3-1
Chapter Four
Country Attractiveness
MKT568
Global Marketing Management
Dr. Fred Miller
Environmental Dimensions for Research
Political Risk Forms and levels of risk
Physical
Climate, topography, space, pop
density, etc
Sociocultural Social interaction, hierarchies,
interdependence, etc
Economic
Income, employment, prices,
development, etc
Regulatory
Government agencies and systems,
laws,ordinances, etc.
Porter’s Diamond
Competitive Advantage for Countries
Firm strategy,
structure and rivalry
Factor
conditions
Demand
conditions
Related and
supporting industries
Source: Adapted and reprinted with the permission of the Free Press, a division of Simon and Schuster, from The Competitive
Advantage of Nations, by Michael E. Porter. Copyright © 1990 by Michael E. Porter
4-10
Political Risk Factors
Factors
Exhibit 4.2
Examples
Level 1: General Instability
Revolution, External
aggression
Level 2: Expropriation
Nationalism,
Contract revocation
Level 3: Operations
Import restrictions,
Local content rules,
Taxes, Export requirements
Level 4: Finance
Repatriation restrictions,
Exchange rates
Source: Steven J. Kobrin, “Political Risk: A Review and Reconsideration,” Journal
of International Business Studies 10, no.1 (1979), p. 67-80. Reprinted by permission.
Sample Political Risk Report
Basic Evaluation Procedure
Four stage process & data sources
country identification:
Project Component
Introduction
grouping,
preliminary screening:
Part 1
Business Int’l indices
in depth screening:
Part 2
DoC ID: msumgtmkt, PW racers
Commercial data: Euromonitor, DIALOG
final selection: prior data, judgment
Special criteria
Competitive attack, leading markets,
Direct experience
Analysis of reports
Country Teams
Asia
Europe
Latin America
China
France
Argentina
India
Germany
Brazil
Indonesia
Italy
Chile
Japan
Spain
Mexico
South Korea
Thailand
UK
World Bank Comparative Data
Population Pyramids
Basic Evaluation Procedure
Four stage process & data sources
country identification:
Project Component
Introduction
grouping,
preliminary screening:
Part 1
Business Int’l indices
in depth screening:
Part 2
DoC ID: msumgtmkt, PW racers
Commercial data: Euromonitor, DIALOG
final selection: prior data, judgment
Special criteria
Competitive attack, leading markets,
Direct experience
Analysis of reports
Euromonitor Data for In Depth Screening
Data Sources in International Market Assessment
At what stage of the international market assessment process
would you typically use each of the following sources of data?
Personal interviews with potential intermediaries in the country
Statistical information from various sources
Market studies purchased from Euromonitor or other sources
Lists of the world’s countries
Trade reports purchased from industry associations
Descriptive information on cultural/religious/ethnic factors
US DoC’s consular lists of potential agents
Forecasting Methods (Pro Forma)
Early Product Life Cycle (PLC) stages
build-up, analogy, judgemental-jury,expert,Delphi
Later PLC stages
extrapolation, regression
Forecasting market share
competitors, domestic and import competition
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Yearly Increase in Household Ownership
of TV Sets, 1946-70
13
10
5
0
1946
1950
United States
1955
1960
United Kingdom
1965
1970
Germany,West
Exhibit
4.8
Source: Lindberg, 1982. Adapted with permission. ©1982 by the American Marketing Association.
Forecasting Methods (Pro Forma)
Early Product Life Cycle (PLC) stages
build-up, analogy, judgemental-jury,expert,Delphi
Later PLC stages
extrapolation, regression
Forecasting market share
competitors, domestic and import competition
Sample Essay Questions
HouseHelp Inc. produces a line of moderately priced, handheld
electronic kitchen appliances which it markets on the benefits
of convenience, ease of use and time savings. For its
international market assessment analysis, the firm wishes to
use one statistical measure related to each of the following:
target market, product strategy, distribution strategy, promotion
strategy and pricing strategy. Identify one measure for each
factor and explain its relevance.
Statistics and Marketing Strategy
Total GNI ($US bil)
GDP growth rate
GNI per capita ($US)
GNI per capita PPP($US)
Gini =
Income to top 10%
Inflation Rate
Population
Age Distribution
Urbanization
Literacy
Life Expectancy
Child Malnutrition
Energy use per capita
KM of paved roads
Internet users per 1000
Percent HHs with TV
Mainline phones per 1000 people
Mobile subscribers per 1000
International voice/bandwidth
Consumer Expend Beer $US Mil
Beer as % of Alcohol Spending
Per Capita Consump (L’s per head)
VAT on beer (% of price)
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Match Statistics with Strategy Elements
Target Market: definition, size, purchasing power, etc
Product: brands, lines, characteristics,
packaging, etc
IMC: message, media, promo,
sponsorship, etc.
Distribution; breadth, intensity, stores,
HORECA, etc
Price: levels, lines,
discounts, channel, etc
Sample Essay Questions
HouseHelp Inc. produces a line of moderately priced, handheld
electronic kitchen appliances which it markets on the benefits
of convenience, ease of use and time savings. For its
international market assessment analysis, the firm wishes to
use one statistical measure related to each of the following:
target market, product strategy, distribution strategy, promotion
strategy and pricing strategy. Identify one measure for each
factor and explain its relevance.
How would these measures change for; 1) a consumer
electronics company, 2) a producer of branded food products, 3)
a cosmetics firm, 4) a specialty retailer, or 5) a mass
merchandise retailer.
Sample Essay Questions
HouseHelp Inc. produces a line of moderately priced, handheld
electronic kitchen appliances which the firm markets on the
benefits of convenience, ease of use and time savings.
Identify and explain one method for forecasting sales in
countries where this type of product is new. For countries
where this type of product has been sold for many years.
Identify and explain two factors you would use to estimate the
firm’s market share in the first year after entry.
3-1
Chapter Four
Country Attractiveness
MKT568
Global Marketing Management
Dr. Fred Miller