international markets – identification, selection and entry

International Markets – Identification, Selection & Entry

Imagine you’re planning a road trip 🚗. First, you decide where you want to go (identification). Then you choose the best route and destination that fits your budget and interests (selection). Finally, you get the car, map, and supplies ready to hit the road (entry). In international marketing, the process is very similar – you identify potential markets, select the most suitable ones, and then decide how to enter them.

• Global Trends: Look at worldwide trends such as digitalisation, sustainability, or ageing populations. 🌍

• Competitive Landscape: Identify where competitors are already operating and where gaps exist.

• Market Data: Use data from trade associations, government reports, and market research firms.

• Example: A UK fashion brand notices a rising demand for eco‑friendly clothing in Scandinavian countries.

Use a scoring system to compare markets. Each criterion gets a weight based on its importance.

The higher the weighted score, the more attractive the market. In our example, Scandinavia scores 37.5, making it a strong candidate.

Think of entry strategies as the different ways you can drive to your destination. Each has its own cost, control level, and speed.

1. Exporting – Ship products from home. Low risk, low control. Example: A UK bakery exports pastries to France.
2. Licensing – Allow a local firm to use your brand. You earn royalties. Example: A tech company licenses its software to a local developer.
3. Franchising – Similar to licensing but includes business model and training. Example: Fast‑food chains like McDonald’s.
4. Joint Venture – Partner with a local firm. Shared risk and local knowledge. Example: A Japanese carmaker partners with a Chinese firm to build cars.
5. Wholly Owned Subsidiary – Build or buy a company. Highest control, highest risk. Example: Apple opening its own retail stores abroad.

Choose the strategy that matches your resources, risk tolerance, and the market’s legal environment.

📌 Key Points to Remember

• Use the PESTLE framework when identifying markets.
• Apply Porter’s Five Forces to assess competitive intensity.
• When scoring markets, justify the weight assigned to each criterion.
• Explain the trade‑offs between control and risk for each entry mode.
• Use real‑world examples (e.g., Nike in China, Starbucks in Japan) to illustrate concepts.

Remember: clarity, structure, and examples score high in exams.

\$MP = P \times I \times S\$

Where \$P\$ = Population, \$I\$ = Average Income, \$S\$ = Expected Market Share. Use this quick check before detailed scoring.