The Marketing Book 5th Edition

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620 The Marketing Book


decision makers will adopt a strategy of infer-
ential, assumption-based reasoning.


The need to identify good potential


markets


 Companies want sure-fire winners not
theories!
 Measures used for analysis? Usually, per capita
GNP or PPP (Purchasing Power Parity)? Just
two measures of personal disposable income,
both flawed. See a current issue of The
Economistfor a discussion on PPP and
international comparisons on this measure, or
Paliwoda and Thomas (1998) for a discussion
of both GNP and PPP (further explanation of
per capita GNP is found below).
 The number of psychologically close countries
is increasing for West European markets, with
a large number of pending EU membership
applications!
 The Internet has changed forever the way in
which we access information, which has now
become a global commodity.


As an activity, international market research
attracts only a small percentage of a com-
pany’s total market research budget. Many
companies do not spend money on foreign
market research or entrust an on-the-spot
appraisal to one of the most junior members
of the firm, often entering into a particular
target market for the first time and without
any proper briefing or linguistic skills. What
results is a ‘go/no go’ decision based on a
poor understanding of the specific market
characteristics. This activity should be approa-
ched as part of the company’s ongoing strate-
gic planning and development. A decision to
enter a market should only be taken with
proper understanding and appreciation of
what is currently happening in the target
market, and what is likely to happen.
Market research is possible but less reli-
able in those markets where market research
data are scarce or the data available are not
directly comparable due to the different statis-


tical bases being used. Source credibility and
comparability of results are the major head-
aches experienced. Another increasingly
important factor is that we approach foreign
markets with a self-reference criterion, mean-
ing that we seek to understand foreign
markets by comparing them with our own
market. While that may be helpful, it is also
important to underline that models created
for Western markets may not be as effective
outside Western markets. Consumer behav-
iour intention models may not be as effective
in the Pacific Basin as they are in North
America (Malhotra and McCort, 2001).
To research country markets effectively,
governmental sources should be used where
they exist. Where these are deficient, there are
a number of agencies, including the US Cen-
tral Intelligence Agency and many specialist
companies such as Business International SA
and others, which offer best estimates as to
probable production and consumption figures.
A company that thinks it knows its market
should then assess its state of preparation
against the Industrial Marketer’s Checklist
provided free by the Department of Trade and
Industry. Identification of national personal
disposable income levels may well be mean-
ingless, and one should seek to identify
important affluent target segments within a
national market with data on lifestyles, educa-
tional background, location and spending pat-
terns, all of which are useful indicators for
any company seriously considering market
entry.
What is important to remember is that
GNP per capita as a measure of national
wealth is an arithmetic mean, which gives a
value for national wealth when calculated on
a per capita basis. It does not equate with
disposable income actually available to cit-
izens to spend, nor their willingness to spend
it. This statistic is fairly meaningless, as it
offers no guidance as to the dispersion of
wealth across the population or the possible
identification of important affluent segments
across a nation. Segmentation remains the key
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