media, K‑pop influencers, etc.), sales‑force training, CRM initiatives.
6. Implementation timetable & resources – Gantt chart of key activities, budget allocation, staffing plan, required partnerships.
7. Performance measurement & control – set KPIs (sales volume, market share, ROI, customer‑retention rate, brand‑awareness score); schedule regular review meetings; develop contingency actions for adverse market developments.