Introduction

Before making an entry in the international market, a firm has to identify those markets in which it can sell its products easily. A proper analysis is necessary for selecting the proper and appropriate foreign market. 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.

Before making an entry in the international market, a firm has to identify those markets in which it can sell its products easily. A proper analysis is necessary for selecting the proper and appropriate foreign market. 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.

Classification Basis:

  • INDUSTRIALLY DEVELOPED ECONOMIES
  • RAW MATERIAL EXPORTING ECONOMIES
  • MORE DEVELOPED COUNTRIES
  • SUBSISTENCE ECONOMIES
  • POPULATION
  • GROSS NATIONAL INCOME
  • OTHER CHARACTERISTICS

INDUSTRIALLY DEVELOPED ECONOMIES

These countries provide a large world market as they have no restrictions on import. They lay more emphasis on the production of more sophisticated products and on research and development.

RAW MATERIAL EXPORTING ECONOMIES

Labor these types of economies are very much rich in minerals and other raw materials but there is a lack of production technique, caplaboretc., for performing productive functions. So these type of economies are exporters of raw material and importer of finished goods.

MORE DEVELOPED COUNTRIES

These economies are growing fastly. Their infrastructure is not very sophisticated but they are progressing by adopting methods like technical advancement to set up their manufacturing units.

SUBSISTENCE ECONOMIES

This type of economy is found in the least developed countries. They produce nothing and depend on imports. As these countries lack infrastructures, there is a much scope for the developing countries to export their product to these countries.

POPULATION

A smart exporter will always search market in a country where the population is high. Because commodities are mainly used by the people living in the country. Therefore, higher the population of the country, higher will be the market potential. Segments of a population can be made on the basis of age, sex,  social class, educational background etc.

GROSS NATIONAL PRODUCT

The growth rate of economy and standard of living of population tell us that what we should produce and what type of price of the product will run here.

Export / Import Ban:

There are few countries/areas to which export/import are not currently carried on by India. For e.g. exports are not permissible to Iraq and Fiji. Hence such countries should straightway be excluded from the list of potential markets.

Market Accessibility:

There are countries which are comparatively less accessible in terms of export regulations in comparison to the countries where imports are freely permissible.

Preferential Treatment:

The countries which have adopted the scheme of Generalized System of Preference (GSP) are giving a preferential treatment to producers from developing countries like India. Such countries comprising West Germany, Italy, Belgium, Netherlands, UK, Denmark, Japan, Australia, USA etc are therefore comparatively easy markets for us.

Location: The countries which are located near to us are comparatively better market than the countries located at a long distance. Selling to distantly located markets becomes difficult on account of non-availability / irregular shipping service besides higher freight rate, thereby, making the goods uncompetitive. To start with on should concentrate in the nearby areas of Middle East, which are currently offering immense scope for selling all sorts of products.

Product Specification:

One should prefer the countries where products of the specification similar to ours are sold. Hence, countries requiring goods with difference specifications should be avoided as the production of items according to the changed specification involves money & time.

Trade Practice:

The countries which are aware of Indian trading practices are better markets in comparisons to those where Indian products/practices are less known. The countries where the business community comprises of Indian or person of Indian origin or which have been trading with India for a long like the United Kindom, are more receptive to our goods, being aware of our trading practices. There might also be no language problem.

OTHER CHARACTERISTICS

Markets can be classified on the basis of per capita income, market characteristics, variables like socio- economic variables, cultural groupings and other behavioral patterns.

 

 

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